Political Determinants Affecting the HK Insurance Market Essay

Introduction This part of the paper will analyse the external environment of HK insurance market through the use of PESTEL and Five Forces Analysis. PESTEL Analysis It can be noted that the HK Insurance market has always been dependent on international business climate as well as its product cycles. Consequently, the HK Insurance market has been deliberated as one of the growing industries throughout the years. The following figure shows the analysis of the political, economical, socio-cultural and technological, legal and environmental attributes and determinants affecting HK Insurance market. Figure 1 PESTLE Analysis Political| Economical| Socio-Cultural| * Taxation Policy of Hong Kong * Foreign trade Regulations * Political status and condition of Hong Kong and the global market| * Product life cycles * Business Cycles * Rate of unempoyment * Disposable income| * Lifestyle of the target market * Income distribution * Cultural diversity| Technological| Legal| Environmental| * Rapid transition in technology * Speed of technological transfer| * Laws and regulations about that covers apparel industries * Following regulations in the foreign trade| * Awareness of environmental protection * Existence of Green Products| One of the political determinants that affect HK Insurance market is the diverse taxations which surrounds Hong Kong market which lead to re-imports. In this regard, the vehicles are being bought overseas, re-imported to the locale market which influence the price of the product. In the period of economical issues, clients do not substitute their financial and insurance products and services offerings. On one hand, there are some insurance firms which are common in the market environment which expresses a new way of providing their services to their clients. In line with technological determinants, HK Insurance market nowadays is being quiker in line with the business standards as well as considers information system for data records management. In addition, so as to cope with the environmental determinants, further consolidation of the HK Insurance market is expected and consideration of insurance products must be given emphasis. Aside from PESTLE analysis, the HK Insurance market will also be analysed through the consideration of Porter’s five Forces model. 1. Suppliers. In the case of the insuranceindustry, speficifically in the current objectives and plans of HK Insurance market, decision-makers of the corporation must have a clear comprehenson of the business dynamics in which employees are directly involved in. Such consider the employees’ concentration or and core corporate interests, diversity of the products as well as the designs being offered as well as the alternative resources that are accessible for the HK Insurance market in terms of business partnerships. Hence, it is most proper to build win–win relationships with employees or have an agreement on the use of multiple employees in array to protect the interests of both ends. 2. Power of BuyersThe power of clients/buyer s describes the implicate clients/buyer s/buyer ss have on an industry. When buyer power is robust, the relationship to the producing industry becomes closer tomarket conditions wherein the buyer has the most influence in shaping the price. In this regard, the insurance company should be able to provide the need of their clients specifically in lique with information system. 3. New Entrants and Barriers of Entry. The plausibility of new corporations entering the industry influences the pace of the industrial competition. Therefore, the key is to analyse the entry technique as well as exit approach of the new player to the HK Insurance market. Although any corporation must be able to enter and exit the sector, each industry presents diverse degrees of complexity influenced by economics. In terms of insurance market. 4. Substitutes. â€Å"Substitute products† as those that is accessible in other industries that meet an identical or similar demand for the end user. As more substitutes become obtainable as well as price affordable, the demand becomes more elastic since clients/buyer s/buyer ss have more optonss. The threat of substitutes often implicates price-based competition since substitute products may restrict the capability of corporations within an industry to raise prices and improve margins. 5. Industry Competitors. A considerable number of corporations have developed into an essential part of the period of global competition, increasing enhancement, enhanced corporate paradigms, and corporate restructure. The continuous transition from the conventional corporate framework with its hierarchical corporations to a worldwide, knowledge-founded financial system as well as intelligent corporations demands business management to realign and relocate its techniques (Oliver, 1997). Along with the intense marketing nowadays, corporations are faced with the challenge to sustain their own competitive edge so as to survive and be successful. Techniques and marketing tactics are carefully planned and executed to gain the ultimate goal of all: corporation growth (Porter, 1990). Among the HK Insurance market player the management of each company should be able to sustain their competencies. Reference Oliver, C 1997, â€Å"Sustainable competitive advantage: Combining institutional and resource-Based views. †Ã‚  Strategic Management Journal18(9): 697-713. Porter, ME, 1980,  Competitive Strategy: Techniques for Analyzing Industries and Competitors, Free Press, New York.

Consumer Perspective About Quality Service Provided

1. 1 AN introduction overview TO THE BROAD AREA OF TOPIC This research is based on comparison of Quality service offered by pizza hut and dominos. This research is based on to test the quality of service and comparison between two Pizza Houses. The fast food industries of India is experiencing phenomenal growth and is one of the fastest growing sectors in the country, with the compounded annual growth rates of the market crossing 25%. Further, on the back of changing and busy lifestyle, fast emerging middle class population and surging disposable income, the industry will continue to grow at a pace in coming years.It now accounts for roughly half of all restaurant revenues in the developed countries and continues to expand there and in many other industrial countries in the coming years. But some of most rapid growth is occurring in the developing world; where it's radically changing the way people eat. People buy fast food because it's cheap, easy to prepare, and heavily promoted. T his paper aims at providing information about fast food industry, its trend, reason for its emergence and several other factors that are responsible for its growth.This report provides extensive research and rational analysis on the Indian fast food industry and tracks the changing dynamics of the market. It features market performance, key related sectors and competitive landscape of the market. The research study looks into the market condition and future forecasts, and outlines current trends and analysis. It has been made to help clients in analysing the opportunities, challenges and Drivers vital to the growth of fast food industry in India.For the purpose of this report, Fast Food Industry includes fast food restaurants, teahouses, coffee shops and juice bars in India. Consumers will be feeling the impact of the crisis far more over the coming months and will have to adjust their daily habits and attitudes accordingly. There are already clear signs pointing in this direction, which are not necessarily detrimental to food retail. In times of economic crisis, the cocooning effect tends to emerge and this involves consumers focusing increasingly on activities within their own homes.Although only around half of consumers will actually be affected by the crisis, the situation will have a major impact on food retail. The various sectors, industries and retail will all be affected by the economic crisis to varying degrees. There will be losers, but also winners in this downturn. The 6000 corer fast food retail industry is mainly dominated by the multinational players and the key players which are active in the research of the food retailing include Pizza hut and Dominos. Introduction to Pizza HutPizza Hut is one of the flagship brands of Yum! Brands,Inc. , which also has KFC, Taco Bell, A&W and Long John Silver’s under its umbrella. Pizza Hut is the world’s largest pizza chain with over 12,500 restaurants across 91countries. In India, Pizza Hut ha s 137 restaurants across 36 cities, including Delhi, Mumbai, Bangalore, Chennai, Kolkata, Hyderabad, Pune, and Chandigarh amongst other is in the process of opening Pizza Hut restaurants at many more locations to service a larger customer base across the country. Introduction to DominosDomino's vision is focused on â€Å"Exceptional people on a mission to be the best pizza delivery company in the world! â€Å". Domino's is committed to bringing fun and excitement to the lives of our customers by delivering delicious pizzas to their doorstep in 30 minutes or less, and all its strategies are aimed at fulfilling this commitment towards its large & ever growing customer base. Domino’s constantly strives to develop products that suit the tastes of its customers, thereby bringing out the Wow effect (the feel good factor). Domino's believes strongly in the strategy of ‘Think local and act regional’.Thus, time and again Domino's has been innovating toppings suitable to the taste buds of the local populace and the Indian market has very well accepted these. Domino's Pizza started life as Domi Nick's in 1960 founded by two brothers Tom and James Monaghan from Michigan. Within 8 months, James sold his share in the company to his brother, leaving Tom the sole owner of the pizza outlet. After 38 years as the head and owner of Domino's, co-founder Tom Monaghan decided to hand over the reins to another company, Bain Capital, selling his 93% share of the firm for a whopping $1 billion in 1998.The first UK Domino's Pizza store was opened in 1985, with the first outlet opening its doors in 1991. Domino's Pizza is now the second largest home pizza delivery company in America and has a global presence with 9,000 corporate and franchise outlets operating across 60 different international markets employing 145,000 employees worldwide. Domino’s Pizza India Limited is a Pizza Retail company spread across India across 85 Locations in 22 Cities. Their Sales Model is Take away and deliveries, deliveries accounting for about 70% of their business.Hence their main focus in to acquire and retain and increase the value of their customers. Domino’s Pizza India Limited is a Pizza Retail company spread across India across 85 Locations in 22 Cities. Their Sales Model is Take away and deliveries, deliveries accounting for about 70% of their business. Hence their main focus in to acquire and retain and increase the value of their customers. It holds the complete Customer Information including the transaction history.Grouping the customers based on User Specified Criteria to facilitate campaigns on the selected groups. The Campaign Management module is used for planning, executing and analysing campaigns results. Apart from this, the solution would also provide detailed analysis of Sales trends and customer behaviour over parameters such has time, Hours of day, Customer Segment, Order value, order frequency etc. 1. 2 INTRODUCTION TO THE SP ECIFIC AREA OF TOPIC This Project has been titled â€Å"Comparative study on consumer perspective about quality service offered by PIZZA HUT Vs.DOMINOS† It is been noticed that there is shift of customer from Dominos to Pizza hut and there is increase in number of customer at Pizza hut and also there is drastic change in areas of customer satisfaction, approach and the customer retention which is only because of the quality service that they are getting from the respective outlets. The study would help the hospitality based industries to plan and to build the strong, sound and rigid strategies to make the loyal customer and their satisfaction and retention.The habit of consumer changing from one brand to another brand due to many reason like Quality of service, Price, Accessibility, Value for money and Speed with service. By comparing Number of transaction that happened at Pizza hut and Dominos from 2006 to 2011. This is found that there is decreasing in Pizza hut Transaction by every Year. This topic of study is based on the SOP and the Standard that the company following to win back their customer again and again. Some of these are as follow:- Fact to Pizza Hut * Pizza Huts worldwide sales were approximately $10 billion. * Pizza Hut service more than 1. million pizzas every day to approximately 5 million customers worldwide. * Pizza Hut owns and operates more than half of its restaurant and delivery units making Pizza Hut, Inc. the largest company-owned restaurant chain in the world. * The highest volume Pizza Hut restaurant in the world is in Moscow followed b stores located in France, Hong Kong, Finland and the U. K. * Outside the US the country with the most Pizza Hut units is Australia (405) followed by Canada (354) and the U. K. (326. * Pizza Hut delivery drivers range in age from 18 to 80 miles, and average 50 miles per driver per day to deliver Pizza Hut products.The mode of transportation varies from country to country with motor scooters the most common mode in Western Europe, the U. K. And the Asia Pacific Countries. * Pizza Hut uses 2. 5 percept of all the milk produced in the US every year for cheese. That cheese production requires a herd of 250,000 dairy cows producing at full capacity 365 days a year. * Pizza Hut uses more than 50 million pounds of wheat representing the annual yield from nearly 400,000 acres of wheat. * Pizza Hut uses more than 400 million pounds of tomatoes each year and 50 million pounds of pepperoni. Approximately 50 % of all Pizza Hut units outside the US are full service restaurant. About 35 to 40 % are delivery carry out units, and 10 t0 15 % are express units or slide â€Å"windows†. Vision â€Å"Growth with big heart† Mission â€Å"To become the number one company in every category we operate† Pizza Hut Objectives * Making great pizza * Customer satisfaction * Customer mania * To have strong appetite for learning * To wake up every day in order to think about global m arket. * To provide great service to all customer. * To celebrate the successful of the company. * To put yum on peoples face around the world Interrelated System at DominosThe Point of Sale application is located at the store. The Customer Service Representative (CSR) takes the order in this system. It is a Clipper/FoxPro Bases system in use since Dominos started operations in India. It primarily holds customer information such as Name, Phone Number and Address and Location (Delivery Area/Sector as defined by Dominos) data transfer is One way i. e. from POS – SLX and subsequently in the next phase it would be 2 way. Email System: A POP3 Email System to send out email. Functional Equipment at Dominos * Customer Management * Campaign Planning * Campaign Execution * Post Campaign Analysis Reports and Analysis Customer Management at Dominos Information from the POS in brought in by Batch Data Import and data such as Last order date, Total order value, Order Frequency, Average ti cket value are calculated after batch update is done. This is used to classify the customer based on customer inactivity, order value etc. to run Campaign to get further business from the customer. Response of Management at Dominos The responses for all the above communication channels are captured in the POS and are then imported into the Sales logic system. The responses are recorded as Orders booked against the campaign.Only a delivered order is considered as a response to a campaign. Sales logic however provides the functionality to capture other forms of response and can be used at a later stage as and when the requirement arises. The response is captured in order to perform effective post campaign analysis. Dominos in India Domino’s was incorporated in New Delhi on March 16th1995 as a private company under the name Dominos India Private Ltd. Domino's Pizza India has remained focused on delivering great tasting Pizzas and sides, superior quality, exceptional customer ser vice and value for money offerings. Domino’s PizzaIndia has a network of around 300outlets, in 65 cities, in 22 states and union territories (as on 31st Jan 2010) According to the India Retail Report 2009; it is the largest Pizza chain in India and the fastest growing multinational fast food chain. Vision â€Å"Exceptional people on a mission to be the best pizza delivery company in the world! † Domino's is committed to bringing fun, happiness and convenience to the lives of our consumers by delivering delicious pizzas to their doorstep in 30 minutes or less ,and its efforts are aimed at fulfilling this commitment towards its large and ever-growing customer base.Today, Domino’s occupies 65% market share in the home delivery segment. Mission â€Å"Exceptional franchisees and team members on a mission to be the best pizza delivery company in the world. † Itimplements this mission statement by following business strategy:- * Puts franchisees and Company-owne d stores at the foundation all thinking and decisions; * Emphasizes ability to select, develop and retain exceptional team members and franchisees; * Provides a strong infrastructure to support stores * Builds excellent store operations to create loyal customers. 1. 3 introductions to the TopicThis study under the head â€Å"Comparative study on Quality service offered by Pizza Hut vs. Dominos† has been undertaken to measure the satisfaction level of customers regarding the products and the services provided by the respective organization. Sources of data collected from Primary data and Secondary data. Sample Size taken 100. Technique of analysis was chi square. The type of study used is Descriptive Study. Sample technique is Convenience Sampling. The topic mainly focuses on the quality of service offered by both the company and the result of which the company got more popular day by day.This Dissertation report provides extensive research and rational analysis on the Indian fast food industry and tracks the changing dynamics of the market and demand. It features market performance, key related sectors and competitive landscape of the market. The research study looks into the market condition and future forecasts, and outlines current trends and analysis. It has been made to help clients in analysing the opportunities, challenges and Drivers vital to the growth of fast food industry in India.For the purpose of this report, Fast Food Industry includes fast food restaurants, teahouses, coffee shops and juice bars in India. Consumers will be feeling the impact of the crisis far more over the coming months and will have to adjust their daily habits and attitudes accordingly. From the study researcher inferred that the customers who are visiting at Dominos are highly satisfied with its products and services than the Pizza Hut. The environment of the store & variety of products at Pizza Hut and Dominos makes difference in mind of visitor.This Out let have a t remendous potential where it can improve its revenue drastically by concentrating on its existing customer base. Thus this project topic is mainly tells about the policy and the standard that the Pizza Hut and Dominos uses to serve the customer daily bases in the Dine In as well as Home Delivery service. This topic will make someone to understand the comparative study of service quality offered by these both company 2. 1-Introduction to literature review and Research Design This research is based on compassion of the quality service offered by Pizza Hut and dominos.This research is based to test the quality of service and comparison between two Pizza outlets jointly, with seeking the factor with the GAP. With this study, we wanted to demonstrate the easiness of use of SERVQUAL instrument in the case of the Quality, showing that the questionnaires can easily be reproduced and adapted to any services organization. Therefore the present model in order to be applied in this kind of orga nization needs future and profound refinements. The research conducted for this Dissertation study is descriptive type. The data collection was done through questionnaire and the secondary Data available.Making right design and the planning for the report is essential for every project reports which will make the reports original, meaningful and the informational. The research design must be simple so that the researcher can complete the report in time with full of information. 2. 2-Literature Review A consumer’s perception of quality levels has long been a focus for marketing literature research. For example, the consumer’s judgement concerning an entity’s overall level of excellence or superiority has been used as a measurement of perceived quality.Objective measures of quality, measured by elements such as the â€Å"conformance to requirements† or â€Å"freedom from deficiencies† have been defined as the basis for quality assessment. However, th ese objective measures are difficult to translate into methods for assessing service (as opposed to product) quality. 2. 2. 1 Customer satisfaction and loyalty studies in service This difficulty led to the development of Seroquel, intended to assess user perceptions of quality in a service environment from the methodological point of view: Respondents fatigue at having to rate all service attributes twice.They also tend to rate most dimensions as being highly important, since they are unable to distinguish between aspects that are very and extremely important Respondents may interpret expectation importance questions in different ways. Parasuraman, Zeithaml and Berry (1988) â€Å"SERVQUAL: A Multiple-Item Scale for Measuring Consumer Perceptions of Service Quality. † Journal of Retailing developed the original 22 item SERVQUAL scale with questions intended to assess five specific dimensions (tangibles, reliability, responsiveness, assurance, and empathy).Parasuraman in 1985 i dentify the 10 core components of service quality as reliability (consistent performance and dependability), responsiveness (willingness/readiness to serve), competence (possessing knowledge and skills), access (approachability and ease of contact), courtesy (politeness, consideration and friendliness of staff), communication (updating and listening to customers), credibility (trustworthy and reputable, with customer interests at heart), security (freedom from danger and risk), customer knowledge (Understanding needs and personalized attention), as well as tangibles (facilities and physical features).The SERVQUAL instrument utilizes a â€Å"gap (or difference) [Carman, James M. (1990) â€Å"Consumer Perceptions of Service Quality score†] analysis methodology, wherein the user’s expectations for service quality are assessed at the same time as the user’s perception of the actual system performance. The difference between these two scores (performance minus expec tation) is used as the basis of analysis. At least two studies have found evidence that SERVQUAL represents a one-dimensional model. [Charles W. Lamb. 1991) â€Å"An Evaluation of the SERVQUAL Scales in a Retailing Setting†,] a 1993 study concluded that the performance-only element of SERVQUAL â€Å"performs about as well as SERVQUAL itself†. The authors found that â€Å"Overall, the oncological validity evidence somewhat favours the non-difference score measure to the SERVQUAL measure†. CONCERNS ABOUT SERVQUAL’S UNDERLYING DIMENSIONS One of the aims of this study involves the use of SERVQUAL instrument in order to ascertain any actual or perceived gaps between customer expectations and perceptions of the service offered.Another aim of this is to point out how management of service improvement can become more logical and integrated with respect to the prioritized service quality dimensions and their affections on increasing/decreasing service quality gaps . In the following, after a brief review of the service quality concept, the model of service quality gaps and the SERVQUAL methodology is demonstrated and an example is presented to pinpoint the application of the SERVQUAL approach. Then, after a discussion the value and the quality of the product should be kept safe. This will ensure the quality of the service offered by the out let is up to mark.So that the guest royalty can be maintained and provide the royalty to every guest. 2. 3 statement of the problem This Project has been titled â€Å"Comparative study on consumer perspective about quality service offered by PIZZA HUT Vs. DOMINOS† this is to find out that the quality of service offered by Dominos and the Pizza Hut and why the customers choosing this industry for their food. It is been noticed that there is shift of customer from Pizza Hut to Dominos and there is increase in number of customer at Dominos and also there is drastic change in areas of customer satisfact ion, approach and the customer retention.The study would help the hospitality based industries to plan and to build the strong, sound and rigid strategies to make the loyal customer and their satisfaction and retention. The habit of consumer changing from one brand to another brand due to many reason like Quality of service, Price, Accessibility, Value for money and Speed with service. By comparing Number of transaction that happened at Pizza hut and Dominos from 2006 to 2011. This is found that there is decreasing in Pizza hut Transaction by every Year. 2. 4 scope of the problemThe current study is undertaken for the purpose analysing the quality of service offered by Pizza Hut and Dominos. Details of the operations of the companies that have been providing the quality service to retain their customer. A study covering performance of the business will definitely give a better result with respect to the financial performance of the business and the marketing aspect of the business. If the financial performance of the company is compared with few other reputed firms in the industry will give the clear picture about the position of Pizza Hut and Dominos. This study helps the organizations to increase the customer loyalty and satisfaction. * This study will help to manage the internal environment and the management to make customer happy by providing quality service * This will ensure to maintain the guest culture at the organisation so the company can achieve the loyal customer again and again. * This will help in maintaining the product quality and accuracy on the service offered. * This study gives s cheer information about consumer preferences on different brands of Pizza out let. * This study gives information about consumer awareness on quality of food they serve. The study is useful to know the consumer preference and their reasons to prefer and not to prefer product of this company. * This study is useful to amylase the price position of their choice. * T his study is useful to know the impact of brand advertisement on consumers. This study is useful to know the set is faction level with different attributes of the company 2. 5 objective of the study This study has been undertaken to: * To study about the quality of service that customer gets from Pizza Hut and Dominos and compare the service quality of both the company to find the required solution to lacking. To make the future plan and to decide for the present changes that need to bring in the business to win back the unhappy customer. * To understand how the hospitality company make the customer satisfaction and deliver quality service. * To understand the procedures and techniques involved in marketing aspects of the concern. * To analyse and evaluate the Marketing performance of the business and to ascertain the rate of success * To know the way of segmented its products to know the areas in which the dealers satisfy their customer and the areas that they need to improve. 2. 6 methodology of the studyResearch generally refers to a search for knowledge. It may be defined as the objective and systematic method of finding solution to a problem, which consists of systematic collection, recording, analysis, interpretation and reporting of information about various facts of a phenomenon under study. It plays a truly analytical approach to decision-making and helps in the evaluation of the decision that has been taken. The study requires data to be collected from Primary and secondary sources Secondary data would be collected from websites, journals, monthly and annual publications of the cement Organizations, Magazines, and Experts.Data collected would be compiled, classified and tabulated for analysis. Analysis would be done using the statistical tool of comparative techniques. Inferences would be drawn from the analysis, conclusions would be made and suggestions would be given The First Phase of Study * To collect secondary data about the customer feedback a nd view about the quality of service received from the company and * Primary data through the questionnaire. The Second Part is an Analytical Study * To examine the requirement quality service and customer satisfaction in the areas of hospitality. Method of Data CollectedThe method adopted for the study is collecting data. The data there are two ways. * Primary data * Secondary data Primary Data Primary data is the data collected by the researcher of the specific study. The study entitled â€Å"Quality of service offered by Pizza hut Vs. Dominos† with special reference quality food. To get an accurate detail separate structured Questionnaires were designed for customers. Discussions were held with customers. The study is of more than 100 customers at different areas in Bangalore * Through questionnaire Secondary Data Secondary data can be defined on the data collected by someone else for the purpose of study.It is based on second hand information. The data collected with comp anies past record, Journals, Broachers and from the library. * Websites * Newspapers * Journals, Magazines, Annual publications of Banks * Books , Internet Sample Size For the need of the study the customer survey was conducted. The sample size for the customers was 100. About Questionnaire The Questionnaire is the most common instrument used in collecting primary data for the study conducted. Questionnaire is one for the consumer was used. These types of questions included in the Questionnaire are: * Multiple Choice Questions, Rating, Ranking and Open-end questions. . 7 Need of the study * To know about the service quality at hospitality industry and to provide the required suggestion. * To know how the hospitality industry can make the customer happy by the quality of service offered by them. * To know the hindrance and the other rules regulation or objection this stops hospitality industry to deliver 100% quality service. * To know the impact of hospitality industry to the Indian economy. * To know about the factor that affects the business of retail food chain and fast food chain and to prevent company from crisis situation. This will help to know the customer and their attitude towards different brands this will help to project the sale for future and to arrange the right product that they need from the out let. * This study will also help Both Pizza hut and Dominos to build the effective business strategy in the market to maximise their revenue. 2. 8 limitation of the study * The study is conducted of academic nature and the time period given was 4 to 6 week to finish the reports. * The information collected for the analysis would be from Newspapers, Journals, Magazines, internet, CSL and other related books. The information provided by the personnel may be biased or inaccurate in case of secondary as well as primary data. * The analysis is based on only the data collected which are secondary and primary data through questionnaire. * Assumption has been made while deriving the various figures in the calculations of data collected. * The company personnel could not spare time due to busy schedule and hence the project proceeded at a very slow pace. * Not much information was revealed by the company, as the executive personnel wanted to keep certain information confidential.Only monetary aspect as projected by the financial statement have been taken into 2. 9 chapter scheme The present study is classified into five chapters 2. 9. 1- The introductory chapter presents the introduction to the company, growth of the company in India and their internal operation to provide the quality service. 2. 9. 2- The second chapter discusses the review of literature, statement of problem, objectives of study, methodology, Scope of study, Need of the study and Limitation of the study. 2. 9. 3- The third chapter presents the company profile and product profiles and the customer profile 2. . 4- The fourth chapter we have all the results, analysis and d iscussions. 2. 9. 5- The fifth chapter consists of major findings, suggestions, conclusions and policy implication and scope for further study. 3. 1 pizza hut profile The legacy of Pizza Hut began in 1958, when two college students from Wichita, Kansas, Frank and Dan Carney, were approached by a family friend with the idea of opening a Pizza parlour. Although the concept was relatively new to many Americans at that time, the brothers quickly saw the potential of this new enterprise. Over the past four decades the Pizza Hut as built a reputation for excellence that has earned the respect of consumers and industry experts alike. Pizza Hut’s products have been voted Number One in countless consumer surveys nationwide. Pizza Hut, a division of Tricon Global Restaurants, Inc. , has more than 7,200 units in the U. S. and 3,000 units in more than 86 other countries. Pizza Hut is owned by Pepsi Internationals who also owns Taco bell and KFC. Pizza Hut is commitment to quality, dedica tion to service and value & the qualities of entrepreneurship, growth and leadership, which have characterized its business through nearly four decades of success.Tricon is the parent company to two other segment leaders, Taco Bell and KFC. When combined with Pizza Hut, these organizations make up the world's largest restaurant group, with almost twice as many units as McDonald's. When it comes to leadership Pizza Hut has a proactive approach to product development and marketing. The five major products, Pan Pizza, Thin ‘N Crispy pizza, Hand-Tossed style pizza, Stuffed Crust Pizza and The Big New Yorker Pizza are loved by millions around the world and have become the standard by which all others are judged. A Glance look at Pizza hut OutletTarget Market The target market belongs to upper – upper and upper middle class who has a definite taste for foreign foodstuff. Out of 140 million people, we are only targeting 20% of the population. Right now they are targeting marke t, which is 1% of the total urban population. Anybody whose household income is over Rs 100,000 is in the â€Å"A† category, Rs. 50,000 is â€Å"B† and â€Å"C† is Rs. 50,000. They are right now catering to â€Å"A† and â€Å"B† market and they have not touched the entire market. They are also targeting kids, teenagers and students ; are also trying to increase their customer base.Growth of the Organisation Pizza hut entered in India in 1996, and opened its first restaurants in Bangalore. Since then it has captured a dominant and significant share of the Pizza market and has maintained an impressive growth rate of over 40 % per annum. Pizza Hut now has 350 outlets across 50 cities in India. And employed nearly 17000 people by end of 2007. Yum ! Has invested about US$25 million in India so far this is over and above investments made by franchisees. YUM ! Brands Owns Kentucky Fried Chicken, Pizza Hut, Taco Bell ,A;W and Long john silver Restaurants w orldwide.Yum ! Generated more than US$ 25. 9 billion in worldwide sales in the year 2003, and has more than 33000 restaurants in over 100 countries. History of Pizza Hut Pizza Hut Year after Year| 1958| The first Pizza Hut restaurant opens in Wichita, Kansas, started by two college-aged brothers who borrowed $600 from their mother. | 1959| Pizza Hut is incorporated in Kansas and the first franchise unit opens in Topeka, Kansas. | 1965| â€Å"Putt-Putt to Pizza Hut† musical jingle developed for Pizza Hut's first television commercial. 1967| World's largest pizza (six feet in diameter) is baked and served at the grand opening of a Fort Worth, Texas Pizza Hut restaurant. | 1968| International market entered with opening of Pizza Hut restaurant in Canada. | 1969| Red roof adopted for restaurants. | 1970| Sandwiches added to basic menu of Thin ‘N Crispy pizza, salad, beer and soft drinks. | 1971| Pizza Hut becomes the number one pizza restaurant chain in the world in both sa les and number of restaurants. | 1972| Pizza Hut, Inc. listed on New York Stock Exchange under the symbol PIZ| 1973| Pizza Hut restaurants open in Japan and England. 1975| Thick'n Chewy pizza introduced. | 1976| The 100th international Pizza Hut restaurant is opened in Australia, while entire system reaches 2,000. | 1984| There are more pizza locations than hamburger restaurants in US. | 1984| Pizzerias account for 9. 9% of all restaurants in the U. S. | 1986| Delivery service, as a new concept, is initiated. | 1988| Hand-Tossed Traditional Pizza is introduced throughout the system. | 1989| The Pizza Hut Jobs Plus program expands nationwide to employ more than 10,000 individuals with physical and developmental disabilities.The Jobs Plus program is recognized as the largest corporate initiative of its kind in the food service industry. | 1990| Pizza Hut delivers more than 1,340,000 pizzas on Super Bowl Sunday. | 1992| Pizza Hut provides 120,000 free meals to relief volunteers and tho se who lost their homes. | 1993| Pizza Hut introduces BIGFOOT Pizza — two square feet of pizza cut into 21 slices. | 1995| Two Customer Satisfaction programs initiated: a 1-800 Customer Satisfaction Hotline and a Customer Call-Back Program, which takes the pulse of 50,000 customers per week. 1995| The Deliver Me Homeâ„ ¢ program is created by Pizza Hut and the National Centre for Missing and Exploited Children and is tested at the Dallas/Fort Worth International Airport to inform the community of an important identification tool in helping to locate, identify and return missing children to their families. | 1995| Pizza Hut wins the 1995 â€Å"Choice of Chains† award for Best Pizza Chain sponsored annually by Restaurants & Institutions magazine, making Pizza Hut the â€Å"Best Pizza Chain† ten of the last eleven years. | 1997| PepsiCo announces restaurant spin-off. 1998| Pizza Hut celebrates 40 years of making and serving great pizza. | Pizza Hut Consumer Prof ile DEMOGRAPHICSThe age group of our customers is family oriented i. e. , the parlor offers a variety that to the needs of the family as a whole. | INCOMEThe income bracket includes Rs. 50,000 per month and above. | OCCUPATIONProfessionals, Executives, House Wives, studying individuals. | PSYCHOGRAPHCS| ACTIVITIESActively participate in social welfare causes, business matters, and members of socially elite clubs, annual family vacations. LIFE STYLEEncouraging eating habits towards foreign foodstuff, for instance, likely to use cake mixes, imported cheese. | MEDIA HABITSRegular readers of Newspapers and Magazines. | PERSONALITYQuality food conscious, outgoing and healthy eating habits health conscious people. | Pizza hut marketing mix Product Pizza Hut offers aims in providing 100% customer satisfaction by excellence in the product, service, equipment and hospitality they offer the products quality and taste remains standard of excellence all over the world.It has maintained its qual ity by importing the main ingredients and keeping the recipes the same exclusively, for the South Asia regions it test launched spicy flavoured Chicken Tikka. Followed by a Seek Kebab Pizza. Which gained and remained so popular that they were included in the regular menu? To make a check of its service and customers satisfaction, they issue a comment card to make sure they come up to their customer’s satisfaction. Price They are serving various variety of Pizzas, there menu card along with their respective prices have been placed at the appendix section. PromotionPizza Hut runs more or less the same type of promotion and advertising campaigns in Pakistan as it does internationally, with the exception of electronic media. It uses advertising tools such as newspapers, magazines to create awareness and to get its message through its required target market. Recently they are doing joint promotion with Milo and Pepsi in connection with World Cup Cricket 1999. Pizza Hut promotion b udget remains the same worldwide except for a few countries i. e. it allocates 50% of its promotion budget on national advertising and 50% of the budget to regional advertising.With regard to promotion, they have launched kid Club for children under 12 year of age. Every Tuesday is kids night for members where they get 50% discount on their order. They are trying to start a program called book it, to promote reading habits among kids. Any child who reads a book and get it signs by his teacher that he has read it get a free Pizza. Pizza Hut has adapted to promotional and advertising techniques regarding the local market. It uses Newspaper and Magazines according to their availability and effectiveness with regard to their respective target market. PlaceBANGALORE:-At present there are 50 functioning units of Pizza Hut in BANGALORE, few of them are ITPL| Takeaway, Dine-in seating capacity of 200| Airport Road| Takeaway, Dine-in seating capacity of 250| PCP| Takeaway, dine-in seating ca pacity of 120| FORUM MALL| Take away with dine-in seating capacity of 50. | C hally| Takeaway, dine-in seating capacity of 150| jayanagar| Takeaway, dine-in seating capacity of 120| Kormangla| Takeaway, dine-in seating capacity of 200| Shanti Nagar| Takeaway, dine-in seating capacity of 150| Signature Mall| Takeaway, dine-in seating capacity of 150| BSK| Takeaway, dine-in seating capacity of 120|BSK-2| Takeaway, dine-in seating capacity of 120| V Mall| Takeaway, dine-in seating capacity of 120| M Mall| Takeaway, dine-in seating capacity of 150| Vijay Nagar| Takeaway, dine-in seating capacity of 150| Ramaya| Takeaway, dine-in seating capacity of 120| CMH Road| Takeaway, dine-in seating capacity of 110| Kanak Pura| Takeaway, dine-in seating capacity of 120| Brigade Road| Takeaway, dine-in seating capacity of 110| Product Profile of Pizza Hut Pizza hut serves the quality and variety of food product of many flavours, this product can be classified as follow:- * Pizzas (Veg ; Non veg) * Beverages Appetizer ( Hot ; Cold) * Main course ( Pizzas) * Deserts * Tea * Pastas Beverages Appetizer Pizzas 3. 2 dominos profile Privately held Domino's, Inc. is the number two pizza chain in the world, trailing only the Pizza Hut division of YUM! Brands, Inc. The company operates a network of more than 7,300 company-owned and franchised stores in all 50 U. S. states and more than 50 other countries. Nearly 90 % of Domino's more than 4,800 U. S. outlets are franchise stores. Including the employees of franchisees, there are about 145,000 Domino's workers around the world, and global system wide sales in 2002 totals $3. 6 billion. Domino's was built on simple concepts, offering just delivery or carry-out and an extremely limited menu: for more than 30 years, the company offered only two sizes of pizza, 11 topping choices, and–until 1990–only one beverage, cola. In recent years the company has added salads, breadsticks, and other non-pizza items to its menu in an effor t to stave off rivals Pizza Hut, Papa John's International, Inc. , and Little Caesar Enterprises, Inc. , but has otherwise held fast to its focus on the basics of providing quality pizza and service.The driving force behind Domino's for most of its history was founder Tom Monaghan, who late in 1998 sold control of the company to Bain Capital, Inc. , a Boston-based private equity investment firm. Monaghan, however, retained a 27 % voting stake. Originating in the 1960s Monaghan was born in 1937 near Ann Arbor, Michigan. Following his father's death in 1941, Monaghan lived in a succession of foster homes, including a Catholic orphanage, for much of his childhood. His mother, after finishing nursing school and buying a house, made two attempts to have Tom and his brother live at home with her, but she and Tom failed to get along.During these years Monaghan worked a lot of jobs, many of them on farms. His father's aunt took him in during his senior year of high school, but after that he was once again on his own. A quote from Monaghan in his high school yearbook read: â€Å"The harder I try to be good the worse I get; but I may do something sensational yet. † For several years Monaghan worked to try to save money for college; he joined the Marines and saved $2,000, but gave it in several instalments to a fly-by-night â€Å"oil man† he met hitchhiking, who took the money and ran. Monaghan returned to Ann Arbor to ive with his brother Jim, who worked for the Post Office and did occasional carpentry work at a pizza shop called Domi Nick's. When Jim Monaghan overheard the pizza shop owner discussing a possible sale, he mentioned buying it as a possibility to Tom. With the aid of a $900 loan from the Post Office credit union, in December 1960 Jim and Tom Monaghan were in business in Ypsilanti, Michigan. Within eight months, Jim Monaghan took a beat-up Volkswagen Beetle as a trade for his half of the partnership. Tom moved in across the street from his sho p. The store Monaghan bought had little room for sit-down dining; from the start, delivery was key.The first drivers, laid-off factory workers, agreed to work on commission. After only $99 in sales the first week, profits climbed steadily to $750 a week. Early on, Monaghan made decisions that streamlined work and greatly enhanced profits: on two separate occasions he dropped six-inch pizzas and submarine sandwiches from his menu when he was shorthanded at his shop, reasoning that he and his staff could handle the rush better without making special-sized pizzas or sandwiches in addition to regular pizzas. When he went over the numbers the day after, both times Monaghan found that his volume and profits had increased.Keeping the menu simple made financial sense. Although his salary rose to $20,000 a year, Monaghan was not satisfied. On the advice of Jim Gilmore, a local chef with some restaurant experience, Monaghan opened a Pizza King store offering free delivery in Mt. Pleasant, nea r the Central Michigan University campus. Gilmore ran the original DomiNick's as a full partner with Monaghan. By early 1962, although the Ypsilanti store was not doing well, Gilmore persuaded Monaghan to open a Pizza King at a new Ann Arbor location, which Gilmore would oversee while Monaghan whipped the original DomiNick's back into shape.Gilmore convinced Monaghan to continue expanding in a financially dangerous way: because Gilmore had been bankrupt when the partnership began, all papers were in Monaghan's name. By 1964, when Gilmore became ill, he made his differences clear: he liked sit-down stores while Monaghan ran delivery. He asked for $35,000 for his share in the pizzerias. Although Monaghan considered the price preposterous, he did want to separate from Gilmore. He hired lawyer Larry Sperling, who worked out a deal whereby Monaghan would pay Gilmore $20,000.Gilmore would keep two restaurants in Ann Arbor; Monaghan, two pizzerias in Ypsilanti and one in Ann Arbor. Althoug h their partnership was dissolved, Monaghan was still dependent on Gilmore's success in business. In February 1966 Monaghan bought one more shop from Gilmore, but later that year Gilmore filed for bankruptcy, with a total debt of $75,000, in Monaghan's name. Monaghan managed to sell Gilmore's restaurant, leaving him immediately responsible for only $20,000, with the new owner of Gilmore's to pay off related debts on a month-by-month basis.As Monaghan's operations grew, the original owner of DomiNick's decided to maintain rights to the name. Under deadline for a Yellow Pages ad, driver Jim Kennedy came up with the name Domino's Pizza. The new company incorporated in 1965. Free from the Gilmore-related debts, Monaghan was ready to begin franchising. The first board of directors included Tom, his wife and bookkeeper, Margie, and Larry Sperling. Sperling drafted a franchise agreement in which Domino's would keep 2. 5 % as royalties from sales, 2 % to cover advertising, and 1 % for bookk eeping.As Monaghan stated in his autobiography Pizza Tiger: â€Å"By today's standards, the royalties were far too favourable to the franchisee. But it served our purpose then, and I was not concerned about covering all future contingencies. † The first franchisee, Chuck Gary, was a man visible in local and state politics; he took over an original store on the east side of Ypsilanti. While Sperling and Monaghan hammered out financial matters–the former wanted to control costs, the latter to build sales–Domino's Pizza slowly gathered a base of corporate staff.The second franchisee, Dean Jenkins, was handpicked by Monaghan to take over the first store to be built from the ground up. By July 1967, when Jenkins's store was up and running, Domino's Pizza moved to East Lansing, home of Michigan State University. Its dormitory population, at approximately 20,000, was the largest in the nation. Dave Kilby, originally hired to do some radio copywriting for Domino's, late r bought into a franchise, then began working at company headquarters, located above the Cross Street shop in Ypsilanti. Kilby then worked on franchisee expansion with Monaghan.In February 1968 a fire swept through Monaghan's original pizza store. Advertising manager Bob Cotman escaped the building just in time, climbing down a fireman's ladder. Although the pizza shop reopened within two days, headquarters was wiped out and Domino's first commissary, with $40,000 of stored goods, was destroyed. The staff pulled together, with each existing store location responsible for producing one pizza item–cheese, dough, chopped toppings–which drivers then ferried from one store to the next to keep operations running.The biggest challenge for Monaghan was not simply covering the total fire losses of $150,000 (only $13,000 paid for by insurance), but also paying the leases on five new franchises and finding store operators as soon as possible. While Tom worked on his task, Margie Monaghan brought in Mike Paul, her contact at the Ypsilanti bank, who soon joined Domino's to run the commissary. Paul fired half of the staff and cleaned up operations; he introduced caps, aprons, and periodic spot checks for employee neatness. Monaghan learned a lot in the early years of Domino's, due in part to road trips he took to research business and learn from competitors.When observing the competition did not result in better methods, Monaghan innovated. Looking for equipment ideas at a Chicago convention, he found a meat-grinder that he used to chop cheese as well as mix consistent pizza dough in less than a minute, in contrast to standard mixers, which took eight to ten minutes to mix dough. Dough, once mixed, was stored on oiled pans; although covered by towels, the outside edges of the dough hardened. Monaghan discovered an airtight fiberglass container that stored dough very well, and his practice later became a standard in the industry.Monaghan also was dissatisfied w ith standard pizza boxes: they were too flimsy to stack, and heat and steam from the pizza weakened them. Monaghan prodded his salesman to work with the supplier and devise a corrugated box with air holes, which also became an industry standard. Franchising in the 1970s Plans began in earnest for Midwest expansion as Domino's jumped on the 1960s franchise bandwagon. Although Monaghan had worked on his plan to expand on college campuses, opening a new store a week in late 1968 proved to be the beginning of a nightmare.Monaghan opened 32 stores in 1969 and was hailed as Ypsilanti's boy wonder. Spurred by McDonald's great success going public in 1965, Monaghan planned to do the same. With the aid of loans, he bought a fleet of 85 new delivery cars, and spruced up his personal image; he also hired an accounting firm to computerize the company's bookkeeping. When moving information from paper to computer, Domino's lost all its records Perhaps as a result, the company underpaid the Intern al Revenue Service by $36,000. Monaghan was forced to sell his stock for the first time to raise the money to pay the IRS.Monaghan tried to do too much, too fast. Ohio stores opened before Domino's reputation had spread that far and sales were poor. This was only the beginning of the downturn: on May 1, 1970, Monaghan lost control of Domino's. Dan Quirk, who had bought Monaghan's stock, recommended that he contact Ken Heavlin, a local man known for turning businesses around. Heavlin, in exchange for Monaghan's remaining stock, would run the company, get loans to cover IRS debts, and after two years keeps a controlling 51 % interest in the company, with Monaghan getting 49 %.In the meantime, Domino's became the target of lawsuits from various franchisees, creditors, and the law firm Cross, Wrack. In March 1971 Heavlin ended his agreement with Monaghan, who shortly went to speak with each franchisee, persuading them that Domino's would survive the crisis and they would all fare better working with him rather than against him. Their lawsuit was dropped. Monaghan pushed on, and Domino's was back in business, however tight its financial strings. One man instrumental in the growth of the early 1970s was Richard Mueller.Originally from Ohio, Mueller bought a franchise in Ann Arbor in 1970, during Domino's lowest period. After Mueller ran this store for a year, Monaghan sent him to Columbus to revive an ailing store; within three months, sales shot up from $600 to $7,000 a week. Mueller soon operated ten Domino's franchises and incorporated as Ohio Pizza Enterprises, Inc. Within six-and-a-half years Mueller opened 50 stores. As Domino's grew, Mueller went on to become vice-president of operations in 1978. Quick to rebuild Domino's, Monaghan encouraged trusted employees and friends to expand.Steve Litwhiler opened five stores in Vermont, while Dave Kilby, who had relocated during the Domino's slump, managed to build a strong base in Florida. A significant hire by Kilby was Dave Black, a top-selling manager who later rose to become president and COO of Domino's Pizza. The year 1973 was a turning point for Domino's. The company introduced its first delivery guarantee, â€Å"a half hour or a half dollar off,† as stated in the company newsletter the Pepperoni Press. The College of Pizzarology was founded to train potential franchisees.The company decentralized as well: accounting was moved from Ypsilanti headquarters to local accountants, while the commissary was reorganized as a separate company. Domino's introduced its corporate logo, a red domino flush against two blue rectangles, in 1975. The company was sued the same year by Amstar Corporation, parent company of Domino Sugar, for the right to use the name. After a five-year battle, Domino's won, but not until after more than 30 new stores were opened under the interim name Pizza Dispatch. Free to expand, Domino's planned to grow by 50 percent each year.By the late 1970s, several acquisiti ons contributed significantly to company growth. Domino's merged with PizzaCo Inc. , in 1978, gaining 23 open stores plus a handful more under lease. The merger with this Boulder-based company allowed Domino's to move into Kansas, Arizona, and Nebraska. The following year, joining with Dick Mueller's Ohio Pizza Enterprises, Inc. , Domino's added 50 stores in Ohio and Texas, for a total of 287 stores. The company ended 1979 by announcing plans to expand internationally. The new non-U. S. store subsequently opened in Winnipeg, Canada, in 1983.Rapid Growth in the 1980s The 1980s was a decade of phenomenal growth for Domino's Pizza, but this time the company was prepared. Although Monaghan had always feared that formal budgeting systems promoted bureaucracy, with the advice of Doug Dawson, Monaghan decided to design companywide budgeting procedures, which Domino's continued to use as training tools for potential franchisees. Dawson implemented the new accounting methods and moved on to become vice-president of marketing and corporate treasurer. Instrumental in Domino's surge was John McDevitt, a financial consultant Monaghan met in 1977.Among other accomplishments, he created and became president of TSM Leasing, Inc. , a financial services company that loaned money to franchisees who could not find other start-up financing. To Monaghan, operations was the backbone of the business. When Dick Mueller left the post of vice-president of operations in 1981 to work as a franchiser once again, Monaghan decided to regionalize Domino's operations. Mueller's previous job entailed far too much travel, and changes were necessary. Monaghan set up six geographic regions, with a director fully responsible for each territory.The regional system, as Monaghan stated in Pizza Tiger, â€Å"gave us the long communication lines with tight controls at the working ends that we needed for rapid but well-orchestrated growth. † At the executive level, Bob Cotman took over as senior v ice-president of operations, including marketing. Dave Black advanced from field consultant and regional director to vice-president of operations. Both men (like Dick Mueller and Monaghan himself) had climbed every step of the Domino's ladder, after beginning as delivery driver and pizza maker.In 1981 Black carried Monaghan's favoured â€Å"defensive management† strategy–whereby each store concentrated on keeping the customers it had–to a new level, by moving the company's focus away from its top-performing stores to its weakest ones. Bringing the lower performers up worked extremely well. As the company added an average of nearly 500 stores each year through the decade, newer, weaker stores were constantly given attention to improve sales. One other element vital to Domino's 1980s growth spurt was choosing Don Vlcek, formerly in the meat business, to head the eight commissary operations.Vlcek focused on uncovering best practices and disseminating them throughou t the organization. When he discovered that one commissary saved on laundry bills by rinsing out the towels used to dry trays, making them last a week before cleaning was necessary, Vlcek made all other commissaries do the same. When he found that another commissary's manager was buying from a local cheese distributor instead of a less expensive national one, the manager reworked his purchasing policies. Fleck moved sauce-mixing from the commissaries to the company's tomato-packing plant, which resulted in highly consistent, quality pizza sauce.Once Vlcek had taken care of the basics, in one eight-month period he opened a new commissary a month, all with state-of-the-art equipment. All the support Monaghan received gave him time to fulfil boyhood dreams on a dramatic scale. In 1983 he bought the Detroit Tigers baseball team, which went on to win the World Series in 1984. He followed with the establishment in 1984 of Domino's Farms in Ann Arbor, a $120 million corporate headquarters modelled after architect Frank Lloyd Wright's Golden Beacon tower. Wright advocated the integration of a high-rise building in a rural setting, rather than an urban one.Monaghan also set up a working farm adjacent to the tower. In 1985, Advertising Age placed Domino's â€Å"among the fastest-growing money makers in the restaurant industry. † The company had to keep pace not only with its own growth but also with that of its competition, including the industry leader, Pizza Hut, which had more than 4,000 units to Domino's 2,300. Domino's stepped up advertising, increasing media spending 249 percent over the previous year. Pizza Hut entered the delivery business in 1986, posing a huge threat to Monaghan's empire. Domino's system wide sales reached $1. 44 billion by 1987.The company had grown to 3,605 units, spreading to Canada, Australia, the United Kingdom, West Germany, and Japan. While 33 per cent of U. S. stores were company-run, international units were franchised, usually to one operator who could opt to sub franchise. The international marketing challenge was to convince buyers of the need for delivery. Back in the United States, Domino's imitated McDonald's Corporation by tailoring an ad campaign to attract the Hispanic market. Competition in the late 1980s got so tough that Monaghan was quoted in Advertising Age as saying, â€Å"I want people here in the company to think of it as a war. Unfortunately, with wars come casualties. By 1989 more than 20 deaths had occurred involving Domino's drivers, calling the company's 30-minute delivery guarantee into question. A Pittsburgh-based attorney representing a couple whose car was broadsided by a driver subpoenaed Domino's for its records. Citizen's groups, major news networks, and the National Safe Work Place Institute joined in the heated criticism. Domino's responded with a national ad campaign and with various tactics at the franchise level. One franchisee hired an off-duty police officer to track h is drivers to ensure that they obeyed the law.Domino's opened its 5,000th store by January 1989, moving into Puerto Rico, Mexico, Guam, Honduras, Panama, Colombia, Costa Rica, and Spain. U. S. sales hit $2 billion. Monaghan named Dave Black as president and chief operating officer, announcing his own intentions to spend more time on community work. In May Domino's introduced pan pizza, its first new product in 28 years. This news was hardly as big, however, as Monaghan's October announcement of his intent to sell the company. After a buyout attempt in the form of an employee stock ownership plan failed, Monaghan went shopping for buyers.By April 1990 Domino's cut its public relations and international marketing departments and continued cutting executive and corporate support staff as part of a companywide effort to improve profitability. Payroll that year decreased by $24 million. Kevin Williams, who made his name as a regional director, replaced Mike Orcus as vice-president of ope rations. At the store level, Domino's opened fewer than 300 units in both 1989 and 1990. Another Comeback in the 1990s With Domino's sales slipping, and rivals Pizza Hut and Little Caesar's gaining market share, Monaghan returned to Domino's in March 1991 to pull his company back on track.By December he had fired David Black, along with other top executives. Former franchisee Phil Bressler became vice-president of operations. Domino's closed 155 stores, cut regional offices from 16 to nine, and unloaded extravagances such as corporate planes, a three-misted ship, a travel agency, a lavish Ann Arbour Christmas display, and various sports sponsorships. Monaghan made some personal sacrifices, too, leaving his post on the boards of directors of 16 Catholic colleges and organizations. Domino's 1991 system wide revenues remained flat at $2. billion, and the company posted a loss of $67 million. Adding three new senior executives, the company geared up to battle Pizza Hut, which had aired an ad showing unkempt Domino's drivers buying Pizza Hut products. Domino's moved its advertising accounts to New York's Grey Advertising, Inc. , from the local ad agency Group 243. While Monaghan was away, PepsiCo’s Pizza Hut had converted half of its 7,000 units for home delivery. Under fire, Monaghan insisted on maintaining Domino's original concept of a simple menu that speeds order preparation, allowing the company to uphold its 30-minute guarantee.In an effort to be flexible–and to compete with Pizza Hut's pan pizza–Domino's offered a new pizza with more cheese and an increased number of toppings. Taking another tip from its rival, Domino's worked on developing a single U. S. phone order number for Domino's customers and a new computer system to track sales, costs, and trends. The company closed the Columbus and Minneapolis offices, with corporate headquarters in Ann Arbour assuming their duties. The overall goal was to decrease debt. Monaghan considered ma king a public stock offering again in 1992, but too few buyers were forthcoming.The company also worked to lessen the number of company-owned stores. In November 1992 Monaghan shook up his upper ranks by replacing his long-time adviser and vice-president of finance, John McDevitt, with Tim Carr, another financial executive at Domino's, and hiring Larry Sheehan, a former executive vice-president of Little Caesar's, as vice-president of marketing and product development. Sheehan immediately put his stamp on the turnaround effort, convincing Monaghan to experiment with new strategies and products, including salads, thin-crust pizza, and submarine sandwiches. Tom Monaghan is now very open about the pizza business,† he said. â€Å"He believes we need to take a different approach to this business and be willing to change. † The changes seemed to work. Earnings for 1993 picked up, after dropping significantly the two previous years. In yet another change, Domino's dropped its famous 30-minutes-or-less pledge after a jury awarded a $78 million settlement to a woman who had been hit by a Domino's delivery driver in 1989. Monaghan stated that â€Å"with our success in home delivery has come a negative public perception that we are not committed to safety. The 30-minute guarantee was replaced with a more general customer satisfaction guarantee. In January 1994 Larry Sheehan left Domino's, after a dispute with Monaghan over the size of his year-end bonus. Although his departure was widely considered a loss to the company, his changes had taken hold, and Domino's system wide sales crept upward, to $2. 5 billion in 1995. Shortly thereafter Domino's celebrated the opening of its 1,000th international store, in a suburb of Perth, Australia.With a stated goal of having more international than domestic stores, Domino's opened stores in Ecuador, Peru, and Egypt in 1995, and planned to have 3,000 international stores by the year 2,000. By 1996 foreign sales stood at $503 million, and in 1997 Domino's entered its 50th international market. In the meantime, the menu in the U. S. stores expanded yet again, with the introduction of Buffalo wings in 1994 and through a limited-time-only promotion of flavoured-crust pizzas during 1996.Sheehan was succeeded as vice-president of marketing and product development by Cheryl Bach elder, a seasoned executive with experience at Planters, Gillette, and Procter & Gamble who brought focus to Domino's efforts. â€Å"We're not trying to be fun and wacky and do delivery and carry-out all at the same time,† she said. â€Å"We're trying to excel single-mindedly on the basics of this business. † In March 1997 Domino's announced its previous year results, which dispelled any doubts that the company was back on track. Earnings were a record $50. 6 million on system wide sales of $2. billion. â€Å"We believe the return to focusing on our core business–pizza delivery–coupled with great new products and

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How does city squares satisfy the requirements of modern urbanism Compare with squares in history using particular squares to discuss - Essay Example Readers will discover that places designed without adequate room for safe walking and biking tend to promote a sedentary way of life for the citizens, whether behind a vehicle’s steering wheel on packed highways or a computer screen. In addition to that, it will come to light that a lively city is one that negates the idea of citizens withdrawing into gated communities. Lively cities are those that have city squares that serve a democratic function where individuals encounter social diversity. Furthermore, architectural design and its impact on the psychology of city dwellers will be examined. Most notably, public spaces lacking comfortable seating and properly scaled â€Å"talkscapes† are likely to bring about a high human toll, thus greatly impacting how a city functions at eye-level. The fact that a good city draws comparison to a good party enlightens all of us. This is because, in both scenarios, the individuals involved stay because they enjoy having a good time. The aim of this paper is to consider the unique feature of urban squares that should be incorporated in today’s contemporary cities. To do that the paper will look at the broad definition of urban squares in respect of urban spaces. Urban public squares, when looked at within the context of public spaces, are key components of a city. This is because they provide room for social interactions, therefore, supporting the civilisation and humanization of people through hearing others, while at the same time one is heard, gathering, lingering and engaging in various activities. Thus, this can have a major impact, especially in the contributions made to the cultural development of communities. Jan Gehl’s thorough introduction to humanistic codes of urban planning reveals ways of improving the urban fabric of a city to benefit the human population. Through his book ‘Cities for people’i1, examines fascinating factors that determine how liveable a city is. According to him, if urban places are

Innovation in Banking Essay Example | Topics and Well Written Essays - 2000 words

Innovation in Banking - Essay Example The purpose of this paper is to explore the technological determinist view of banking and the way in which it is causing changes in the society and customer behavior. The term technological determinism was first coined by Veblen, a sociologist in America and had later recurred in the works of a number of researchers. The fundamental idea behind technological determinism is that technology cannot be influenced by cultural and political forces as it has its own predictable and traceable path. Researchers have also suggested that once a technology has been introduced then it begins to show its effect on the society and the society supports further technological development. Though technological determinism has received its own share of criticisms, it remains as one of the most popular concepts of the 19th century. Technological determinism has been pointed as the key source that is driving competition in the global market in the present era. According to the research conducted by Chandl er, it has been found that technological determinism is the main reason that causes historical and social changes at a macro and social level. It was also pointed out in his research that technological determinism has the power to produce psychological influences on the minds of the consumers. According to the research conducted by Smith and Marx, it was established that technology can act as a major driver leading the path in which organizations and society are expected to behave in the future as successive innovations are introduced in the society.

Industry Analysis Term Paper Example | Topics and Well Written Essays - 2250 words

Industry Analysis - Term Paper Example Toyota Motor Corporation is one of those firms. The other top firms are Ford Motor Company, General Motors Company and Honda Motor Company. The automobile industry has been through a number of revolutions starting with standardized mass production which was instigated by Henry Ford; the second which was designed by Alfred Sloan included the organizational ‘creation of the Corporation with multi-product divisions emphasizing marketing and branding;’ the third revolution was created by Eiji Toyoda of Toyota Motor Corporation which focused on lean manufacturing and the development of quality (Maxton and Wormald 2005). The automobile is one of the most important industries in the world in terms of its contribution to GDP; it uses large steel and glass and consumes a high percentage of the world’s oils (Maxton and Wormald 2004). In addition to the transportation of people to various locations in order to facilitate various activities, it has also contributed to the fle xibility of the human race in terms of the transportation of goods for consumption and production. However, automobiles have lead to million of casualties on our roads, pollution of the environment, depletion of natural resources and global warming (Maxton and Wormald 2004). These have gained significant attention and have led to increasing legislation. The automobile industry is also very capital intensive due to the complex nature of the automobile. ... Some of Toyotas well known models are the Corolla in the compact range; Camry in the sedan range; Land Cruiser in the SUV category; the Lexus line in the luxury line; Celica in the sports line; the Tundra in the truck line; and the Coaster in the bus line. The Toyota Camry has been the best selling motor vehicle in America for 13 of the last 14 years (Toyota Motor Corporation). The Camry has won a number of awards 2.0 Analysis of the Industry Porter’s Five Forces model can be used to analyze the environment in the automobile industry. Porter indicates that there are five forces in an industry environment which work together to determine profitability and attractiveness in the long run. The five forces will assist firms like Toyota Motor Corporation determine their strength and competitive position. Walton (1999) indicates that a firm can be effective strategically once it can manipulate the forces in a way that is favorable to it. The more it does so the more it will achieve i ts goals. The five competitive forces in Porter’s Five Forces model are: the threat of substitutes; barriers to entry; rivalry in the industry; bargaining power of suppliers; and bargaining power of customers. The model is shown in Figure 1. Figure 1 – Porter’s Five Forces Model 2.1 Threat of new substitutes A substitute is anything that is able to serve as replacement. In this case it specifically relate to anything that will help in transporting goods and people. There are a number of options available to customers who want to move from one place to another. They include bicycles and bikes for people travelling short distances. Bicycles are cheaper as they do not require fuel. However, they take

Do We Really Listen To Young Children An Investigation into The Essay

Do We Really Listen To Young Children An Investigation into The Importance of Listening to Young Children In Early Years Sittin - Essay Example The question whether do we really listen to young children brings about a few thoughts to a person’s mind. Questions such as how much importance is provided to listening to children and how they have been they treated by the adult world needs to be unearthed. It is significant to note that children are least noticed or listened to at the earlier stages. In many circumstances the early intervention into the life of the children would lead to solving many issues related to their life. Moreover, the careful examination on the unique individualities of children will help others find out the mysteries that surround children, their feelings, thoughts and creativity during the early years of life. The characteristic attributes are attained at an early stage. So it can be said that the life of each children is highly valued and so the educators at the early years sitting should clearly listen to the activities of the children who are entrusted to their care. It is important to recogni se that a number of factors has influenced the growing interest in listening to children. ... Background: In many countries children are treated as having not much of importance. Much negligence was reported on children all over the world. This prompted various organisations and persons to look into the matter very seriously. In 1904 the Prevention of Cruelty to Children Act was established in England and hence forward many laws came into force on the rights of children in the country. The UN assembly too shared its concern for the rights of children all over the world. 1979 was considered as the International year of children and the Assembly decided to pass a convention on the rights of children. It was adopted in the year 1989 and Britain ratified this law in 1991. The country stresses much importance on the well being of the children. Children under five are placed in babysitting and the government makes ample measures for the overall development of children at this stage. Many strategies are implemented for the total development of children in the country. All these nece ssitate the importance of children’s rights as subjects of the state. In the recent years, the government agendas in England have focused on the need to involve children in policy and service design. There has been a strong feeling that the provision and evaluation of services used by children, or which affect them, should be given priority. Whereas consultation with older children is given importance in the recent years, the case for younger children is much different and they are not given due respect for their opinions. Significantly, listening to children has been regarded as an integral part of understanding their needs and feelings from their early experiences. Linda Kinney maintains, â€Å"there were two key outcomes from our work on consultation with

Forensic case portfolio Study Example | Topics and Well Written Essays - 2750 words

Forensic portfolio - Case Study Example The field of digital forensic analysis has various techniques that are critical in the identification, preservation, extraction, and documentation of digital evidence. The process of digital forensic is useful in solving criminal activities that touch on the use of computers (Casey, 2011). As a computer forensic, handling criminal involving computers is process of applying various procedures and practices that constitute best practices in digital forensics. This paper outlines the process of collecting digital evidence from the crime scene after the police called the digital forensic investigators. The paper outlines the digital forensic process applied on the photo show appendix A. the photo represents the area where the police officers believe a suspect took part in viewing and distribution of child pornography. On 10 December 2012, our computer forensic department received a request for computer forensic analysis. The local district police had sent the request to the head of the d epartment after they had a suspect in custody. The suspect was behind the bars after the police received two complains from the suspect neighborhood that the suspect, Lee Oswald Havey, took part in distribution of child pornography. The request from the police was usual since the police also rely on the work of digital forensic analyst to collect digital evidence that is admissible before the courts of law. While computer forensic is of great value to investigators dealing with digital crime, such as seen in appendix A, there are many legal issues that are critical in any crime scene. Before working on the request, the department had to verify that the police had filled the appropriate forms requesting for the service. In addition, the department requested the police to furnish a copy of the warrant allowing for the seizure of computer hardware and other evidence that could link the Havey to the crime. The role of the warrant was critical since the Fourth Amendments protect all Amer ican citizens’ seizure or search unless police officers have probable cause of committing crime. As per the request, the request was in order and the investigators proceeded to carry the investigation at the crime scene. The investigators arrived at the home of the suspect the police showed them the room they suspected Havey to have used in watching and distributing child pornography. The room was dark with lights that were dim, but the investigators could still see the room. The room had two tables on the right and both had computer and other material. The first table had two computers under the desk with one being a Dell Vostro and another generic computer. The system units of these two computers were under the desk, but the user had switched them off. On the left desk were two sony 17’’ TFT screen. Both screens were connecting to the computer, but switched off. The same table also had a keyboard and a mouse. Beside the mouse were a USB thumb drive, mouse, and a notebook with a pen beside the book. Just beside the Sony TFT screen was some pieces of paper with some writings. There was a digital disk on the table, which appeared to have been in use. In addition, one of the screens had a sticky note attached to it with the note having some writings. The other screen also had some cables placed besides the base of the screen. The cables were the ends a microphone that was hanging off the table (the picture does not show the microphone hanging from the table). The second table had several items, as well. The

The Arkansas State Lottery Essay Example | Topics and Well Written Essays - 3000 words

The Arkansas State Lottery - Essay Example Based on a US 2003 Report, Arkansas ranked only 43rd in academic achievement among the 48 contiguous states in U.S. The National Education Association in 2002, meanwhile, rated Arkansan teachers' salaries at 41st place, pegged at no more than $36,962 per year. Additionally, the American Legislature Council bemoans that spending per pupil in the state is $5,764, roughly 25 percent lower than the national average of $7,557 per student (Muck). Local supporters of the lottery, hence, claim that returns drawn from the lottery would, by way of improving cash flows, facilities, technologies, and the overall serviceability of the institution, uplift the lagging educational system in the Arkansan state. Lottery money can also plug income and funding gaps critical to the overall maintenance and expansion of institutional development programs3. One such lottery supporter, Sandy Garrett, Oklahoma's state superintendent of public education, recounted that the expansion of the local scholarship program in Georgia was augured by its vigorous state lottery, and captured more fluently by its HOPE Program4. These scholarships had enabled several average or "B" students in high school land into top state-universities sans any significant financial burden (Muck). On a more On a more practical light, Rep. Shirley Walters-Greenwood of Arkansas explained that in-situ lotteries can generate savings. She mentioned that scores of people from Arkansas travel interstate to play lottery in presumably more palatable and less notorious gaming venues such as billiards halls, bingo sprees and casinos. Likewise, crossing states impose additional costs for gas and travel, and compel Arkansan

Business Analysis and Corporate Strategy of BP GROUP PLC Essay

Business Analysis and Corporate Strategy of BP GROUP PLC - Essay Example The customers had a high bargaining power in regard to petroleum products. The buyers of BP products are always price sensitive hence the company has always ensured the prices are relative low to maintain them. The bargaining power of the supplier is low in regard to BP Group Plc since the suppliers of petroleum products are few in number. The bargaining power of the supplier is also low because there is availability of suitable substitute products similar to those supplied by BP. There are other petroleum company that produces petroleum products similar to those produced by BP thereby making the bargaining power of the supplier very low. 1 The bargaining power of the buyers of petroleum products is quite higher is high since the buyers are many in number. The buyers purchase a large potion of an industry's total output and a significant potion of a supplier's annual revenue. There is a clear revelation that revenues of the company have been increasing since 2000 since the company's turnover in 2000 was less that 100 billion and in year 2005 they were over 150 billions. 2 The company has significant strengths in regard to brand name. ... Their production accounts to three percent of gasoline supply in the US. Another company's strength can be seen where BP is ranked to be the leading company in sale and distribution of solar panels. This resulted after acquiring Lucas Energy Systems and Solarex in 1980 and 2000 respectively. On the sale of photovoltaic, BP had a world market share of twenty percent in 2004 after producing 90 mega watts of solar panels. This ranking increased BP's brand loyalty hence to the advantage of the company as the sales increase drastically. Since 2000, BP Company has been eager to embrace new technology in their product. They have always ensured that their products are integrated to suit their customers' tastes and preference. This opportunity has ensured that the company is produces world class products thereby increasing their market share. BP Company has had a number of threats in terms of competition. Since year 2000, there have been a number of new companies that have been established that deal with petroleum products. This competition is a threat to the growth of BP company hence for them to prevail in the market they have to ensure they use their market strategies properly. The opportunity of BP Company is seen where the company merged with Amoco Company. The company took the merger advantage as it was able to produce other products that included solar panels. The solar panel were produced when Lucas Energy Systems and Solarex were acquired by BP in Amoco acquisition. By increasing the number of product the company dealt with, the company ensure that if the market share is low for one product, it might be high for the other products. This ensures that the company's sales will always be high

In what ways do poets portray the exprience of war in Dulce et Decorum Est and in For the Fallen Essay Example for Free

In what ways do poets portray the exprience of war in Dulce et Decorum Est and in For the Fallen Essay Laurence Binyon wrote For the Fallen in 1914, at the beginning of the Great War, while Wilfred Owen composed his Dulce et Decorum Est in 1917-18, by the end of the conflict. This difference in time means that there might be inconsistencies in the portrayal of the war, due to the changing perspectives of the fighting, which in turn would provoke irregularities in the purpose, style and nature of the two poems. In Dulce et Decorum Est, Owen tries to prove us that war has no mighty purpose behind it and that it is just a waste of lives. He describes one soldier dying with verbs such as guttering, choking, drowning and gives an account of the blood which came gargling from the froth-corrupted lungs. This strikingly visceral portrayal of loss of life suggests that he sees nothing spiritual or divine in the sacrifices that the soldiers make for their country. He prefers to depict the experience of the war as true and cruel as it is in reality without sparing the reader. In the poem we are informed about two deaths. The first is due to harsh conditions, when some soldiers dropped behind, while the second is caused by lethal gas that one of the soldier inhales. In both of these cases, the young mens deaths didnt contribute in any way to the protection of their country and they werent even fighting when they passed away. This suggests that war is just a waste of human life which wont secure Englands peace. In For the Fallen, Binyon tells us that the soldiers have fallen in the cause of the free, thus suggesting that they try to make the world a better place, that they fight for something good. This gives war a mighty purpose and to the deaths meaning. This idea of for the greater good is further highlighted in the phrase a glory that shines upon our tears, which conveys the idea that the sacrifices of the soldiers contribute to the welfare of society and thats why everybody should be proud of those who are fighting. It is clear that the two poems depict the meaning and purpose of the war very differently. While Owen indicates that war is a meaningless and cruel waste, Binyon tries to cast a better light upon the deaths of the soldiers, giving their sacrifices a higher significance and thus implying that war with all its faults is for the greater good. In Owens poem the soldiers going to the fight are like old beggars under sacks, coughing like hags blood shot and drunk with fatigue. Many had lost their boots, implying that they cannot face the harsh conditions of the war and that they are even unable to look after their essential belongings. The description of bootless beggars is humiliating, while their tiredness and the hag simile suggests that there are lethargic and hopeless. Their physical appearance isnt attractive either. All these depict the soldiers as tired, old and humiliated men who are unable to face life and are completely incompetent in war. However, in Binyons version the soldiers went with songs to the battle, suggesting their fearlessness and gaiety. They were young, straight of limb, true of eye, steady and aglow. This phrase conveys an admiration for the almost divine soldiers who seem to be the incarnation of some hero from a childs tale powerful, handsome and determined men who save the world. This image of glorious warriors seems to be taken out of a happy-end story rather than the realism to satisfy the audience. Once again the dissimilarity between the two accounts is obvious. Owen sticks to the merciless truth, while Binyon sees something beyond the harsh experience of the war. Actually, he seems to use the brutality of the fighting and the deaths to emphasise the greatness and divinity of the soldiers. In Dulce et decorum Est soldiers die either to the harsh conditions of the war, or due to poisonous gas. The soldier who experienced the later, plunges at the nearest men choking and drowning an image of a helpless, suffering person. Unlike the soldiers in Owens poem, in For the Fallen, the fighters fell with their faces to the foe, not to their companions in the middle of the battle, fearless and brave. The determination which they seem to possess suggests that they believe that their deaths have a higher purpose. This encourages the reader and the mourning families to have faith that their loved ones lives werent wasted, but contrarily represented a salvage for humanity. It seems that the greatest difference between the two poems lies in the way they portray death and their significance. In Dulce et Decorum Est the dying soldiers face is like a devils sick of sin with writhing eyes. The phrase implies that the soldiers committed the greatest sins, most probably killing, which this altered the way they viewed life forever. They seem to be sick not only of the war, but of the persons in which the war transformed them, into devils. The writhing eyes suggests the violent ending that they had, and it possibly implies that they never found peace. The mention of the devil together with this, insinuates that they will never go to heaven, but rather to hell. The phrase incurable sores on innocent tongues further emphasises the idea that the experience of the war severely damaged their character in a negative and irredeemable way. Incurable sores implies that the greatest wounds were not physical, but psychological, and this might be the reason why they will never find peace, not even the moment they die. In For the Fallen death is august and royal, thus dignified and splendid, something rather positive and good. This is because the sacrificed soldiers songs go to up into immortal spheres, suggesting the place where the dead soldiers found peace. This idea is repeated throughout the whole poem. The phrase they shall not grow old, as we that are left to grow old implies that the deceased soldiers are divine, angelic and eternal beings. Due to their valiant death, their gift is that of eternity, as if their vibrant, determined and brave souls were immortalised, and thus they will be forever young, forever in the best of their condition. The deceased soldiers march in the heavenly plains is as the stars that are starry in the time of our darkness. Heavenly and stars suggest that the divine fighters will always light upon the mortal humans, guiding and protecting them. Time of our darkness refers to the war, and how young men, in the hardest periods of their life, left their homes to save their loved ones, as they will always do from heaven. Binyon sees a continuation of life after death, and thats why the choice of the word fallen in the title, because the sacrificed young men never die. Contrarily, they seem to receive a better, divine existence, incomparable to that of their living fellows. This idea might very well surprise Owen, who suggests that the experience of the war turned the innocent soldiers into devils, who will never find peace in heaven, but will burn in hell thus the violent death of the soldier and the obscene cancer which infects him. The differences between the portrayals of the experience of war in the two poems in striking. Binyons account is patriotic one, which glorifies the fallen soldiers and gives meaning and divinity to their deaths. However, considering the time when it was written at the beginning of the Great War we can get a better understanding of the poets reasons for such an idyllic portrayal of the fighting. At the start of it, the government needed to make the idea of warfare an appealing one in order to have young men risking their lives in the battle . Thus the attractive and heroic depiction of the combating soldiers. At the same time, the poem tries to soothe the mourning families, and this explains the almost holly aura that encircles the deaths on the front. However, as time went on, people got tired of the war and the increasing number of deaths. Soldiers returning from the battle spread the world about appalling conditions and cruel, meaningless deaths. Owen, who wrote the poem by the e nd of the conflict, seems to be well informed about the direct experience of the war and at the same time he is aware of the patriotic and idyllic accounts that existed at the beginning of the fighting. This explains the angry, visceral and meaningless deaths which he depicts in his poem, almost as if he was angry about people lying and making war seem a worthy, purposeful thing. And indeed, his poem ends with a call to other people not to tell with such high zest/To children ardent for some glory, / the old Lie: Dulce et decorum est/ Pro patria mori (It is sweet, and honourable to die for ones country). Owen wrote as an answer to other poems such as Binyons which glorify the experience of war, and this is why he chose the title Dulce et decorum est, to arise the memory of the patriotic accounts from the beginning of the war, and then throughout his poem to shatter the old Lie. He personifies this lie with the capital letter, making it seem as a destructive, evil person. This is the reason why Owen sticks to visceral descriptions he prefers not to spare the reader, because he believes that the Lie is even crueller than the merciless reality of the war.

Examining the difference between a material weakness and a significant deficiency

Examining the difference between a material weakness and a significant deficiency The purpose of this memo is to summarize selected paragraphs of AS5 to form an understanding of how the top down approach is applied to an audit of internal controls. It is also to explain the difference between a material weakness and a significant deficiency by providing a list of indicators of material weaknesses, as well as an explanation of how both a material weakness and a significant deficiency will be communicated to the audit committee and on the auditors report. Top Down Approach The purpose of using the top down approach for an audit of internal controls is to allow the auditor to take a systematic approach to identify risks and select which controls to test. The top down approach begins with the auditor forming a general understanding of the entity and the industry in which it operates. This is accomplished by looking at the companys financial statements, and acquiring general business knowledge. The auditor then looks at the entity-level controls of the company to ensure that sufficient policies and procedures are implemented to recognize misstatements, due to error or fraud, in a timely manner so that material misstatements do not affect the financial statements. The two most important types of entity-level controls are those related to the control environment, and those over the period-end financial reporting process. Controls over the control environment should assess how management promotes ethical values and integrity, as well as whether or not the Board of Directors or the audit committee has assumed the responsibility of the accuracy and completeness of the financial statements and internal controls. Controls over the period-end financial reporting process should assess the methods used to enter information to the general ledger, how much IT is used in the financial reporting process, types of adjusting and consolidation entries, and the involvement of management, Boa rd of Directors, and the audit committee in the period-ending financial reporting process. Other entity-level controls that must be taken into account include controls over management override, the companys risk assessment process, centralized processing controls, controls that monitor operations, and controls that monitor other controls. It is important to understand that entity-level controls vary both in nature and precision. Some entity-level controls only indirectly affect the likelihood of detecting or preventing material misstatements, whereas others are specifically designed to monitor the effectiveness of the other controls. The more precise the control, the less tests the auditor must perform on those controls. Next, the auditor identifies any significant accounts and disclosures, and their relevant assertions. Relevant assertions are basically risky financial statement assertions. Financial statement assertions show that a transaction has occurred, is complete, is valued correctly, has transferred ownership to the company, and is properly presented on the financial statements. A relevant assertion, therefore, would be any of these financial statement assertions that are exceptionally vulnerable to having a misstatement and could cause the financial statements to be materially misstated. Significant accounts and disclosures that require more attention are those that are larger in size, are more susceptible to misstatements, are very complex, contain a larger volume of transactions during the period, have realized losses during the period, involve a high likelihood of related party transactions within the account, or there has been a significant change in the accounting methods used from las t year. It is beneficial for the auditor to go through the financial statements, and for each account and disclosure brainstorm all the ways it could have been misstated to identify as many risky areas as possible. Risk factors, as well as significant accounts and disclosures, and their relevant assertions will be the same for both the audit of internal controls as well as the financial statement audit. When auditing an enterprise with multiple business entities, the auditor should use the consolidated financial statements to identify significant accounts and disclosures. The next step is for the auditor to understand likely sources of misstatement. In order to do this, the auditor should achieve a series of objectives. These objectives include the auditor being able to show where there are vulnerabilities in a companys internal controls that could result in material misstatements to the financial statements, and what controls management has implemented to reduce these risks. The best way for the auditor to achieve these objectives is by performing walkthroughs. A walkthrough is when the auditor follows a transaction from its origination until it reaches the financial records, and makes sure that all of the control procedures were conducted properly. It is important that the auditor conducts these types of procedures him or herself and takes careful notes about what type of information technology is used, as well as what personnel is involved in each processing procedure. The final step in the top down approach is to select which controls to test. The auditor should test each control that is the most important in determining whether or not a particular risk has been sufficiently addressed. If two controls address the same risk, it may not be necessary to test both controls. Also, it may not be necessary to address two risks separately if one control sufficiently addresses both of them. Together, the tests of these internal controls will provide the auditor with a conclusion about the effectiveness of the internal controls over financial reporting. Material Weakness or Significant Deficiency The difference between a material weakness and a significant deficiency is simply that a significant deficiency is less severe. A significant deficiency is, however, still risky enough for the auditor to let management know so that they may have a chance to get rid of the problem. If management does not sufficiently address the problem within one year, the deficiency becomes a material weakness. All material weaknesses must be communicated to both management and the audit committee as well as mentioned in the auditors report on internal controls over financial reporting. A material weakness is a problem with the internal controls over financial reporting that will most likely result in an important error on the financial statements that would alter creditors and investors opinions about the company. Indicators of Material Weaknesses Auditing Standard five mentions four important indicators of material weaknesses to help the auditor determine what deficiencies are considered material weaknesses. The first indicator of material weakness is if there is any evidence that shows there may be fraud present. The second occurs when management alters the financial statements to fix a material misstatement that they found. The third is when the auditor finds a material misstatement and informs management about the problem. The fourth is an assessment of the audit committee. If the audit committee is doing a poor job acting as oversight over the financial reporting process of the company, there may be an increased likelihood of a material weakness. If any or all of these indicators are present for a given deficiency, the auditor should compare the facts with what a reasonable professional would consider to be in accordance with GAAP. If this is determined not to be true, the auditor must consider this deficiency a material weakness and disclose it on the auditors report of internal controls over financial reporting. Communicating to the Audit Committee and on the Auditors report The auditor is required to report any and all deficiencies found to management in writing and tell the audit committee about this communication. If the deficiency has already been revealed to management through different means, the auditor does not need to repeat this communication. If a material weakness is discovered, the auditor must communicate it to management and the audit committee first, and then disclose it in the auditors report. If a deficiency is determined to be significant, the audit committee, as well as management, must be informed in writing. The auditor is not responsible to report control deficiencies he or she is not aware of, nor is he or she responsible to provide assurance that all deficiencies have been discovered. The top down approach is a systematic method of assessing risk that an auditor uses to locate specific areas of risk in a companys internal controls over financial reporting, and select the best tests to make sure these risks are sufficiently addressed. The top down approach requires the auditors to start by understanding a company and its industry, then moving down to the companys entity-level controls, then to significant accounts and disclosures and their relevant assertions, then double check that the auditor has a complete understanding of the risks, and then finally select the controls that are necessary to test to make sure that all risks have been addressed. The main difference between a material weakness and a significant deficiency is that a significant deficiency is less severe. Also, although both must be communicated, in writing, to both management and the audit committee, only a material weakness must be disclosed in the auditors report.