The Current Positioning Of PepsiCo

The Current Positioning Of PepsiCo Pepsi International is a world renowned brand. It is a very well organized multinational company, which operates almost all over the world. They produce, one of best carbonated drinks in the world. Pepsi is a symbol of hygiene, quality and service, all over the world. Pepsi is producing Cola for more than 100 years and it has dominated the world market for a long time. Its head office is in New York. PepsiCo is the second largest food and beverage company in the world. It manufactures markets and sells a variety of salty, sweet and grain-based snacks, carbonated and non-carbonated beverages PepsiCo seeks to achieve growth and long-term value in its operational activities by creating competitive advantages through new product innovation. MISSION STATEMENT To be the worlds premier consumer Products Company focused on convenient foods and beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity. VISION STATEMENT To be the worlds best beverage company. Being the best means providing outstanding quality, service, cleanliness and value, so that their every customer is contented and happy with their products. To increase the value of their shareholders investment through sales growth, cost control and wise investment of resources. FACTS ABOUT THE COMPANY Pepsi is a USA based public company whose stocks are available in New York. Mountain Dew, acquired by Pepsi-Cola in 1964, switches its advertising and package graphics room hillbillies to action-oriented scenes. The third Mountain Dew slogan appeared in 1973 Put A Little Yahoo in Your Life. PepsiCo acquired Pizza Hut, Inc. Pizza Hut was founded in 1958 by Dan and Frank Carney. Taco Bell is was acquired by Pepsi. Taco Bell was established in the mid 1960s by Glen Bell. PepsiCo purchased Kentucky Fried Chicken, the leader in the quick service chicken market. KFC was founded by Colonel Harland Sanders. Colonel Sanders began franchising the company in 1952. KFC was spun off along with Pizza Hut and Taco Bell businesses as Tricon Global Restaurants, Inc. in 1997. PepsiCo purchases Seven-Up International, the third largest franchise soft drink operation outside the United States SWOT Analysis, which is based on thorough review of the business (corporation, product category competition, customers and products), identities and evaluates the internal strengths and weakness of the companies well as its external threats and opportunities. The marketing mix is driven by the results of the SWOT analysis. 2.1. STRENGTHS Demand of Pepsi is more than its competitors. Company has a very established name and a good reputation. Pepsi has large market share than its competitors. As the target customers of Pepsi is young generation, so Pepsi has more brand loyal customers. Most of the customers are satisfied with the price of the Pepsi. Pepsi is an international company and it has a very strong position internationally. The environment of factory is very good and attractive. Pepsi spends a lot of budget on its advertising. Pepsi has a very vast distribution channel and it is easily available everywhere. Employees are also motivated. People like the taste and quality of Pepsi around the world Pepsi has heavy advertising and promotion activities Pepsi offers many discount schemes for customers time to time. Pepsi Cola is sponsoring sports, musical concerts, walks 2.2. WEAKNESSES Pepsi does not offer any sort of incentive or discount to its retailers. Pepsi target only young customers in their promotions. Crown of the disposable bottle is not good. Demand of disposal bottle is declining. Result of low profile or non-existent advertising Pepsi tin pack is not available in far off rural areas. Pepsi is not considering many potential outlets like hotels, college canteens etc. Most of the beverages supply is restricted to few countries. Lack of innovation. Lack of popularity of many Pepsis brands Health issues 2.3. OPPORTUNITIES Innovation Company may start entering rural areas also. The company may also diversify its business in some other potential business. Launch healthy drinks Increase mineral water sales Increased interest of people in musical groups, cultural shows and sports has provided an opportunity for Pepsi to increase its sales through them. Overtake competitors Increase Awareness programs New technologies that access efficiencies. Launch other Pepsi variants in the untapped countries. 2.4. THREATS The main competitor of the company is the Coca Cola. At the international level, Pepsi has a very strong competition with Coke. Coke has started its advertisements more effectively to increase their demand and it is a very strong threat for Pepsi. New entrants are gaining market share Ongoing recession Cola drinks are not good for the health so the awareness level of the people is increasing which is a big threat to the company Decrease in Pepsi brand value in last few years. Some negative health effect Economy instability in third world countries Economic altitude become abortive Political instability in few countries The prices of raw materials such as sugar and metals using in manufacturing are increasing rapidly. Adversary is Thinking Seriously About Textile Sector Market Bounded brands 3.1. POLITICAL FACTORS: Political Stability Whenever the government is considered to be stable, the business will flourish. If there is political stability in the country the policies and strategies made by Pepsi can be consistent to be implemented. Foreign companies are also keen to invest in those countries which are politically stable where they have no fear of decline in their market share or shut down due to sudden change of government. Mixed Economy In mixed economy government and private sector both plays their role in developing the economy of the country. Investment by foreign companies like Pepsi is more likely to flourish in mixed economy. Laws Formulation Government has given copy rights to Pepsi so that another company cannot sell their product by the name of Pepsi. The countries where laws are formulated, the strategies and activities of the company are different. Social Responsibility Pepsis social responsibility is to provide its customers with clean and hygienic product so to do this they have increased the use of disposable bottles. 3.2. ECONOMIC FACTORS: Income and Income per Capita If the income level or per capita income of the people increases, it will have a positive effect on the consumption of Pepsi. Inflation If the country faces inflationary trend in the market, the price of the Pepsi will ultimately increase which will lower its demand. Consumption Behavior United Kingdom and other countries are consumption oriented societies. Due to demonstration effect the people are more inclined towards consumption than saving. So the people spent heavily on food items. Hence Pepsi has a good market share in the present circumstances. Income Distribution It means how much is in the hands of rich and poor class. In World 10% rich people posses 93% of wealth and 90% people posses 7% of wealth. If there is balanced distribution of income in the country, the consumption of the people will increase hence increasing the sales of beverages as well. Payment Mod As the use of plastic money is increasing the consumption pattern of the people are increasing. Although it will have a low affect on the consumption of Pepsi. Employment Opportunities As employment opportunities increase the living standard of the people increase and the people consume more. Aggregate Demand In case of Pepsi, aggregate demand of the product increases in the season of summer as the hot weather makes the consumers want to drink more. Aggregate Supply In summer season to cope up with the increasing demand they have to increase the aggregate supply of their product. Economic Policies Some of the economic policies which can affect the market of Pepsi are discussed below: Fiscal Policy It is the policy of taxes. If heavy tax is levied on Pepsi then its price will rise having negative effect on its consumption. Monetary Policy Monetary policy is made to restrict or increase the supply of money in the market. If policies are made to restrict the flow of money in the market, inflation can be controlled hence increasing the real income of the people which will ultimately affect the consumption of Pepsi. Price Policy If price of Pepsi is increased its demand will decrease and vice versa. Income Policy If income of the people will increase their purchasing power will increase and hence increasing the market share of Pepsi? 3.3. SOCIAL FACTORS: Psychographic It is a combination of demographic and psychological factors. Psychological attributes mean how you perceive things. The company will focus on the behavior of consumers and make different changes in their product quantity or quality and in promoting their product so that they can attract the customers. Keeping in view that the behavior of different consumers is not alike they have to make their marketing strategies in accordance with their requirements so that they are convinced to buy the product. Religious Religious factors can influence the market sales of Pepsi as it happened in 2003 when the U.S-led attack on Iraq, wide sections of society in Pakistan have banned American multinationals Coke and Pepsi Social Status Pepsi is a well renowned brand. People who are brand conscious will not drink beverages of lesser known brands. They will try to show their status by drinking Pepsi which is known to all as a quality drink. Media It is a very important factor for marketing. Media these days is a very effective way of inspiring people to buy a specific product. A good promotion can boast up sales to a great extent. 3.4. TECHNOLOGICAL FACTORS: Research and Development Through research and development quality of the product can be improved or better techniques or machinery can be developed which can increase the production. When technology is advance the supply of the product increase hence the company experiences growth in their business. Pepsi operates in almost all the countries and these are also technological factors: Introduction of cans and plastic Bottles Newer and attractive Designs State-of-the-Art plants Advertisement 3.5. OTHERS FACTORS: 3.5.1. DEMOGRAPHIC FACTORS: Age The requirements of different age groups are different. Pepsi should target that age group that consumes it the most and make promotional strategies according to their behavior. So their main target is the young generation. Education A company has to make promotional strategies keeping in view the customer level. If the percentage of education is high in a country then through advertisements people can be made well aware of their product and can convey their message easily. Promotion and education has a direct relationship. Population Distribution Population distribution means how much [population lives urban areas and rural areas. Pepsi is focusing on urban areas as people there are more inclined towards such beverage while people in rural areas are more inclined drinking desi drinks. 3.5.2. PHYSICAL FACTOR: Region World is divided into different geographical regions. Marketing and sales of Pepsi is different in different geographical regions. In hot areas its demand is more. City Size The cities which are densely populated the consumption of Pepsi is more. Climate Pepsi is more suitable for humid or hot weathered countries. It is a source of refreshment when a person is thirty due to the hot weather. Infrastructure Roads are the basic need for transportation of Pepsi from one place to another. Pepsi cannot open factories in every city so it has to transport it to other cities where Pepsi is demanded. Electricity is the basic necessity for production of any product. Constant load shedding slows down the process of production which leads to less production and low market share. The marketing world is full of surprises. Who could imagine that Coca Cola would be overtaken by Pepsi? If Coke could be overrun by Pepsi, it would be no wonder that Pepsi might be overtaken by some other beverage. The need then is to combine quality with ingenuity. Along with that, the reputation of the company has to be kept robust. Today we live in a fast moving world where novelty and newness count a lot. One cannot rest on ones laurels. Fresh efforts, newness of approach must remain the cardinal principles of a well orchestrated marketing strategy and the campaign must be relentless. A continuous bombardment in advertisement would convince the clients that Pepsi is a part of their lives. In order to live with style, Pepsi ought to be an essential ingredient of ones life. The Pepsi is at its maturity stage and the sales of company are not growing very rapidly. Company is doing a lot of promotional activities to let the product remain in the market. It holds a large share of the market and whenever the sales state declining, the company can improve it by different promotional activities. Marketers of Pepsi can try to improve sales by improving one or more marketing mix elements. They can cut prices to attract new users and competitors customers. They can also launch a better advertising campaign or use aggressive sales promotion to improve the sales. Thus, Pepsi is at its maturity stage. PEPSI, the choice of Generation next is not providing the first choice of young generation. A young generation wants something strong in cold drinks thus prefers Thumsup. Pepsi should come out with some extra strong taste to catch up maximum young generation to become exactly Generation Next drink. Company should appoint competent honest salesman so that they could provide schemes to the entire retailers cover their full route. It is often seen that some salesman do not intimate schemes to the retailer few of the retailers complained about it. So there should be frequent visits of Customer Executives to their respective areas to keep the shopkeepers benefited with various schemes. Delay in starting of supply vans from respective depot should be checked a proper time register should be maintained. Most of the retailers are complaining about non-fulfillment of commitments regarding their sampling. Company should make sure that the retailers get the sampling on time so that they are satisfied. Most of the retailers are complaining about delay no replacement of burst bottles. Marketing Management should sort some solutions to this major problem of replacing burst bottles. Half filled bottles should also be checked at the time of issue of goods from the distributors go down to the respective routes. Company should try to give some credit facility to the distributors so that they get motivated. Credit facility for retailers should be provided. Proper feedback system should be developed by ensuring regular visits check randomly at the various outlets Pepsi is a well renowned company and it has maintained its position well by understanding the client psychology, by ensuring quality, by introducing ingenuity in products, by enlarging its product base, by keeping economic factors in view and by intense and jazzy advertisements. Whenever and where ever there is a spotlight event, Pepsi must figure in, like the cricket and football matches between any country and many other such occasions. The key word for success in the Marketing World is to remain in the spotlight and that is what Pepsi is doing. SWOT Analysis of Pepsi, which is based on thorough review of the business (corporation, product category competition, customers and products), identities and evaluates the internal strengths and weakness of the company well as its external threats and opportunities.

Indians :: essays research papers

Mohegans and Comanches Different or Similar Long ago, the Earth was formed atop the back of a giant turtle. From the earth the Great Spirit put life into all things: trees, plants, animals and people. An Indian was created named Gunche Mundo who developed a Mother Tribe, and divided it into three clans--Turtles, Turkeys and Wolves. The Wolf People, known as Mohegans, separated from the Turtles and Turkeys, and headed east toward the rising sun. While the Mohegans headed east to find land, a tribe called the Comanches headed south. Both of the tribes farmed, hunted, and made money in different ways, but they both believed that the power of the government came from the people. The two tribes had their differences, however they both managed to get by with what they had. From the Southeast corner of Connecticut, the three clans that made up the Mohegan tribe had to hunt, fish, and farm to stay alive. The Mohegans came from the upper Hudson River Valley in New York near Lake Champlain. Around the year 1500, the Mohegans moved to the Thames River Valley in southeastern Connecticut. They named their homeland the Moheganeak. It occupied the upper and western portions of the Thames River. All the Mohegan people lived within three different clans. The three clans made up the Mohegan tribe. Every one of the clans had its own chief. The chiefs had only limited power within the clans. If the Mohegan people did not believe in what the chief had to say, then the people did not have to obey it. One of the ways the Mohegans obtained food was by burning their land around their villages and planting crops. During the spring the woman planted, while the men were on fishing trips. In August the men returned from their fishing adventures to help with harvest. The Mohe gans sustained themselves with fishing and farming, while the Comanches turned to violence to secure food and money. In the Southern groups of the Eastern Shoshoni, the Comanche warriors lived as extended family units and were legendary for raiding villages and other tribes. Unlike the Mohegans, the Comanche moved south and were located between the Platte and Arkansas Rivers. The Mohegans moved very seldom where as the Comanche Indians moved many times. They moved into New Mexico and later moved to the foothills of the Rocky Mountains. Both the Comanche and the Mohegans based their land area on the name of their tribe.

The University Education Puzzle :: Personal Narrative, Autobiographical Essay

The University Education Puzzle My four years of education at Bemidji State University have been comparable to a huge jigsaw puzzle. When I first began, I needed to find my interest, my field of study. I was shopping for the picture puzzle of my preference. I found that there was no particular field that I was interested in so I just grabbed at something. I bought my puzzle without really caring what the picture would be of. I consulted my catalog and found that you could determine what courses to take without wasting valuable time, by determining which ones were required for the two fields most suitable to me. I chose limiting myself to English and Psychology. I now had an idea of what my puzzle would end up looking like. I compared the required curriculum for both majors and took classes needed for both majors, as well as liberal education classes. I was building the framework for my puzzle by grabbing the outside pieces first. I began to piece it together by what I knew would benefit me the most. In building thi s puzzle, I found that some classes would link with one piece, but would be more difficult to pair with another in order to make this border. Psychology was not working out beyond the intro courses to I stuck to classes offered for liberal education and English. It took my two and a half years to find out what my puzzle would really look like. I had stuck with English classes, mainly out of personal interest, and at that point I was nearly done with the liberal education requirements. My puzzleà ­s border was complete and there were even a few layers building unto it. So after consulting with my catalog frequently, much like a puzzleà ­s box with the complete picture illustrated upon it, I decided to go for filling in the rest of the picture. I worked very hard at eliminating classes down to when they would be offered and if I would have fulfilled any prerequisites or class level guidelines prior to taking it. In other words, I was separating the sky pieces from the landscape ones to determine whereabouts each piece would need to be placed in order to accomplish the puzzle. I found that the recommended guidelines suggested having many courses, most of which I had not yet taken, finished at the end of a freshmen and sophomore level.

PHL 2560 Reasoning Exercise #4 Essay

1.What speciï ¬ c techniques were used to bring about the destruction of self-awareness among the prisoners? The prison camp used social alienation techniques to bring about the destruction of self-awareness among the prisoners. They treated each prisoner like animals and did not acknowledge them as human beings. The ability to cater to basic human functions as we do was taken away. This degradation broke the prisoners down and stripped them of their personal traits. This kind of treatment worked well in a group-style setting with other prisoners experiencing the same type of torture. 2.What opposite processes could be used to create the reverse process, that is, a strengthening of the self-concept? By empowering the unique individual traits we all possess, we in turn strengthen the self-concept. Encourage people to put their best work out there and recognizing individual strengths that make a strong team nearly unstoppable. All of those things make the self-concept crystal clear. 3. Assume that you are charged with the orientation of a cohort of new managers in your organization. How would you help them understand their own strengths and inclinations and how they could best contribute to the ï ¬ rm? My overall goal would be to show them that â€Å"teams work† based on diverse traits and talents. An important first step would be to help the group identify the strengths and talents each individual holds, and also show that one person’s strength may not be present in another. That’s why working together is not only vital for personal success and growth, but benefits the company as a whole.

Discrimination of Against Women

This refers to any form of exclusion, restriction, or distinction that is made on the grounds of sex and that has the purpose or effect of nullifying or weakening the exercise, enjoyment or recognition of women regardless of their human rights, equality, freedom and marital status. Women today unfortunately are still a group that is discriminated against, stereotyped and even prejudiced by the society in general and at the workplace in particular.The concept of discrimination against womenHandhelds of thousands of women around the world have been living under circumstances of utter deprivation, and constant violation of their basic human rights and the reason is only because they are women. Women around the world are battered, raped, traded, and also trafficked to become workers in compelled prostitution. The ability of women to join and remain in employment is barred by employers who exclude them from employment just because of being women.The employment law is also discriminatory i n some places all to the disadvantage of women. In some countries like Saudi Arabia, the government goes to the extreme by legalizing discrimination that makes women unequal to men in the eyes of the law. In the family, young girls and women normally have their rights taken away and have them placed under the mercies of the family members who are male. Women are also prohibited and restricted from participating in public affairs, Thomson, C. and Rampton, L. (2003).Discrimination against women is systematic, relentless and widely accommodated and even openly condoned. These issues are a global epidemic in spite of the progress made in the international movements on women’s basic human rights. The movements have been creating awareness on women’s discrimination and also challenging the violation of women’s rights.In the world that we are living in today, women have no control over their bodies. Millions of girls and women are forced in to marriage and sexual relat ions with men whom they have no desire for, Sparrow, P. and Hilltop, J. (1994). The government has not been strongly supporting women in the fight against discrimination. Women have faced grave consequences like physical violence and the risk of contracting HIV/AIDS in women has been on the higher side.Women face violence even in jail and in hospitals, the poor women are subjected to mandatory family planning. The access to reproductive health and care of women is subject to discussion by the husband and on his absence, the male family members take over. In situations where there is poverty, women are accorded the least in   accessing health, training, food, and employment opportunities among others needs. Discriminating against women is violation of the principle of equality of rights and value of human dignity.  This is a barrier to women’s participation on equal grounds with their counterparts in the economic, social, cultural and political arenas of their respective c ountries. This consequently interferes with the growth, development and prosperity of the family unit and the society. In addition, the discrimination against women makes it difficult for the complete development of women’s potential in being of service to humanity and the society.  Forms of discrimination against womenDiscriminatory employment lawsSome of the employment laws that are put in place out rightly discriminate against women. At some work places, women serve in the lowly paid positions as secretaries, cleaners are even receptionists. This is not due to lack of competence but due to discrimination. The top and powerful positions are then reserved for their male colleagues.Some of the laws reduce the opportunities for women to join certain jobs. For instance, some employment contracts dictate that a woman can only get pregnant once in five or so years. This bars women from such forms of employment. Employment law discriminates against women where some times women w ho hold similar positions with men are paid lesser amounts so that they appear lower even if they hold the same position with the men, Sparrow, P. and Hilltop, J. (1994).InequalityThere is lack of equal opportunities for both men and women where women are put on the receiving end. The women are denied opportunities which are then taken by men. Women come second to men and are treated as lesser beings. This is realized in the roles and positions that women are given at the work places, in the family, community and the country in general.Women receive lesser recognition in the society and are even given lesser education opportunities compared to men. Women are normally forced to early marriages and do not get the opportunities to get a good education. They consequently are not able to compete with men in the job market. Culturally, women are highly discriminated by the norms and traditions of the society. For instance, in some societies women are told whom to marry, and when and they are not consulted. They end up marrying people they do not love.Domestic ViolenceWomen are physically assaulted and brutally beaten in their own homes by their husbands for domestic reasons. The society has for a long time considered it as a way of disciplining women for any mistakes. Some of them are even beaten up for no apparent reasons, but their husbands subject them to domestic violence since they are the heads of their homes. Such violent treatment against women is dehumanizing not to mention risky since some women end up dying under such circumstances.DeprivationWomen are deprived off their basic human rights at the places of work, in the society and even by their families. For instance, women do not have control over their lives; they are controlled by their husbands or senior male family members. Women are not allowed to participate in public affairs a factor that violates their freedom of association. Marchington, M.   & Adrian, W. (2005).Sexual assaultWomen have been b rutally raped and violated at work places. Most of the women have their employers demanding for sexual favors, a factor that has seen many women lose their jobs for failing to conform. At work places, the promotion of women to higher positions depends on their cooperation with the employers in sexual relations. At the family level, women are raped by their own husbands and other male members of the family. The women are also victims of rape in jails, and in the communities where they live and especially in the warring countries.TraffickingWomen world over are trafficked to various countries where they become slaves and subjected to forced laboring the foreign lands, women are under paid or not paid at all, they are treated like lesser beings. Some of these women are forced to be commercial sex workers and this lowers their dignity.Probable Solutions to the discrimination against womenEquity at the work placesThis is the best way to bring an end to the persistence poverty that makes women vulnerable to discrimination. Women in this regard should be given equal pay at the place of work for equal positions held with the men. This would translate to an elevated economic position of the households that are headed by women. There should be equal employment opportunities for both men and women and the employment law should not favor men.Rather it should accommodate women with their feminine natural processes like pregnancy and child birth. Some employers often fire women employees when they leave for their maternity leave. Other employers especially in the private sector limit the number of times that a woman can get pregnant while working in that organization. The promotions at work places should be done on merit and based on competence and performance and not on the sex of the individual, Maundy, L. (2001).Socialization processThe cultural process of men and women socialization is to blame for much of the discrimination we have today. There should be a change in th e way the society is socialized. Much of the violence and discrimination today results from the fact that men from their young ages are treated as better and more senior as well as important to women. This is attitude is carried to the places of work and in all other political, economic and social aspects. The women on the other hand have been socialized into being senior to men and have accepted the discrimination as a normal way of life. A change is desirable in the socialization process and this may bring an end to discrimination against women, Hoyer, S. (2001).Government initiativeThere should be pressure on the government to implement and enforce the policy on discrimination that is already in place. The government and relevant authorities should also include the principle of equality in the legal system as well as eradicate all the laws that are discriminatory. In addition, appropriate laws should be adopted to proscribe the discrimination against women.There should be equalit y in access of opportunities in education, employment, economic, social, public and political arenas. The government should protect women from discrimination by affirming the human rights. In addition, strict measures should be taken on issues to do with domestic violence, sexual assault, trafficking and other forms of exploitation and discrimination against women.ConclusionDiscrimination against women is one way of violating the women’s human rights. Women have been marginalized and dehumanized and deprived off their dignity. International movements have been fighting for the liberalization of women and campaigning to bring to an end any form of discrimination against women. Women’s lives have to be made important at all the places all the time. This can only happen if discrimination against the women of the world is brought to an end.

Indian Business Environment Essay

Abstract One of the major objectives of Indian banking sector reforms was to encourage operational self-sufficiency, flexibility and competition in the system and to increase the banking standards in India to the international best practices. The second phase of reforms began in 1997 with aim to reorganization measures, human capital development, technological up-gradation, structural development which helped them for achieving universal benchmarks in terms of prudential norms and pre-eminent practices. This paper seeks to determine the impact of various market and regulatory initiatives on efficiency improvements of Indian banks. Efficiency of firm is measured in terms of its relative performance that is, efficiency of a firm relative to the efficiencies of firms in a sample. Data Envelopment Analysis (DEA) has used to identify banks that are on the output frontier given the various inputs at their disposal. The present study is confined only to the Constant-Return-to-Scale (CRS) assumption of decision making units (DMUs). Variable returns to scale (VRS) assumption for estimating the efficiency was not attempted. It was found from the results that national banks, new private banks and foreign banks have showed high efficiency over a period time than remaining banks. II. Reforms and Banking system In the post liberalization-era, Reserve Bank of India (RBI) has initiated quite a few measures to ensure safety and consistency of the banking system in the country and at the same point in time to support banks to play an effective role in accelerating the economic growth process. One of the major objectives of Indian banking sector reforms was to encourage operational self-sufficiency, flexibility and competition in the system and to increase the banking standards in India to the international best practices 4. Although the Indian banks have contributed much in the Indian economy, certain weaknesses, i.e. turn down in efficiency and erosion in profitability had developed in the system, observance in view these conditions, the Committee on Financial System(CFS) was lay down. Reserve Bank of India has implemented banking sector reforms in two phases. The first reform focused on introduction of several prudential norms, major changes in the policy framework, and formation of competiti ve atmosphere. The second phase of reforms began in 1997 with aim to reorganization measures, human capital development, technological up-gradation, structural development which helped them for achieving universal benchmarks in terms of prudential norms and pre-eminent practices. The Financial sector reforms were undertaken in 1992 based on the recommendations of the CFS. Later, The Narsimham Committee has provided the proposal for reforming the financial sector. The committee also argued that ‘economic reforms in the real sector of economy will, however, fail to realize their full potential without a parallel reform of the financial sector. It focused on several issues like, releasing of more funds to banks, deregulation in interest rates, capital adequacy, income recognition, disclosures and transparency norms etc. However, financial sector reforms focused on improving the competitive efficiency of the banking system. The financial reform process has commenced since 1991 which was made the banking sector healthy, sound, well- capitalized and become competitive. The competitive pressures to improve efficiency in the banking sector has resulted in a switch from traditional paper based banking to electronic banking, use information technology and shift of emphasis from brick and mortar banking to use of ATMs. INDIAN BUSINESS ENVIRONMENT IN BANKING INDUSTRY Indian banking industry, the backbone of the country’s economy, has always played a key role in prevention the economic catastrophe from reaching terrible volume in the country. It has achieved enormous appreciation for its strength, particularly in the wake of the worldwide economic disasters, which pressed its worldwide counterparts to the edge of fall down. If we compare the business of top three banks in total assets and in terms of return on assets, the Indian banking system is among the healthier performers in the world. This sector is tremendously competitive and recorded as growing in the right trend (Ram Mohan, 2008). Indian banking industry has increased its total assets more than five times between March 2000 aThe overall development has been lucrative with enhancement in banking industry efficiency and productivity. It should be underlined here is financial turmoil which hit the western economies in 2008 and the distress effect widened to the majority of the other countries but Indian banking system survived with the distress and showed the stable performance. Indian banks have remained flexible even throughout the height of the sub-prime catastrophe and the subsequent financial turmoil. The Indian banking industry is measured as a flourishing and the secure in the banking world. The country’s economy growth rate by over 9 percent since last several years and that has made it regarded as the next economic power in the worldnd March 2010, The Indian banking industry is measured as a flourishing and the secure in the banking world. The country’s economy growth rate by over 9 percent since last several years and that has made it regarded as the next economic power in the world. Our banking industry is a mixture of public, private and foreign ownerships. The major dominance of commercial banks can be easily found in Indian banking, although the co-operative and regional rural banks have little business segmentIn the post liberalization-era, Reserve Bank of India (RBI) has initiated quite a few measures to ensure safety and consis tency of the banking system in the country and at the same point in time to support banks to play an effective role in accelerating the economic growth process. One of the major objectives of Indian banking sector reforms was to encourage operational self-sufficiency, flexibility and competition in the system and to increase the banking standards in India to the international best practices. Although the Indian banks have contributed much in the Indian economy, certain weaknesses, i.e. turn down in efficiency and erosion in profitability had developed in the system, observance in view these conditions, the Committee on Financial System. Reserve Bank of India has implemented banking sector reforms in two phases. The first reform focused on introduction of several prudential norms, major changes in the policy framework, and formation of competitive atmosphere. The second phase of reforms began in 1997 with aim to reorganization measures, human capital development, technological up-gradation, structural development which helped them for achieving universal benchmarks in terms of prudential norms and pre-eminent practices. The Financial sector reforms were undertaken in 1992 based on the recommendations of the CFS. Later, The Narsimham Committee has provided the proposal for reforming the financial sector. The committee also argued that ‘economic reforms in the real sector of economy will, however, fail to realize their full potential without a parallel reform of the financial sector. It focused on several issues like, releasing of more funds to banks, deregulation in interest rates, capital adequacy, income recognition, disclosures and transparency norms etc. However, financial sector reforms focused on improving the competitive efficiency of the banking system. The financial reform process has commenced since 1991 which was made the banking sector healthy, sound, well- capitalized and become competitive. (CFS) was lay down. Liberalisation of India’s banking sector †¢ Liberalisation of India’s banking sector begun since 1992, following the Narasimhan Committee’s Report (December 1991) †¢ Important recommendations of the Committee were – [i] reduction of statutory pre-emptions (SLR and CRR) [ii] deregulation of the interest rates [iii] opening up the sector to foreign and domestic private banks [iv] adoption of prudential regulations relating to capital adequacy, asset classiï ¬ cation and provisioning standards Service firms such as ITC Hotels and ANZ Grindlays Bank found direct marketing very effective in retailing customers and weathering competition. †¢ The Indian banking system is growing in a robust manner. †¢ The Indian banking system complies with international standards of prudential regulation. †¢ The Indian banking system is opening up for entry of foreign banks. †¢ Despite the growth, Indian banking system is not entirely inclusive. †¢ There is good opportunities for the banking industry – domestic and foreign – for expansion to ï ¬ ll the gap. A decade after the Narasimham report was published and in the light of new challenges from the norms laid down by the WTO and Basel II, it is imperative to have a close look at the performance of banks in the last decade or so to assess the success of the reform process. INDIA inherited a very weak banking system following Independence. However, the nationalisation programme (1969) helped this sector achieve remarkable success in many respects. The stability among depositors, penetration into rural India and the consequent reduction in poverty and diversification out of agriculture were some of its laudable achievements. Given the predominantly bank based nature of financial system, the banking industry gained the reputation of one of the most protected in the country. However, in the 1990s a chain of events such as introduction of modern technologies, competition from new players in the liberalised market place, and enhanced emphasis on governance to protect shareholder interest changed the way banks conducted business. The Indian banking sector with its diversity of ownerships — State Bank of India and its associates, nationalised banks, private domestic banks and foreign banks also faced a similar set of challenges. Although the public sector banks acquired a dominant presence thanks to the regulatory environment, several of them performed poorly in the late 1980s. To preserve the soundness of the financial system, especially the banking segment, the Government set up the Narasimham Committee. The Committee (in 1991) made far-reaching recommendations that formed the basis of banking reforms. Some of the comprehensive reform measures suggested included: Stricter income recognition and asset classification, higher capital adequacy ratio, phased deregulation of interest rate, lowering statutory liquidity ratio (SLR) and cash reserve ratio (CRR), entry deregulation, and branch-de-licensing. These measures mainly aim to improve the efficiency/profitability of banking industry. A decade and half after the Narasimham report was published and in the light of the World Trade Organisation and Basel II norms, it is imperative to have a close look at the performance of banks in the last decade or so to assess the success of the reform process. Performance indicators Commonly-used measures to assess the performance of the banking industry are: Return on Asset (ROA), Operating Profit Ratio (OPR), Net Interest Margin (NIM), Operating Cost Ratio (OCR) and Staff Expenditure Ratio (SER). The first two are generally considered profitability measures, while the others, the efficiency indices. These five measures have been considered in this analysis for two sub-periods: Pre-liberalisation (1992-1995) and post-liberalisation (2000-2003). The total number of banks considered for two sub-periods were 64 (eight State Banks, 19 nationalised banks, 19 private banks and 18 foreign banks) and 87 (8, 19, 28 and 32 respectively). Overall performance improvement A comparison of performance indices during the study period reveals that the reform measures helped to improve the overall performance of industry. This is reflected in the improvement of all performance indicators barring the net interest margin (see Table). Interestingly, the ROA, treated as a proxy for risk-adjusted return, increased from (-) 0.28 per cent in the pre-liberalisation period to 0.79 per cent (against more than 1 per cent in other merging markets such as Singapore, Malaysia and Korea) post-liberalisation, indicating a significant rise in the ability of banks to convert their assets into net earnings. Another interesting aspect is that despite a marginal fall in the net interest margin from 2.84 to 2.73 (which might be due to policy change), the banking industry has managed to improve its OPR by increasing its non-interest fee-based income and reducing its operating costs/staff expenses. The evidence indicates that after the reform initiation period, the banks have increasingly been providing off balance sheet items such as derivatives, which generate major part of non-interest income. The proportion of operating costs/staff expenses has declined mainly due to computerisation and the voluntary retirement scheme. The property rights theorists believe that the private banks are more efficient than their counterparts in the public sector. This view is corroborated by the public choice theorists who argue that the specific X inefficiency factors are more prevalent in the public sector, irrespective of market conditions. Further, many cross-country findings report an increased government ownership as a deterrent to the development of the banking system. The Indian banking scenario seems to be consistent with the above, as the privately owned (foreign as well as domestic) banks seem to be superior to their public counter parts with respect to all performance indicators except the NIM. Despite a fall in their OPR and NIM between 1992-95 and 2000-03, the private banks successfully managed to reduce their operating expenditures, particularly the staff expenditures, thereby successfully maintaining their status. Among private banks, the foreign banks seem to be superior in terms of three out of five the criteria used. Within the public domain, the State Banks tend to be superior with respect to ROA, OCR and SER, while the nationalised banks seem to show better performance in terms of OPR and NIM. Thus, although there is a significant improvement in the overall performance of banks as one moves from the post-reform period to the late-reform period, one finds certain anomalies such as a fall in the NIM (except in the case of the nationalised banks), a fall in the ROA of private domestic banks, a reduction in the OPR of private domestic and foreign banks and a rise in the OCR/SER of foreign banks. Convergence or divergence Apart from the overall improvement across the board, another important criterion to evaluate the success story is to check whether the competitive force has led to any convergence in the performance of different ownership groups in the post-liberalisation period. Exposure to the competitive forces is often argued as a panacea to shake poorly performing banks out of their slumber. Although the public banks compared poorly with private banks during the initial period, they made a significant improvement in the later period by responding well to the new challenges of competition and consolidation, mostly following a gradual and cautious approach. The pay off is well reflected in the increase in their ROA, OPR and NIM. Some possible reasons for the better performance of public banks could be they still undertake most of the government borrowing programmes, thereby generating significant fee based income; the market discipline imposed by the listing of most public sector banks has also probably contributed to this improved performance; and ï‚ · the reform measures have changed their business strategies particularly greater diversification of non-fund based business and emergence of treasury and foreign exchange business. The study reveals that the OPR across four ownership groups tend to converge. The NIM tend to converge across private and public sectors while the OCR continues to remain significantly different across ownership groups. The above analyses indicate that the banking sector performs reasonably well with respect to the goals set by the Narasimham Committee, particularly in the context of the poorly performing banks and showing some encouraging signs to meet the Basel II norms by 2006. However, one should not go over board in reading these numbers to evaluate the success of the Indian banking sector, particularly from the perspective of a developing economy such as ours. Policy-makers should be extra cautious in giving free a reign to the banking sector in pursuing â€Å"profit and risk† based strategies. Recent trends in non-synergy based consolidation, growing disinclination to lend money towards productive purposes and to the unprofitable sectors such as agriculture, self-help groups, infrastructure and to small and medium sized enterprises, its growing engagement in non-productive treasury operations and conspicuous consumer lending will seriously impair the role of banks as public instruments of development. Therefore, maintaining a balance between these two objectives will remain a challenge to the banking sector for some time to come. Bibliography- * www.thehindubusinessline.com * iimahd.ernet.in/assets/snippets/ *

Negotiation with chinese Essay

We wish to express sincere appreciation to Professor Shia Yun Chiang for his assistance in the preparation of this manuscript. In addition, special thanks to Yama (Yuehai shoe material Ltd) who’s familiarity with the needs and ideas of these team and was helpful during the early programming phase of this research. INTRODUCTION Continental Design is a company where excellence and customer satisfactory are priority. After ten years of being in business, continental now seeks to enter the Chinese market. On Thursday, June 13th 2013, some members were selected to visit the potential customers of our new shoe-soles designs to introduce and negotiate our terms. These members include Mr. Emmanuel Mlay (Financial Officer), Mr. Robin Sharma(Managing Director), Mr. Cliff Osoo (Contracting Officer), Ms. Bella Chan (General Overseer), Ms. Sandra O. K (Sales Manager). Upon arrival, we were taken in and around the factory to experience their works and then to the meeting room. In this report, we explain further our observation and findings in negotiating with the typical Chinese. This report emphasizes mainly on the observations which includes specifications, mode of conduct, styles and techniques also elaborating on how they work together as individualist or collectivism. Again the language used, what they felt at ease to say, their communication skills, relationships with clients, were also under study. However their reasoning and way of thinking was somehow fascinating and very interesting which this report enlightens ideally and strategically. A brief but very informative research was done to know our potential customers before reaching out to them. The one talked about in this report is â€Å"Yuehai shoes material†, a very renowned shoesole company in China. In the end, all business operations can be reduced to three words: people, product and profits. Unless you’ve got a good team, you can’t do much with the other two. 1 1 By: Lee Iacocca 1 Chapter 1 THE CONTINENTAL DESIGN Continental design provides differentiated products that accelerate innovations in the global design market. With ten years of experience and commitment, Continental design has grown to be one of the strongest competitors in the field of designing. This company has also spent those ten years in developing its communication and negotiation skills. Its management capabilities have enabled it to technically handle the challenges and efficiently provide products that are best in the market. As Victor Papanek once said â€Å"Design is the conscious effort to impose a meaningful order. † Continental design was founded by a team of five engineers with one primary goal of working hard helping all small and big shoes companies to succeed through professionally enhanced designs. Today, Continental design is a full-service independent company with about 10 percent of the world market share. Our services cover the whole of Africa, South and North America, Middle East and few countries in Asia. Recently we have initiated our first staple toward China market. 2 BUYERS COMPANY PROFILE Yuehai Shoes Materials Yuehai shoe material has more than 20 years of manufacturing experience and large number of qualified senior employees who are devoted to settling problems and confronting challenges. It has adopted advanced equipment from Taiwan and main land China. The production technology is matured and reliable; at the same time it uses the original material that makes its products to be famous by their high qualities. Its domestic market ranges from Guangzhou and Dongguan where there is a stiff competition that helps them to develop new and up-to date designs that meet the market demands. It then covered the whole of China before capturing Europe and America as the first target in external market. Most recently, it has expanded its external market to Middle East and Africa as a whole, where it has entered into more than 10 different countries. Shoes are human daily life necessities. Shoes industries will never perish as long as human being still exists. With the use of imagination this company is committed to continue to develop shoe industries as part of making the life of entire society in the world better off. Address: No. 39 beicun road, huangqi, nanhai district, foshan city, Guangdong province, China. Tel: 8675785938525 Fax: 867578592981 Email: tailon@21cn. net Yuehaixe. com. cn 3 Chapter 2 NEGOTIATION PREPARATION In negotiation there are few things that have to be put in place before the negotiating team or person set off for the negotiation. The factors that are mostly considered before negotiation are: ? Length of contract This is the period that the contract will take before it’s renewed again. The seller always concentrate in this factor because it affect the profit the company will make and for how long. Mostly its 1 to 3 years. This factor is important because it also influence the price to be offered to the buyer. ? Volume to be ordered After a seller has agreed on the length of contract then the next thing to talk about is the Volume that will be bought. When few goods are bought, there is a high possibility that the price will be higher unlike when a large quantity is bought; therefore these first two factors influence the price of the item. ? Price The third factor to talk about after length of contract and volume is price at which the good will be sold. In every company, there is a price offered depending on the quantity to be bought, quality and other things needed for production. The larger the quantity, the lower the price will be and vice versa. 4 ? Payment Terms and Services. The most important thing for a company going for a negotiation is; length of contract, volume and price and other things like payment terms and services comes up later. The last two remaining factors are considered to make sure that the items agreed before is taken into account in a proper manner. Payment terms are important because even if you have a long contract with large volume but payment is not done in time, you will have to lose something. Services are offered to the buyer to make sure he/she is satisfied with the goods bought. 5 SELLER’S WISH LIST. Here we made our wish list before we went to the meeting. We had decided our lowest price and the contract length. Below you can see the result of our company board meeting before going to negotiate with Chinese company ITEM2 Length of contract Volume Price Payment terms Services WEIGHT 40% 25% 20% 10% 5% RANGE 2-1 Years 500-100units/month $200-$150 10-15days 5/5-8/5 In the following table you can see that we agreed to have at least 1 year contract with Chinese company. As they are old and experience company, we believe that it won’t be any problem even if we have 2 years long contract. In terms of volume we were ready to deliver any amount till up to 500 per months. Price was the main concern of our meeting. We know that they will try to spend more time on the price negotiating and knowing we have many competitors in the market, we needed to come up with a very good price range. We also had an agreement on payment terms which should meet within the short period. Lastly, we agreed to offer them a good customer service. 2 Professor Shia Yun Chiang Power point presentation-Estimating wish list ,Power point presentation slide no. 9 & 10 6 THE AGREEMENT ZONE In every negotiation, there are two possible outcomes. The parties can either reach an agreement or not. The first situation is where the seller and the buyer don’t reach an agreement at all, either, due to the buyer or seller not agreeing with the offer given. The second situation is where the two parties (Buyer and Seller) reach an agreement and signs a contract for the business to take place immediately. For the two parties to reach an agreement, they will have to consider their Consequence of No Agreement (CNA). CNA will either make the two parties to agree or disagree. BUYER’S WISH LIST ITEM3 Price Services Payment terms Length of contract Volume WEIGHT 45% 25% 20% 5% 5% RANGE $100-$150 8/5-5/5 Cash transfer 3-1Years 50-100units/month After a lengthy discussion with the buyer, following were the outcomes of negotiation; OUTCOME ITEM Price Length of Contract Volume Payment Terms Services DETAILS $150/Design 1 Year 100 Units/month Cash Transfer in 2 days 10 Days training Professor Shia Yun Chiang Power point presentation-Estimating wish list ,Power point presentation slide no. 9 & 10 7 Chapter 3 OBSERVATION VALUES AND THINKING IN NEGOTIATION. When going for a negotiation one has to learn the buyer’s values in thinking. These values differ from one country or one region to the other and it can cause a misunderstanding between the two parties. According to the research we did about Chinese negotiation, we found out that Chinese are more relationship oriented than Africans and even other nations. As soon as we entered into the Chinese office for the negotiation, they offered us Water. This proves that they are more relationship oriented; they use this to build a rapport between their clients even before negotiation. Another thing that the company we were negotiating with did is that, they invited us for supper. In these acts we can see how Chinese people are mostly towards relationship with their clients unlike other European countries or America and even Africa. Before us reaching a conclusion, the Chinese people asked a lot of personal questions even in the middle of our negotiation. Some of the questions they asked were; When will you go back to your country? Do you like china? Is your country very hot than china? These personal questions that are not related to business are a clear picture of Chinese values and thinking in a negotiation. â€Å"As a general rule, it’s always safer to adopt a formal posture and move to an informal stance, if the situation warrants it, than to assume an informal style too quickly†4 4 As Jeswald W. Salacuse- (Ivey Business journal) 8 . During our research, we were also able to notice some of the things that are not common in African countries and even other continents. The first thing that they did is to welcome us in a very encouraging manner that made us feel at home, and with such hospitality, we were able to do the negotiation having been convinced that Chinese are good business people. This kind of hospitality that Chinese people give to their clients make them win in the businesses they negotiate in because the other party will feel so cared for that they can trust the offers given. Another thing we noticed in the research is the way they asked us whether someone has introduced us to the company or we looked it up in the internet. At the beginning I didn’t see the reason why they should be concerned with how we got to know about the company, but after we finished the meeting I had to ask and what they told us is, in Chinese (Intermediary/ middleman). This is one of the things that make us to realize how important Chinese value relationship in the business arena. The other behavior that we observed in the process of visiting and doing the negotiation is that, immediately we arrived at the factory, we were received and taken around the factory to see how they do their production and even explaining every step of production line. This really made us feel honored and we started to see them as transparent and responsible people, something that needed in business so much. â€Å"Chinese negotiating style is people oriented and permeated with such Confucians notion as guanxi, renqing, face, family age, harmony, hierarchy, li (etiquette)†5. 5 As said by Tong Fang –Chinese Business Negotiating Styles 9 CIRCULAR REASONING & TALKING In our haste to market our designs for shoe soles. We came across various ways in which Chinese carry out their business negotiation. While most of the companies we approached exhibited the sequential kind of talking, the Chinese demonstrated the circular type. Interestingly, as we tried to obtain information and answer their questions regarding our products, we realized that Chinese, when not interested in your product would rather beat about the bush than going straight to the point. This is mostly demonstrated in the time of negotiating prices. This makes it hard to determine their stance in terms of buying the product. It is almost impossible at that moment to determine the level of consequence of no agreement on the buyer’s side. As much as you try explaining and convincing Chinese buyers who are less interested in a product, you will end up just like before. It is hard for them to say â€Å"no† point blank. This I believe is because of the long courting and relationship they build up with their business partners before negotiating. For instance, in one of our interviews, the interviewee mentioned after our refusal to take lunch with him that it is the culture of Chinese people to dine with their potential business partners irrespective of their interests. He explained that not only does this emphasize politeness; it also creates room for next or future cooperation. That is why in almost every meeting with a Chinese business man, you are served tea or water even before the talking starts. As pleasing as this might sound, it is also the reason behind the average Chinese would want to beat about the bush when not interested in the product for sale. Relationship and friendship are commonly used to obtain a better price and more concessions. 10 Herbig and Martin (1998), Stark, Fam, Waller and Tian (2005), and Zhu et al. (2007) all found that the Chinese do not rush into the negotiation, but rather, spend a lot of time in getting to know their counterparts as much as possible, even including personal information in order to build guanxi and trust from the beginning. Another finding is that they would want to end the meeting peacefully and friendly just as it had started without having to ruin the relationship or hurt anyone’s feelings, yet they have to decide whether or not to purchase the product. According to Faure (1999), the Chinese focus more on relationship building during this stage, as they need to know their counterparts for any business deal to occur. This negotiation practice might cause conflict with Westerners, as Westerners prefer to start negotiations straight away after basic greetings and introductions. Rule how to be successful in dealing with Chinese: â€Å"Be fair, reasonable and diplomatic: â€Å"If your Chinese counterpart believes that you are being unreasonable, they may not openly say so, but your negotiations are likely to stall and go nowhere. If you disagree with your counterpart, don’t simply reject their position out of hand, but carefully explain your reasoning†. 6 6 â€Å"Forbes† by Jack Perkowski (Negotiating in China; 10 rules for Success 11 QUESTIONING & INTERRUPTING We’ve had several encounters with many customers throughout the years, but what makes the Chinese customers outstanding is their mode of questioning. Unlike our African customers, they tend to interrupt and chip in their questions whiles you are talking. In some cultures, this might seem rude and impolite but this is not so for Chinese. They are very cooperative, assertive and defensive. This encourages and makes the one talking feel he’s being listened to. This normally generates positive feedback. During one of the interviews conducted, it came to our realization that, the typical or traditional Chinese interrupts more than the Chinese who has been open to Western culture. Customers who deal with Westerners or Africans have adjusted to some of their negotiation skill. This we believe will go a long way to influence most Chinese business partners. Their character or attitude of seeking and asking questions is different from other people in the sense that Chinese exhibits a character of â€Å"Xenophobia which is a distrust of all things foreign to one’s own culture. Xenophile is a lust to obtain all things new and or foreign. The Chinese have become inclined to distrust anything and everyone from foreign lands due to their history of violent revolutions and government seizures and changes. On the other hand, they have also seen the new technologies and high standard of living in the West, and many Chinese struggle with these mixed feelings as they pursue business opportunities with foreigners and seek to acquire western technologies â€Å"(Pye, 1992) 12 COLLECTIVISM Under collectivism, the means of production are owned and controlled by the state or the people as a whole. Also, it describes any outlook or philosophy that stresses the interactivity between people. It is often consider as opposite of individualism. There are two basic types of collectivism: horizontal and vertical. In the horizontal type, members are considered to be as equal as possible, and share resources and responsibilities. The vertical include a social hierarchy that society member work to maintain, and people submit to those above them in the hierarchy. Collectivism in China When Mao Ze Dong came into power; he strengthens the collectivism by eliminating landowners and individualists, sending nearly everyone to work in collectivist communities. Therefore, China has been more collectivist than individualist in both ancient and modern history. Many research states that, there are many leaders in China today who believe that the days of collectivism in China will soon be gone. There are several reasons for this. First is that the â€Å"one-child-policy,† especially in the cities, it gives us many younger citizens who have been raised to believe that they hold a special place in the world. This kind of upbringing leads to individualism over collectivism. In business point, there are still many examples of collectivist thinking. For example, When we(foreigner) and Chinese, began to work together, mainly the Chinese look towards the team as 13 the reason for the company success, but on the other hand, the foreigner(us) were trying to identify individual high performers. That’s one of the different between Chinese and foreign culture. Collectivism between our culture (as a foreigner) and Chinese Collectivism is a cultural pattern found especially in East Asia, Latin America, and Africa. But nowadays societies are not purely individualist or collectivist, but some of them are the mixture of the two. Western and Northern Europe, USA, Canada, Australia, and New Zealand are individualist. Conclusion Although there are few countries fully apply in collectivism, like North Korea, most of the countries are applying the mixture of collectivism and individualism. Those countries practicing collectivism mainly have a low GDP level, because it affects trade with the other countries. 14 THE RELATIONSHIP BETWEEN SPECIFICATION OF TIME AND PRICE. The important aspects when we negotiate with Chinese: Patience is the most important qualification for successful negotiations with the Chinese. Negotiations in China often take time because of different departments within one organization tend to be involved in negotiation processes and decision-making within the Chinese bureaucracy often takes time. By Confucianism, Chinese will not rush into any serious meetings with someone whom they do not know; trust and a certain feeling of closeness. Here is the example of Chinese negotate style we found. It prove that, to negotiate a favourite price with Chinese, obviously we need time. 1. Don’t expose too much of your interest in a product you want to buy even though you’re really drawn to it. It is better to act like that it does not matter to you and you don’t have to have it. Sometimes the sales person would tell you if he or she can judge from your facial expression that you really want that item. 2. In the first time you will never get the exact item for the price. Usually the sales person would try to seduce you by offering an unfavorable price. For example, for a necklace placed at $100, if you ask the sales person for discount, perhaps for the first time she would give you a discount like $90. Don’t take it. Just think that it is too high and walk away. Sometimes the sales person would shout at your back and offer much more favorable discounts. 15 3. The second negotiation is to reach a middle point. Try to get 45-60% discount of the original price. If it is impossible, try to get somewhere around 70-85%. Try to negotiate in a friendly way. If the agreement cannot be reached, walk away again. 4. The final negotiation will be the last attempt. Be firm and try to get 40% off. Some might finally give you 40% off, while some can’t due to different price strategies involved and store renting fees, staff cost, etc. To compare with our culture(as a foreigner), in our country, all the goods had set their fixed selling price, and most of the company usually have their own rule for market selling, therefore the vacuum for price negotiate will be less. 16 LANGUAGE BARRIER Our group members come from Nepal, Ghana, Tanzania, and Hong Kong. We speak different languages. English is our second language. We often face with language barrier within and outside the group. . Language barrier often is a big problem. If this was an outsourcing job or transcription work, language would probably have a major role, as both require clear understanding of the accents, practice of speaking in a fluent way. Cause of language barrier: 1. Emails – written communication we should be able to clearly understand written instructions and reply with clear and also follow rules in a polite way. Sometimes we often wrote a business mail in a friendly tone, instead we should write in a formal way. 2. Phone Calls While working with an outsourcing partner, providing a phone number for emergencies may seem to be a good idea. However if this phone number happens to be attended by a non-English speaking person, it will serve nothing but a source of irritation. So we can think of giving the mobile number of a representative who can speak with clear and patience – even if the resolution is not attained on the call in itself. 17 Useful method between different language. Pictogram and simple image are useful method as icon or sign for almost every place. It means they are efficient to give information to people without any words. They have high possibility to support the communication between two people without spoken language. Conclusion We need to use English to communicate with each other, when we were going to Nanhai to take the video, sometimes we need to use Chinese to communicate with the local Chinese people. When people from different countries speak in different languages, we often face difficulties an understanding each other. We cannot express our meaning in a proper way. During our research, when we took the train, there was problem in translating Chinese characters. So it is quite hard for us to find the way to the shoe factory. In addition, the English level of a local Chinese are mainly still in low level, some of them even cannot understand what we are asking. I think it is what we are called language barriers. 18 Chapter 4 TIPS TO NEGOTIATE WITH CHINESE The intensive research negotiation we conducted at Yuehai Shoes Materials factory widened up our knowledge about Chinese negotiation. We believe through this report you have acquired some usefully tips on how to strategically negotiate with Chinese. Upon what you have learned here are our recommendations for you to conquer any negotiation: ? Be prepared†¦Ã¢â‚¬ ¦ Make sure you are well prepared. ? Understand the cultural differences†¦. Get to know the other culture. ? Don’t be afraid of negotiation†¦ if you can talk you can negotiate. ? Show some emotions (share some burden)†¦remember, people value them. ? Be on time†¦.. time is money. ? Be careful†¦ use appropriate language. ? Be in control†¦ don’t allow other things to distract your focus. ? Give some room for the other party (compromise whenever necessary). ? Show some vivid example†¦ a picture is worth a thousand words. 19 CONCLUSION â€Å"Deal is always better that no deal. †7 As hard as negotiation may seem to be, its outcomes are almost always worth the endurance. In different cultures where there are different goals, different point of views, different interests, different values and beliefs, different needs and different decision making styles; it takes a considerably huge amount of effort for sellers and buyers to reach the agreement zone. Both parties must be willing to give up part of their wish or lower their requirements which do not happen easily. With better understanding of both cultures of the parties involved, the negotiation will yield more significance solutions. One should keep in mind that negotiation is the cornerstone of any successfully business in the world. Despite the difficulties involved in the strategic negotiation, lets us follow the words of one of our great fathers who once said, â€Å"Let’s never negotiate out of fear, but lets us never fear to negotiate. †8 7 Professor Shia Yun Chiang class PowerPoint presentation 8a.