susor mark
As a Global Vice President of Transportation, Mark Susor is responsible for developing and overseeing domestic and international strategies for UPS Hub operations. His responsibilities include driving growth through people development, service reliability, profitability, and asset management while building operational efficiencies.
Mark held various positions within the Central Ohio District before being promoted in 1991 to a District Industrial Engineering Director. He served in that capacity in West Canada, Alabama, North Illinois, and the UPS Chicago Area Consolidated Hub (CACH), the largest ground package facility in the world.
In 1989, Mark was assigned to the Corporate Automated Sort Team that helped develop the use of automated sortation within UPS hub facilities. Mark also helped with the development of UPS’s application of the Balance Scorecard measurement process, and while assigned to UPS Canada, led a project team consolidating UPS Canada’s Phone Centers and International & Brokerage offices.
In 1995, Mark transferred to the Corporate Office and worked with the UPS Internal Consulting Group. In 2003, he was promoted to region I.E. manager and became a Package Project Management portfolio manager responsible for developing transportation systems. Mark became the Southeast Region operations manager in 2005 and rejoined the Corporate I.E. staff in 2007. In 2008 Mark was promoted to the US Vice President of Engineering reports directly to the Senior Vice President - US Operations; UPS Management Committee. All these assignments allowed Mark to develop in-depth knowledge regarding UPS operations and structure prior to taking on his current position in 2013.
UPS is the world's largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information, and funds.
Mark is also a lifetime member of Sigma Beta Delta International Honor Society for Business, Management and Administration
Address: Atlanta, Georgia, United States
Mark held various positions within the Central Ohio District before being promoted in 1991 to a District Industrial Engineering Director. He served in that capacity in West Canada, Alabama, North Illinois, and the UPS Chicago Area Consolidated Hub (CACH), the largest ground package facility in the world.
In 1989, Mark was assigned to the Corporate Automated Sort Team that helped develop the use of automated sortation within UPS hub facilities. Mark also helped with the development of UPS’s application of the Balance Scorecard measurement process, and while assigned to UPS Canada, led a project team consolidating UPS Canada’s Phone Centers and International & Brokerage offices.
In 1995, Mark transferred to the Corporate Office and worked with the UPS Internal Consulting Group. In 2003, he was promoted to region I.E. manager and became a Package Project Management portfolio manager responsible for developing transportation systems. Mark became the Southeast Region operations manager in 2005 and rejoined the Corporate I.E. staff in 2007. In 2008 Mark was promoted to the US Vice President of Engineering reports directly to the Senior Vice President - US Operations; UPS Management Committee. All these assignments allowed Mark to develop in-depth knowledge regarding UPS operations and structure prior to taking on his current position in 2013.
UPS is the world's largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information, and funds.
Mark is also a lifetime member of Sigma Beta Delta International Honor Society for Business, Management and Administration
Address: Atlanta, Georgia, United States
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1. Why should an MNC identify net exposure before hedging?
2. Explain how a U. S. corporation could hedge net receivables in Euros with futures contracts. Explain how a U. S. corporation could hedge net payables in Japanese yen with futures contracts.
3. Explain how a U. S. corporation could hedge net receivables in Malaysian ringgit with a forward contract. Explain how a U. S. corporation could hedge payables in Canadian dollars with a forward contract.
(Benedictine, n.d.).
The answer as to why an MNC needs to identify net exposure before hedging lies with understanding the level of risk posed by positions in foreign currency and / or the impact of other international companies within their industry on their particular market. In the reference provided on this week’s multimedia link the following was stated regarding risk exposure: “The single most important point to take away from this [hedging article] is that financial risk management is critical to the survival of any non-financial corporation. Investors who have real money at risk must understand the exposures facing the firms in which they invest, they must know the extent of risk management at these companies and they must be able to distinguish between good risk management programs and bad ones. Without this knowledge, they may be in for some ugly surprises” (Finpipe.com, 2013).
According to Johansson (2009); “For most companies some product standardization is unavoidable. Cost savings from longer product series often outweigh the disadvantages of not being perfectly adapted to customers’ precise requirements. At the same time, the customer satisfaction advantages of a high level adaption are well understood by most companies. The point at which combined costs are at a minimum…is the optimum level of standardization. Finding this point in practice is often a delicate balancing act” (p. 403).
This failure to provide independent, objective ratings was evidently clear during the housing bubble that occurred during the past decade. Structured finance products like residential mortgage-backed securities (RMBS) became very popular as they appeared to supersede poor returns in the markets and the Federal Reserve Bank’s low interest rate policies. The RMBS’ were highly sought after because of their higher than normal returns. These instruments consisted of bundled home loans purchased by investment banks, then the creation of a pool of home loans that appeared to be bond equity. The problem with RMBS’ was that there was little transparency and they required sophisticated systems to securitize (Lawrence & Weber, 2011, pp. 456-462).
The popularity of the RMBS’, public policy that promoted home ownership, and home financing products that allowed for questionable loans created an atmosphere that lacked oversight. Moody’s showed little restraint in this environment and jumped right into the housing bubble market. In the five years, leading up to 2006, structured finance instruments drove almost 40% of their revenues, and resulted in leading operating margin performance amongst companies in the S&P 500 for five straight years (Lawrence & Weber, 2011, p. 456). Because of Moody’s financial success, CEO Raymond McDaniel, enjoyed a salary of $7.4 million. Under his leadership, the organization was primarily applying the ownership theory versus the stakeholder theory (Lawrence & Weber, 2011, p. 6). Moody’s may not have broken the law, but they clearly did not reflect the ethics and leadership the public needed from them during the period leading up to the financial crisis.
When looking at Nigeria’s macroeconomic environment today, we find natural endowment factors that include natural resources, land and agricultural. The discovery of oil in the 1960’s created a tremendous income source, but it was abused by corrupt governments that failed to provide the human capital and infrastructure investments that would lead to long-term sustainable economic growth, improved standards-of- living and a reduction in poverty.
The “African Economic Outlook, an annual report of the bank, made available to the News Agency of Nigeria on Saturday in Abuja….said: “Nigeria’s prospect of halving poverty by 2015 seems weak. “The proportion of people living below the national poverty line has worsened from 65.5 per cent in 1996 to 69.0 per cent in 2010. “Poverty is higher in rural areas at 73.2 per cent than in urban area at 61.8 per cent….The report noted that the rate of poverty varied significantly between the urban and rural citizens and among the geographical zones, adding that 66 per cent of the rural population lives below poverty line of $1 per day” (The Eagle Online, 2013).
The “Keynesian theory is the most prominent of the demand-side theories. Keynes argued that a deficiency of spending would tend to depress the economy. This deficiency might originate in consumer spending, inadequate business investment or insufficient government spending” (Hill, Schiller, & Wall, 2013, p. 170).
The Great Recession of 2008 is the most recent example of using the Keynesian theory to address an economic imbalance in the US macro economy. The 2008 recession was created by a lack of consumer demand which shifted the aggregate demand curve to the left.
In reaction to the drop in demand, President Obama’s “first major intervention was a massive fiscal policy package of increased government spending and tax cuts—the kind of policy Keynes advocated” (Hill, Schiller, & Wall, 2013, p. 174). The weak demand was triggered by the housing bust and the resulting foreclosures, falling home prices, financial crisis, collapse of the credit markets, drop in the investment markets, closing of auto plants; which resulted in the highest unemployment in 35 years. The drop in home prices during 2007 led to a fourth quarter drop of 29 percent in residential investment which drove U.S. investment down by $50 billion. This was the beginning of the recession and what can be called the multiplier process. Keynes not only rejected the classical notion of self-adjustments; he also argued that things were likely to get worse, not better, once a spending shortfall emerged….Cutbacks in investment spending in 2007-2009 led to layoffs among homebuilders, mortgage companies, banks, equipment manufacturers, auto companies, and even high-tech companies like Hewlett-Packard, IBM, Yahoo!, and Google” (Hill, Schiller, & Wall, 2013, pp. 212, 214). This led to the multiplier process which states that “a decline in investment reduces consumer incomes, and induces cutbacks in consumer spending. The resultant [investment] decline in consumption triggers further declines in income and spending [on the part of the consumer]” (Hill, Schiller, & Wall, 2013, p. 215). This could be seen in the fourth quarter of 2008 when gross domestic product (GDP) declined by 3.8 percent after incurring a 0.5 percent drop in the third quarter.
While the growth of world trade opens doors to many businesses and countries that were previously prevented from participating in international markets, it also increases risk and complexity. National economies were much easier to regulate and control than today’s global economy. This was very apparent during the global financial crisis in 2008-2009. The sub-prime loan policies in America triggered a recession that eventually impacted the entire globe (Hill, 2013, p. 26). But with this risk also comes the opportunity to impact poverty on a global scale.
Before reviewing Nigeria’s macroeconomic environment and current status in regards to growth I will provide some additional detail about Nigeria in general. Nigeria is currently a Federal Republic; it operates the Presidential system of Government with three distinct but complementary arms namely the Executive, the Legislature and the Judiciary (The Heritage Foundation, 2013). The structure of the government is similar to that of the United States and Brazil, and presents a democratic environment.
Nigeria is in West Africa, along the eastern coast of the Gulf of Guinea, and just north of the equator. It is bordered on the west by Benin, on the north by Niger and Chad, and on the east by Cameroon. Nigeria covers an area of 356,669 square miles (923,768 square kilometers), or about twice the size of California (Countries and their Culture, 2013).
The Nigerian colonial economy lasted from 1860 to 1960. Starting in 1960, at the time Nigeria was granted independence from Great Britain, the Nigerian economy entered into what is described as a mixed economy. “In a mixed economy, certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have significant state ownership and government planning,” (Hill, 2014, p. 52). The economy up to 1960 had been dominated by agriculture and trade. Fertile land, human resources, and natural resources were and still are key basic factor endowments within Nigeria. As a result of its colonial origins and the resulting exploitation of its human and natural resources, the Nigerian government invested over $100B in public institutions across all sectors of the economy between 1975 -1995 (Nzeka & Rondon, 2011). This protectionist attitude resulted in a period between 1960-1990, characterized as highly unstable due to government corruption, internal conflict, and therefore a lack of social and economic development. One sector of the economy that remained predominately private was the agricultural sector. “More than 70 percent of all businesses operating in the country are agribusiness concerns primarily in the hands of the private sector. In a recent survey, NISER (1999) observed that 41 percent of agro industries are sole proprietorships, while another 41 percent are private limited liability companies,” (Bashasha et al., 2004).
AEO opened its first store in the United States (US) in 1977 and as of December 31, 2008 is operating in 1,098 stores and also operates e-commerce sites under AEO Direct. AEO has 37,500 employees who work under the name American Eagle Outfitters, and wholly-owned subsidiaries, American Eagle, and AE brand names (aerie, Dormware®, AE® Martin + OSA® and 77kids™), (Libby, Libby, & Short, 2011, pp. B-2 – B-3)
UO was founded in 1970 as a predecessor partnership and later “incorporated in the Commonwealth of Pennsylvania in 1976….The company’s principle business is the operation of a general consumer product retail and wholesale business selling to customers through various channels including retail stores, three catalogs, and four web sites” (Libby et al, 2011, p. C-7). As of January 31, 2009, the company operated out of 294 stores and “in addition, the company’s wholesale segment sold and distributed apparel to approximately 1,800 better specialty retailers worldwide” (Libby et al, 2011, p. C-7).
The company originated in Ireland in 1759 and began exporting early on. However, their first independent brewery built outside of Ireland and Great Britain was in Nigeria in 1963. Research was conducted to determine how the company localized operations in Nigeria from Ireland, and created additional international markets, whether or not it was successful, and how Team S&P would or would not do it differently. Research for this report included a review of current literature on the topic of globalization, including Government circulars and future trend reports. Additional research was conducted with the use of peer reviewed journals, professional and government organizational websites, and collegiate text.
The major findings indicate that while there is a current rapid expansion toward globalization, largely through the use of modern technology, some pioneering companies proved to be forward thinking and set the initial international business model. However, before this model became viable for all international trade, some significant challenges were faced. The company used a process-driven approach and standardization in key areas. Issues such as Culture, Politics, Economics and Location were of primary consideration, and robust structures were necessary for implementation into a new market.
Furthermore, research indicated that a web of companies is intricately intertwined in various locations of the globe to perform brewing and distribution, and asset holding. Research also found that the company was highly successful in branching out into multiple worldwide markets with this alcoholic beverage, in spite of varying social and religious beliefs and systems, and diverse political and economic climates.
Guinness has been highly successful in sourcing capital where it is the cheapest, production where it is most cost effective and sales where they are most profitable. Each country’s competitive advantage has been useful in the production of goods and services to produce and deliver Guinness on a global scale.
The information included in this report was provided by an eclectic, highly qualified Team. Contributing team members include:
• Terrence Smith, District Business Manager – Pfizer, Inc. – Fifteen years Business and Management experience in sales, training and development. B.S. Healthcare Administration, University of Alabama.
• Mark Susor, VP Transportation – UPS – Thirty five years Operational and Engineering Management, Logistics, Supply Chain and Customer Technology Solutions. B.B.A. Finance, Toledo.
• James “Mick” Piper, District Business Manager – Pfizer, Inc. – Twenty years Leadership, Finance, Marketing, Sales. B.A. Communications – Minor, Marketing, St. Louis University.
• Traci Santillanes, CFE – Sr. Internal Auditor – SBTGC – Thirty years Business Management, Accounting, Insurance, Regulation experience. B.S. Accounting, Rasmussen College.
1. The exiting of traditional financial institutions from the small-denomination, short-term credit market—a change largely due to the market’s high cost structure.
2. The soaring cost of bounced checks and overdraft protection fees, late bill payment penalties, and other informal extensions to short-term credit.
3. The continuing trend toward regulation of the payday advance services, providing customers with important consumer protections” (Gamble, Peteraf, Strickland & Thompson, 2012, p. C-113).
Economic Statistics
“The German economy - the fifth largest economy in the world in PPP [(Purchasing Power Parity)] terms and Europe's largest - is a leading exporter of machinery, vehicles, chemicals, and household equipment and benefits from a highly skilled labor force” (Cia.gov., 2014).
In terms of economics, Germany provides an ideal place to conduct business. Not only does it score high (73.4) on the Index of Economic Freedom, but it’s “economy is the world’s third largest, when measured at market exchange rates, and the fifth largest, when using purchasing power parity” (Library, 2008).
Germany ranks extremely high when it comes to open markets and the ability to trade on a global basis. According to the Index of Economic Freedom (2014); “EU members have a low 1.1 percent average tariff rate and, in general, few non-tariff barriers to trade. Investment in a few sectors of the economy may be subject to government screening, but the government generally does not discriminate against foreign investment.
The competitive financial sector remains largely stable, offering a full range of services. The traditional three-tiered system of private, public, and cooperative banks remains intact” (The Heritage Freedom). Germany scored 87.8 on trade freedom, 90.0 on investment freedom and 70.0 on financial freedom. (The Heritage Foundation, 2014).
From a regulatory point-of-view, Germany also provides an environment conducive to business. “The overall entrepreneurial environment remains one of the world’s most transparent and efficient. The business start-up process is straightforward, with no minimum capital required.
Labor relations are sound, and employers and workers have worked cooperatively to adjust wages and work hours in response to the changing economic environment.
Monetary stability is well maintained, although the government subsidizes the cost of renewable power” (The Heritage Foundation, 2014). The only concern would be from a labor point-of-view; labor unions in Germany are powerful and can be restrictive when it comes to operational flexibilities needed to stay competitive in the transportation and logistics industry. This will require solid working relationships between management and labor to ensure the transportation industries growth is not limited by labor rules.
1) “Consumer behavior is a complex multidimensional process. Consumer decision often involve numerous steps and are influenced by a host of factors including demographics, lifestyle, and culture values….
2) Successful marketing decisions by firms, nonprofit organizations, and regulatory agencies require an understanding of the processes underlying consumer behavior….
3) Successful marketing decisions require organizations collect information about the specific consumers involved in the marketing decision at hand. Consumer decisions are heavily influenced by situation and product category….
4) Marketing practices designed to influence consumer behavior involve ethical issues that affect the firm, the individual and society” (Hawkins & Mothersbaugh, 2013, pp. 6-7)
1. Why should an MNC identify net exposure before hedging?
2. Explain how a U. S. corporation could hedge net receivables in Euros with futures contracts. Explain how a U. S. corporation could hedge net payables in Japanese yen with futures contracts.
3. Explain how a U. S. corporation could hedge net receivables in Malaysian ringgit with a forward contract. Explain how a U. S. corporation could hedge payables in Canadian dollars with a forward contract.
(Benedictine, n.d.).
The answer as to why an MNC needs to identify net exposure before hedging lies with understanding the level of risk posed by positions in foreign currency and / or the impact of other international companies within their industry on their particular market. In the reference provided on this week’s multimedia link the following was stated regarding risk exposure: “The single most important point to take away from this [hedging article] is that financial risk management is critical to the survival of any non-financial corporation. Investors who have real money at risk must understand the exposures facing the firms in which they invest, they must know the extent of risk management at these companies and they must be able to distinguish between good risk management programs and bad ones. Without this knowledge, they may be in for some ugly surprises” (Finpipe.com, 2013).
According to Johansson (2009); “For most companies some product standardization is unavoidable. Cost savings from longer product series often outweigh the disadvantages of not being perfectly adapted to customers’ precise requirements. At the same time, the customer satisfaction advantages of a high level adaption are well understood by most companies. The point at which combined costs are at a minimum…is the optimum level of standardization. Finding this point in practice is often a delicate balancing act” (p. 403).
This failure to provide independent, objective ratings was evidently clear during the housing bubble that occurred during the past decade. Structured finance products like residential mortgage-backed securities (RMBS) became very popular as they appeared to supersede poor returns in the markets and the Federal Reserve Bank’s low interest rate policies. The RMBS’ were highly sought after because of their higher than normal returns. These instruments consisted of bundled home loans purchased by investment banks, then the creation of a pool of home loans that appeared to be bond equity. The problem with RMBS’ was that there was little transparency and they required sophisticated systems to securitize (Lawrence & Weber, 2011, pp. 456-462).
The popularity of the RMBS’, public policy that promoted home ownership, and home financing products that allowed for questionable loans created an atmosphere that lacked oversight. Moody’s showed little restraint in this environment and jumped right into the housing bubble market. In the five years, leading up to 2006, structured finance instruments drove almost 40% of their revenues, and resulted in leading operating margin performance amongst companies in the S&P 500 for five straight years (Lawrence & Weber, 2011, p. 456). Because of Moody’s financial success, CEO Raymond McDaniel, enjoyed a salary of $7.4 million. Under his leadership, the organization was primarily applying the ownership theory versus the stakeholder theory (Lawrence & Weber, 2011, p. 6). Moody’s may not have broken the law, but they clearly did not reflect the ethics and leadership the public needed from them during the period leading up to the financial crisis.
When looking at Nigeria’s macroeconomic environment today, we find natural endowment factors that include natural resources, land and agricultural. The discovery of oil in the 1960’s created a tremendous income source, but it was abused by corrupt governments that failed to provide the human capital and infrastructure investments that would lead to long-term sustainable economic growth, improved standards-of- living and a reduction in poverty.
The “African Economic Outlook, an annual report of the bank, made available to the News Agency of Nigeria on Saturday in Abuja….said: “Nigeria’s prospect of halving poverty by 2015 seems weak. “The proportion of people living below the national poverty line has worsened from 65.5 per cent in 1996 to 69.0 per cent in 2010. “Poverty is higher in rural areas at 73.2 per cent than in urban area at 61.8 per cent….The report noted that the rate of poverty varied significantly between the urban and rural citizens and among the geographical zones, adding that 66 per cent of the rural population lives below poverty line of $1 per day” (The Eagle Online, 2013).
The “Keynesian theory is the most prominent of the demand-side theories. Keynes argued that a deficiency of spending would tend to depress the economy. This deficiency might originate in consumer spending, inadequate business investment or insufficient government spending” (Hill, Schiller, & Wall, 2013, p. 170).
The Great Recession of 2008 is the most recent example of using the Keynesian theory to address an economic imbalance in the US macro economy. The 2008 recession was created by a lack of consumer demand which shifted the aggregate demand curve to the left.
In reaction to the drop in demand, President Obama’s “first major intervention was a massive fiscal policy package of increased government spending and tax cuts—the kind of policy Keynes advocated” (Hill, Schiller, & Wall, 2013, p. 174). The weak demand was triggered by the housing bust and the resulting foreclosures, falling home prices, financial crisis, collapse of the credit markets, drop in the investment markets, closing of auto plants; which resulted in the highest unemployment in 35 years. The drop in home prices during 2007 led to a fourth quarter drop of 29 percent in residential investment which drove U.S. investment down by $50 billion. This was the beginning of the recession and what can be called the multiplier process. Keynes not only rejected the classical notion of self-adjustments; he also argued that things were likely to get worse, not better, once a spending shortfall emerged….Cutbacks in investment spending in 2007-2009 led to layoffs among homebuilders, mortgage companies, banks, equipment manufacturers, auto companies, and even high-tech companies like Hewlett-Packard, IBM, Yahoo!, and Google” (Hill, Schiller, & Wall, 2013, pp. 212, 214). This led to the multiplier process which states that “a decline in investment reduces consumer incomes, and induces cutbacks in consumer spending. The resultant [investment] decline in consumption triggers further declines in income and spending [on the part of the consumer]” (Hill, Schiller, & Wall, 2013, p. 215). This could be seen in the fourth quarter of 2008 when gross domestic product (GDP) declined by 3.8 percent after incurring a 0.5 percent drop in the third quarter.
While the growth of world trade opens doors to many businesses and countries that were previously prevented from participating in international markets, it also increases risk and complexity. National economies were much easier to regulate and control than today’s global economy. This was very apparent during the global financial crisis in 2008-2009. The sub-prime loan policies in America triggered a recession that eventually impacted the entire globe (Hill, 2013, p. 26). But with this risk also comes the opportunity to impact poverty on a global scale.
Before reviewing Nigeria’s macroeconomic environment and current status in regards to growth I will provide some additional detail about Nigeria in general. Nigeria is currently a Federal Republic; it operates the Presidential system of Government with three distinct but complementary arms namely the Executive, the Legislature and the Judiciary (The Heritage Foundation, 2013). The structure of the government is similar to that of the United States and Brazil, and presents a democratic environment.
Nigeria is in West Africa, along the eastern coast of the Gulf of Guinea, and just north of the equator. It is bordered on the west by Benin, on the north by Niger and Chad, and on the east by Cameroon. Nigeria covers an area of 356,669 square miles (923,768 square kilometers), or about twice the size of California (Countries and their Culture, 2013).
The Nigerian colonial economy lasted from 1860 to 1960. Starting in 1960, at the time Nigeria was granted independence from Great Britain, the Nigerian economy entered into what is described as a mixed economy. “In a mixed economy, certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have significant state ownership and government planning,” (Hill, 2014, p. 52). The economy up to 1960 had been dominated by agriculture and trade. Fertile land, human resources, and natural resources were and still are key basic factor endowments within Nigeria. As a result of its colonial origins and the resulting exploitation of its human and natural resources, the Nigerian government invested over $100B in public institutions across all sectors of the economy between 1975 -1995 (Nzeka & Rondon, 2011). This protectionist attitude resulted in a period between 1960-1990, characterized as highly unstable due to government corruption, internal conflict, and therefore a lack of social and economic development. One sector of the economy that remained predominately private was the agricultural sector. “More than 70 percent of all businesses operating in the country are agribusiness concerns primarily in the hands of the private sector. In a recent survey, NISER (1999) observed that 41 percent of agro industries are sole proprietorships, while another 41 percent are private limited liability companies,” (Bashasha et al., 2004).
AEO opened its first store in the United States (US) in 1977 and as of December 31, 2008 is operating in 1,098 stores and also operates e-commerce sites under AEO Direct. AEO has 37,500 employees who work under the name American Eagle Outfitters, and wholly-owned subsidiaries, American Eagle, and AE brand names (aerie, Dormware®, AE® Martin + OSA® and 77kids™), (Libby, Libby, & Short, 2011, pp. B-2 – B-3)
UO was founded in 1970 as a predecessor partnership and later “incorporated in the Commonwealth of Pennsylvania in 1976….The company’s principle business is the operation of a general consumer product retail and wholesale business selling to customers through various channels including retail stores, three catalogs, and four web sites” (Libby et al, 2011, p. C-7). As of January 31, 2009, the company operated out of 294 stores and “in addition, the company’s wholesale segment sold and distributed apparel to approximately 1,800 better specialty retailers worldwide” (Libby et al, 2011, p. C-7).
The company originated in Ireland in 1759 and began exporting early on. However, their first independent brewery built outside of Ireland and Great Britain was in Nigeria in 1963. Research was conducted to determine how the company localized operations in Nigeria from Ireland, and created additional international markets, whether or not it was successful, and how Team S&P would or would not do it differently. Research for this report included a review of current literature on the topic of globalization, including Government circulars and future trend reports. Additional research was conducted with the use of peer reviewed journals, professional and government organizational websites, and collegiate text.
The major findings indicate that while there is a current rapid expansion toward globalization, largely through the use of modern technology, some pioneering companies proved to be forward thinking and set the initial international business model. However, before this model became viable for all international trade, some significant challenges were faced. The company used a process-driven approach and standardization in key areas. Issues such as Culture, Politics, Economics and Location were of primary consideration, and robust structures were necessary for implementation into a new market.
Furthermore, research indicated that a web of companies is intricately intertwined in various locations of the globe to perform brewing and distribution, and asset holding. Research also found that the company was highly successful in branching out into multiple worldwide markets with this alcoholic beverage, in spite of varying social and religious beliefs and systems, and diverse political and economic climates.
Guinness has been highly successful in sourcing capital where it is the cheapest, production where it is most cost effective and sales where they are most profitable. Each country’s competitive advantage has been useful in the production of goods and services to produce and deliver Guinness on a global scale.
The information included in this report was provided by an eclectic, highly qualified Team. Contributing team members include:
• Terrence Smith, District Business Manager – Pfizer, Inc. – Fifteen years Business and Management experience in sales, training and development. B.S. Healthcare Administration, University of Alabama.
• Mark Susor, VP Transportation – UPS – Thirty five years Operational and Engineering Management, Logistics, Supply Chain and Customer Technology Solutions. B.B.A. Finance, Toledo.
• James “Mick” Piper, District Business Manager – Pfizer, Inc. – Twenty years Leadership, Finance, Marketing, Sales. B.A. Communications – Minor, Marketing, St. Louis University.
• Traci Santillanes, CFE – Sr. Internal Auditor – SBTGC – Thirty years Business Management, Accounting, Insurance, Regulation experience. B.S. Accounting, Rasmussen College.
1. The exiting of traditional financial institutions from the small-denomination, short-term credit market—a change largely due to the market’s high cost structure.
2. The soaring cost of bounced checks and overdraft protection fees, late bill payment penalties, and other informal extensions to short-term credit.
3. The continuing trend toward regulation of the payday advance services, providing customers with important consumer protections” (Gamble, Peteraf, Strickland & Thompson, 2012, p. C-113).
Economic Statistics
“The German economy - the fifth largest economy in the world in PPP [(Purchasing Power Parity)] terms and Europe's largest - is a leading exporter of machinery, vehicles, chemicals, and household equipment and benefits from a highly skilled labor force” (Cia.gov., 2014).
In terms of economics, Germany provides an ideal place to conduct business. Not only does it score high (73.4) on the Index of Economic Freedom, but it’s “economy is the world’s third largest, when measured at market exchange rates, and the fifth largest, when using purchasing power parity” (Library, 2008).
Germany ranks extremely high when it comes to open markets and the ability to trade on a global basis. According to the Index of Economic Freedom (2014); “EU members have a low 1.1 percent average tariff rate and, in general, few non-tariff barriers to trade. Investment in a few sectors of the economy may be subject to government screening, but the government generally does not discriminate against foreign investment.
The competitive financial sector remains largely stable, offering a full range of services. The traditional three-tiered system of private, public, and cooperative banks remains intact” (The Heritage Freedom). Germany scored 87.8 on trade freedom, 90.0 on investment freedom and 70.0 on financial freedom. (The Heritage Foundation, 2014).
From a regulatory point-of-view, Germany also provides an environment conducive to business. “The overall entrepreneurial environment remains one of the world’s most transparent and efficient. The business start-up process is straightforward, with no minimum capital required.
Labor relations are sound, and employers and workers have worked cooperatively to adjust wages and work hours in response to the changing economic environment.
Monetary stability is well maintained, although the government subsidizes the cost of renewable power” (The Heritage Foundation, 2014). The only concern would be from a labor point-of-view; labor unions in Germany are powerful and can be restrictive when it comes to operational flexibilities needed to stay competitive in the transportation and logistics industry. This will require solid working relationships between management and labor to ensure the transportation industries growth is not limited by labor rules.
1) “Consumer behavior is a complex multidimensional process. Consumer decision often involve numerous steps and are influenced by a host of factors including demographics, lifestyle, and culture values….
2) Successful marketing decisions by firms, nonprofit organizations, and regulatory agencies require an understanding of the processes underlying consumer behavior….
3) Successful marketing decisions require organizations collect information about the specific consumers involved in the marketing decision at hand. Consumer decisions are heavily influenced by situation and product category….
4) Marketing practices designed to influence consumer behavior involve ethical issues that affect the firm, the individual and society” (Hawkins & Mothersbaugh, 2013, pp. 6-7)