Tuesday, December 31, 2019

Supplier Relationships Importance And Supply Chain Management - Free Essay Example

Sample details Pages: 17 Words: 5102 Downloads: 6 Date added: 2017/06/26 Category Statistics Essay Did you like this example? In todayà ¢Ã¢â€š ¬Ã¢â€ž ¢s increasing economic environment, organisations are looking for new techniques to improve their competitive advantage. The focus of my research is in the area of purchasing which have now become a strategic function and a key reason in positioning competitively among all other competitors. The paper discusses that in recent years, the relationships between buyers and suppliers have been continuously receiving a considerable attention for effective operations within organisations. Don’t waste time! Our writers will create an original "Supplier Relationships Importance And Supply Chain Management" essay for you Create order Traditionally, supplier-buyer relationships were regarded as adversarial, armà ¢Ã¢â€š ¬Ã¢â€ž ¢s length transactions. However, the approach towards managing this relationship is changing and moving towards a more collaborative approach due to the fact that now suppliers are important sources to gain competitive advantage to operate in global markets in terms of their expertise, knowledge and ability of sharing risks. [Research paper à ¢Ã¢â€š ¬Ã¢â‚¬Å" Journal] The research aims to provide an understanding of supplier relationship management, factors of supplier evaluation and selection process, and the elements that contribute to the establishment of a productive customer/vendor relationships. Such a study is important for buyers to build and maintain effective relationships with their suppliers for consistent cost reductions while working together to mutually create revenues and other benefits. The paper recommends that this information may work as a reference guideline for buyers when initiating cooperative relationships with their supply sources resulting in advanced purchasing and strategic supply chain management in their organisation. The research method adopted in this dissertation is secondary exploring various business journals, business websites, textbooks and articles. Due to continuous new product developments, product innovations and increase in costs, managing supplier relationships will further become crucial in the near future. Due to this reason, therefore, this paper discusses the requirement of supplier relationships and how this shift in organisational strategy towards building relations has and will going to change the employeeà ¢Ã¢â€š ¬Ã¢â€ž ¢s role, companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s processes and organisational goals. The findings from this research provides an evidence of how companies have improved their supply chain operations through understanding the importance to develop effective supplier relationships as part of their core business activity for not only to achieve success within procurement department but also to successfully complete other supply chain cycle such as maintaining production flow at all times, planning accurately, inventory handling, logistical issues and achieving financial benefits. Examples included findings from large organisations of Hong Kong, Rolls Royce, GE, and Japanese firm Toyota. The main conclusion that can be drawn from this research is that every organisation must emphasise the need to actually develop world class suppliers that helps in building long-term relationships, reduction in costs, improved QCDS (quality, cost, delivery and service) criteria, improved customer service, mutual information sharing, reducing the NPI (new product inspection) costs and becoming world class organisation in the market. Introduction Nowadays, the majority of Organisations believe that their companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s real assets are embedded in the quality of the relationships shared between the business and their stakeholders such as clients or customers, employees and suppliers. Developing and managing supplier relationship will be the main subject throughout this project. The objective of this research is to investigate the importance of the need to focus more on building collaborative relationships with their strategic suppliers by large manufacturing companies. With increase in globalisation and restructuring of several organisations, procurementà ¢Ã¢â€š ¬Ã¢â€ž ¢s role has changed focusing more towards costs, quality, flexibility and technology. [Herbig and Oà ¢Ã¢â€š ¬Ã¢â€ž ¢Hara, 1995; Goh and Lau, 1999] In the previous years (traditionally), purchasing was considered as a secretarial function in which the buyer-supplier relationships were viewed as being adversarial and unsurprisingly results in a win/lose outcome. Before, business operations from manufacturing to assembling the finished goods were prepared in-house but now many organisations have moved towards a more combined approach where manufacturing firms have started concentrating more on their core competencies only and rest outsourcing nationally and internationally to satisfy their customer expectations. Organisations are going lean i.e. working towards continuous improvement, adopting just-in time and total quality management and eliminating wastes. This highlighted the requirement for most of the lean organisations to grow cooperative supplier-buyer relationships to achieve real productivity, improved design and quality that are unattainable unless the supplying partners assist in product innovation. Hence, several manufacturers have recognized their ability to become world class competitors based on establishing high levels of trust and cooperation among their suppliers. [They and Briggs (1994)] For example, highlighting the case of Rolls Royce, the engine manufacturer, that outsources 70% of their material from external supply chain and thatà ¢Ã¢â€š ¬Ã¢â€ž ¢s the reason Rolls Royce try to encourage their suppliers to work openly and jointly contributing to their performance. Rolls Royce belief in building good supplier relationships assures quality and competitiveness to their product offerings and helps to achieve customer standards. The growing face of domestic and global competition has led to understand the manufacturing companies to practise global sourcing which is a strategy to improve companies competitiveness in the international market through reducing costs, improving quality, increased exposure to universal technology, and improving delivery and reliability. A à ¢Ã¢â€š ¬Ã‹Å"connection or associationà ¢Ã¢â€š ¬Ã¢â€ž ¢ is known as a relationship. Relationships are said to be when individuals, organisations and internal or external groups to an enterprise interact. At recent times, relationship marketing describes long-term marketing strategy that emphasise on building and maintaining long-term relationships with customers rather than just focusing on à ¢Ã¢â€š ¬Ã‹Å"one-timeà ¢Ã¢â€š ¬Ã¢â€ž ¢ sale approach. At business level, relationship marketing is applied to variety of purchasing à ¢Ã¢â€š ¬Ã¢â‚¬Å" supplier relationships in the context of a broader network of interconnected purchasing, supplier and competitor organisations. à ¢Ã¢â€š ¬Ã…“Supplier relationship is defined as a systematic approach to supplier evaluation, selection and ongoing relationship management with the goal of cutting the costs of goods and services boosting profits.à ¢Ã¢â€š ¬? Supplier relationship management is a proactive approach of an ongoing business links to secure a competitive advantage within the organisation, focusing more on overall relationships between the supplier and the customer (buying organisation) rather than focusing on specific contracts. The idea is to develop trust and understanding of each otherà ¢Ã¢â€š ¬Ã¢â€ž ¢s requirements and interests while providing assistance to each other. For example, Rolls Royce sends their experts to their sub-contract suppliers to improve their technology and performance standards. Such relationships bring profit and provide competitive advantage. [https://www.ogc.gov.uk/process_supplier_performance_and_contract_management_6368.asp] Today, most of the companies have realised that doing business jointly with their strategic suppliers will enhance their organisational ability to respond quickly to demand changes, focus on core business only and hence, results in implementing best practises. For example, Rolls Royce believes their supplier make very essential contribution to their business performance as over 70% of their manufacturing costs comes from external supply sources. focus more on their core competencies such as encouraging suppliers to work with transparency, openly and together to enhance continuous improvements. rather than Small to Medium size Enterprises and many local businesses use Transactional Purchasing whereas Large Enterprises use Relationship Purchasing to compete strongly in this economic climate. Transactional Purchasing Relationship purchasing Focus on short, discrete purchasing Focus on supplier retention Short-term orientation Long-term orientation Arms length Closeness Simple buyer-seller relationship Complicated, including internal relationships Emphasis on price, quality and delivery in the offered product No Innovation Emphasis on price, quality, delivery other factors, like innovative design as a collaborative exercise b/w purchaser and supplier Moderate supplier contacts High level of supplier contact with each contact being used to gain information strengthen the relationship Little sharing of information Significant sharing of information, including cost information and transparency Introducing Supply chain management The project is focused on process for choosing world class suppliers, importance of building supplier relationships, various supplier development approaches and process of negotiation required in purchasing that plays a vital role in todayà ¢Ã¢â€š ¬Ã¢â€ž ¢s supply chain management. Explaining what is supply chain management and its various elements that are necessary for the movement of goods and services within the business. à ¢Ã¢â€š ¬Ã‹Å"Supply chain management consists of the intra à ¢Ã¢â€š ¬Ã¢â‚¬Å" and inter-organisational co-ordination of business functions that act as both transformative and support functionsà ¢Ã¢â€š ¬Ã¢â€ž ¢. This emphasises managing supply chain effectively must be a key activity within the businesses. [Mentzer et al. (2001)] Supply chain combines flow of materials, goods, and information (includes money) that floats within and between organisations linking with a variety of tangible and intangible facilitators, e.g. relationships, processes, activities and integrated information systems. Different views of supply chains are implemented in terms of a process when operations are emphasised, a logistical channel when emphasises marketing, a value chain whey looking at value added activities, and a demand chain when considering customer satisfaction. [Peck H. (2006)] Key elements of supply chain The key elements of supply chain are that links with each other by the movement of products. The following explains that supply chain starts and ends with the customer: [https://logistics.about.com/od/supplychainintroduction/a/into_scm.htm] Customer à ¢Ã¢â€š ¬Ã¢â‚¬Å" This is the customer that starts the value chain by deciding to make a purchase of a particular product for example, in an aviation industry procuring turbine blades or a fan shaft which is offered for sale by an organisation. At this stage, the customer contacts the sales team and places purchase order with a right quantity and delivered on a right date. If in case, this product needs manufacturing then the purchase order includes a requirement that must be fulfilling by the production facility. Planning à ¢Ã¢â€š ¬Ã¢â‚¬Å" The requirement for planning occurs when customerà ¢Ã¢â€š ¬Ã¢â€ž ¢s purchase order is received and processed with other existing orders. Production plans are created by the planning department to generate products to accomplish the customerà ¢Ã¢â€š ¬Ã¢â€ž ¢s order. If manufacturing requires, then raw materials are purchased to complete the process. Purchasing à ¢Ã¢â€š ¬Ã¢â‚¬Å" The list of materials e.g. raw materials and services is obtained which is required by the production department to complete the purchase order. Then purchasing team issues purchase orders to procure raw material from selected suppliers on their manufacturing site on a requisite date. Inventory à ¢Ã¢â€š ¬Ã¢â‚¬Å" The raw materials that are received from suppliers are checked for quality and moved into the warehouse. The invoice is received for the parts that are delivered by the supplier and then materials are stored until there is a demand from a production area. Production à ¢Ã¢â€š ¬Ã¢â‚¬Å" According to the production plan, the raw materials from the inventory are moved into the production area where product manufacturing takes place and creates the finished product. Once the parts are completed, they are again sent back to the warehouse and stored prior to delivery to the ultimate customer. Transportation à ¢Ã¢â€š ¬Ã¢â‚¬Å" Logistics department then finds the most efficient shipping method in order to achieve on-time delivery at the right date mentioned by the customer. After goods are received by the customer, an invoice is sent by the organisation (supplier) for delivered products. Outlining Case study: GE-Aviation In this project, there will be discussion on relationship purchasing within aviation industry considering GE Aviation as a case study. Suggesting methods of procurement and ways of maintaining GEà ¢Ã¢â€š ¬Ã¢â€ž ¢s existing and new relationships with suppliers. On-line procurement is one of the major processes that I will be focusing in my project which GE adopts within their business that not only reduces the cost and saves time but also provides the right amount of communication with its suppliers at the right time. For example, GE-Aviation has its own department for RB211 jumbo jet engine where there are teams responsible for engineering, operations, purchasing and billing. The engine gets repaired and maintained on site. For RB211 engine type, GEà ¢Ã¢â€š ¬Ã¢â€ž ¢s biggest supplier is Rolls Royce who is the OEMà ¢Ã¢â€š ¬Ã¢â€ž ¢s and can provide material many times. Using SAP software within the whole organisation saves a huge amount of time for purchasing transactions and also makes easy for GE purchasing team to analyse demand raised and provide forecasting to their suppliers for each product by just looking into the system and working through its historical past. GE uses Relationship Purchasing in which they believe to maximise their revenue it is very important to have good supplier relationships. Some of the key approaches/strategies required before working towards building relationships are as follows: Selecting a world class supplier Companies that outsources internationally their materials opens the opportunity to identify potential suppliers, evaluate and reasonably short list them that result with the best supplier. This is considered as one of the most important process to perform by the procurement team that aims to choose the best supplier that ensures reliable supplies with low risk involved and maximises the overall value to the buyer. The following are the seven key steps involved in supplier evaluation and selection process: (Fig 7.5 Supplier evaluation and selection process [pg 163]) Recognise the need for supplier selection The first step is to recognise the actual need for selection of supplier. Purchasing team must work with new product development department in order to recognise future buying behaviours. Purchasing groups proactively select suppliers and anticipate demands rather than wait until a demand rises. The process to start this evaluation arises due to the following scenarios: Through new product development Poor performance received from existing internal and external suppliers Closure of the contract Procuring new tools and equipments Thinking to expand business into new markets or products Due to inadequate capacity of existing suppliers Throughout outsourcing and re-engineering analyses Deciding to reduce the size of the supply base Identifying the main sourcing requirements All the way through evaluation process, procurement team must keep an eye on what they are intended to do. Acquiring materials is not just important but also focus to meet specific requirements set by the other internal customer and indirectly by other supply chain members. For example, an aviation company like GE that makes engines has to buy all the machinery and spare parts along with buyers taking care to ensure a perfect quality products are delivered on time. Establishing sourcing strategy Developing purchasing strategies results in long term alliances that buyers look each time to compete in todayà ¢Ã¢â€š ¬Ã¢â€ž ¢s growing competition. Several vital strategic decisions that affect the selection of suppliers are: Picking single or multiple suppliers Creating short-term or long-term contracts Supplierà ¢Ã¢â€š ¬Ã¢â€ž ¢s wish to develop working partnerships rather than armà ¢Ã¢â€š ¬Ã¢â€ž ¢s length relations Working with suppliers that can provide support with product designs rather than those who cannot modify designs Having choice of local, domestic, foreign or global suppliers Therefore, sourcing strategies and policies must be carefully re-evaluated during supplier selection as requirements changes frequently in shorter times because of changing market conditions, changing consumer preferences and accustomed corporate goals. Identifying potential suppliers This stage identifies a list of suppliers that can actually have the capability to deliver of what is required by the customer. Buyers can use various numbers of sources to develop the preliminary list of supply sources by a quick search of company websites as well as long and detailed search for companies that can support with design and make specialised products. A rule of thumb must take place to determine the effort to be used into supplier selection by comparing the existing supplierà ¢Ã¢â€š ¬Ã¢â€ž ¢s efficiency and strategic importance of an item because too much effort and expensive resources are wasted; too little effort and potential suppliers might be missed in this initial search criteria. Following are the sources of information widely-used to identify potential suppliers: Current suppliers à ¢Ã¢â€š ¬Ã¢â‚¬Å" Using existing suppliers who are already on the preferred list which are consistently meeting buyerà ¢Ã¢â€š ¬Ã¢â€ž ¢s requirements that reduces the purchasers time and effort in evaluation of supplier capabilities. But at the same time, existing supplier may not always provide the world class long term results and that is the reason why organisations scan information continuously to recognize potential new sources. Sales representatives and agents à ¢Ã¢â€š ¬Ã¢â‚¬Å" Marketing information received from these individuals can become a valuable source of information for new product offerings. Buyers keep this information in their file for future reference even if there is no urgent requirement for a supplier service. Internet searches à ¢Ã¢â€š ¬Ã¢â‚¬Å" Nowadays suppliers launch customer websites as part of their marketing approach and help the buyers with detailed information from a simple search of possible suppliers. Various other websites can also help in discovering and assessing important information like reviews, comparisons, comments, analyses and case studies of potential suppliers. Experience à ¢Ã¢â€š ¬Ã¢â‚¬Å" Experienced individuals working within purchasing team generally carries a wide knowledge about various capable suppliers as experienced buyers have already worked in a particular industry for many years and familiar with the main suppliers and their features. Internal sources à ¢Ã¢â€š ¬Ã¢â‚¬Å" Operating different business units within large organisations, each may have their own procurement department. Therefore, other units in the same organisation becomes a valuable source of information exchange to buyers through informal meetings, formal team sessions, an internal database, purchasing newsletters, etc. Limit suppliers in the selection pool At this stage, the procurement team must consolidate and analyse the information gathered on potential supply sources that helps them to make informed decisions. Getting a long list of suppliers is just the initial task but buyers then have to eliminate the weakest suppliers until they attain the strong shortlist. Therefore, the final supplier is then selected from this list. The following are the entry qualifiers features that influence buyerà ¢Ã¢â€š ¬Ã¢â€ž ¢s final decision [Howard (1998)]: Financial strength Appropriate business strategy Strong supportive management Proven manufacturing capability Design capability There are also many reasons that influence buyerà ¢Ã¢â€š ¬Ã¢â€ž ¢s decision to procure material on the following basis: Buying directly from the original manufacturer or distributor à ¢Ã¢â€š ¬Ã¢â‚¬Å" Original equipment manufacturers mostly offer lower prices that avoid the costs of wholesalers and retailers along with profit margins. The final choice must be considered on the basis of four factors including the size of the purchase, the manufacturerà ¢Ã¢â€š ¬Ã¢â€ž ¢s policies of direct sales, availability of storage at buyerà ¢Ã¢â€š ¬Ã¢â€ž ¢s facility, and the required additional services. Local, national, international and global suppliers à ¢Ã¢â€š ¬Ã¢â‚¬Å" Choosing international suppliers are more favourable as they usually offers the best price along with technical support but these have to be balanced by higher shipping costs, stocks, communication problems and common risks involved. Also, choosing local suppliers are considered more responsive to fluctuating demands, small deliveries and regular changes in purchase orders using Just-in-time method that not only supports local suppliers and allows the buyerà ¢Ã¢â€š ¬Ã¢â€ž ¢s to enhance local economy but also helps in building community goodwill. Large or small suppliers à ¢Ã¢â€š ¬Ã¢â‚¬Å" Usually buyers focus on supplierà ¢Ã¢â€š ¬Ã¢â€ž ¢s capability to do the work rather than selecting on the basis of its size. But a buyer must keep in mind the unexpected increase in demands that can only be dealt by larger firms providing extra capacity to overcome these fluctuations. At the same time, in order to create a diversified supply base, buyers intentionally deal with smaller suppliers. Multiple or single sourcing à ¢Ã¢â€š ¬Ã¢â‚¬Å" When there are numerous different suppliers available then it becomes very difficult to make a decision of how many to use? Most of the organisations have chosen a trend to reduce the supply base that will benefit them accordingly. Determining method to select supplier This is the last stage where buyers are left with four to five suppliers in their shortlist and decide to evaluate these remaining organisations by looking at the alternatives in more detail for example, using supplier-provided information, supplier/customer visits, preferred list of suppliers and third-party information. Supplier-provided information à ¢Ã¢â€š ¬Ã¢â‚¬Å" Detailed information can be acquired through requesting price quotations. Information received from quotations are then used to understand the product description and supply which is then followed by another requests of a detailed cost breakdown of the price quoted by suppliers initially that must include the costs of labour, materials, overheads and profit as buyers also require operational details to finally evaluate them. Supplier visits à ¢Ã¢â€š ¬Ã¢â‚¬Å" One of the most efficient ways of getting an overall view of supplierà ¢Ã¢â€š ¬Ã¢â€ž ¢s capabilities and performance is to visit supplierà ¢Ã¢â€š ¬Ã¢â€ž ¢s facilities by a cross-functional team. Generally, these visits are expensive and time consuming so a buyer must balance their desire to gather as much information as possible confidentially. The following table shows important information points that a buyer must collect during its visit: Management capability Quality management Technology levels Planning and scheduling effectiveness Financial strength Personnel relations E-business capabilities Sophistication and efficiency of operations ISO certifications Skills, knowledge and experience of workforce Evidence of good management and housekeeping Types of inventory Nature of the goods inwards, stores and outwards areas Environmental practices Employee employment contracts Any significant changes planned or expected Contact details of key decision makers Use of preferred suppliers à ¢Ã¢â€š ¬Ã¢â‚¬Å" This is a list of suppliers created by the purchasers to reward their best suppliers that consistently meets their strict performance criteria. The list can also be used as an incentive to improve the existing supplierà ¢Ã¢â€š ¬Ã¢â€ž ¢s performance and assessed accordingly. External or third-party information à ¢Ã¢â€š ¬Ã¢â‚¬Å" This consists of all the other information available about a potential supplier. For example, Total quality management is a system that insists suppliers to meet the quality standards as similar to buyers and generates a flow of related information throughout the supply chain. Selecting supplier and signing agreement This is the final step to choose the supplier followed by signing a contract. This includes different purchasing orders required for routine and major items, i.e. using standard purchase orders for routine items whereas, detailed negotiation is required to agree on specific details for major items that increases the complexity in the purchase order. Supplier evaluation criteria After considering various steps in selecting suppliers, the buying organisation must analyse the following questions with the supply organisation in order to progress outside their traditional purchasing relationships and possibilities for long term relationships with them: [Spekman (1988)] Has the supplier signified a dedication or willingness for a longer term relationship? Is the supplier enthusiastic to perform resources to develop this relationship? Is the supplier willing or able to participate at the early stage or throughout the stage of product design? Has supplier brought any unique service to the business? Is the supplier showed their interests or commitment towards customerà ¢Ã¢â€š ¬Ã¢â€ž ¢s problems and effectively solving them together? Is the supplier is interested in improvements and innovations in the operations? Is there any openness of sharing and exchanging information between both companies? How much knowledgeable is the supplier about the customerà ¢Ã¢â€š ¬Ã¢â€ž ¢s industry and business? Is the need for confidentially exchanged information taken seriously? Supplier management and development In todayà ¢Ã¢â€š ¬Ã¢â€ž ¢s time, the need to improve supplier performance is open in large or small organisations and for this reason; the purchasing teams must introduce a supplier relationship management (SRM) approach to achieve their organisational goals and success in global purchases of technology. Therefore, this calls for managing resources efficiently throughout supply chain collaborations, dedication required from supply managers, creating standardised best practices effectively and tools required for tracking and evaluating the results. The process must begin with effective supplier performance measures required to undertake strategic supply or procurement decisions for the organisation. [Minahan T. And Vigorose M. (2002)] Effective supplier performance measurements What to measure The factors important to assess the performance includes: Delivery performance à ¢Ã¢â€š ¬Ã¢â‚¬Å" The purchase orders that are sent to suppliers involves all the appropriate information on deliveries, with quantities, lead times and due dates. Therefore, it is buyerà ¢Ã¢â€š ¬Ã¢â€ž ¢s responsibility to check regularly that how well a supplier actually meets their expected conditions. Cost performance à ¢Ã¢â€š ¬Ã¢â‚¬Å" There are many ways that can measure cost performances for example, monitoring real price delivered by the supplier after adjusting increase in the prices (inflation). Quality performance à ¢Ã¢â€š ¬Ã¢â‚¬Å" In order to measure quality, the best criteria for buyers is to check that products are delivered in 100% perfect condition with no defects. This also includes comparing previous performances, latest performance with mutually agreed standards and various other figures. Other qualitative factors in supplier performance Factor Explanation Problem solving Supplierà ¢Ã¢â€š ¬Ã¢â€ž ¢s attention to provide solutions to the problem Technical skills Comparing supplierà ¢Ã¢â€š ¬Ã¢â€ž ¢s manufacturing capacity with other business suppliers Reporting progress Supplierà ¢Ã¢â€š ¬Ã¢â€ž ¢s incomplete reporting of existing problems and identifying and communicating other potential problems Corrective action Supplierà ¢Ã¢â€š ¬Ã¢â€ž ¢s timely response to requests for corrective actions and requests for changes Cost-reduction plans Supplierà ¢Ã¢â€š ¬Ã¢â€ž ¢s enthusiasm to find techniques that helps to reduce the total purchase cost New-product development support Supplierà ¢Ã¢â€š ¬Ã¢â€ž ¢s capability to reduce time and cost required for new product development Buyer/seller compatibility Rating subjectively how well a purchasing firm and a supplier work together Therefore, the above are various other factors that help the buyers to measure the supplierà ¢Ã¢â€š ¬Ã¢â€ž ¢s technical ability and closeness of both partiesà ¢Ã¢â€š ¬Ã¢â€ž ¢ relationships. Reporting frequency à ¢Ã¢â€š ¬Ã¢â‚¬Å" This includes preparing reports to provide a clear feedback to supplier on their performance. Purchasing management must communicate with their buyers to send these reports by reviewing them weekly, monthly, quarterly or annually which is then followed with more face-to-face team meeting that reviews their actual performance, discussion on targets, identify potential improvements, examine changes, and so on. Any problems (for example, supplier fails to meet the required standard) occurred during crucial time must be addressed with special reports and meetings to avoid any financial and operational problems. Use of measurement data à ¢Ã¢â€š ¬Ã¢â‚¬Å" Procurement staff can make use of data collected from its measurement systems in many ways including: Identifying suppliers which are not meeting the performance goals and highlighting areas that calls for improvements, followed by corrective actions taken to raise the performance to acceptable levels or else finding new suppliers. It helps in discovering excellent performances achieved from supplier which then helps identify preferred suppliers that qualify for long term alliances. It also recognises the worst performing suppliers that are continuously not improving and needs to be removed from supply base whereas offering more work to superior suppliers. Supplier measurement techniques à ¢Ã¢â€š ¬Ã¢â‚¬Å" There are three techniques discussed for evaluating performance of suppliers, each differs in their use, level of subjectivity, resources required and implementing cost. Categorical techniques à ¢Ã¢â€š ¬Ã¢â‚¬Å" These techniques considers a particular aspect of performance, for example lead time and classifies a set of categories for performance rating as excellent, good, fair or poor and therefore, helps buyers in deciding which supplier is good or bad. This is an easiest system of measurement, easy to use, comparatively inexpensive and also the most subjective. There are some drawbacks of using this technique as they do not provide a clear analysis of performance, slower than automated systems and regarded as the lowest of the three techniques in terms of reliability. Scoring model This method overcomes the subjectivity of categorical technique by calculating a weighted score for different performance categories. This is more reliable and requires reasonable implementation cost providing flexibility for buyers to change the categories included as well as weights allocated to each. Cost-based techniques à ¢Ã¢â€š ¬Ã¢â‚¬Å"This technique is the most comprehensive that can help the buying organisation to look for the total cost required for doing business with a particular supplier by identifying the lowest purchase price is not always the lowest cost of acquisition. Hence, this technique works through collecting data from the purchasing firmà ¢Ã¢â€š ¬Ã¢â€ž ¢s information system, analysing the total cost including the additional occurring costs whenever a supplier fails to perform as per expected by the buyer. This can be calculated using formula of supplier performance index (SPI) SPI = Total purchase costs + Non-performance costs Total purchase costs Supplier Development Approach Supplier development is an approach which was initially started in Toyota, Nissan and Honda in the 1930à ¢Ã¢â€š ¬Ã¢â€ž ¢s time. Toyotaà ¢Ã¢â€š ¬Ã¢â€ž ¢s emphasised the need to treat suppliers as a major part of their company though working together to develop their businesses collectively. The approach consists of all the initiatives that buyerà ¢Ã¢â€š ¬Ã¢â€ž ¢s can undertake to improve supplier relationships, performance or capabilities to meet the buyerà ¢Ã¢â€š ¬Ã¢â€ž ¢s short or long-term supply requirements. [Sako, M. (2004)] Procedures required for supplier development are as follows: [Handfield et al., 1998] Step 1: Identification of critical items/parts for development It is not important for every organisation to seek development approach within their business but when we talk about companies operating within aviation industry automatically needs to develop these approaches as work is involved on engines which require careful attention to crucial and specific parts. Following are some example of questions that must be answered yes by the procurement team in order to adopt the supplier development process: Do material procured account for more than 50% of product value? Is the existing or potential supplier can bring competitive advantage? Do you currently procure, or intend to procure on the basis of total cost or considering initial cost only? Can existing suppliers are able to meet the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s competitive needs for 5 years from now? Do the company wants the most responsive suppliers to demand and supply change? Is the buying organisation willing to become more responsive to the supplierà ¢Ã¢â€š ¬Ã¢â€ž ¢s needs? Does the buyer intend to treat their suppliers as partners in the business? Do the procurement staff plans for open and long-term trustworthy relationships with suppliers? Therefore, if the answers to above questions is yes, then it is worth introducing resources into supplier development programme followed by focusing on core activities first, for example analysing and defining a portfolio of the purchased critical items (materials) where solid benefits can be achieved from supplier development. Step 2: Identifying critical suppliers for development This step involves targeting those suppliers that needs development. The most common method could be the routine analysis of supplier performance such as using measurement approaches discussed before in the project. Suppliers producing unique and essential products with a difficulty to replace them if they donà ¢Ã¢â€š ¬Ã¢â€ž ¢t achieve the pre-determined targets are considered for development. Step 3: Forming cross-functional development teams Case study à ¢Ã¢â€š ¬Ã¢â‚¬Å" Accentureà ¢Ã¢â€š ¬Ã¢â€ž ¢s strategic supplier relationship management Accenture is a global management consulting, technology services and outsourcing company. They collaborate with their clients to help them become high-performance businesses and governments. The Accentureà ¢Ã¢â€š ¬Ã¢â€ž ¢s supply chain department works with customers across a broad range of industries to develop and execute operational strategies that allows profitable growth within existing and new markets. Their commitment is to help customers achieve high performance through supply chain excellence with a combination of global industry expertise and skills in supply chain strategy, sourcing and procurement, supply chain planning, manufacturing design, fulfilment and service management to help organisations transform their supply chain capabilities. Accenture defines SRM à ¢Ã¢â€š ¬Ã…“A systematic approach to manage suppliers in order to optimize the value delivered through the relationship over its life cycleà ¢Ã¢â€š ¬?. In todayà ¢Ã¢â€š ¬Ã¢â€ž ¢s economic environment, every organisation must adopt strategic approach to supplier relationship. Accentureà ¢Ã¢â€š ¬Ã¢â€ž ¢s strategic SRM methodology helps their customers to handle procurement costs and risks to achieve high performance in both good and bad economic times. Factors that emphasise the need for more strategic approach to SRM à ¢Ã¢â€š ¬Ã¢â‚¬Å" Increasing global competition and shorter product life cycles continues to call the need for strategic SRM. Factors are as follows: Volatile commodity prices

Sunday, December 22, 2019

A Comparative Analysis of Julius Caesar and Augustus

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Saturday, December 14, 2019

Social Media and Business Free Essays

string(35) " Media is far from groundbreaking\." Business Horizons (2010) 53, 59—68 www. elsevier. com/locate/bushor Users of the world, unite! The challenges and opportunities of Social Media Andreas M. We will write a custom essay sample on Social Media and Business or any similar topic only for you Order Now Kaplan *, Michael Haenlein ? ESCP Europe, 79 Avenue de la Republique, F-75011 Paris, France KEYWORDS Social Media; User Generated Content; Web 2. 0; Social networking sites; Virtual worlds Abstract The concept of Social Media is top of the agenda for many business executives today. Decision makers, as well as consultants, try to identify ways in which ? rms can make pro? able use of applications such as Wikipedia, YouTube, Facebook, Second Life, and Twitter. Yet despite this interest, there seems to be very limited understanding of what the term ‘‘Social Media’’ exactly means; this article intends to provide some clari? cation. We begin by describing the concept of Social Media, and discuss how it differs from related concepts such as Web 2. 0 and User Generated Content. Based on this de? nition, we then provide a classi? cation of Social Media which groups applications currently subsumed under the generalized term into more speci? categories by characteris tic: collaborative projects, blogs, content communities, social networking sites, virtual game worlds, and virtual social worlds. Finally, we present 10 pieces of advice for companies which decide to utilize Social Media. # 2009 Kelley School of Business, Indiana University. All rights reserved. 1. The specter of Social Media As of January 2009, the online social networking application Facebook registered more than 175 million active users. To put that number in perspective, this is only slightly less than the population of Brazil (190 million) and over twice the population of Germany (80 million)! At the same time, every minute, 10 hours of content were uploaded to the video sharing platform YouTube. And, the image hosting site Flickr provided access to over 3 billion photographs, making the world-famous Louvre * Corresponding author. E-mail addresses: mail@andreaskaplan. eu (A. M. Kaplan), haenlein@escpeurope. eu (M. Haenlein). Museum’s collection of 300,000 objects seem tiny in comparison. According to Forrester Research, 75% of Internet surfers used ‘‘Social Media’’ in the second quarter of 2008 by joining social networks, reading blogs, or contributing reviews to shopping sites; this represents a signi? ant rise from 56% in 2007. The growth is not limited to teenagers, either; members of Generation X, now 35—44 years old, increasingly populate the ranks of joiners, spectators, and critics. It is therefore reasonable to say that Social Media represent a revolutionary new trend that should be of interest to companies operating in onlin e space–—or any space, for that matter. Yet, not overly many ? rms seem to act comfortably in a world where consumers can speak so freely 0007-6813/$ — see front matter # 2009 Kelley School of Business, Indiana University. All rights reserved. doi:10. 1016/j. bushor. 2009. 09. 003 60 with each other and businesses have increasingly less control over the information available about them in cyberspace. Today, if an Internet user types the name of any leading brand into the Google search, what comes up among the top ? ve results typically includes not only the corporate webpage, but also the corresponding entry in the online encyclopedia Wikipedia. Here, for example, customers can read that the 2007 model of Hasbro’s Easy-Bake Oven may lead to serious burns on children’s hands and ? gers due to a poorly-designed oven door, and that the Firestone Tire and Rubber Company has been accused of using child labor in its Liberian rubber factory. Historically, companies were able to control the information available about them through strategically placed press announcements and good public relations managers. Today, however, ? rms have been increasingly relegated to the sidelines as mere observers, having neither the knowledge nor the chance–—or, sometimes, even the right–—to alter publicly posted comments provided by their customers. Wikipedia, for example, expressly forbids the participation of ? ms in its online community. Such an evolution may not be surprising. After all, the Internet started out as nothing more than a giant Bulletin Board System (BBS) that allowed users to exchange software, data, messages, and news with each other. The late 1990s saw a popularity surge in homepages, whereby the Average Joe could share information about his private life; today’s equivalent would be the weblog, or blog. The era of corporate web pages and e-commerce started relatively recently with the launch of Amazon and eBay in 1995, and got a right ticking-off only 6 years later when the dot-com bubble burst in 2001. The current trend toward Social Media can therefore be seen as an evolution back to the Internet’s roots, since it retransforms the World Wide Web to what it was initially created for: a platform to facilitate information exchange between users. But does that mean that Social Media is just old wine in new bottles? Probably not! As we will delve into further, the technical advances that have been made over the past 20 years now enable a form of virtual content sharing that is fundamentally different from, and more powerful than, the BBS of the late 1970s. This article discusses the challenges and opportunities that emerge from this evolution for ? rms, and provides structure to better understand the rapidly evolving ? eld of Social Media. We begin by providing a de? nition and classi? cation of Social Media by looking at their historical roots, technical speci? cities, and differences from other entities such as Web 2. 0 and User Generated Content. We then focus on six types of Social Media–—collaborative projects, blogs, A. M. Kaplan, M. Haenlein content communities, social networking sites, virtual game worlds, and virtual social worlds–—and present ways in which companies can ef? iently make use of these applications. Based on this analysis, we then derive a set of 10 recommendations companies should follow when thinking about developing their own Social Media strategy, be it with respect to these aforementioned types or other applications which might emerge in the future. 2. What is Social Media– —And what is it not? As highlighted, the idea behind Social Media is far from groundbreaking. You read "Social Media and Business" in category "Essay examples" Nevertheless, there seems to be confusion among managers and academic researchers alike as to what exactly should be included under this term, and how Social Media differ from the seemingly-interchangeable related concepts of Web 2. and User Generated Content. It therefore makes sense to take a step back and provide insight regarding where Social Media come from and what they include. By 1979, Tom Truscott and Jim Ellis from Duke University had created the Usenet, a worldwide discussion system that allowed Internet users to post public messages. Yet, the era of Social Media as we understand it today probably started about 20 years earlier, when Bruce and Susan Abelson founded ‘‘Open Diary,’’ an early social networking site that brought together online diary writers into one community. The term ‘‘weblog’’ was ? st used at the same time, and truncated as ‘‘blog’’ a year later when one blogger jokingly transformed the noun ‘‘weblog’’ into the sentence ‘‘we blog. ’’ The growing availability of high-speed Internet access further added to the popularity of the concept, leading to the creation of social networking sites such as MySpace (in 2003) and Facebook (in 2004). This, in turn, coined the term ‘‘Social Media,’’ and contributed to the prominence it has today. The most recent addition to this glamorous grouping has been so-called ‘‘virtual worlds’’: computerbased simulated environments inhabited by threedimensional avatars. Perhaps the best known virtual world is that of Linden Lab’s Second Life (Kaplan Haenlein, 2009c). Although the list of the aforementioned applications may give some idea about what is meant by Social Media, a formal de? nition of the term ? rst requires drawing a line to two related concepts that are frequently named in conjunction with it: Web 2. 0 and User Generated Content. Web 2. 0 is a term that was ? rst used in 2004 to describe a new way in which software developers and end-users started to Users of the world, unite! The challenges and opportunities of Social Media utilize the World Wide Web; that is, as a platform whereby content and applications are no longer created and published by individuals, but instead are continuously modi? ed by all users in a participatory and collaborative fashion. While applications such as personal web pages, Encyclopedia Britannica Online, and the idea of content publishing belong to the era of Web 1. 0, they are replaced by blogs, wikis, and collaborative projects in Web 2. 0. Although Web 2. 0 does not refer to any speci? technical update of the World Wide Web, there is a set of basic functionalities that are necessary for its functioning. Among them are Adobe Flash (a popular method for adding animation, interactivity, and audio/video streams to web pages), RSS (Really Simple Syndication, a family of web feed formats used to publish frequently updated content, such as blog entries or news headlines, in a standardized format), and AJAX (Asynchronous Java Script, a technique to retrieve data from web servers asynchronously, allowing the update of web content without interfering with the display and behavior of the whole page). For the purpose of our article, we consider Web 2. 0 as the platform for the evolution of Social Media. When Web 2. 0 represents the ideological and technological foundation, User Generated Content (UGC) can be seen as the sum of all ways in which people make use of Social Media. The term, which achieved broad popularity in 2005, is usually applied to describe the various forms of media content that are publicly available and created by end-users. According to the Organisation for Economic Cooperation and Development (OECD, 2007), UGC needs to ful? l three basic requirements in order to be considered as such: ? rst, it needs to be published either on a publicly accessible website or on a social networking site accessible to a selected group of people; second, it needs to show a certain amount of creative effort; and ? nally, it needs to have been created outside of professional routines and practices. The ? rst condition excludes content exchanged in e-mails or instant messages; the second, mere replications of already existing content (e. g. , posting a copy of an existing newspaper article on a personal blog without any modi? ations or commenting); and the third, all content that has been created with a commercial market context in mind. While UGC has already been available prior to Web 2. 0, as discussed above, the combination of technological drivers (e. g. , increased broadband availability and hardware capacity), economic drivers (e. g. , increased availability of tools for the creation of UGC), and social drivers (e. g. , rise of a generation of ‘‘digital natives’’ and ‘‘screenagers’’: younger age groups with substantial technical knowledge and 1 willingness to engage online) make UGC nowadays fundamentally different from what was observed in the early 1980s. Based on these clari? cations of Web 2. 0 and UGC, it is now straightforward to give a more detailed de? nition of what we mean by Social Media. I n our view–—and as used herein–—Social Media is a group of Internet-based applications that build on the ideological and technological foundations of Web 2. 0, and that allow the creation and exchange of User Generated Content. Within this general de? ition, there are various types of Social Media that need to be distinguished further. However, although most people would probably agree that Wikipedia, YouTube, Facebook, and Second Life are all part of this large group, there is no systematic way in which different Social Media applications can be categorized. Also, new sites appear in cyberspace every day, so it is important that any classi? cation scheme takes into account applications which may be forthcoming. To create such a classi? cation scheme, and to do so in a systematic manner, we rely on a set of theories in the ? ld of media research (social presence, media richness) and social processes (self-presentation, self-disclosure), the two key elemen ts of Social Media. Regarding the media-related component of Social Media, social presence theory (Short, Williams, Christie, 1976) states that media differ in the degree of ‘‘social presence’’–—de? ned as the acoustic, visual, and physical contact that can be achieved–—they allow to emerge between two communication partners. Social presence is in? uenced by the intimacy (interpersonal vs. mediated) and immediacy (asynchronous vs. ynchronous) of the medium, and can be expected to be lower for mediated (e. g. , telephone conversation) than interpersonal (e. g. , face-to-face discussion) and for asynchronous (e. g. , e-mail) than synchronous (e. g. , live chat) communications. The higher the social presence, the larger the social in? uence that the communication partners have on each other’s behavior. Closely related to the idea of social presence is the concept of media richness. Media richness theory (Daft Lengel, 1986) is based on the assumption that the goal of any communication is the resolution of ambiguity and the reduction of uncertainty. It states that media differ in the degree of richness they possess–—that is, the amount of information they allow to be transmitted in a given time interval–—and that therefore some media are more effective than others in resolving ambiguity and uncertainty. Applied to the context of Social Media, we assume that a ? rst classi? cation can be made based on the richness of the medium and the degree of social presence it allows. With respect to the social dimension of Social Media, the concept of self-presentation states that 2 in any type of social interaction people have the desire to control the impressions other people form of them (Goffman, 1959). On the one hand, this is done with the objective of in? uencing others to gain rewards (e. g. , make a positive impression on your future in-laws); on the other hand, it is driven by a wish to create an image that is consistent with one’s personal identity (e. g. , wearing a fashionable out? t in order t o be perceived as young and trendy). The key reason why people decide to create a personal webpage is, for example, the wish to present themselves in cyberspace (Schau Gilly, 2003). Usually, such a presentation is done through self-disclosure; that is, the conscious or unconscious revelation of personal information (e. g. , thoughts, feelings, likes, dislikes) that is consistent with the image one would like to give. Self-disclosure is a critical step in the development of close relationships (e. g. , during dating) but can also occur between complete strangers; for example, when speaking about personal problems with the person seated next to you on an airplane. Applied to the context of Social Media, we assume that a second classi? ation can be made based on the degree of self-disclosure it requires and the type of self-presentation it allows. Combining both dimensions leads to a classi? cation of Social Media which we have visualized in Table 1. With respect to social presence and media richness, applications such as collaborative projects (e. g. , Wikipedia) and blogs score lowest, as they are often text-based and hence only allow for a relatively simple exch ange. On the next level are content communities (e. g. , YouTube) and social networking sites (e. g. Facebook) which, in addition to text-based communication, enable the sharing of pictures, videos, and other forms of media. On the highest level are virtual game and social worlds (e. g. , World of Warcraft, Second Life), which try to replicate all dimensions of face-to-face interactions in a virtual environment. Regarding self-presentation and self-disclosure, blogs usually score higher than collaborative projects, as the latter tend to be focused on speci? c content domains. Table 1. A. M. Kaplan, M. Haenlein In a similar spirit, social networking sites allow for more self-disclosure than content communities. Finally, virtual social worlds require a higher level of self-disclosure than virtual game worlds, as the latter are ruled by strict guidelines that force users to behave in a certain way (e. g. , as warriors in an imaginary fantasy land). We will now provide more detail on each of these six different types of Social Media, and discuss the challenges and opportunities they offer companies. 3. The challenges and opportunities of Social Media 3. 1. Collaborative projects Collaborative projects enable the joint and simultaneous creation of content by many end-users and are, in this sense, probably the most democratic manifestation of UGC. Within collaborative projects, one differentiates between wikis–—that is, websites which allow users to add, remove, and change text-based content–—and social bookmarking applications–—which enable the group-based collection and rating of Internet links or media content. Exemplary applications within this category include the online encyclopedia Wikipedia, a wiki currently available in more than 230 different languages, and the social bookmarking web service Delicious, which allows the storage and sharing of web bookmarks. The main idea underlying collaborative projects is that the joint effort of many actors leads to a better outcome than any actor could achieve individually; this is similar to the ef? cient-market hypothesis in behavioral ? nance (Fama, 1970). From a corporate perspective, ? rms must be aware that collaborative projects are trending toward becoming the main source of information for many consumers. As such, although not everything written on Wikipedia may actually be true, it is believed to be true by more and more Internet users. This may be particularly crucial as regards corporate crises. For example, Classi? ation of Social Media by social presence/media richness and self-presentation/self-disclosure Users of the world, unite! The challenges and opportunities of Social Media when online book retailer Amazon started to test the idea of dynamic pricing, comments declaring such a practice as unfair showed up instantaneously under the Wikipedia entry on ‘‘time-based prici ng. ’’ Yet, collaborative projects also provide some unique opportunities for ? rms. Finnish handset manufacturer Nokia, for instance, uses internal wikis to update employees on project status and to trade ideas, which are used by about 20% of its 68,000 staff members. Likewise, American computer software company Adobe Systems maintains a list of bookmarks to company-related websites and conversations on Delicious. 63 3. 3. Content communities The main objective of content communities is the sharing of media content between users. Content communities exist for a wide range of different media types, including text (e. g. , BookCrossing, via which 750,000+ people from over 130 countries share books), photos (e. g. , Flickr), videos (e. g. , YouTube), and PowerPoint presentations (e. g. , Slideshare). Users on content communities are not required to create a personal pro? e page; if they do, these pages usually only contain basic information, such as the date they joined the community and the number of videos shared. From a corporate viewpoint, content communities carry the risk of being used as platforms for the sharing of copyright-protected materials. While major content communities have rules in place to ban and remove such illegal content, it is dif? cult to avoid popular videos–—such as recent episodes of comedy dramas–—being uploaded to YouTube only hours after they have been aired on television. On the positive side, the high popularity of content communities makes them a very attractive contact channel for many ? rms; this is easy to believe when one considers that YouTube serves over 100 million videos per day. In 2007, Procter Gamble organized a contest for its over-the-counter drug Pepto-Bismol, whereby users were encouraged to upload to YouTube 1-minute videos of themselves singing about the ailments Pepto-Bismol counteracts, including heartburn and nausea. In a similar spirit, kitchen appliances manufacturer Blendtec became popular for its bevy of inexpensive ‘‘Will it blend? ’ videos, which have been watched by millions of people. Other ? rms, such as Cisco and Google, rely on content communities to share recruiting videos, as well as keynote speeches and press announcements, with their employees and investors. 3. 2. Blogs Blogs, which represent the earliest form of Social Media, are special types of websites that usually display date-stamped entri es in reverse chronological order (OECD, 2007). They are the Social Media equivalent of personal web pages and can come in a multitude of different variations, from personal diaries describing the author’s life to summaries of all relevant information in one speci? content area. Blogs are usually managed by one person only, but provide the possibility of interaction with others through the addition of comments. Due to their historical roots, text-based blogs are still by far the most common. Nevertheless, blogs have also begun to take different media formats. For example, San Francisco-based Justin. tv allows users to create personalized television channels via which they can broadcast images from their webcam in real time to other users. Many companies are already using blogs to update employees, customers, and shareholders on developments they consider to be important. Jonathan Schwartz, CEO of Sun Microsystems, maintains a personal blog to improve the transparency of his company; so does automotive giant General Motors. Yet, as is the case with collaborative projects, blogs do not come without risks. These generally present in two fashions. First, customers who–—for one reason or another–—turn out to be dissatis? ed with or disappointed by the company’s offerings may decide to engage in virtual complaints in the form of protest websites or blogs (Ward Ostrom, 2006), which results in the availability of potentially damaging information in online space. Second, once ? rms encourage employees to be active on blogs, they may need to live with the consequences of staff members writing negatively about the ? rm. Microsoft’s former ‘‘technical evangelist’’ Robert Scoble, for example, had a tendency to ? ercely criticize the products of his employer–— before he decided to leave the Redmond-based software company in 2006. 3. 4. Social networking sites Social networking sites are applications that enable users to connect by creating personal information pro? les, inviting friends and colleagues to have access to those pro? es, and sending e-mails and instant messages between each other. These personal pro? les can include any type of information, including photos, video, audio ? les, and blogs. According to Wikipedia, the largest social networking sites are U. S. -based Facebook (initially founded by Mark Zuckerberg to stay in touch with his fellow students from Harvard University) and MySpace (with 1,500 employees and more than 250 million registered users). Social networking sites are of such high popularity, speci? cally among younger Internet 4 users, that the term ‘‘Facebook addict’’ has been included in the Urban Dictionary, a collaborative project focused on developing a slang dictionary for the English language. Several companies are already using social networking sites to support the creation of brand communities (Muniz O’Guinn, 2001) or for marketing research in the context of netnography (Kozinets, 2002). To promote the movie ‘‘Fred Claus,’’ a 2007 Christmas comedy ? lm, Warner Brothers created a Facebook pro? le via which visitors could watch trailers, download graphics, and play games. Likewise, the Adidas custom soccer community on MySpace allows visitors to associate themselves with one of two brands of elite soccer cleats produced by the German sports apparel manufacturer, and to access product reviews and information on professional soccer players who play using ‘‘their’’ shoes. Some ? rms even go one step further and use Facebook as a distribution channel. Consider U. S. -based ? orist 1-800-Flowers. com, which offers a widget on Facebook called ‘‘Gimme Love’’ whereby users can send ‘‘virtual bouquets’’ to friends or, with a click of the mouse, be directly transferred to the company’s website to send real ? wers. A. M. Kaplan, M. Haenlein hunter–—starts to more and more closely resemble their real life personality. Besides their use for ingame advertising (similar in idea to product placement in blockbuster movies), the high popularity of virtual game worlds can also be leveraged in more traditional communication campaigns. Japanese automotive giant Toyota, for example, used pictures and mechanics from the World of Warcraft application in its latest Tundra commercial to reach the 2. 5 million players in the U. S. lone. 3. 6. Virtual social worlds The second group of virtual worlds, often referred to as virtual social worlds, allows inhabitants to choose their behavior more freely and essentially live a virtual life similar to their real life. As in virtual game worlds, virtual social world users appear in the form of avatars and interact in a three-dimensional virtual environment; however, in this realm, there are no rules restricting the range of possible interactions, except for basic physical laws such as gravity. This allows for an unlimited range of self presentation strategies, and it has been shown that with increasing usage intensity and consumption experience, users of virtual social worlds–—or ‘‘residents,’’ as they prefer to be called–—show behavior that more and more closely mirrors the one observed in real life settings (Haenlein Kaplan, 2009; Kaplan Haenlein, 2009a, 2009b). Arguably, the most prominent example of virtual social worlds is the Second Life application, founded and managed by the San Francisco-based company Linden Research Inc. Besides doing everything that is possible in real life (e. g. , speaking to other avatars, taking a walk, enjoying the virtual sunshine), Second Life also allows users to create content (e. g. , to design virtual clothing or furniture items) and to sell this content to others in exchange for Linden Dollars, a virtual currency traded against the U. S. Dollar on the Second Life Exchange. Some residents are so successful in this task that the virtual money earned that way complements their real life income. Virtual social worlds offer a multitude of opportunities for companies in marketing (advertising/communication, virtual product sales/v-Commerce, marketing research), and human resource and internal process management; for a more detailed discussion, see Kaplan and Haenlein (2009c). 3. 5. Virtual game worlds Virtual worlds are platforms that replicate a threedimensional environment in which users can appear in the form of personalized avatars and interact with each other as they would in real life. In this sense, virtual worlds are probably the ultimate manifestation of Social Media, as they provide the highest level of social presence and media richness of all applications discussed thus far. Virtual worlds come in two forms. The ? rst, virtual game worlds, require their users to behave according to strict rules in the context of a massively multiplayer online role-playing game (MMORPG). These applications have gained popularity in recent years, as standard game consoles–—such as Microsoft’s X-Box and Sony’s PlayStation–—now allow simultaneous play among a multitude of users around the globe. Examples of virtual game worlds include the cod-medieval ‘‘World of Warcraft,’’ which counts around 8. 5 million subscribers who explore the virtual planet of Azeroth in the form of humans, dwarves, orcs, or night elves, to ? ght monsters or to search for treasure; and Sony’s EverQuest, in which 16 different races of players (e. g. , wizards, clerics) travel the fantasy world of Norrath. The rules of such games usually limit the degree of self-presentation and self-disclosure possible, although some users spend so much time with these applications that their character–—be it a warrior, a wizard, or a dragon . Ten pieces of advice for companies deciding to use Social Media Social Media is a very active and fast-moving domain. What may be up-to-date today could have Users of the world, unite! The challenges and opportunities of Social Media disappeared from the virtual landscape tomorrow. It is therefore crucial for ? rms to have a set of guidelines that can be applied to any form of Social Media, whether they are part of the aforementioned list or not. Next, we provide such a set of recommendations. Given that Social Media have both a social- and a media-component, we split our advice into two sections: ? e points about using media and ? ve points about being social. 65 4. 1. Five points about using media 4. 1. 1. Choose carefully There are dozens–—if not hundreds–—of Social Media applications, and new ones are appearing on the horizon every day. If you still need time to run your core business, you simply cannot participate in them all, especially since ‘‘being active’’ is one key requirement of success (see below). Choosing the right medium for any given purpose depends on the target group to be reached and the message to be communicated. On the one hand, each Social Media application usually attracts a certain group of people and ? rms should be active wherever their customers are present. For example, if your main target audience is book lovers, a content community via which users share self-written novels or poems is likely better suited to your purpose than a virtual world which centers on ? ghting dragons and ? nding treasures. On the other hand, there may be situations whereby certain features are necessary to ensure effective communication, and these features are only offered by one speci? c application. For example, when the U. S. Army undertook an initiative in 2007 to reach the Hispanic community, it decided to utilize the social networking site Univision rather than the more popular Facebook. This choice was driven in part by the fact that Univision–—a Spanish-language television network in the U. S. and Puerto Rico–—is the social networking application with the largest Latin American audience, due to an extensive range of telenovelas and Mexican programs produced by Grupo Televisa. However, another reason Univision was chosen is because it offers a moderating service which checks comments from users for appropriateness before posting them on the site. In contrast, other applications, including Facebook, allow users to post messages without supervision. 4. 1. 2. Pick the application, or make your own Once you know which game you’re playing, the next decision involves whether to make or buy. In some cases, it might just be best to join an existing Social Media application and bene? t from its popularity and user base. After all, there is no need to reinvent the wheel if somebody has already done it, especially given that Social Media show positive network externalities in the sense that they get more attractive to join the more participants they already have. But in some cases, the right application might just not be available yet. Japan’s Fuji? lm, for example, recently launched its own social network to build a community of photo enthusiasts. In a similar spirit, U. S. -based department store ? rm Sears collaborated with MTV music television to create a social network around back-to-school shopping. Yet, whatever the ultimate decision–—to buy, make, or both–— it is vital that there is an understanding of the basic idea behind Social Media. It’s all about participation, sharing, and collaboration, rather than straightforward advertising and selling. 4. 1. 3. Ensure activity alignment Sometimes you may decide to rely on various Social Media, or a set of different applications within the same group, in order to have the largest possible reach. In this case, it is crucial to ensure that your Social Media activities are all aligned with each other. A prime example in this context is computer manufacturer Dell and its ‘‘Digital Nomads’’ campaign. Dell uses a combination of social networking sites (Facebook, LinkedIn), blogs, and content communities (YouTube videos) to show how its range of laptop computers enable individuals to become a nomadic mobile workforce. In a similar spirit, Chrysler’s Jeep brand connects with its customers by combining photos shared on the content community Flickr, with groups on social networking sites such as MySpace and Facebook. Using different contact channels can be a worthwhile and pro? table strategy. But remember: one goal of communication is the resolution of ambiguity and reduction of uncertainty, and nothing is more confusing than contradicting messages across different channels. 4. 1. 4. Media plan integration What is true for different types of Social Media also holds for the relationship between Social Media and traditional media: Integration is key! While you may consider these two arenas to be completely different, in customers’ eyes they are both part of the same: your corporate image. Consider the actions of soft drink giant Coca-Cola. In June 2006, a pair of performance artists shot a video featuring a series of geysers they created by dropping Mentos brand mints into 2-liter bottles of Coke; the clip became a major hit on YouTube. Realizing customers’ enthusiasm for this performance, Coca-Cola fostered the sensation by airing the video on late-night television and ensuring broad digital distribution across different content communities. Besides the advantage of 66 high impact/low cost media coverage, the campaign also resulted in a measurable sales uplift. 4. 1. 5. Access for all Although this might sound elementary, once the ? rm has decided to utilize Social Media applications, it is worth checking that all employees may actually access them. Commonly, ? rms block Facebook, YouTube, and Second Life on corporate PCs for fear that staff might spend too much time networking instead of working. While this is certainly a consideration, it cannot imply that employees must have special permission to be able to access the company blog. At the same time, there is a need to curtail the possibility of the entire organization spending all its time producing funny videos and uploading them to YouTube. One possible approach involves de? ning groups of employees whose primary objective is the management of corporate Social Media; all other staff members are treated as occasional participants. Under this scenario, the ? rst group is given administrator rights–—which allows the opening of new discussion threads and deletion of inappropriate posts–—while the second group is not. Also, at some point, it will be necessary to develop certain guidelines for Social Media usage; as done, for instance, by ‘‘Big Blue’’ IBM, which has a corporate charta for appropriate behavior within Second Life. For example, it is important to highlight that every employee needs to identify himself or herself as such when posting a comment on the corporate blog. Otherwise, end-consumers could get the impression that anonymous accounts are used to enable employees to post fake messages and overly-positive feedback, which could severely damage the credibility of your whole Social Media campaign. A. M. Kaplan, M. Haenlein else’s than it is about engaging others in open and active conversation. Participants on Social Media applications have the desire to actively engage and to become both producers and consumers of information, so-called ‘‘prosumers’’ (Tof? er, 1980). Be considerate of this need and act accordingly. 4. 2. 2. Be interesting Let’s face it: nobody is interested in speaking to a boring person. As such, if you would like your customers to engage with you, you need to give them a reason for doing so–—one which extends beyond saying you are the best airline in town, or manufacture the most robust kitchen blender. The ? st step is to listen to your customers. Find out what they would like to hear; what they would like to talk about; what they might ? nd interesting, enjoyable, and valuable. Then, develop and post content that ? ts those expectations. Coffee powerhouse Starbucks, for example, created the ‘‘My Starbucks I dea’’ platform, via which customers can submit new ideas for the company. These ideas are subsequently voted on by other users, with the winners being considered for implementation by Starbucks top management. As stated by Oscar Wilde in his novel, The Picture of Dorian Grey: The one sin for which there is no forgiveness is ennui. . 2. 3. Be humble Never forget that Social Media existed before you decided to engage in them; indeed, in many cases, even before you knew about their existence. In this light, do not expect that you know better how to use them than others who have spent countless hours on Facebook or Second Life, for example. Before you enter any application, ? rst take some time to discover it and to learn about its history and basic rules. Only once you have gained the necessary understanding, start to participate. When aerospace and defense ? rm Boeing decided to launch its ? st corporate blog, the site was designed such that users were not allowed to com ment on what they saw. Yet, interaction and feedback are critical elements of all Social Media, blogs included. Hence, many readers perceived the Boeing blog as a fake, and simply corporate advertising in disguise. If there is one certain path to failure, it involves thinking that Social Media is just about posting existing TV spots on YouTube or putting prefabricated press announcements on corporate blogs. 4. 2. 4. Be unprofessional Have you ever noticed that in Hollywood blockbuster ? ms, it’s not usually the handsome guy who ends up with the girl, but rather the clumsy, charming one? The same goes for Social Media, and ? rms 4. 2. Five points about being social 4. 2. 1. Be active If you want to develop a relationship with someone, it is always advisable to take the lead and to be active. Social Media are all about sharing and interaction, so ensure that your content is always fresh and that you engage in discussions with your customers. Consider the aforementioned blog kep t by Sun Microsystems CEO Jonathan Schwartz. Via this outlet, the ? urehead discusses–—on an ongoing basis–—his corporate strategy, new product development projects, and company values, and replies directly to correspondence received. In considering your Social Media efforts, be aware that ? rm involvement must extend beyond responding to negative comments and defending product offerings. Social Media is less about explaining why your baking mix, detergent, or shampoo is better than anyone Users of the world, unite! The challenges and opportunities of Social Media would be wise to avoid overly-professional content offerings. There’s no need to spend $100,000 to design the perfect MySpace presence, or hire a professional writer to manage your corporate blog. Instead, try to blend in with other users and don’t be afraid to make mistakes! Bill Marriott, Chairman and CEO of the Marriott International Hotel chain, uses his blog, for example, to post regular updates and stories from his travels to Marriott properties around the world–—very much in the same way as would a work colleague when describing her last vacation. Social Media users are people like you, who understand that things do not always go smoothly. And, if you’re nice to them, they may even give you free advice on how to do it better the next time. 4. 2. 5. Be honest Last but not least, be honest and respect the rules of the game. Some Social Media–—such as Wikipedia–— may not allow companies to be involved, so do not try to force your way in. Consider Anheuser-Busch, owner of SeaWorld marine mammal parks. Anheuser-Busch tried to ‘‘rectify’’ misleading information on Wikipedia through the use of PR ? rms, and failed miserably at it. Never expect that other participants may not ? d out who stands behind some anonymous user account; after all, you’re dealing with some of the most technologically sophisticated people on the planet. 67 5. Nothing to lose but their chains Today, everything is about Social Media. Some industry gurus claim that if you do not participate in Facebook, YouTube, and Second Life, you are not part of cyberspace anymore. Social Media allow ? rms to engage in timely and direct end-consumer contact at relatively low cost and higher levels of ef? ciency than can be achieved with more traditional communication tools. This makes Social Media not only relevant for large multinational ? rms, but also for small and medium sized companies, and even nonpro? t and governmental agencies. Using Social Media is not an easy task and may require new ways of thinking, but the potential gains are far from being negligible. Dell, for example, states that its use of Twitter–—a micro blogging application that allows sending out short, text-based posts of 140 characters or less–—has generated $1 million in incremental revenue due to sales alerts. Some ? ms may even be too successful for their own good, as illustrated by Burger King’s ‘‘Whopper Sacri? ce’’ campaign: In December 2008, the fast food giant developed a Facebook application which gave users a free Whopper sandwich for every 10 friends they deleted from their Facebook network. The campaign was adopted by over 20,000 users, resulting in the sacri? cing of 233,906 friends in exchange for free bur gers. Only one month later, in January 2009, Facebook shut down Whopper Sacri? ce, citing privacy concerns. Who would have thought that the price of a friendship is less than $2 a dozen? A new trend is on the horizon, though; Watch out for Mobile Social Media! Mobile Web 2. 0 is very similar to Web 2. 0, as discussed earlier. In contrast to its predecessor Mobile Web 1. 0, which relied on proprietary protocols (e. g. , WAP) and use-based pricing, Mobile Web 2. 0 is characterized by open standards (e. g. , a transition to the TCP/IP protocol, the technical foundation of the World Wide Web) and ? at-rate systems. Even the manual entry of web addresses using small and dif? cult-to-handle keyboards is becoming history. Soon, all items around you will be equipped with Radio Frequency Identi? cation (RFID) tags that will be able to automatically connect to your mobile phone and send URLs to them, similar to today’s text messages. This technical evolution is laying the groundwork for moving Social Media applications away from desktop PCs and laptops, toward mobile devices. Why log into Facebook if you can easily update all your friends using Twitter? Why wait until you return home to watch the new YouTube video if you can do so conveniently on your iPhone? According to Jupiter Research, the market for Mobile Web 2. evolutions will grow from a mere $5. 5 billion today to an impressive $22. 4 billion by 2013. Mobile Social Media applications are expected to be the main driver of this evolution, soon accounting for over 50% of the market. In one way, this surge toward Mobile Social Media can even be seen as another step toward Internet democratization and closing the digital divide between develop ed and emerging countries. In India, for example, mobile phones outnumber PCs by 10 to 1. In Thailand, only 13% of the population owns a computer, versus 82% who have access to a mobile phone. It is therefore not surprising that the Pew Research Center–—a Washington-based think tank–—estimates that by 2020, a mobile device will be the primary Internet connection tool for most people in the world. Making Social Media applications mobile is likely to tap a currently unexploited base of new users. Even if percapita spending in these countries may still be low, vast population numbers make them relevant for virtually any ? rm. Obviously, Mobile Social Media does not come without a price. Some would argue that while it enables the detailed following of friends half-way across the world, it can foster a society where we don’t now the names of our own next-door neighbors. Be that as it may, and independent of 68 whether or not one approves of such an evolution, it seems undisputable that (Mobile) Social Media will be the locomotive via which the World Wide Web evolves. Businesses, take note–—and don’t miss this train! A. M. Kaplan, M. Haenlein Kaplan, A. M. , Haenlein, M. (2009b). Consumers, companies, and virtual social worlds: A qualitative analysis of Second Life. Advances in Consumer Research, 36(1), 873—874. Kaplan, A. M. , Haenlein, M. (2009c). The fairyland of Second Life: About virtual social worlds and how to use them. Business Horizons, 52(6), 563—572. Kozinets, R. V. 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Friday, December 6, 2019

Short Essay Public Health

Question: Describe the determinant of urbanization on major chronic diseases in low- and middle-income countries, focusing on at least 3 major points? Answer: Many chronic diseases have occurred within low and medium developed countries of the world. Cancer, stroke, heart diseases are very chronic diseases within low and medium countries. However, the deaths of people by chronic diseases have been increased in developing countries. On the other hand, 80 % deaths of people by chronic diseases have been decreased within many developed countries of the world. However, most of the people live here within low and medium earning countries of world. Several impacts of chronic diseases are increased within low and middle economic countries of the world. As discussed by Ebrahim et al. (2013), the increased phenomenon of chronic diseases are caused for the rapid changes of urbanization, globalization and increase of ageing population. Therefore, these countries of middle income have seen a rapid progress within the process of urbanization. The process of urbanization has affected the changing habits of people within the society. The determinants of urbanization, globalization has affected upon the risk factors of physical inactivity, use of tobacco and unhealthy diet of the people within the society. However, these countries also have faced several issues while acquiring the services of healthcare within these developing countries of middle economy. These countries have faced issues regarding better infrastructure of healthcare within the country. Several media campaigns have been taken place for mitigating the risks of the chronic diseases within the society. Full range of disease interventions is very costly for the people of middle ranges of people of these countries of middle or low income (Popkin, 2014). Reference list: Ebrahim, S., Pearce, N., Smeeth, L., Casas, J. P., Jaffar, S., and Piot, P. (2013). Tackling non-communicable diseases in low-and middle-income countries: is the evidence from high-income countries all we need.PLoS Med,10(1), e1001377. Popkin, B. M. (2014). Synthesis and implications: China's nutrition transition in the context of changes across other low and middle income countries.obesity reviews,15(S1), 60-67.