International Business Analysis of the Macro Environment

Question: Discuss about the International Business Analysis of the Macro Environment. Answer: Introduction The present business report focuses on the features that are involved in the process of international business. With the advancement of globalization, the barriers of international trade have been neutralized and it is possible for the Multinational companies to expand their business territories in the market of many different countries. According to Hirst et al. (2015), the globalization of market and the globalization of different products have been the main driving force of globalization in all the major nations of the globe. In the current context all the major companies of the world has been successfully able to establish themselves as the major global brands. The two of the major types of international business includes the import and the export based types of business. In case of import based business, the sourcing of the supplies is done from the oversea areas. On the other hand, in case of the export based international business, the products or service is being delivered to the overseas customers. It is essential for an international company to deal with the political and economical conditions of a nation, where they are planning to do their business. Considering the legal matters is also one of the important parts of the international business. The local culture and lifestyles of the people of the nation also has a major impact on the business as it helps to decide the demand of a product. The current business report focuses on the Company named Tyson Food, which is an American based meat and food processing company and they are planning to expand their market in the Australian region. Brief Introduction to the Company The Tyson Foods Inc. is one of the leading multinational companies of the world that is considered to be one of the leading meat and food producing brands. It is an American based company, which has its headquarter in the Arkansas region of United States. The company is considered to be the worlds largest producers of beef, pork and chicken. It is also considered to be one of the largest exporter of all types of meat in the world and it is has a significant market share in the meat and food processing industry, in all the major nations of the world. The company was established in the year of 1930. In the early years the company has to struggle especially during the time of World War II, when there was shortage of food. Nevertheless, due to high level of cultural diversity within the company, they have been able to establish themselves as one of the leading meat and food processing brands of the world. The company is one of the leading procedure of meat and other poultry products in the world. In the fiscal year of 2013, the company has been able to invest $15 billion to all the independent farmers, who has been able to supply live stocks for the production of processed meat. There are more than 11,000 farmers, who are directly dependent on the company for the sale of their products ("Tyson Foods: Around the World", 2017). The company also has been working directly with the poultry farmers, and provides them with assistance regarding the increasing the rate of their production, which has allowed the company to meet the global demand of meat and other, processed foods. The use of the latest technology along with the findings in the advanced poultry products is being applied in all the poultry that has helped the company to increase the rate of production. The wide range of processed food and meat products that are available within the market has helped the Tyson Food Company to have wide range of market share in the respective domain. With the introduction of the processed foods, it is possible for the company to deal with the increased demand of foods within in all parts of the globe. The Tyson Foods is also the largest suppliers of meat to all the major fast food companies of the world including KFC, MacDonald and Dominos. Many of the major retail companies of the world including Wal-Mart and Kroger and many other small scale industries depends on Tyson Foods to get the supply of raw meat and other processed foods. Brief Introduction to the chosen country The Tyson Foods in the recent years have planned to expand their range of international business in the market of Australia. According to the report of the Australian International Business, the nation has been considered to be one of the best destinations of investments by the foreign companies. With effective support from the government of Australia all the major global brands have been get wide range of business opportunity and expand the business in the nation. With the change in the life styles among the people, the food habit of the people of the people of Australia has changed significantly in the recent years. More number of people is dependent of processed meat products that can easily be stored and used for longer period of time. With the advancement of food technology and better processing unit in the food industry, it seems to have a huge potential. During the present days, there are no major international companies in Australia that has been introduced the business processed meat and food. However, with the current trends of the people off Australia and their food habit style, the processed meat and food industry is one of the fastest growing sectors of the nation. As no major international brands have established the business in the Australian region, the Tyson Food Company has good opportunity to penetrate the industry in the consumer market of Australia. In spite of being one of the major producers of raw meat nations of the world, the meat processing industry of Australian has not been able to grow due to lack of investment in this sector. The domestic production of raw meat in the Australian region has witnessed tremendous improvement in the recent times, which provides sufficient opportunity for the meat processing companies to get sufficient supply of raw materials. The political, economic and the cultural background of the nation are highly responsible for the rate of success of the international business in the Australian region. With the help of the friendly business environment and high demand in the consumer market, it is possible for the Tyson Foods to make strong establishment in the region. Economic Analysis The Economic factor of a region is one of the primary determinants of factors that help in the process of international business of the multinational companies. The economic policies of a nation prepared by the respective governments that includes all the taxation policies have major impact on the international business that is being practiced by the multinational companies (Rahman Mamun 2016). The specific policies have includes all the major tax regulation rules that will help in the development process of the business. The rate of success of the international business and the level of profit that is earned by the international companies depends largely on the role played by the International Monetary Fund (IMF) in making economic rules. The IMF has its base in 188 nations of the world and it is the duty maintain foster in the global economic condition of the world. With the help of the economic policies, it is possible to decide upon the foreign exchange rates, which decide upon the rate of conversion of the currencies from one nation to another. The international financial market plays a significant role in the controlling the international capital market of international business. The value of currency of Australia is totally dependent on the rate and the nature of the foreign exchange market in US and China. Australia being one of the developed nations of the world is known to have highly stable economic condition that can provide good opportunity for any multinational companies to expand their level of international business. Australia is considered to be one of the leading economic powers of the world with the net GDP value of AUD$ 1.62 trillion, which was considered to be one of 12th largest in the world. The rate of growth of GDP in 2016 was calculated to be 1.7%. With the occupancy of 68% of the total economic growth the service sector is the leading contributors to the economy of Australia (Hellwig McAllister 2016). In spite of the recent crisis of in the global financial and economical sectors, the economy of Australia has not witnessed any major setbacks. This stable economic condition of the nation has encouraged high rate of foreign cash flow in the nation. The International Monetary Fund has also predicted Australia as one of the major advanced economies in the world. The level of corruption is also one of the leading factors that help to decide upon the economic condition of a nation. With high level of corruption with the government administration of a nation, there is high chance of poor economic condition of the nation that is major barrier in the path of economic development. Hence, is important to have low rate of corruption in the market economy of a nation, which will help to deal with better position related to the international business. With higher rate of corruption within a nation the rate of business taxes that are charged by the government increases, thereby increasing the cost of the business. In Australia the tough and extreme form of laws have ensured that there are almost negligible loss of government from any forms of corruption, which has created a good condition for the international business. The Tyson Foods being one of the major American Multinational companies, it is possible for them to explore the business opportunities, which exist in the food and meat processing industries of Australia. The economic relation between the nations of United States and Australia also will help the Tyson Foods to easily expand in the consumer market of Australia and thereby have the capacity to deal with the all the business challenges that exists within the nations. The establishment of the company is also expected to boost the economic growth of the nation as it will help in the contribution of GDP by providing employment to the people of the nation. With the establishment of the food processing industry, the dairy and the poultries of Australia is also expected to have better rate of business as they will get regular source to sell their products at a standard level of price. Political and Legal Analysis The political factors are also one of the key deciding elements that decide level of success of international business. The policy made by the government of a region also plays a major part in encouraging the performance of international business. In Australia is of federal parliamentary type that is elected by the people. According to Evans et al. (2016), Australia is considered to be one of the politically stable nations of the world, which gives rise of healthy business condition and also encourages all forms of foreign industry to establish their business in the region. The parliamentary type of government in Australia has helped to establish a healthy legal system, which provides assistance to all types of business environment. The Government of Australia is administered under the guidelines of the Australian Constitution that was established in the year 1901. The stable political situation of the nation has also helped to deal with the free trade along with import and export si tuations. There is minimal amount of risks that is involved in the process of operating business in the consumer markets of Australia due to lower level of political risks that is involved in the process. The government of Australia has also set up a stable legal system of business that ensures that all the process of commercial transaction are done in free and fair manner. There are also specific set of laws that are aimed to support the international business and thereby encourages the foreign companies to invest more in the capital market of Australia (Caldicott et al. 2014). The Australian Competition and Consumer Commission was formed by the government of Australia, in order to deal with the all the hazards that are related to the legal matters of business. The competitive laws that is implemented by the government help to deal with the all the illegal actions that are related to gain competitive advantage in the consumer markets by the leading brands of the industry (Lucadou-Wells Bourke, 2015). There is also the Fair Trading Laws that helps to deal with all the trading of import and export business within the nations. The Australian Consumer Laws is also set to ensure that all the interests of the consumer groups are being protected. This will also help the consumers to take legal action against all types of fraud cases that a company imposes upon their buyers (Smith 2015). It is also the duty of the business organizations to ensure that they take full liability to ensure the safety level of the products and that no consumers are harmed by the use of the products. Hence, it is the duty of the Tyson Foods to ensure that they do not use any harmful preservatives in the food that has the potential to harm the health of the people. It is the duty of the business organizations also to ensure that they take care of the local environment. It is the duty of the Tyson Foods, to understand the legal guidelines related to the business operations of Australia, which will ensure that they are able to carry out free and fair process of business. Culture and Ethics Considering the fact that the considered organization Tyson Foods desires to expand their business in the forefront of Australia, it is essential to evaluate those cultural aspects which can possibly make potential impact on the business in future. In this context, it is required to mention that influencing factors or elements such as aesthetics, religion, education, attitude, values and language would play significant role in time of implementing the international business venture (Hoffman et al., 2014). Following the significance of the aforementioned aspects, it is essential to consider the differentiation between the applications of Hofstedes model of cultural dimension on Australia as well as on America. As per the Hofstedes model of cultural dimension of Australia, it seems that the country people have a high extent of optimism though their shared values are found out to be determined by a society that is masculine (Ng Metz, 2015). However, it is fortunate to note that the di mension is indicative of the fact that the power distance of the society is not high and most of the time, managers and employees share a flexible zone between them. It is fortunate to note that, like Australia, hierarchy is established based on convenience and similarly like Australia, Americas society is masculine, which means, as the Australians Americans are also proud of their success. Therefore, it can be said that it would not be culturally much difficult for the considered organization to expand its business in Australia. On the other hand, it is fortunate that in term of psychic distance for international business, the organization would not have to face any linguistic barrier (Caprar et al., 2015). It is because; both the foreign country and the host country have same linguistic background as both of them have English as their national language. It is to mention in this context that both of the countries have low context cultures, therefore it can be said that the organization has to prioritized verbal communication as well as has to consider the fact that Australians are culturally very punctual or time bound. Most significantly, the o rganization has to maintain a diverse workplace and should not ignore the fact that the racial and cultural discrimination level between indigenous and non-indigenous community is very high. Therefore, anti-discrimination policies should be determined considering the particular situation. Most significantly, in terms of consumer culture, the level of consumer boycott and consumer purchasing power is very high (Wood, 2015). Therefore, the organization has to consider these facts too. However, in terms of ethical obligation, it is understandable from the aforementioned discourse that in Australia, treatment of employees or other stakeholders are important needs to be maintained ethically. The organization should stay aware about issues like corruption and should consider the fact that the Australian government is very concerned regarding minimizing environmental hazards. Therefore, it has been found out that the Australian government follows environmental sustainability policy that includes, policy regarding use of energy, water use, waste recovery and policy on the use of material (Wood, 2015). Therefore, the considered organization has to oblige the policies outlined by the Australian government in order to pursue ethical business operations. Furthermore, it has been found out that the ethical priorities of Australian business is more concerned about the biodiversity, therefore Tysons main business operation, which is meat processing would probably has to face difficulties. It is because, the operations regarding the business of meat processing involves use of various chemicals and machines, which are not environment friendly. Most significantly, Australian policies regarding employment are highly concerned regarding labor payment and fair employee treatment. In order to pursue an ethical as well as successful business in the chosen foreign country, the organization would have to maintain the aforementioned aspects. Conclusion In order for a business organization to be establish as a successful international brand it is important for them to analyze the political, economic and legal aspects of the nation. In this case, the Tyson food company, who wants to expand their business in the Australian region and explore the opportunities that exist in the local market must explore the cultural and lifestyle of the local people, which will help them to meet the demand of the local people and thereby increase the reputation of the company. The rules of the international business that are set by the International Monetary Fund help to deal with all financial and economical conditions and help the international brands to deal with all the challenges. Reference Caldicott, R., Scherrer, P., Jenkins, J. (2014). Freedom camping in Australia: current status, key stakeholders and political debate.Annals of Leisure Research,17(4), 417-442. Caprar, D. V., Devinney, T. M., Kirkman, B. L., Caligiuri, P. (2015). Conceptualizing and measuring culture in international business and management: From challenges to potential solutions.Journal of International Business Studies,46(9), 1011-1027. Evans, M., Stoker, G. (2016). Political participation in Australia: Contingency in the behaviour and attitudes of citizens.Australian Journal of Political Science,51(2), 272-287. Hellwig, T., McAllister, I. (2016). Does the economy matter? Economic perceptions and the vote in Australia.Australian Journal of Political Science,51(2), 236-254. Hirst, P., Thompson, G., Bromley, S. (2015).Globalization in question. John Wiley Sons. Hoffman, W. M., Frederick, R. E., Schwartz, M. S. (Eds.). (2014).Business ethics: Readings and cases in corporate morality. John Wiley Sons. Lucadou-Wells, R., Bourke, J. F. (2015). Teaching Business Law: Some Ethical Dimensions from Australia.Procedia-Social and Behavioral Sciences,209, 102-108. Ng, E. S., Metz, I. (2015). Multiculturalism as a strategy for national competitiveness: The case for Canada and Australia.Journal of Business Ethics,128(2), 253-266. Rahman, M. M., Mamun, S. A. K. (2016). Energy use, international trade and economic growth nexus in Australia: New evidence from an extended growth model.Renewable and Sustainable Energy Reviews,64, 806-816. Smith, N. N. (2015). Thai and Australian foreign business law and the impact of the Thailand Australia FTA.J. Int't Com. L. Tech.,10, 22. Tyson Foods: Around the World. (2017).Tysonfoods.com. Retrieved 13 April 2017, from https://www.tysonfoods.com/our-story/around-the-world Wood, G. W. (2015). Communicating the ethos of codes of ethics in Australia's largest organizations: a reliance on osmosis. InProceedings of the 2000 Academy of Marketing Science (AMS) Annual Conference(pp. 425-429). Springer International Publishing.

21 Words Stemming from the Latin Word for Look At

21 Words Stemming from the Latin Word for Look At 21 Words Stemming from the Latin Word for Look At 21 Words Stemming from the Latin Word for Look At By Mark Nichol A surprising number and array of English words derive from the Latin verb specere, meaning â€Å"look at.† Each word, and its meaning and related forms, appears below. 1. aspect: a part or quality of something, the way someone or something appears, or the direction that something faces (adjectival form: aspectual) 2. circumspect: reflective about the consequences of doing or saying something (noun form: circumspection; adverbial form: circumspectly) 3. conspicuous: easy to see, or attracting attention (noun form: conspicuousness; adverbial form: conspicuously) 4. despicable: obnoxious or worthless (verb form: despise; noun form: despicableness; adverbial form: despicably) 5. expect: look forward to something or think that something will happen, consider something necessary or reasonable, or, as expecting, being pregnant (noun forms: expectedness, expectation, expectancy; adjectival form: expectable; adverbial forms: expectably, expectedly) 6. frontispiece: an illustration opposite the title page of a book, or the front of a building, or an architectural feature over a window or other opening (the final syllable is not cognate with piece) 7. inspect: look at something carefully (noun forms: inspector, inspection; adjectival form: inspective) 8. introspection: examination of one’s own feelings or thoughts (verb form: introspect; alternate noun form: introspectiveness; adjectival forms: introspective, introspectional; adverbial form: introspectively) 9. perspective: point of view, a literal or figurative view, or a way to represent an image by using converging parallel lines to give an illusion of depth and distance (or such an image) (adjectival form: perspectival) 10. prospect: as a verb, scout, or search for mineral deposits; as a noun, an opportunity or possibility, or someone likely to be chosen (alternate verb form: prospecting; alternate noun forms: prospector, prospecting; adjectival form: prospective) 11. respect: as a verb, to admire or regard; as a noun, admiration or regard (adjectival form: respective) 12. retrospect: as a noun, review; as an adjective, relating to the past or a past event (alternate noun form: retrospective; alternate adjectival form: retrospective) 13. species: related living things capable of interbreeding with other members of the species, one of several kinds of atomic particle, or a thought or mental image, or, loosely, synonymous with kind or sort (adjectival form: species) 14. specimen: a thing typical of its kind, or a remarkable example of something, or a minuscule amount or piece of a substance to be examined or tested 15. spectacle: an impressive show or sight; in plural form, a synonym for eyeglasses (adjectival form: spectacular; alternate noun form, spectacular) 16. spectator: a person who watches an event (verb form: spectate; adjectival form: spectator or spectatorial; alternate noun forms: spectatorship, spectatory) 17. specter: a ghost or spirit, or something that bothers or haunts one; British English spelling is spectre (adjectival form: spectral) 18. spectrum: range of light or sound waves, or range of people or things; scientific plural form: spectra 19. speculation: guess or idea, or financial activity with high risk but possibility of high profit (adjectival form: speculative; adverbial form: speculatively) 20. speculum: a medical instrument inserted into a body passage, or an image showing the relative positions of the planets, or a patch of color on a bird’s wing 21. suspect: as a verb, think that a crime has been committed or someone has done something wrong or that something is the cause of something bad; as a noun, someone or something that has caused something bad to happen; as an adjective, causing doubt or a feeling that someone did something wrong or that something bad is likely or true (alternative noun form: suspicion) Todays YouTube video: Program vs. Programme Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Vocabulary category, check our popular posts, or choose a related post below:Dialogue Dos and Don'tsWhat is the Difference Between Metaphor and Simile?What the heck are "learnings"?

Essay Examples For Writing Essays

Essay Examples For Writing EssaysIn a very exciting time in the world of higher education, there is a new level of creativity and innovation being achieved through the use of the computer for the teaching of core concepts and in writing for the Higher Education course. It has become a way of working, not just to make the work easier but also to come up with excellent essays in an extremely short time. These essay examples have already proved to be an indispensable tool for writers who want to achieve their goal of writing essays with more impact and focus.The use of the Internet is the greatest advantage of these essays. Internet Essay competitions are common and many students find it very difficult to make their mark in this competitive world of essay writing. But online colleges have provided essay writing facilities for students and this has also made the task much easier. Most students prefer essays because it is the key instrument of their graduation process and has to be very c onvincing and dynamic for the best results.These essays are perfect for high school students and are used as pre-missions for colleges. It also provides perfect learning tools for the college course for the students to learn new concepts that they had not heard or had forgotten. Since it helps them learn new concepts, essays are now the most preferred form of class evaluation for the students.It has become important for every essay writing to have essay samples so that students can get the right idea of what they can expect to learn from these samples. Most students do not have the opportunity to look at such sample because they are only present during the actual course time.This helps the students prepare well for the tasks of reading and writing essays for the High School and in getting prepared for the exams. These essays have become a vital part of preparation for the tests for the students. It is also a good way of life for the college students to have such written materials. T hey may have different topics and style of writing, but they all need to be written using the same essential characteristics.Essays written by professional writers are usually more persuasive and creative than other writings and students are able to see it at once, when they read it. The Essay sample that is offered online helps the students understand the point and explore the topic of the article properly.Essay samples are generally categorized into the categories of classic, one-page, two-page, three-page, and four-page sample. Most of the students may find a two-page sample as the best essay writing material for the High School to the college students. It has become the most preferred practice because it suits all the requirements and the students may also use it in the college stage.

The Sixties essays

The Sixties essays The Sixties split the skies. Only Civil and two world wars so neatly divided our history into a Before and After. And the Sixties were more divisive than World War II, which drew more people for the war effort. The Sixties drove people apart husbands from wives, children from parents, students from teachers, citizens from their government. Authority was strengthened by World War II. It was challenged by the sixties. Relatively few Americans in 1960 would have predicted that the decade ahead was to be among the most turbulent of the century. Despite the growing restiveness of the nations African American population, and despite undercurrents of protest and discontent from many other groups, most Americans faced the future with optimism. The civil rights movement spawned social activism. Among the many effects of the civil rights movement as it gained momentum in the early 1960s was its impact on Greensboro sit-ins in 1960, accelerating with the 1961 Freedom Rides, and with the Mississippi Summer project. These movements opened up some eyes to Americans so they could see what was going on in the country at this time. Most of the things that went on in the sixties dealt with the War. The Cold war in which included the Korean War, but mostly dealt with our little rivalry the Soviet Union. There was a lot of division between people because of the War. Many people couldnt handle the thought of War. They were just scared that they had to be in a country that was involve in the War. Others thought that it was the perfect time to start their own groups. Some were Ethnic groups in which gained more power. Though much of American history, most of the nations dominant institutions had been controlled by middle-cla ss, Protestant, white males. Nonetheless, throughout those same years, American society was extraordinarily diverse. It included may groups whose political economic, and social outlo...

Management Information System Coursework Example | Topics and Well Written Essays - 250 words - 2

Management Information System - Coursework Example The network has also helped the company to better manage its finances because clients do not pay in cash, but through credit cards. Finally, the network, especially GPS, has helped the company to track its bicycles, which is useful for operations management and security purposes. The main challenge is that clients who want to steal bikes may remove the RFID tag from the bicycle, which would disconnect the bicycle from the company’s database and/or prevent the company from tracking the bike. Another challenge is that wireless network does not provide a way of checking the condition of the bike when a client is returning it. This way, clients might be returning damaged bikes so long as the network will allow bike return. The company should have a mechanism of charging customers who are late to return bikes. To achieve this, the company’s database should record the ID tag of the bicycle that has left its dock, the credit card number of the client and the return date based on the time the client has hired the bike. Once the hiring period is over with the bike having not been returned (ID tag missing in the database) the system should start charging the client based on an agreed policy. Once the bike is returned, the system should check in the bike using its ID tag to complete the transaction. The company should also use wireless payment system that facilitates payment via mobile phone. This will help the company increase its customer base since not all customers will are able to pay via the allowed systems. wireless payment system is whereby a customer pays for a bike via mobile phone. The company sends the client a code via short message service (sms) that the client can use to unlock the

The Strategic Causes of Conflict - What caused the 1991 Gulf War Essay - 1

The Strategic Causes of Conflict - What caused the 1991 Gulf War - Essay Example Up today, the access of a country to chemical and nuclear weapons has caused severe oppositions and conflicts. There are those who support that all countries would have such right while others claim that only certain countries should be authorized to obtain such weapons. Current paper focuses on the identification and the analysis of the reasons that have led to the development of the 1991 Gulf war. The specific war, which was developed by US against Iraq seemed to be related to the latter’s efforts to develop chemical and nuclear weapons. However, other views have also appeared. For example, it has been noted that Iraq paid a high price for its efforts to become the region’s leader, a plan that would threaten the interests of other region’s countries, especially of Kuwait. There is also the view that the practice of Iraq to ignore the guidelines of international community in regard to the trade of the oil could not be tolerated. The views that have been develope d in regard to the causes of the 1991 Gulf war are analytically presented below using relevant literature. It is proved that the specific war was rather unavoidable since its causes were many and their elimination was not feasible, as explained below. In any case, the 1991 Gulf war revealed a series of problems and revealed the ineffectiveness of international community to resolve critical disputes by avoiding the use of military forces. 2. Gulf War of 1991 – Causes 2.1 1991 Gulf War – a brief overview of critical events In order to identify the causes of the 1991 Gulf war it is necessary to refer to a series of events that took place before the development of the war. In August of 1990 Iraqi troops entered in Kuwait; the specific initiative surprised international community and led to the immediate reaction of USA and UN.1 UN ‘warned Iraq to withdraw’.2 Severe sanctions were introduced, as a threat, so that Iraqi government is persuaded to change its plan s and to withdraw its troops from Kuwait; the sanctions were mostly economic while air force was involved for securing the inability of Iraq to seek for support by other countries.3 In addition, US troops were sent to the Gulf so that to secure that there would be no risk for the development of the crisis to the other countries of the region.4 Shortly, the US government developed a coalition, at international level, for deciding on the measures that should be taken against Iraq: Egypt and Saudi Arabia were among the Arab states that stated their willing to participate in such coalition since their security seemed to be threatened by Iraq.5 In addition, the Security Council of UN was asked to give its authorization for the use of military forces, an initiative that was developed in November 1990 and since Iraqi government refused to withdraw its troops from Kuwait.6 The Security Council set a deadline for the withdrawal of Iraqi troops from Kuwait: it was the 15th of January 1991; af ter that date the international community would have the right to use ‘any means for securing the withdrawal of Iraq from Kuwait’.7 In 16th January and since no response existed from Iraqi government President Bush ordered the beginning of ‘aerial bombardment’.8 These bombardments were continued for about 5 weeks with no success since Iraqi troops refused to leave Kuwait; a ground military operation was ordered, an initiative that finally led to the release of Kuwait from the Iraqi troops.9 The ground operation was terminated in February the 27th

Study on online gambling market Essay Example for Free

Study on online gambling market Essay For thousands of years, mankind has enjoyed spending money on games of chance. Today this has developed into a multi-billion dollar worldwide phenomenon- the gambling industry. While the total number of gambling enterprises has fallen in recent years the overall number of people employed in the industry has increases, suggesting that enterprises are now larger than they were a decade ago. The way people bet has been revolutionised of recent years with the online gambling industry taking over the traditional high street bookmakers. Betting exchanges on the internet where punters can offer bets to other punters. Meaning the average punter can now act as the bookie and say that a certain event will not happen. To understand the impact of the gambling industry, one has to consider the percentage of people that partake in gambling. Knowing it has been around for two millennia, it is interesting to observe today 80 to 85% of people will gamble in any given year. The gambling industry has evolved greatly in recent years due to the development of online gambling, this is clearly the reason for the rapid growth in the market. Along with new markets such as the online poker industry, that has taken the world in a massive fad with millions playing poker online. The gambling industry tends to be an industry in which people will use their disposable income, but the desire to win more and the increased joy from having a larger bet causes people to spend more money on gambling than they wish. This is a market driver for the industry but also the general increase in people gambling has become the main market driver in recent years. (Party Gaming) For the five year period from 2005 to 2009, it is estimated that revenues generated by the global online gaming market will increase to approximately $22. 7 billion, representing a compound annual growth rate of approximately 22 per cent. From this estimation of expected spending in the online gambling market, it shows a market with great potential. Introduction . The following report analyses the dynamic market within which gambling exists, and the way the online gambling industry beginning to takeover the gambling industry. From the report on the market it will be possible to have a clearer understanding of whether the market will continue to grow or whether the market can not continue to grow at such a rapid rate. The following report analyses the dynamic market within which online gambling exists. The report will focus on areas such as 1. PEST Analysis 2. Boston Matrix 3. Porters Five Forces 4. Competitors Analysis 5. SWOT Analysis 6. Shareholders Such consideration of the market will enable a clearer understanding of whether the market will continue to grow at such a rapid rate. Market Definition Market sectors There are four main gambling sectors that attract the vast majority if online gambling ? Online Poker ?Online Casinos ?Sports Betting ?Betting Exchanges Online poker and betting exchanges are dominating the market and have only been introduced in recent years to the online gambling market. Sports betting and casinos still have large market share of the market but growth has slowed down. The size of the online gambling market for 2004 was $8. 2 billion for the world. In 2004 in the U. K ? 7. 4 billion was spent in gambling. Even though stats are not that easy to compare it shows that online gambling has not yet dominated the gambling market and there is potential for further growth. PEST Analysis PEST Analysis is analysis of macro-environments that affects all firms. PEST stands for Political, Economic, Social, Technological factors of the external macro-environment. Such external factors are beyond most firms control and sometimes present themselves as threats. On the other hand changes in the external environment can lead to new opportunities; this is certainly true for the gambling industry. Political Political and legal factors are those controlled by ? governments, local authorities, or other trade or activity orientated regulatory bodies (Brassington and Pettitt, 2000). Gambling legislation is put in place in order to prevent consumers been taken advantage and also help control consumers with gambling problems. The internet is open to great abuse in all areas of the internet and gambling is no exception. Within five minutes it is possible to be gambling on the internet at as high stakes as one desires, this obviously has its dangers. Companies have recently been pushed to be more responsible for caring for their customers. Some of the companies now have a system which its customers can use. The system offers the customer control of how much they can deposit in a designated time period, this helps the customers control their spending. Though this may affect profits for a company, it gives the impression that they care for their customers, which promotes their company. The laws for online gambling are reasonably relaxed and with it been a worldwide market that anyone from any country can access it is hard to control such a market. There have been recent worries about illegal gambling carried out on Betfair with trainers and owners regarding the running of a horse to lose. Many bets would be taken on the specific horse resulting in a major movement in the market and the price . The in the know punters will know the certain horse that is going to lose the race and they then lay the horse to lose on betfair, guaranteeing that they will win. This has caused many investigation and question over betting exchanges. Economic This considers both the ?macro- and micro-economic environment conditions which affect the structure of the market (Brassington and Pettitt, 2000). With the UK expecting an increase in disposable income this is likely that more money is to be spent in gambling. The gambling market may, however, be susceptible to recessionary influences. In times of economic downturn consumers become more reserved in their spending. With the market been worldwide the economic stability of different countries should balance the market out at such times, but large consumers of the market such as the US may have an effect on the market. Interest rates and level of inflation must be considered as threats to the online gambling industry. Social In order to combat the issues surrounding gambling addiction, casino staff undergo training in order to identify problem gamblers. The Gambling Bill is to focus on social responsibility rather than on casinos. The resort casinos which the gambling bill allows are an issue as evidence from New Zealand suggests that the bigger the casino the bigger the risk of problem gambling. This kind of control on the internet is done in a different way and there is no obligation for companies to offer this service. It is only the leading companies who tend to offer protection against gambling addiction. The way it is done on the internet is to let customers set there deposit limit with a desired time period. Obviously this is not as well controlled as at the casino as employees can take control of the problem customers but on the internet that kind of control does not exist, which proves to be a real worry for the online gambling industry. Many online gambling companies cater for only English speaking consumers due to the large domination of the market from the U.S and the U. K. This restricts market growth in other countries but companies are changing towards catering for other countries, with casinos ahead of the game due to its global appeal. As gambling is seen as a use of leisure activity the market considers its success on the amount of leisure time consumers have but from research it is clear to see consumers feel no obligation to carrying out their gambling whilst at work, often a poker game in the lunch break or even whilst working, which creates extra revenue for the online gambling industry. It also emphasis the ease at which it is to gamble online, which is the main reason behind the success of the market. Technological Gambling has been revolutionised in recent years by technological change and this is the reason for the rapid growth in the industry, making it easier than ever to gamble. The internet has seen new systems such as Betfair, and online poker which is know an $8. 6 billion market. The idea of online gambling is the ease of placing a bet. Before people would have to go to the betting shop or the casino to gamble but with such easy access for customers to access there betting accounts it has a bee a revolutionising advancement in the gambling market. New software is constantly been developed to offer an enhanced experienced for the consumers. The betting exchanges offer the chance for consumers to act as the bookies by being able to lay their bets. This obviously offers a new exciting way for consumers to experience gambling and has helped to develop the market. With improved graphics companies are making it more like the real thing. Some of the casinos online are designed to make you actually feel like you are in the casino the same is done with online poker games and even sports betting is going down the same line with offering text and audio commentary for sports events. This encourages consumers to use the internet rather than go to the casino or the betting shops. Porters Five force analysis Mr Porter was a scholar and management consultant. His model is based on the insight that a corporate strategy should meet the opportunities and threats in the organisations external environment. Porter has identified five competitive forces that shape every industry and every market. These forces determine the intensity of competition and hence the profitability and attractiveness of an industry. The objective of corporate strategy should be to modify these competitive forces in a way that can improve the position of an organisation. Barriers to Entry New entrants into to the market are quite regular due to the low costs of setting up an online gambling site. However, in practice, there are significant barriers to building a large, successful online gambling firm, as the business model is dependent to a large extent on, amongst other things, a strong brand underpinned by liquidity and effective payment processing. The exceptions of success by new entries tends to be when a company has an innovative idea such as Betfair. They are offering something different to the customer. The key features of a successful online gambling firm are difficult to achieve due to the following: ? Player liquidity: a large number of players are required for online poker and betting exchanges, to provide customers with opposing players for poker or a price for betting exchanges. In addition, player liquidity means that the larger sites can offer a greater variety for its customers. ?Software control: ownership of software to provide the operator with greater control, improved margins and bespoke functionality, with the ability to develop high quality user interface and scalable systems which are critical for attracting and retaining customers. Payment processing expertise: to attract and maintain customers, sites must be trusted and must provide a wide range of methods to pay-in and withdraw funds. Such payment processing must also be quick and efficient whilst maintaining low levels of fraud. ?Customer support: responding to customer enquiries on a timely and efficient basis enhances the level of customer service and customer retention. To build and sustain a large online gaming business requires significant investment in customer service operations. Marketing and global reach: as competition increases, the leading operators have greater marketing resources with which to attract and retain customers and are increasingly becoming global brands in order to penetrate new geographic markets. Buyer power The buyer power of customers determines how much customers can impose pressure on margins and volumes. The gambling market is driven by consumer trends and companies need to identify these trends and implement their strategies to remain competitive. Promotional strategies are used to initially sign up a customer and once signed up they are likely to stay there if they like the lay up of the site. It is predicted that one in three people that sign up for a free bonus will use that company for their gambling. Threats of Substitutes This is no real concern for the online gambling market, the only substitutes is betting shops and casinos, but these where all put in place before the online gambling market was created, so there is no possibility of threats from this. Supplier Power The supplier in this market is the software developers, where many companies use the same software to run their websites and with a worldwide market suppliers are never short when it involves employees skills to create the products, unlike coffee that may be affected by poor weather conditions. The concern of software developers rising prices for their products may be an issue due to them feeling they are loosing out on profit with which some online gambling companies are creating a large amount of profit. Competitor Analysis Competitor analysis is a ? systematic attempt to identify and understand the key elements of a competitors strategy (Brassington and Pettitt, 2000). An understanding of competitors enables competitive advantages to be formed. Gambling is a highly competitive market which may discourage market entry and stifle innovation, it may similarly stimulate a range of strategies for promoting growth and with constant technological improvements markets may open in the future. The amount of online gambling companies available to consumers are very variant, this has made a very competitive markets with companies offering free bonuses and providing the latest in software technology. The online gambling market can be split up into 4 sub-markets, online poker, betting exchanges, sports betting, and casinos. Betting exchanges market is dominated by betfair. Betfair is the dominant player in the betting exchange market, with an estimated 86% market share by value. Betfair exchange boasts a high level of liquidity across a wide range of betting markets, and a professional customer service operation alongside a fully integrated telephone and internet betting service. These features, have served to act as a significant barrier to entry into the betting exchange marketplace. Several other betting exchanges were set up including Sporting options and Betdaq. Sporting options was no success and was closed with many people losing money in there betting accounts because the company were unable to pay them back, betfair stepped in to offer support for these people which helped betfair grow even more dominant in the market. While there are over 200 online poker sites in operation, the online poker market is dominated by a small number of large operators. For the current year to 5 June 2005, the top eight operators had an estimated combined market share of 95 per cent in terms of ring game rake, 92 per cent in terms of number of ring game players and 88 per cent in terms of number of tournament players, which illustrates the effective barriers to developing an online poker business. Of these operators, PartyPoker. com has been the clear market leader in terms of both revenue and number of players since mid-2003. The sports betting market is much like the poker market, as many companies exist but the market is dominated by several market leaders such as William Hill and Paddy Power. William Hill has had success due to it is reputation of stores in towns and cities all over the U. K. As for paddy Power the success has been from large amounts or promotion and innovative ideas to promote the company. The casino market also works on the same basis that there are few market leaders that dominate the market. The main market leaders are casino on net, Golden Palace and Ladbrokes casino; there are still many major competitors in the market but with less market share but have the potential to take more of the market share. Most traffic is driven to online casinos via marketing on television channels and bonus deals in order to get customers to sign up for the casinos. Boston Matrix The Boston matrix is a chart created by the Boston Consulting Group in 1970. This is a useful marketing tool when analysis of market growth-relative share is required; the growth and share of different online gambling methods can be compared. The markets on the internet consist of poker, sports betting, betting exchanges and casinos. Dogs These are products with a low share of a low growth market. They do not generate cash for the company, they tend to absorb it. There are no online gambling markets that are in this category, this shows a strong healthy market. Cash Cows These are products with a high share of a slow growth market. Cash Cows generate more than is invested in them. Sports betting and casinos markets have slowed down as the stars of the online gambling market have entered the market. Problem Children These are products with a low share of a high growth market. They consume resources and generate little in return. They absorb most money as you attempt to increase market share. These gambling games are fairly new to the market and have yet had a chance to grow. Stars These are products that are in high growth markets with a relatively high share of that market. Stars tend to generate high amounts of income. Betting and exchanges and online pokers have taken the market to the new levels of turnover and have set of a craze worldwide. Shareholders For nearly every industry, sustainability is a key objective. Creating a sustainable online gambling industry benefits all of the industrys stakeholders. In recent months we have seen the flotation of many online poker companies, which developed a great relationship between the stock market and online gambling. But in September this year PartyGaming warned its growth prospects may be not be as great as was suggested when it floated in July 2005. More than ? 2 billion was wiped of the value of its shares; they dropped 30% in value. This obviously had an effect on other online gambling company shares which saw a slide in share price as well. One indicator of the slowdown is that although there are still more people signing up to play poker online, their average spend is falling. This is a concern for the online poker market as it shows the growth is not sustainable and action must be taken to not just let the online poker market just a short fad. Chief Executive Richard Segal said as these trends continued, the group would adapt its marketing strategy and infrastructure to provide greater focus on customer retention and player value. SWOT Analysis ________________________________________ SWOT analysis is useful in auditing information in a systematic manner. It demonstrates how strengths and weaknesses can be understood in context with opportunities and threats. SWOT analysis helps to explain where the online gambling market is today, but also where it is likely to be in the future. ?Strengths 1. New innovations and improvements are a regular feature due to a highly competitive market and high demand from consumers. 2. The growth in new consumers is constant, especially with the current fad of online poker. 3. Consumers have more faith in using the internet which is helping the market to grow: new payment systems such as Paypal are trustful and they prevent, together with insurances and banks, consumers from online fraud. 4. The overheads are very low for new companies to enter the market of online gambling: create a webpage and buy a payment gateway is basically enough to have a gambling website. 5. Online gambling represent entertainment at home that can be accessed at anytime, from anywhere and by anyone. 6. Due to the diversity of gambling available bringing consumers into the market that would not potentially consider gambling (e.g. gambling on games such as Chess) is very easy. ? Weaknesses 1. Online gambling is likely to become quite a saturated market, and will only continue to grow at such a rate if innovations can be added to the existing offer: develop gambling in new areas such as politics, decrease the time between the deadline to place a bet and the event on which the bet is placed 2. Companies with poor marketing strategies will have to struggle to exist due to the amount of competition: new websites are issued quite every day without even proposing new possibilities for consumers. 3. In becoming stronger, more reputable organisations have the capability to over power smaller organisations or websites: this may occur in France in the next few years if La Francaise des Jeux decides to develop a wide-scale platform for online betting it will probably have a very negative impact on smaller competitors. 4. Gambling laws in several countries such as France or Italy constrain success of market with the social issues of gambling addiction. 5. Betting shops and Casinos when they are allowed by national gaming acts still have a high presence in the gambling market and stop people using the online gambling options as much. 6. It appears to be quite difficult for new company to enter the market place due to high competition and dominance of large firms controlling the market, unless with having an innovative idea: some small websites, for example, focus on the European market, they propose adapted hours for online tournaments or develop their pages or hotlines in many languages ?Opportunities 1. Can emphasis on the rapid popularity of online gambling and that anyone can do it. 2. It is highly potential to gain a lead on the market with new technology. 3. Innovative ideas such as celebrities even gamble online, e. g. www. celebritypoker. com offers the chance to play poker against celebrities. 4. Inexpensive start up costs for a new online gambling company. 5. Constant improvement in technology opens up opportunities in the market. 6. Broadband creating much more opportunity. 7. The market is worldwide so anyone who has access to the internet can be targeted. Threats ?Rapid growth of the market may cause gambling laws to be tightened affecting profit for companies. ?Negative publicity highlighting the dangers of gambling. ?Demand depends upon real income therefore downturns in the economy can have an adverse effect of demand. ?Some companies are in a weak position financially. ?Dominance of the market. ?Market dependant on technology, which is not always reliable. Conclusion ________________________________________ The future of online gambling is bright with estimates of $32 billion spent in the year of 2009 compared to $14 billion this year. The market has seen rapid growth in recent years and it is not possible for a market to sustain such rapid growth forever, but it is still likely to grow at such a rapid rate for several years to come but it will slow down gradually. Gambling laws vary in different countries but could prevent the growth of the market, due to worries such as gambling addiction. There will always be a strong market for online gambling but is likely to see more domination by larger companies keeping the barriers of entry difficult to succeed in the market. Online gambling is highly innovative industry with new ideas to draw more people into gambling with the latest idea of offering to be able to gamble on games of chess or snooker or backgammon It is possible to gamble on nearly everything, this just defines the potential of the market. References Textbooks Brassington, F. and Pettitt, S. (2000). Principles of Marketing. Websites www. quickmba. com/strategy/porter. shtml Five forces analysis diagram. www. gamblinglicenses. com Provided information on the gambling laws work. www. partygaming. com Provided stats on market size and useful information on the online poker market. www. bettingmarket. com Reviews of the online gambling market with stats of traffic on online sites. www. reports. mintel. com Provided a report on the gambling industry, with helpful information on market size. www. amadeus. bvdep. com Provided information on the market share of companies. www. thismoney. co. uk Provided information on the share situation for the market.