Nike Promotions Essay

After looking at Nike’s marketing strategy with respect to product, price, place and promotion, the outstanding success of the brand name calls for more attention to Nike’s promotional strategies. Nike’s promotions and advertisements have been deemed the best in the retail industry. The â€Å"Just Do It† slogan is supposedly one of the most famous and easily recognized slogans in advertising history. It would be safe to claim that brand management is easily one of Nike’s core capabilities. With the company’s advertising budget today reaching $2.4 billion, it is worth looking into Nike’s advertising strategies and how these strategies helped strengthen the brand image. 1980-1988: Early Advertising Before television advertisements, Nike released several successful print ads. One of its earliest print ad campaigns was the â€Å"There is no finish line† campaign by John Brown and Partners. The posters were an instant hit, since, it did not focus on the running shoe product, but instead on the person wearing the shoes. At this early stage, Nike saw the lucrative value in sports sponsorships. The company began sponsoring track and field athletes like Carl Lewis. With lucky breaks, Nike signed some bigger names in the athletic world like Wayne Gretzy and, probably the most important sponsorship signing in Nike history, Michael Jordan. 1988: The JUST DO IT Campaign This campaign was probably Nike’s most known and successful. In 1988, Nike worked with ad agency Wieden and Kennedy to create the slogan Just Do It. The company used this campaign to cash in on the jogging/fitness craze of the 80s. Top competitor Reebok was sweeping the aerobics race so Nike responded with Just Do It ads that practically shamed people into exercising, and more importantly, to exercise in Nikes. The Just Do It ads truly embodied the philosophy of grit, determination and passion to encourage consumers to embrace the culture of fitness rather than focus on the product. The Just Do It campaigns were also successful because of their celebrity features including Bo Jackson, John McEnroe, and Michael Jordan. These famous athletes reassured the quality of the Nike product and gave Nike a â€Å"hip† brand image. These ads were basically turning sweaty, pain-ridden exercise into something sexy and exciting. And lastly, the Just Do It ads were usually humorous, thus connecting to consumers on a level that made them comfortable and feeling positive about the brand. 2000-2005 Using its cooperations with various ad agencies, Nike released several popular and well-received TV commercials. In fact, the company received two Emmy awards for best commercial twice. The first was for â€Å"The Morning After,† which featured a runner on his morning jog on January 1, 2000, facing the chaos of the Y2K predictions. The commercial really connected to consumer emotions, as speculations of the new millennium were the conversation buzz around that time. The second Emmy was for a Nike commercial called â€Å"Move† that featured many famous and regular athletes performing a serious of athletic pursuits in a creative â€Å"pass it on† way. Starting in 2005, Nike released another successful ad campaign that were targeted at athletic woman. The ad focused on women’s Thunder Thighs and Big Butts, encouraging them to embrace their athletic body parts and shapes. This was yet another successful way Nike connected to the consumer on a personal level, as we all know that women tend to care about their self images. 2005 to Present Having built up an empire of a brand, Nike continued to focus on celebrity endorsements. Nike took famous athletes in a variety of sports to feature them in ads. LeBron James from basketball, Tom Brady from football, Ronaldhino from soccer, Roger Federer from tennis and Tiger Woods from golf, just to name a few. Using the A-list, top-notch names in the athletic world really helped tip Nike over into the â€Å"elite† brand division. At this point, Nike is reaching its peak in sales and in brand image. Having reached this peak, Nike is now changing up the promotion game and branching out to the digital world. With a 40% decrease in print and TV advertising, Nike is now trying to stray away from superstars. Now that Nike as perfected the art of branding, it is moving on to a world where consumers want to be told less. In 2010, Nike launched its new marketing division called Nike Digital Sport. This digital focus on sports conceived the Nike+ platform, which is a marriage of Apple and Nike technologies that allows people to track their athletic performance. It is also a platform that allows Nike to virtually have personal conversations with its consumers and, subtly study its consumer’s behavioural patterns. Overall, it seems like Nike is always in tune with consumer preferences and addresses them through strategic and well-executed advertising tactics. It is no surprise that the Nike brand is one of the most well recognized in the world.

Global Chemical Industry

www. moodys. com Rating Methodology Table of Contents: Summary About the Rated Universe About This Rating Methodology The Key Rating Factors Assumptions and Limitations and Rating Considerations That are not Covered in the Grid Conclusion: Summary of the GridIndicated Rating Outcomes Appendix A: Global Chemcial Industry Methodology Factor Grid Appendix B: Methodology GridIndicated Ratings Appendix C: Observations and Outliers for Grid Mapping Appendix D: Chemical Industry Overview Appendix E: Key Rating Issues over the Intermediate Term 1 3 5 8Corporate Finance December 2009 Moody’s Global Global Chemical Industry Summary This rating methodology explains Moody’s approach to assessing credit risk for global chemical companies. This document replaces a previous publication from February 2006. The grid for the rating methodology is substantially unchanged from the 2006 publication, with minor updates to provide greater clarity regarding application of the grid. We also hav e provided a clearer explanation of how ratings in the chemical industry are derived.This publication is intended to provide a reference tool that can be used when evaluating credit profiles within the global chemical industry, helping issuers, investors, and other interested market participants understand how key qualitative and quantitative risk characteristics are likely to affect rating outcomes. This methodology does not include an exhaustive treatment of all factors that are reflected in Moody’s ratings but should enable the reader to understand the qualitative considerations and financial ratios that are most important for ratings in this sector.This report includes a detailed rating grid and illustrative mapping of each rated company in a representative sample of companies against the factors in the grid. The purpose of the rating grid is to provide a reference tool that can be used to approximate credit profiles within the chemical industry sector. The grid provides summarized guidance for the factors that are generally most important in assigning ratings to chemical companies. The grid is a summary that does not include every rating consideration, and our illustrative mapping uses historical results while our ratings methodology also considers forward-looking expectations.As a result, the grid-indicated rating is not expected to match the actual rating of each company. 17 18 19 20 21 26 27 Analyst Contacts: New York 1. 212. 553. 1653 William Reed Vice President -Senior Credit Officer John Rogers Senior Vice President James Wilkins Vice President -Senior Analyst Steven Wood Senior Vice President Tokyo 81. 35408. 4100 Noriko Kosaka Vice President -Senior Analyst Analyst Contacts continued on last page Rating Methodology Moody’s Global Corporate Finance Global Chemical IndustryThe grid contains five key factors that are important in our assessments for ratings in the global chemical sector: 1. Business Profile 2. Size & Stability 3. Cost P osition 4. Leverage / Financial Policies 5. Financial Strength Each of these factors also encompasses a number of sub-factors or metrics, which we explain in detail. Since an issuer’s scoring on a particular grid factor often will not match its overall rating, in the Appendix we include a brief discussion of â€Å"outliers† – companies whose grid-indicated rating for a specific factor differs significantly from the actual rating.This rating methodology is not intended to be an exhaustive discussion of all factors that Moody’s analysts consider in ratings in this sector. We note that our analysis for ratings in this sector covers factors that are common across all industries (such as ownership, management, liquidity, legal structure in the corporate organization, and corporate governance) as well as factors that can be meaningful on a company specific basis. Our ratings consider qualitative considerations and factors that do not lend themselves to a transp arent presentation in a grid format.The grid represents a compromise between greater complexity, which would result in grid-indicated ratings that map more closely to actual ratings, and simplicity, which enhances a transparent presentation of the factors that are most important for ratings in this sector most of the time. Because this methodology applies globally, it is necessarily general in some respects and is not intended to be an exhaustive and country-specific discussion of all factors that Moody’s analysts consider in every rating.Moody’s rating approach considers country-specific differences and at the same time allows for qualitative evaluation of these factors as well as other factors that cannot be easily presented in grid format. Highlights of this report include: ? ? ? An overview of our rated universe. A description of the key factors that drive rating quality. Comments on the rating methodology’s assumptions and limitations, including a discussio n on other rating considerations that are not included in the grid.The Appendices show the rating grid criteria on one page (Appendix A), tables that illustrate the application of the methodology grid to 20 representative rated chemical companies (Appendix B) with explanatory comments on some of the more significant differences between the grid-implied rating and our actual rating (Appendix C), a brief industry overview (Appendix D), and a discussion of key rating issues for the chemical sector over the intermediate term (Appendix E). 2 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody’s Global Corporate FinanceGlobal Chemical Industry About the Rated Universe Moody's rates 107 companies globally in the chemicals and allied industries. In the aggregate, these issuers have approximately $230 billion of rated debt. Our definition of the chemical industry includes a variety of related industrie s, such as: ? ? ? ? ? ? ? ? ? ? ? ? Commodity organic and inorganic chemicals ? Specialty chemicals ? Plastics, resins and elastomers ? Fertilizers, agricultural chemicals and seeds ? Industrial gases ? Architectural and industrial coatings ? Flavors and fragrances ? Other food ingredients ? Pharmaceutical intermediates ?Organometallics ? Specialty materials produced from refinery by-products ? Specialty materials that are used in composites ? These companies develop and produce a wide variety of products including basic chemicals, specialty materials, and industrial gases. Products range from true commodities to highly customized products used in technically demanding applications. The rated universe is spread throughout the world with the highest concentrations in the Americas (68), Europe (24) and Middle East/Asia (15). Companies range in size from as large as $40 billion in revenues to as small as $100 million.Some may be multinational with numerous manufacturing locations aroun d the globe, while others may operate a single facility with domestic customers only. The highly volatile nature of the industry as well as fairly high levels of business risk make it increasingly difficult for all but a select few companies who are extremely large and diversified to achieve and maintain a Aa rating. Ratings of A3 or above are generally limited to larger companies or to smaller specialty companies that exhibit uncommon stability in financial performance and relatively low business risk.The Corporate Family Rating (CFR) or senior unsecured ratings of the covered issuers range from Aa2 to Caa2 with a concentration in the Baa, Ba and B rating categories. The median rating for chemical companies is Ba1. The vast majority of companies – 81 out of 107, approximately 76%, are in the Baa (27), Ba (26), and B (28) range because of the cyclical nature of the industry and our view of the industry’s moderate to high business risk. 3 December 2009 ? Rating Methodol ogy ? Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody’s Global Corporate FinanceGlobal Chemical Industry Exhibit 1: Global Chemical Rating Distribution 2009 and 2006 Chemical Industry Ratings Distribution 25 Number of Issuers 20 15 10 5 0 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3 Ba1 Ba2 Ba3 Ratings 2009 – 107 com panies 2006 – 111 com panies B1 B2 B3 Caa1 Caa2 Caa3 Over the last ten years, in Europe and in the US, a growing number of speculative grade names have been added to the rated universe. This is attributable in part to incumbents' recent strategic efforts to focus on their core businesses by selling non-core assets as well as to a growing interest from private equity sponsors.For the purpose of this methodology we have identified 20 representative issuers out of the companies that we rate globally. These issuers represent both investment grade and speculative grade issuers. The criteria used to select the 20 focu sed on the larger, in terms of revenues, well-known issuers. For this reason the proportion of investment grade to non-investment grade issuers represented is higher than it is in the rated universe. 4 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody’s Global Corporate FinanceGlobal Chemical Industry Exhibit 2 Global Chemical Rating Methodology Representative Sample Company Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Shin-Etsu Chemical Company Ltd BASF (SE) E. I. du Pont de Nemours and Company Kaneka Corporation Teijin Limited Bayer AG Akzo Nobel N. V. Potash Corporation of Saskatchewan Inc. Rating Aa3 A1 A2 A2 A3 A3 Baa1 Baa1 Baa1 Baa2 Baa2 Baa3 Ba1 Ba2 Ba3 Ba3 B1 B1 B1 B3 Outlook Stable Stable Negative Stable Negative Stable Negative Stable Stable Stable Stable Negative Stable Positive Stable Stable Stable Stable Positive NegativeApprox Debt millions $189 $21,347 $7,545 $293 $ 2,143 $20,215 $5,233 $3,082 $2,716 $1,441 $1,971 $23,073 $4,456 $3,390 $3,156 $1,217 $1,904 $4,681 $423 $3,451 LG Chem, Ltd. Eastman Chemical Company Yara International ASA The Dow Chemical Company Braskem SA Celanese Corporation Nalco Company ISP Chemco LLC NOVA Chemicals Company Huntsman Corporation PolyOne Corp Hexion Specialty Chemicals Inc. About This Rating Methodology This report explains the rating methodology for chemical companies in six sections, which are summarized as follows: 1.Identification of Key Rating Factors The grid in this rating methodology focuses on five key rating factors. These five broad factors are further broken down into eleven sub-factors that are equally weighted. 5 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody’s Global Corporate Finance Global Chemical Industry Factor Weighting Sub-Factor Weighting Rating Factor Relevant Sub-factor Operational Diversity Product Diversity Geographic Diversity Factor 1: Business Profile 9. 09%Commodity/Specialty Market Shares Raw Material Access Government Impact Revenues 9. 09% 9. 09% 9. 09% 9. 09% 9. 09% 9. 09% 9. 09% 9. 09% 9. 09% 9. 09% Factor 2: Size & Stability 27. 27% Divisions of Equal Size Stability of EBITDA Factor 3: Cost Position 18. 18% EBITDA Margin (5 yr Avg. ) ROA – EBIT / Avg. Assets (5 yr Avg. ) Factor 4: Leverage / Financial Policies 18. 18% Current Debt / Capital* Debt / EBITDA (5 yr Avg. )* EBITDA/ Interest Expense Factor 5: Financial Strength 27. 27% Retained Cash Flow/Debt (5 yr Avg. )* Free Cash Flow (FCF) /Debt (5 yr Avg. * *Where appropriate net adjusted debt may be used (see discussion of Cash Balances and Net Debt Considerations) 2. Measurement of the Key Rating Factors We explain below how the sub-factors for each factor are calculated. We also explain the rationale for using specific rating metrics, and the ways in which we apply them during the rating process. Mu ch of the information used in assessing performance for the sub-factors is found in or calculated using the company’s financial statements; others are derived from observations or stimates by Moody’s analysts. Moody’s ratings are forward-looking and incorporate our expectations of future financial and operating performance. We use both historical and projected financial results in the methodology and the rating process. Historical results help us to understand patterns and trends for a company’s performance as well as for peer comparison. While the rating process includes both historical and anticipated results, this document makes use of historical data only to illustrate the application of the rating methodology.Specifically, unless otherwise stated, the mapping examples in this report use reported financials for the last three audited fiscal years. All of the quantitative credit metrics incorporate Moody’s standard adjustments to income statemen t, cash flow statement and balance sheet amounts for, among others, off-balance sheet accounts, receivable securitization programs, under-funded pension obligations, and recurring operating leases. Note: For definitions of Moody's most common ratio terms please see Moody’s Basic Definitions for Credit Statistics, User’s Guide which can be found at www. oodys. com in the Research and Ratings directory, in the Special Reports subdirectory (07 June 2007, document #78480/SP4467). 3. Mapping Factors to the Rating Categories After identifying the measurements for each factor, the potential outcomes for each of the 11 sub-factors are mapped to a broad Moody’s rating category. (Aaa, Aa, A, Baa, Ba, B, Caa, Ca). 6 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody’s Global Corporate Finance Global Chemical Industry 4.Mapping Issuers to the Grid and Discussion of Grid Outliers In t his section (Appendix C) we provide tables showing how each company maps to grid-indicated ratings for each rating sub-factor and factor. The weighted average of the sub-factor ratings produces a grid-indicated rating for each factor. We highlight companies whose grid-indicated performance on a specific sub-factor is two or more broad rating categories higher or lower than its actual rating and discuss general reasons for such positive outliers and negative outliers for a particular factor or sub-factor. . Assumptions and Limitations and Rating Considerations That are not Included in the Grid This section discusses limitations in the use of the grid to map against actual ratings, additional factors that are not included in the grid that can be important in determining ratings, and limitations and key assumptions that pertain to the overall rating methodology. 6. Determining the Overall Grid-Indicated Rating To determine the overall rating, we convert each of the 11 factor ratings in to a numeric value based upon the scale below.Aaa 6 Aa 5 A 4 Baa 3 Ba 2 B 1 Caa 0 Ca -1 The numerical score for each factor is weighted equally with the results then summed, and divided by 11, to produce a total factor score. The total factor score is then mapped back to an alphanumeric rating based on the ranges in the table below. Grid-Indicated Rating Aaa Aa1 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3 Ba1 Ba2 Ba3 B1 B2 B3 Caa1 Caa2 Caa3 Ca Total Factor Score X ? 5. 50 5. 17 ? X ; 5. 50 4. 83 ? X ; 5. 17 4. 50 ? X ; 4. 83 4. 17 ? X ; 4. 50 3. 83 ? X ; 4. 17 3. 0 ? X ; 3. 83 3. 17 ? X ; 3. 50 2. 83 ? X ; 3. 17 2. 50 ? X ; 2. 83 2. 17 ? X ; 2. 50 1. 83 ? X ; 2. 17 1. 50 ? X ; 1. 83 1. 17 ? X ; 1. 5 0. 83 ? X ; 1. 17 0. 50 ? X ; 0. 83 0. 33 ? X ; 0. 50 0. 17 ? X ; 0. 33 0. 0 ? X ; 0. 17 x ; 0. 0 7 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody’s Global Corporate Finance Global Chemical Industry For e xample, an issuer with a composite weighted factor score of 1. 5 would have a Ba2 grid-indicated rating. We used a similar procedure to derive the grid-indicating ratings in the tables embedded in the discussion of each of the five broad rating factors. The Key Rating Factors Moody’s analysis of chemical companies focuses on five broad factors: ? ? ? ? ? Business Profile Size & Stability Cost Position Leverage / Financial Policies Financial Strength Factor 1: Business Profile (9. 09% weight) Why It Matters Business Profile is an important indicator of credit quality.The chemical team at Moody's looks at seven factors and aggregates them into a single score which is then mapped to a specific rating. The first three factors focus on diversity. Diversity, whether it be operational, product, or geographic, is a key component of business position that, can help mitigate the volatility in financial performance characteristic of the chemical sector. 1. Operational Diversity Single s ite locations, as an indicator of operational diversity, can expose a company to the prospect of unanticipated down times.We note that this factor is extremely important. Where a company operates a single site, the risk of that single site failing is deemed to have such a catastrophic impact on the business model that even the prospect of site insurance or business interruption insurance will not provide sufficient mitigation against the potential effects of a fundamental failure of the site. 2. Diverse Product Lines Diverse product lines can help stem volatility in cash flows to the extent that different products can have varied pricing dynamics. 3. Geographic DiversityGeographic diversity can also be beneficial as a company with multiple plant sites can still be negatively affected by both economic and weather related events. 4. Commodity Versus Value Added Products In the chemical sector commodity players are typically more volatile in terms of cash flow generation whereas the va lue added producers often produce more stable cash flows. At times, today's value added producers can become more commodity-like in their cash flow generating capabilities, so we will carefully assess where a product or group of products may be in its life cycle. 5.Market Share or Unique Competitive Advantage Large market share suggests a sustainable business position with the proven ability to weather the volatile market conditions in the chemical cycle. In some instances companies with large market shares will adjust their production volumes to help balance the supply and demand dynamics in the markets served as a means to stabilize product pricing. Market share that is protected by patent and unique licensing restrictions can also be a strong, positive contributor to stable cash flows and performance. 8 December 2009 ? Rating Methodology ?Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody’s Global Corporate Finance Global Che mical Industry 6. Exposure to Volatile Raw Materials Raw material exposures greater than 33% in terms of cost of goods sold, for example, can often result in dramatic swings in cash flow. This is especially true in times of supply/demand imbalances, which can create shortages in raw materials and exaggerate raw material price movements. Companies with the ability and foresight to locate their production facilities in areas of the world where they can benefit from long term fixed riced raw materials have a distinct advantage over companies that are subject to the vagaries of the raw material spot markets. 7. Impact of Government Regulation The final factor we assess is the positive or negative impact of government regulation. This factor addresses the positive or negative role that government regulation or policy may have on an individual company or sector of the chemical industry. For many companies, the impact of government regulation may be neutral. For some sectors, such as the e thanol sector in the U. S. the very existence of the sector is a function of government legislated policy. In still other instances, the government has sought to ban the use of certain products – such as MTBE – in some markets. This factor is also extremely important and we will, as explained below, overweight it when assessing companies for whom government regulations/mandates are, essentially, the sole driver for the business model. How We Measure it for the Grid The 7 Business Profile criteria are merged into an assessment score, as follows: Business Profile Assessment Score This score is made up of seven criteria.To each we assign a discrete numerical value. The values across the criteria range from (-2) to 2 with many coming in at 0 or 1. Moody's analysts may use a modifier of 0. 5 across the seven criteria to refine the score relative to other companies in the industry. These values are totaled into a score which is then mapped to a rating category in the followi ng manner: Aaa Aa A Baa Ba B Caa Ca = = = = = = = = > 6. 0 > 4. 5 to < 6. 0 > 3. 5 to < 4. 5 > 2. 5 to < 3. 5 > 1. 5 to < 2. 5 > 0. 5 to < 1. 5 > – 0. 5 to < 0. 5 < – 0. 5 ?Operational diversity – We count the number of discrete operating plants that have a globally competitive scale. A (-2) is assigned for 1 or 2 plants, a 0 is assigned for 2 – 8 plants and a 1 is assigned if there are greater than 8 large manufacturing locations. This is one of three factors with a negative score given the importance we assign to operational diversity. A sole site simply leaves the company with too many eggs in one basket. Product diversity – We assign a 0 if a majority of cash flow is generated from 1-2 key product lines and a 1 if a company relies on 3 or more product lines or product categories.Geographic diversity – We assign a 0 if a majority of the production assets are primarily in a single geographic region and assign a 1 if production assets are i n multiple regions Commodity versus value added products – We assign a 0 if a majority of sales are primarily commodity products and assign a 1 if we view products as adding distinct unique additional value. Quantitative factors such as stability of EBITDA and EBITDA margins are used later as another component in the measurement of this important factor. ? ? ? 9 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical IndustryRating Methodology Moody’s Global Corporate Finance Global Chemical Industry ? Market share – We assign a 0 if a market share is inconsequential relative to the next three largest competitors and assign a 1 if a sector or company has large share or few real competitors. We would assign a 2 if the company has a unique competitive advantage (patents, know-how, etc. ) that could reduce competition significantly. Market share assessments are driven by the definition of the markets served. Definitions should be wide enough to represent legitimate alternative products.Raw material access – We assign a (-1) or (-2) if we estimate exposure to volatile raw material costs at greater than 33% of costs of goods sold. We assign a 0 if exposure to volatile raw materials costs is from 10% to 33% of costs of good sold. We assign a 1 if the exposure to raw materials is less than 10% and a 2 if the company has a material, demonstrable, long-lived feedstock advantage. Given the importance of raw material inputs to ultimate cash flows this metric is vitally important. It is one of three metrics with a possible negative value. Given the importance of this metric, the value can go as high as 2.Impact of governmental regulations or policies – For companies subject to significant government regulations or sensitive to changes in government policies, we assign a score reflecting the positive or negative impact of these regulations/policies on the companies' long term financial perform ance. Most of the companies in this industry will score a 0. Ethanol producers in the US would be assigned a (-1) because of their reliance on government regulation to create demand for the product. Companies that would be positively affected over the long term by government regulations could be assigned a 1. ? The importance of the business profile score is highlighted by the fact that, in certain cases, it can outweigh all other factors in the methodology, materially lowering ratings. The two most prominent examples are: operations limited to a single site and a business model whose success is highly or solely dependent on government actions or policies. Factor 1: Business Profile (9. 09%) Weight a) Business Position Assessment 9. 09% Aaa ? 6. 0 Aa 4. 5 – 6. 0 A 3. 5 – 4. 5 Baa 2. 5 – 3. 5 Ba 1. 5 – 2. 5 B 0. 5 – 1. 5 Caa – 0. 5 – 0. 5 Ca ; – 0. 5A chart that illustrates grid mapping results for Factor 1 and a discussion of o utliers for companies in the sample is included in Appendix C. Factor 2: Size & Stability (27. 27% weight) Why It Matters This factor includes discrete quantitative measures that attempt to measure size, diversity and the stability of a business model. Large revenues combined with large divisions as well as a long history of stable performance suggest sustainable business positions that have been and will be able to demonstrably weather the vagaries of capital and economic cycles. SizeSize can suggest the ability to benefit from much needed economies of scale both in production and access to raw materials on a preferred basis. In addition, size suggests the ability to service large customers globally — an important attribute as many customers step up efforts to reduce the number of their suppliers. Size also tends to favor the companies that sovereigns, government related entities, and other large companies choose as their joint venture partners or technology suppliers of che micals that add important value added properties to customer’s products. Number of DivisionsThe presence of multiple large divisions typically signals a balanced diversified product portfolio and, by extension, more stable cash flows. Companies with high product concentration may exhibit more volatile cash flows and may be more vulnerable to one time events that can be damaging to credit quality. Multiple divisions also provide for discrete assets that can be sold as necessary to provide alternate liquidity. Larger companies 10 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody’s Global Corporate FinanceGlobal Chemical Industry with many divisions can, for example, sell weaker performing or non-core segments, with the sale proceeds providing funding for debt reduction or growth in other segments. Stability of Business Model (Stability of EBITDA) Given the diversity of this industry, we attempt to gauge the likely level of volatility in earnings and cash flow. Companies with elevated levels of volatility in earnings and cash flow will require better liquidity and more robust financial metrics, on average, to compensate for uncertainty over the magnitude and duration of potential downturns.We analyze the volatility of EBITDA over a long period of time (7-10 years, when the data is available) to get an estimation of the expected volatility of the company relative to its peers in the industry. While there are many problems associated with the use of EBITDA as a measure of either profitability or cash flow, EBITDA is typically less affected by extraordinary items, fluctuations in working capital, and capital spending on new capacity than other measures of cash flow. It also allows us to remove the potential impact from differences in capital intensity across the industry.To the extent that a company's EBITDA may contain unusual items, or items that we judge to be one- time, the reported data may be adjusted to improve the quality of the analysis and hence get a better view of the true volatility of the company relative to its peers in the industry. When companies have completed a transformational acquisition or divestiture, or if seven years of data is otherwise unavailable, we estimate this metric based on a comparison to other rated companies and attempt to adjust for differences in product or geographic mix, as well as the impact of feedstock advantages or disadvantages.A transforming transaction is typically defined as the acquisition or divestiture of assets that comprise more that 1/3 of the pre-transaction EBITDA. While we measure the past 7-10 years of data, we would emphasize that our ratings are a forward view informed by historical volatility. To the extent we believe that future performance might deviate from historical patterns, we will modify this factor. How We Measure it for the Grid Size Measured by Revenues We use the most recen t annual revenues or latest 12 month reported revenues.The current year's revenues obviously can be either understated or overstated subject to where the company is in the commodity price cycle. While the commodity price cycle may be different for various companies, this metric measures all companies, by and large, at the same point in the economic cycle. For companies whose revenues are on the border between two ratings categories, the analyst would consider the point in the commodity price cycle at which the measurement is taken and the estimate of future revenues. Divisions with Revenues of Equal Relative SizeThis factor can be captured from financial statements. We use the segment information found in the most recent quarterly report on a latest four quarter basis. We are attempting again to capture both diversity as well as scale. The analyst may adjust segment revenues manually to adjust for non-ordinary items or non-public segment information provided by management. For compa nies whose divisional revenues are volatile and subject to cycles, the analyst would again consider the point in the pricing cycle at which the measurement is taken.Our focus is to measure diversity of revenue streams. For a company with $1 billion in revenues – if all revenues come from a sole division/product it would map to a B. If there were four discrete divisions with $250 million in revenues each (essentially equal in size) it would map to a Baa. For a company with $10 billion in revenues with four discrete divisions/products, if two divisions had $3 billion in revenues each and 2 divisions had $2 billion in revenues each – it would still be judged to be relatively diverse and equate to a Baa. 1 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody’s Global Corporate Finance Global Chemical Industry Stability of EBITDA This factor is measured by the normalized standard error of the company's EBITDA as determined by a least squares regression on seven to ten years of data. We utilize standard error rather than standard deviation as it is much better at differentiating between commodity and specialty chemical companies.Standard deviation is a static measure that cannot clearly differentiate between a stable company growing over time and a commodity company whose volatility is induced by changes in its cash margins. Standard error is a statistical measure of the difference between the company's actual performance versus a theoretical line drawn through the data (hence normal growth in EBITDA over 7-10 years should not have a negative impact on this metric). The normalized standard error is obtained by dividing the standard error obtained from a linear regression by the average EBITDA over the period analyzed.This allows us to compare the standard error of large companies to much smaller companies This measurement is designed to capture two types of stabil ity: For smaller companies – The stability of business or businesses relative to other companies in the industry. The absolute size of a company is not considered. For larger companies – A very large or diverse commodity company may exhibit more stability based on the number of businesses in its portfolio, especially if the earnings of their individual businesses are not correlated (i. e. , all businesses don't go into a downturn or upturn at the same time).In statistical terms, if the covariance of the company’s businesses is low, the company's performance should be more stable although it may be an inherently cyclical commodity chemical business. Companies with a normalized standardized error above 40% (which maps to the Caa category) are most common for companies with very low or negative EBITDA at the bottom of a downturn. Factor 2: Size & Stability (27. 27%) Weight a) Revenue (Billions of US$) b) # of Divisions of Equal Size c) Stability of EBITDA 9. 09% 9. 09% 9. 09% Aaa ? $50 8 ; 2% Aa $20 – $50 6 to 7 2% – 6% A $10 – $20 5 6% – 12%Baa $5 – $10 4 12% – 20% Ba $1 – $5 2 or 3 20% – 30% B $. 2 – $1 1 or 2 30% – 40% Caa $. 1 – $. 2 1 40% – 60% Ca ; $. 1 0. 5 ? 60. 0% A chart that illustrates grid mapping results for Factor 2 and a discussion of outliers for companies in the sample is included in Appendix C. Factor 3: Cost Position (18. 18% weight) Why It Matters Relative cost position is a critical success factor for a chemical company because, in a downturn, (either cyclical or economic) prices often decline to the point where only companies with first and second quartile cash costs generate meaningful cash flow.Operating cost positions are a function of criteria that include size, access to low cost raw material inputs, location of assets, labor rates, and capital invested. Further, with low levels of financial leverage, low cost producers are typicall y better positioned to outperform competitors. Low cost producers, with low leverage, are better able to survive in a downturn and are also better positioned to grow when opportunities arise. A company's cash costs and its position on the industry cost curve, as well as the overall shape of the industry cost curve, are all valuable information.However, true cash cost curve data, while useful, is often proprietary or may be the property of various consultants and difficult to verify. 12 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody’s Global Corporate Finance Global Chemical Industry Comparisons across the wide variety of commodity and specialty chemical companies make it difficult to rely on relative or absolute costs for ranking companies. We use two measures in addition to information provided by companies to assess cost positions: ? ?EBITDA Margin Return on Average Assets How We Measur e it for the Grid EBITDA Margin This factor is used in part to gauge the quality of the pricing power a company has and is likely to achieve. It is measured using EBITDA, which includes recurring â€Å"other† income and excludes non-recurring â€Å"other† income and one time charges. This factor, along with several others, is an important measure of a company's profitability in multiple economic scenarios. We use the past three years' actual results along with our expectation for the next two years, and to consider the average as well as the high and low points.For illustrative purposes the measurement used in the company examples herein is based on an average of the past three years' EBITDA margin. The choice of EBITDA, versus EBIT, is driven in part by the many and varied depreciation polices used globally and the need for comparability between regions. Nonetheless, we recognize the weaknesses of EBITDA, discussed below, and analysts within regions will also evaluate EBIT margins as well. Another reason for the use of EBITDA is the aterial difference in capital intensity within sub-sectors of the chemical industry. The capital intensity of a large commodity company can be very different from a smaller specialty player. The use of EBITDA – as opposed to EBIT – has a disadvantage in that EBITDA fails to address the capital intensity of the chemical industry effectively. Clearly an important indicator of a company's ability to generate operating profit should be assessed after the costs of plant maintenance and capacity expansion, as represented by its annual depreciation charges.Experience indicates that while a chemical company's capital spending often swings with major projects, it will generally need to spend its depreciation over time as it maintains and develops new facilities. We attempt to capture the effect of this capital intensity in our use of free cash flow metrics in the financial strength rating factor discussion. Retu rn on Average Assets This is a strong measure of a company's ability to generate a consistent and meaningful return from its asset base. This metric specifically takes into account the capital intensive nature of the industry.This is also a five-year average measurement using the past three years of actual results along with our expectation for the next two years. We use total assets, less cash and short term investments rather than tangible assets to provide a more meaningful measure for the universe of speculative grade companies. Factor 3: Cost Position (18. 18%) Weight a) EBITDA Margin b) ROA – EBIT / Assets 9. 09% 9. 09% Aaa ? 30% ? 25% Aa 20% – 30% 15% – 25% A 15% – 20% 10% – 15% Baa 10% – 15% 7% – 10% Ba 8% – 10% 4% – 7% B 4% – 8% 2% – 4% Caa 1% – 4% 0. 5% – 2% Ca < 1% < 0. 5%A chart that illustrates grid mapping results for Factor 3 and a discussion of outliers for companies in the sam ple is included in Appendix C. 13 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody’s Global Corporate Finance Global Chemical Industry Factor 4: Leverage / Financial Policies (18. 18% weight) Why It Matters Management's willingness to enhance shareholder value via debt financed acquisitions and/or share repurchases, is likely to increase credit risk. The chemical industry is particularly vulnerable given its volatile nature.We learn about financial policies through a discussion with management that includes hypothetical scenarios. Such meetings often examine management's willingness to stretch its balance sheet and/or financial flexibility. The hypothetical situations often relate to acquisitions or share repurchase appetites. Concerning acquisitions, discussions often focus on size and on the combination of debt and/or equity that will be used to fund a growth initiative. Another key conce rn is management's approach to managing financial flexibility through a range of cycles.Specifically we look for an approach that emphasizes preparedness for lean times such that strong cash flows, when available, are used to reduce debt. Measurement of leverage and financial policies is based on two different estimates of leverage: current debt to capitalization, and debt to EBITDA. We believe that the amount of leverage with which management operates is a choice and a direct result of a company's financial strategy. Issuers, particularly those in the investment grade and high Ba rating categories, often actively manage to these ratios.Certainly these ratios, especially debt to EBITDA, are used by providers of capital in the form of specific covenant tests. Debt to capital is a simple way to compare the capital structure of companies operating within an industry, and managements often claim to manage to it. This metric is also a way to assess management's willingness to grow via de bt financed acquisitions. The debt to EBITDA ratio is a measure that balances the debt to capitalization ratio with a measurement of a company's ability to generate EBITDA both in times of peak pricing and in times of stress.We believe these two metrics provide insight into the company's financial policies, including its tolerance for debt and the ability of the company to ride out the highs and low of a cycle. How We Measure it for the Grid Debt to Capital This factor can be easily captured from financial statements using the most recent annual or quarterly debt and equity balances (incorporating our standard adjustments). There are certainly situations where this metric becomes less useful — particularly in the case of LBOs or spinouts wherein book equity is low or nonexistent. In these instances this metric could be given reduced weight.In the event that a company's book equity is extremely low and the stock is publicly traded, the analyst may use the market capital of the company in place of book equity in this ratio. While market capital has its own weaknesses and can be very volatile, this approach can be of some value. Debt to EBITDA For this measure we use a five-year average of the annual debt and EBITDA balances as shown on the financial statements. We look back three years and use estimates to make assumptions for two years going forward. Factor 4: Leverage / Financial Policies (18. 18%) * Weight a) Current Debt / Capital b) Debt / EBITDA 9. 09% 9. 09% Aaa lt; 15% < . 5x Aa 15% – 25% . 5x – 1. 5x A 25% – 35% 1. 5x – 2. 25x Baa 35% – 50% 2. 25x – 3x Ba 50% – 70% 3x – 4x B 70% – 80% 4x – 6x Caa 80% – 95% 6x – 8x Ca ? 95% ? 8x * Where appropriate net adjusted debt may be used (see discussion of Cash Balances and Net Debt Considerations) 14 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodo logy Moody’s Global Corporate Finance Global Chemical Industry A chart that illustrates grid mapping results for Factor 4 and a discussion of outliers for companies in the sample is included in Appendix C. Factor 5: Financial Strength (27. 7% weight) Why It Matters The three key indicators of financial strength are 1) Interest Coverage, 2) Retained Cash Flow to Debt, and 3) Free Cash Flow to Debt. All of these metrics are averaged over five-year periods to address the volatile nature of the industry. Interest coverage: Interest coverage can be particularly meaningful for speculative grade companies. This is especially true if the interest rate environment is in a period of change — such as the migration from lower rates to higher rates — and an issuer is facing the need to refinance debt that is nearing maturity. It is a less important metric for higher-rated companies.The remaining two metrics are useful across the rating spectrum and relate to the amount of ca sh flow available to cover varied scenarios of both operating needs and financing needs. ? ? Operating needs include major items such as working capital and capital spending. Financing needs refers to the impact of dividends and the â€Å"free† cash then available to service debt. As discussed above, the use of EBITDA (as opposed to EBIT) in the interest coverage ratio is important for companies in the chemical industry and the decision to use it is a function of the need to make the ratio more comparable globally.Retained Cash Flow and Free Cash Flow: The cash flow metrics we use measure two different levels of cash flow: retained cash flow and free cash flow and their ratio to total adjusted debt. Retained cash flow is a broader measure of financial flexibility than free cash flow as it excludes the potential ‘noise' created by changes in working capital and unusual capital spending programs. This is a helpful measure given the volatility and the variation in capital intensity within the chemical sector.As with other factors in which debt is involved we can look at these cash flow metrics in two ways — as a percentage of both debt and of net debt (net of cash balances). We use net debt for companies at which it is either a stated, long-lived policy to hold material cash balances or for which there may be unique scenarios such as recent asset sales whereby cash may be earmarked for use in debt reduction efforts. In some specific instances we may use a net debt denominator for the free cash flow metric as well. A more detailed discussion of our views on cash balances appears below.Free cash flow is, in many instances, one of the most important and reliable measures of financial strength and flexibility. This metric reflects a company's primary source of liquidity as it directly speaks to management's ability to service its debt burden after considering both its operating and financial commitments to shareholders. In this metric we often ide ntify where capital spending programs may be extraordinarily large and/or risky. At times, programs can have a direct impact on ratings because of the size of expenditure that may be involved as well as the risks of executing the program on time and on budget.If, for example, a large amount of capital is spent on new greenfield capacity and we believe that such capacity is being added at a time when product prices are low (i. e. , there is a lack of an adequate return on capital) the ratings may be negatively affected. There is also the risk that anticipated operating cash cost benefits upon project completion are different than expected. 15 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody’s Global Corporate Finance Global Chemical Industry How We Measure it for the GridInterest coverage This metric is a straightforward look at EBITDA (adjusted for non-recurring other income and one-time ch arges) to gross interest expense (including capitalized interest). This is a five-year measure. Cash Flow to Debt ? Retained Cash Flow to Debt – Defined as funds from operations (FFO) minus dividends, as a percentage of total debt. This is a five-year measure. Free Cash Flow to Debt – Defined as cash flow from operations (by its nature operating cash flow is determined after taking into account working capital) minus capital spending and dividends, as a percentage of total debt.This is a five-year measure. ? Cash Balances and Net Debt Considerations Typically, analysts approach the use of cash balances and the use of cash in â€Å"net debt† calculations in a conservative fashion. As a general rule we would not typically consider cash on the balance sheet as a true offset to adjusted total debt in for the purpose of ratio analysis. Reasons that we would not look at cash on the balance sheet as fungible for the debt include concern that: ? the cash is easily used for other purposes and debt reduction is only counted hen debt is permanently reduced in some instances cash is actually needed to fund the day-to-day operations of the issuer the cash is â€Å"stranded' overseas and subject to material taxes such that the true cash balance is materially lower than represented in the financial statements there may be other claims on the cash for restructuring efforts or legacy liabilities. ? ? ? There are, however, examples where our analysis for chemical companies incorporates cash balances as providing a measure of offset to adjusted total debt balances. Exceptions to the above analytical approach, for which we give credit for cash balances include: ? he specific refunding of near term debt maturities wherein management borrows in advance to prefund a near term maturity. cash is held temporarily for legal, tax or other purposes and the company has publicly stated its intention to reduce debt once the temporary period has ended. ? Other instances, typically only for large companies, include situations in which management has a history of maintaining material levels of cash on the balance sheet, it has publicly stated its intention not to pursue largedebt financed acquisitions or share repurchases, and cash is accessible without meaningful loss to taxes.In Europe and Latin America, we also generally observe that companies are more willing to maintain higher cash balances that may sometimes be linked to tax considerations or more broadly reflect a more conservative style of financial policies. Considering only gross debt may not reflect the real financial strength of these companies and we may prefer in this case to focus on net debt. In these cases, however, we capture the expectation that these cash balances can be liquidated at least at book value and without tax costs.Factor 5: Financial Strength (27. 27%) * Weight a) EBITDA / Interest Expense b) Retained Cash Flow / Debt c) Free Cash Flow / Debt 9. 09% 9. 09% 9. 09% Aaa ? 20x ? 65% ? 40% Aa 15x – 20x 45% – 65% 25% – 40% A 10x – 15x 30% – 45% 15% – 25% Baa 5x – 10x 20% – 30% 8% – 15% Ba 2x – 5x 10% – 20% 4% – 8% B 1x – 2x 5% – 10% . 5% – 4% Caa 0. 5x – 1x 1% – 5% 0% – . 5% Ca ; 0. 5x ; 1% ; 0% * Where appropriate net adjusted debt may be used (see discussion Cash Balances and Net Debt Considerations) 16 December 2009 ? Rating Methodology ?Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody’s Global Corporate Finance Global Chemical Industry A chart that illustrates grid mapping results for Factor 5 and a discussion of outliers for companies in the sample is included in Appendix C. Assumptions, Limitations and Rating Considerations not Covered in the Grid The rating methodology grid incorporates a trade-off between simplicity that enhances transparency and greater complexity that would enable the grid to map more closely to actual ratings.The five rating factors in the grid do not constitute an exhaustive treatment of all of the considerations that are important for ratings of global chemical companies. In choosing metrics for this rating methodology grid, we did not include certain important factors that are common to all companies in any industry, such as the quality and experience of management, assessments of corporate governance and the quality of financial reporting and information disclosure.The assessment of these factors can be highly subjective and ranking them by rating category in a grid would, in some cases, suggest too much precision in the relative ranking of particular issuers against all other issuers that are rated in various industry sectors. Ratings may include additional factors that are difficult to quantify or that only have a meaningful effect in differentiating credit quality in some cases. Such factors include regulatory and l itigation risk as well as changes in end use demand such that today’s specialty chemical becomes tomorrow’s commodity.While these are important considerations, it is not possible to precisely express these in the rating methodology grid without making the grid excessively complex and less transparent. Ratings may also reflect circumstances in which the weighting of a particular factor or qualitative issue will be different from the weighting or outcome suggested by the grid. For example, the importance of the business profile score is highlighted by the fact that, in certain cases, it can outweigh all other factors in the methodology materially, lowering ratings significantly. The three most prominent examples are: ? ? operations limited to a single site, and a business model whose success is highly dependent on government actions or policies. a company with significant litigation related to either environmental or product liability issues. This variation in weighting as a rating consideration can also apply to factors that we chose not to attempt to represent in the grid. For example, liquidity is a rating consideration that can sometimes be critical to ratings and under other circumstances may not have a substantial impact in discriminating between two issuers with a similar credit profile.Ratings can be heavily affected by extremely weak liquidity that magnifies default risk. However, two identical companies might be rated the same if their only differentiating feature is that one has a good liquidity position while the other has an extremely good liquidity position. This illustrates some of the limitations for using grid-indicated ratings to predict rating outcomes. Another consideration is the increase in pension underfunding that occurred at the end of 2008 as a result of large declines in the global equity markets.Increased pension fund liability is unlikely to be the sole driver of ratings downgrades where issuers have adequate liquidity, sufficient resources to alleviate their funding deficiency over time and financial metric contraction is modest for their rating category and the metric contraction is expected to only temporarily deviate. In evaluating the impact of an issuer’s pension liability on ratings, the analyst will consider the magnitude of the shortfall, the ability of the company to reduce the shortfall over time using internal sources and committed external sources of capital, and the plans for doing so.Issuers with higher ratings are likely to avoid a downgrade solely resulting from the increased pension liability if there is a clearly articulated plan for reducing the liability and we believe there are resources available to meet the plan without putting the core business and financial profile at risk. Issuers with speculative grade ratings and those at the lower end of investment grade rating levels are at greater risk of ratings transition because of higher potential exposure to liquidity is sues and weaker perceived capability of eradicating the funding liability without weakening the company’s financial or business position. 7 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody’s Global Corporate Finance Global Chemical Industry In addition, our ratings incorporate expectations for future performance, while the financial information that is used to illustrate the mapping in the grid is historical in practice we look at a combination of prior years and future years; usually three years of history and two years looking forward. In some cases, our expectations for future performance may be informed by confidential information that we cannot publish.In other cases, we estimate future results based upon past performance, industry trends, demand and price outlook, competitor actions and other factors. In either case, predicting the future is subject to the risk of substantial i naccuracy. Assumptions that can cause our forward looking expectations to be incorrect include unanticipated changes in any of the following: the macroeconomic environment and general financial market conditions, industry competition, new technology, regulatory actions, and changes in environmental regulation. Conclusion: Summary of the Grid-Indicated Rating OutcomesThe methodology grid-indicated ratings based on last twelve month financial data as of the quarter end closest to September, 30, 2009 map to current assigned ratings as follows (see Appendix B for the details): ? ? 8 companies map to their assigned rating 10 companies have a grid-indicated rating that is one or two alpha-numeric notches from the assigned rating 2 companies have a grid-indicated rating that is three notches from their assigned rating ? Overall, the framework indicates that there are an even number of companies whose grid-indicated rating is below their actual rating (6) than above their actual rating (6). This can be attributed to a variety of factors including: (a) willingness to look through periods of stronger or weaker activity where appropriate; (b) grid metrics do not capture our expectation of lower raw material costs and their benefit to margins and (c) liquidity concerns such as generating cash from working capital in a downturn are not fully captured by the grid. 18 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody's Global Corporate Finance Global Chemical IndustryAppendix A: Global Chemical Industry Methodology Factor Grid Weight Factor 1: Business Profile a) Business Position Assessment Factor 2: Size & Stability a) Revenue (Billions of US$) b) # of Divisions of Equal Size c) Stability of EBITDA Factor 3: Cost Position a) EBITDA Margin b) ROA – EBIT / Assets Factor 4: Leverage / Financial Policies * a) Current Debt / Capital b) Debt / EBITDA Factor 5: Financial Strength * a) EBIT DA / Interest Expense b) Retained Cash Flow / Debt c) Free Cash Flow / Debt 9. 09% 9. 09% 27. 28% 9. 09% 9. 09% 9. 09% 18. 19% 9. 09% 9. 09% 18. 9% 9. 09% 9. 09% 27. 28% 9. 09% 9. 09% 9. 09% ? 20. 0x ? 65. 0% ? 40. 0% 15. 0x – 20. 0x 45. 0% – 65. 0% 25. 0% – 40. 0% 10. 0x – 15. 0x 30. 0% – 45. 0% 15. 0% – 25. 0% 5. 0x – 10. 0x 20. 0% – 30. 0% 8. 0% – 15. 0% 2. 0x – 5. 0x 10. 0% – 20. 0% 4. 0% – 8. 0% 1. 0x – 2. 0x 5. 0% – 10. 0% 0. 5% – 4. 0% 0. 5 – 1. 0x 1. 0% – 5. 0% 0. 0 – 0. 5% < 0. 5x < 1. 0% < 0. 0% < 15. 0% < 0. 50x 15. 0% – 25. 0% 0. 50x – 1. 50x 25. 0% – 35. 0% 1. 50x – 2. 25x 35. 0% – 50. 0% 2. 25x – 3. 00x 50. 0% – 70. 0% 3. 00x – 4. 00x 70. 0% – 80. 0% 4. 00x – 6. 00x 80. 0% – 95. % 6. 00 – 8. 00x ? 95. 0% ? 8. 00x ? 30. 0% ? 25. 0% 20. 0% – 30. 0% 15. 0% â €“ 25. 0% 15. 0% – 20. 0% 10. 0% – 15. 0% 10. 0% – 15. 0% 7. 0% – 10. 0% 8. 0% – 10. 0% 4. 0% – 7. 0% 4. 0% – 8. 0% 2. 0% – 4. 0% 1. 0% – 4. 0% 0. 5% – 2. 0% < 1. 0% < 0. 5% ? $50. 0 8 > 2. 0% $20. 0 – $50. 0 6 to 7 2. 0% – 6. 0% $10. 0 – $20. 0 5 6. 0% – 12. 0% $5. 0 – $10. 0 4 12. 0% – 20. 0% $1. 0 – $5. 0 2 or 3 20. 0% – 30. 0% $0. 2 – 1. 0 1 or 2 30. 0% – 40. 0% $0. 1 – $0. 2 1 40. 0% – 60. 0% < $0. 1 0. 5 ? 60. 0% ? 6. 0 4. 5 – 6. 0 3. 5 – 4. 5 2. 5 – 3. 5 1. 5 – 2. 5 0. – 1. 5 0. 5 – 0. 5 < – 0. 5 Aaa Aa A Baa Ba B Caa Ca * Where appropriate net adjusted debt may be used (see discussion Cash Balances and Net Debt Considerations) 19 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical Industry Rating Methodology Moody's Global Corporate Finance Global Chemical Industry Appendix B: Methodology Grid-Implied Ratings Overall Grid Implied Rating Issuer Moody's Rating Business Profile Size & Stability # of Divisions of Equal Size Baa Aa Aa Aa Aa A A B A Baa Ba Aa Ba B Ba B Caa Ba B Ba Cost PositionLeverage / Financial Policies EBITDA/ Interest Expense (3 Yr) Avg Aaa A A Aaa A Ba Baa Aaa A Baa A A B Ba B Ba B Ba B Ca Financial Strength Retained Cash Flow/ Debt (3 Yr Avg) Aaa A Baa A Ba Ba Ba Aaa A Baa Baa Baa B Ba B Ca Ba Ba Ba Caa Free Cash Flow/ Debt (3 Yr Avg) Ca Baa Ba Ca Ca Ba Ba Aa B B Ba Ba Ca Ba Ba Ca Ba Ca Ba Ca Business Position Assessment Shin-Etsu Chemical Company Ltd BASF (SE) E. I. du Pont de Nemours and Company Revenue (Billions of US$) A Aaa Aa Ba Baa Aa Aa Baa A Baa A Aaa Baa Baa Ba Ba Baa A Ba Baa Stability of EBITDA Baa A Baa Ba Baa A Aa Ca Baa Ba Ba Baa Ba Ba A Baa Ca Ba Ba BaEBITDA Margin % (3 Year Avg) Aaa A A Baa Baa A Baa Aaa Baa A Baa Baa A Aa A A Baa Ba B Ba ROA – EBIT / Assets (3 Yr Avg) A A A Ba Ba Ba Ba Aaa A A A A Baa A Baa A Baa Ba Ba Ba Current Debt/Capital Aaa Baa Ba A Ba Baa Baa Baa Baa Ba Ba Ba B Caa Caa Caa Ba B Caa Ca Debt/ EBITDA (3 Yr Avg) Aaa Aa Baa A Ba Ba Ba Aa A Baa Baa Baa Ba Ba B B B B B Ca Aa3 A1 A2 A2 A3 A3 Baa1 Baa1 Baa1 Baa2 Baa2 Baa3 Ba1 Ba2 Ba3 Ba3 B1 B1 B1 B3 A1 A1 A3 Baa1 Baa3 Baa1 Baa1 A2 Baa1 Baa2 Baa2 A3 Ba3 Ba1 Ba1 Ba3 B1 Ba3 B1 B2 Aa Aa Aa A Aa Aa A A Ba A Baa Aa B Baa A Baa Ca Baa B Baa Kaneka Corporation Teijin Limited Bayer AG Akzo Nobel N.V. Potash Corporation of Saskatchewan LG Chem, Ltd. Eastman Chemical Company Yara International ASA Dow Chemical Company (The) Braskem SA Celanese Corporation Nalco Company ISP Chemco LLC NOVA Chemicals Corporation Huntsman Corporation PolyOne Corporation Hexion Specialty Chemicals Inc. Positive Outlier Negative Outlier For illustrative purposes most financial metrics used the last three full fiscal years of reported data FYs 2006, 2007 and 2008 20 December 2009 ? Rating Methodology ? M oody’s Global Corporate Finance – Global Chemical Industry Rating MethodologyMoody's Global Corporate Finance Global Chemical Industry Appendix C: Observations and Outliers for Grid Mapping Factor 1 – Business Profile The majority of positive outliers for business profile are associated with companies whose financial strength, financial policy measures or liquidity are weakly positioned, providing offsets that are more consistent with the overall ratings. Factor 1: Business Profile Issuer Shin-Etsu Chemical Company Ltd BASF (SE) E. I. du Pont de Nemours and Company Kaneka Corporation Teijin Limited Bayer AG Akzo Nobel N. V. Potash Corporation of Saskatchewan Inc.LG Chem, Ltd. Eastman Chemical Company Yara International ASA Dow Chemical Company (The) Braskem SA Celanese Corporation Nalco Company ISP Chemco LLC NOVA Chemicals Corporation Huntsman Corporation PolyOne Corporation Hexion Specialty Chemicals Inc. Positive Outlier Rating Aa3 A1 A2 A2 A3 A3 Baa1 Baa1 Ba a1 Baa2 Baa2 Baa3 Ba1 Ba2 Ba3 Ba3 B1 B1 B1 B3 Business Position Assessment Aa Aa Aa A Aa Aa A A Ba A Baa Aa B Baa A Baa Ca Baa B Baa Negative Outlier 21 December 2009 ? Rating Methodology ? Moody’s Global Corporate Finance – Global Chemical Industry Rating MethodologyMoody's Global Corporate Finance Global Chemical Industry Factor 2 – Size & Stability Here the majority of positive outliers for revenue are associated with companies whose financial strength, financial policy measures or liquidity are relatively weakly positioned, providing offsets that are more consistent with the overall ratings. The negative outliers are largely related to the stability of EBITDA metric and reflect the volatility of cash flows in certain companies and sectors due to unprecedented high raw material prices and the significant global economic downturn in 2008.Factor 2: Size & Stability Revenue (Billions of US$) A Aaa Aa Ba Baa Aa Aa Baa A Baa A Aaa Baa Baa Ba Ba Baa A Ba Baa Issuer Shin-Etsu Chemical Company Ltd BASF (SE) E. I. du Pont de Nemours and Company Rating Aa3 A1 A2 A2 A3 A3 Baa1 Baa1 Baa1 Baa2 Baa2 Baa3 Ba1 Ba2 Ba3 Ba3 B1 B1 B1 B3 # of Divisions of Equal Size Baa Aa Aa Aa Aa A A B A Baa Ba Aa Ba B Ba B Caa Ba B Ba Stability of EBITDA Baa A Baa Ba Baa A Aa Ca Baa Ba Ba Baa Ba Ba A Baa Ca Ba Ba Ba Kaneka Corporation Teijin Limited Bayer AG Akzo Nobel N. V. Potash Corporation of Saskatchewan Inc. LG Chem, Ltd.Eastman Chemical Company Yara International ASA Dow Chemical Company (The) Braskem SA Celanese Corporation Nalco Company ISP Chemco LLC NOVA Chemicals Corporation Huntsman Corporation PolyOne Corporation Hexion Specialty Chemicals Inc. Positive Outlier Negative Outlier 22 December 2009 ? Rating

Wine Club Advert Research Paper Example | Topics and Well Written Essays - 750 words

Wine Club Advert - Research Paper Example I consider the Wine Club advertisement on the New York Times newspaper as an appropriate article for rhetorical analysis. The basic message propagated by the advertisement is the 50% discount entitled for every member of the club for all their purchases on wine. The first approach towards rhetorical analysis is to consider the ethos aspect of the advertisement. In this case, ethos reflects the ethical and moral aspect of the advert (Faigley & Jack 2010). The people behind the advert believe that drinking of wine has health and lifestyles benefits. However, people do not benefit from the health and therapeutic value resulting from drinking of wine due to price factors. Thus reducing price through discount is the first strategy of eliminating cost burden. However, the advertisement considers price reduction strategy as a sufficient factor for encouraging wine drinking among the people. According to the advertisement, joining a wine-drinking club will contribute to the development of wi ne drinking habit among the people. The advertisement is trying to make the audience to reconsider their naivety towards their health. In addition, the advertisement is trying to erase people’s mentality towards wine drinking and the association of wine with immorality. Thus, the advertisement is trying to make people reconsider their attitude towards wine drinking. The advertisement is also trying to explore people’s ignorance that results from generalization. Although the advert is trying to pass credible information to the audience, it fails to set its facts straight. The advertisement illustrate useful information about drinking wine and encouraging people to drink wine by joining wine drinking clubs. However, the advert does not provide accurate information concerning the benefits of drinking wine and the role of wine drinking clubs in influencing people’s behaviors. The only evidence provided by the advertisement concerns the role of wine drinking club mem bership in eliminating consumer’s burden. For instance, the advertisement claims that all members of the wine drinking will obtain their favorite drink at a price 50% below the marked price. However, this price reduction does not imply that wine drinking will increase by 50%. Despite the controversies surrounding the advert concerning inadequate evidence, the advertisement has a high degree of persuasiveness. Firstly, the advertisement contains colorful pictures of different brands of wine. These pictures not only encourage the audience about wine drinking club membership but also the lifestyle that comes with wine drinking. The advertisement has significant claims concerning different lifestyle diseases and the recent discoveries on the benefits of drinking wine. However, the advert does not provide a clear link between its message and a solution to the problem. It is evident that the advertisement provides solution to the problem without setting appropriate strategies for s olving the problem. The advert has evident mythology aspects that relate to its intended message. Firstly, the advert relies on the power of association as a strategy towards elimination of people’s attitude towards drinking of wine. In addition, the advertisement relies on scientific discoveries and people’s observation. Although the advert creates a link between current scientific discovery and modern day medical problem, it is slightly unrealistic (Radway, 2010). This deficiency creates a basis for the cultural myth in the advertisement. In addition, the advertisement illustrates the numerous cultural myths associated with wine drinking. For instance, people associate wine drinking with the rich people. In addition, different brands of wine are associated with ancient European monarchies. For instance, the

Hobbes and Locke on the Evolution of the Civil Society Term Paper

Hobbes and Locke on the Evolution of the Civil Society - Term Paper Example Their views are important for international political thought, because they influenced present international political economy theories and helped paved the debate on political ideology, particularly shaping the discourse on the concept of â€Å"civil society† and the rise of nation-states vis-a-vis â€Å"civil society.† Locke and Hobbes have diverging views on the relationship between the government and civil society, as well as the notions of slavery, sovereignty, direction of international politics, and peace, but they share somewhat similar beliefs in the role of education and the state of nature of humanity. Locke and Hobbes have diverging views on the relationship between the government and civil society. Hobbes believes that Europe has changed as a civil society through the evolution of the social contract. The Commonwealth only exists because of the Covenant between the people and the government or the state. Hobbes says in the Leviathan: â€Å"Essence of the C ommon-wealth; which (to define it) is ‘One Person, of whose Acts a great Multitude, by mutual Covenants one with another, have made themselves every one the Author, to the end he may use the strength and means of them all, as he shall think expedient, for their Peace and Common Defense.’† This statement shows that the main goal of the government is to ensure peace and national defense. The covenant or social contract, however, for Hobbes is absolute, where the state incorporates the wills of the individuals; the state is the body and individuals are just parts of it: â€Å"The only way to erect such a Common Power† is â€Å"to confer all their power and strength upon one Man, or upon one Assembly of men, that may reduce all their Wills, by plurality of voices, unto one Will† (Hobbes). This statement underscores that the social contract binds all individuals. On the one hand, it enforces plurality of wills. On the other hand, it means the precedence o f the state over civil society. Locke confirms the same views as Hobbes and argues that Europe also changed because of the need for the social contract. Unlike Hobbes, Locke believes that people take part of social contracts merely to help adjudicate disputes between individuals or groups. He says: â€Å"And this is done, where-ever any number of men, in the state of nature, enter into society to make one people, one body politic, under one supreme government†¦to make laws for him, as the public good of the society shall require†¦Ã¢â‚¬  (Locke, Two Treatises on Government). From here, it is clear that Locke believes that it is the people or civil society that legitimizes the state; while for Hobbes, it is the government that legitimizes the existence of a peaceful civil society. My criticism of Hobbes is that he overlooks that the people make the government. The social contract binds the people, but the people can unbind some laws too in order to make the contract fit th eir changing needs and issues. I agree more with Locke, who reminds governments of their servitude to the civil society. It does not mean, however, that the civil society will also abuse its rights and fully void the social contract without due justifications. Locke and Hobbes diverge on the notion of sovereignty. Locke argues that civil society precedes the state. For him, it is society that provides the state its essential source of legitimacy. He contends that when the rulers fail to encourage interests, independence,

European Cinema Essay Example | Topics and Well Written Essays - 2000 words

European Cinema - Essay Example The concepts that were associated with pan – European films created an alternative culture that identified the margins of culture, as opposed to the mainstream that was often accepted in contemporary movies. The concept of pan – European films began to become significant after the 1950s and 1960s with the emergence of Hollywood. As the styles and themes of Hollywood began to reach popular culture, those in Europe also began to change the approach to film. While looking at the movies of Hollywood, there was a movement that was defined which rejected the American culture in movies. The pan – European movement was one that went in the opposite direction of creativity and inspiration as Hollywood, specifically to create a European style film. The particular movement began with the French New Wave in the 1950s and 1960s and was known to adapt to specific influences that were a part of the films in cinema. â€Å"Here European cinema adopts a mode of film practice that rejects dialogue with Hollywood, favouring instead filmic models, which appear to be embedded in European culture and untouched by American cultural influence.1† The rejection of influence from popular cultu re, as well as the influences of American Hollywood was then able to define the pan – European film and the way that it was associated with the culture of Europe. The concept of moving into the culture of Europe to produce films was not the only definition that was associated with Europe and the functions that it had for film. The establishment of culture in pan – Europe also led to the understanding of borders and the concept of Europe as the cultural affiliation that was associated with this particular arena. The pan – European film focused not only on the concepts of culture, but also was affiliated with creating movies that were nationalistic in nature. Because there was a movement against

Disaster related risk management practices in IHG Essay

Disaster related risk management practices in IHG - Essay Example Risk management in this context can be stated as an ongoing process which sustains throughout organizational life cycle. With these considerations, the essay discusses disaster risk management practices in an organization namely InterContinental Hotels Group (IHG) in Japan. Disaster usually follows natural threats and its severity depends on the level of impact on the organization. On the other hand, the level of impact is subjected to the choices made by organizations (U.S. Department of Health and Human Services, â€Å"Risk Management Plan†). THESIS STATEMENT The essay is based on understanding the disaster related risk management practices in IHG which faced losses due to recent earthquake in Japan, in the year 2011. The objective of the study is to discuss the event along with its consequence on the risk management activities of IHG. Furthermore, it also describes the learning gained from the incident. BUSINESS OF THE ORGANISATION IHG is a British hospitality organization and is also considered as one of the biggest hotel brands in the world. IHG operates in excess of nine hotels under its name and its business strategies concentrate on driving the demand of the brand. IHG operates the business in three different ways namely franchising, joint venture and ownership. Franchising is the biggest part of the business of IHG, however, it also uses the bricks and mortar model of business (InterContinental Hotels Group, â€Å"Overview†). ... This natural disaster had created a drastic impact on the performance of IHG. Its ANA Holiday Inn, which is situated in Sendai, had to be closed down for new reservation. The organization also became vulnerable in terms of safety of its people and guests due to the disaster. Furthermore, the property of ANA Holiday Inn which was situated in the close proximity to Fukushima Daiichi nuclear plant also faced the risk of disruption. The share price of the organization also fell drastically after the incident occurred in Japan (Telegraph Media Group Limited, â€Å"Japan Earthquake: The Companies Most Affected by the Disaster†). RISK MANAGEMENT IN IHG IHG has an established international risk management procedure and outline which is entrenched in every operation and activity of the organization. The objectives of risk management of IHG are to create a vigorous, reactive and strong procedure along with a successful, respected and liable business over the long run. With respect to ri sk management, the key objective of the organization is to recognize and manage risks, in line with the strategic objectives and long-term value of the business (InterContinental Hotels Group PLC, â€Å"Corporate Risk Management†). Risk Screening The risk management process is characterized by risk screening procedure which determines the risk severity and frequency. According to risk severity and frequency, risks can be separated into minor risks which do not necessitate much management attention and significant risks which require considerable management attention. There are two types of risks an organization can face such as internal risks and external risks. Internal risks comprise management, cost and cash flow related risks. On the other hand, external risks are usually related with

R Software to complete this task Coursework Example | Topics and Well Written Essays - 500 words

R Software to complete this task - Coursework Example The negative skewness implies that there are more data points on the left side of the histogram (negative side of a skew plot). One can conclude that the life expectancy across the 182 countries is well below 70 years. The scatter plot above barely indicate any form of correlation between internet usage and life expectancy. However, it is clearly indicative that as internet usage increase from 20 to 80, the life expectancy tends to stay above 70 years and steadily moves towards 80 years. This can be simply explained by the fact that increased internet usage leads to better health care awareness. Being exposed to better and healthy living habits and information through the internet may be the cause for increased longevity. The histogram for life expectancy in Europe also shows that the distribution is negatively skewed, but much lesser compared to the entire world life expectancy. The skewness coefficient stands at (-0.52496). However, looking at the bar plots above, there seems to be a reduced number of age data points on the left side. This means that Europe experience increased longevity compared to the world (Reimann et al.). A careful look at the histogram shows that between ages 60 to age 78, the distribution is symmetrical. However, when the age limit is extended above 80, the distribution becomes negatively skewed. The life expectancy in Europe is much higher compared to the 182 countries. The first histogram plot clearly shows that the life expectancy across the 182 countries is 70 years, while the second histogram plot shows that the life expectancy in Europe is at 78 years. Both histograms distribution are negatively skewed, however, Europe seems to have more access to information technology (internet access) which obviously has improved the living standard and heath care for the aging population. In addition, one can also conclude that since Europe has many developed markets, a huge proportion of the population is able to

Reseach methods Essay Example | Topics and Well Written Essays - 500 words

Reseach methods - Essay Example Multiple form reliability refers to the application of equivalent forms of measure and correlation. This measurement tool is similar to test-retest reliability, but in this, subjects are given both forms of measure concurrently. Split half reliability reflects the correlation between the two halves in a set of items but the coefficient varies, depending on how the scale is split. Sometimes when more than one scale, dimension or factor is evaluated then split half reliability is used to check the consistency (Sekaran, 2006). Ans. Crime seriousness scales are the severity scales that judges the seriousness of the crime on the basis of weights assigned to them. There are two types of crime seriousness scales, simple rating scales and magnitude scales. Simple rating scales determine the rate of the crime on the basis of scales ranging from 1(not serious) to 9 (extremely serious). But this rating scale is unable to determine the magnitude difference between the scale scores. While magnitude scale measures the degree of seriousness of various crimes by public ranking. Selling-wolf gang index and national survey of crime severity are the two examples of magnitude scales in crime seriousness. Both these crime seriousness scales are used in criminal justice research to determine and analyze the seriousness of the crime. Crime seriousness scales not only judges the crime level but it also helps in controlling (Wilmot, 2002). Ans. Least square regression line is known as the best fitted line, least square line, regression line and least square prediction equation. It represents a mathematical model for a group of data. Generally, linear regression consists of finding the best-fitted line through the points in the scatter diagram. This line identifies the relationship between a single predictor variable X and the response variable Y, while the other predictor variables are held fixed. This

Mareting Essay Example | Topics and Well Written Essays - 2250 words

Mareting - Essay Example In today's business world it has become crucial for the management to be very keen when pricing of products and services. In pricing a firm should consider the value perception of the customers that is when attaching a price to a product then that price should reflect the value perception of that product. If a firm set a price that is higher than the value of a product; then that means, the demand for that product will go down which consequently will lead to decline in the volume of sales. If this happens then the contribution (sales less variable costs) and the gross margin of that product will decline leaving that firm lesser gross and net profits (Drew 1). Alternatively, if a firm set a price that is less that its value this will lead to high demand since the customers can derive more satisfaction from the product at a lesser cost. When a customer feels satisfied with a given product this will tend to increase his/her expenditure and volumes in that product. The increase in sales of that product may not necessarily lead to increase in the product's contribution or the firm's overall profit since the value of that product is higher than its price (Drew 1). This may lead to a loss in that product and also contribute a loss to a firm's overall profits. ... The price of any product should show a reflection of its value. Every time when a firm is setting a price it should ensure that neither it nor its customers loose from the decision made (Dodd 10). It is of utmost importance for the management or the pricing team to consider both the customer-value perception and therefore, they are responsible for regular and timely review of a firm's products prices and their quality. Comparing a firm's products to other firms trading in similar products in the market which they operate in terms of quality and price is important for that firm if it will remain relevant in the market. The firm should be in a position to differentiate their products from others so that their customers can be in a position to totally distinguish them. This translates to customer loyalty since they will not be faced with confusion due to the products available thereby increasing sales volume and margins of that product. A firm's product that has many substitutes available is at high risk of loosing its market share that is if the firm product doesn't give the much needed satisfaction by the customer in both aspects of quality and price. Therefore, it is imperati ve for a firm to regularly review its products quality by redesigning to avoid being faced out of the market. Further, a firm should always offer competitive prices to its customer in order to compete favorably with other firms' products. But in so doing they should not do it while disregarding the costs involved since after all it will determine their profitability (Dodd 14). Other important internal and external factors affecting a firm's pricing decisions Internal factors (a) Experience curve This is a situation in which the average cost (AC) declines as production of a product

Developing service Assignment Example | Topics and Well Written Essays - 2000 words

Developing service - Assignment Example Focusing on this aspect, the report describes about how the various features of services can have an impact on the design and delivery of the proposed services. Besides, the report also analyses the proposed services on the basis of different service models and extended marketing mix strategies. The objective is thereby to understand that various aspects which needs to be considered in designing and developing the services at Derby Museum. How Would the Features of Services Affect the Design and Delivery of the Service and What Could Managers Do to Limit the Effects of These? The services provided by organisations are diverse in nature. They can determine the performance of organisations. However, designing and delivering of services relies on the features of services provided by an organisation (Pride & Ferrell, 2012). Since services are not physical, they are termed as intangible. Services cannot be touched and hence evaluating the quality of services becomes quite challenging to b e measured. The other feature of services is its perishable nature. It denotes that unlike goods, services cannot be warehoused for future purposes. Therefore, this feature of services can also be observed to have a deep impact on the overall performance of organisation. To be precise, as services are not perishable, it is hard for organisations to balance its supply and demand. Variability is the other vital feature of services (Wild, 2007). It is also known by heterogeneity which denotes that services provided by organisations are dependent on great variability being delivered by individual entities. The behaviour of people is quite challenging to control as it has been observed to fluctuate on a regular basis. Aspects such as work pressure, experience, knowledge and skills among other factors can further lead to variability of the services. Inseparability is the fourth feature of services. The creation of services is often observed as related with the consumption, unlike products and goods where production and consumptions occur at separate instances (Wild, 2007). As a result, in order to make intangible services more tangible for the customers, managers need to determine the way for effective service deliveries which can help to create a high degree of confidence among customers about the value of services. The tangibility of services arrives from profound personal interactions, clear communications and physical atmospheres where the business operates. Hence, maintaining a positive customer relationship, setting proper potentials and representing the organisation in acceptable manner by appropriate advent, approach and facilities can enhance the service quality for the proposed services of Derby museum (Fisk et al., 2008). Besides, managers of Derby museum can enhance customer satisfaction facilitating the involvement of consumers in the service delivery procedure. Regular communication with customers and frequent meetings can further help to establish ass urance towards providing quality assured and customer convenient services. In order to enhance customer satisfaction towards the offered services, the managers of Derby museum can focus on recognising the degree of personalisation required

Stalin Power Essay Example for Free

Stalin Power Essay Joseph Stalin, the Man of Steel, is one of the most powerful dictators in history. Stalin was the General Secretary of the Communist Party and the Soviet Union’s sole leader from 1924 until his death in 1953. Stalin is one of the most controversial figures in Russian history; he is still the subject of fierce discussions. Stalin was a very powerful leader who had a huge impact on USSR; Stalin consolidated power in the USSR through propaganda, fear and, the five-year plan. Stalins rise to power was methodical and strong. The construction of his image was very well thought of and arranged. Nearly every medium propagandized Stalins image, propaganda was used to build up Stalins image. Like a religious worship, a cult of Stalin was formed. Stalin was like a godlike leader to the people, praised in the newspapers, books and in films, posters and poems. Everything praised his deeds, his skills, his modesty, his wisdom and his brilliance. Censorship was used to censor anything and everything that might reflect badly on Stalin. Leaving, no one a chance to see the bad side of Stalin, hence having everyone love and praise him. â€Å"The soviet education system was geared not to independent thinking but to Stalinist propaganda.† Parents taught their children that Stalin was the wisest and greatest. History books and photographs were changed to make him the hero of revolution, and obliterate the names of purges people. Stalin gave the people no chance to worship any kind of religious path; he did not want the people to have loyalty to anyone but him. Belief in god was replaced by belief in communism and Stalin. Cities and towns were named in his honor. Stalin established and consolidated his power through propaganda, thus gaining the love, respect and trust of the majority of the Russian people. However, propaganda alone was not enough to consolidate full power. Stalin was a paranoid ruler, always feared that political opponents, military officials, even common citizens were plotting against his political position and even his life. Perhaps as self-defense, Stalin was responsible for killing millions. Stalin consolidated his power base with the Great Purges against his political and ideological opponents. â€Å"Under the dictatorship of Joseph Stalin, tens of millions of ordinary individuals were executed or imprisoned in labor camps, that were little more than death camps. The Purge period of Soviet history can be considered the worst period of the twentieth century.† Stalin managed to use purges and violence to make people fear him, and therefore support him. Stalin imprisoned and executed anybody who opposed industrialization, and the kulaks who opposed collectivization. â€Å"Stalin also arrested thousands of his political opponents, they were put on show trials, where they pleaded guilty to impossible charges of treason.† Stalin executed or imprisoned almost all of the admirals and half the Army’s officers. Many people disappeared including teachers, miners, doctors, and ordinary people. Around 18 million were sent to labor camps, ten million died. â€Å"Stalin’s secret police had very effective torture methods. Many of the accused’s families were also killed or tortured in order to provoke confessions.† â€Å"Stalin had succeeded in destroying any sense on independent thinking. Everyone knew that his or her lives depended on thinking exactly as Stalin did.† Stalin accomplished power through fear, by using purges and violence to make people fear him and therefore support him, by having anyone who threatened his leadership, killed or murdered. â€Å"Propaganda and fear are not enough to explain Stalins extraordinary power. No dictator can hope to rule without popular support, and this was also true of Stalin. Power can only be acquired and retained by delivering benefits to significant numbers of people.† In Stalin’s case, this was achieved via five-year plans. Collectivization brought mechanization, rationalization to the many small plots that peasants worked on and put in place the distribution and supply networks needed to modernize agriculture and to produce enough grain for export. This system gave Stalin effective control over the entire economy, and thereby the Soviet people. The most effective means of increasing Stalin’s power was collectivization. â€Å"This involved the elimination of private ownership of agricultural land, and its replacement with a system of state-owned and collectively owned farms. The peasants who worked on these farms were under the control of the Party, which in turn was under the control of Stalin. Collectivization also gave Stalin the opportunity to eliminate large numbers of class enemies, the kulaks, and to steal Party members to wholesale murder.† Serious famines resulted, livestock and grain were destroyed and agriculture never fulfilled its potential. Yet most peasants remained grateful to Stalin for giving them a better standard of living. The Five Year Plans were also an essential part of Stalin’s consolidation of power. Targets were set for coal, iron and electricity production and progress was achieved through propaganda, fear, education, forced labor and socialist competition. â€Å"Stalin had declared that Russia was at least 100 years behind the industrialized world and, in setting out to modernize Russia; he was symbolically breaking with the past.† Stalin consolidated power through the achievements of the fiver year plan; new cities, dams and hydroelectric power, farm machinery, coal; steel, plastic, education and no unemployment and doctors and medicine were available. â€Å"For all the problems and hardship caused by the Five Year Plans, by 1941, Stalin had transformed Russia into a world class industrial power. This was to be vital for Russia as the war was about to test her to the extreme.† Today the role of Stalin in Russian history is the subject of bitter debate, with a number of Russian history textbooks calling him â€Å"an effective manager† and others presenting him as absolute evil dictator. Nevertheless, It can be seen that Stalin succeeded in consolidating power through many factors, mainly from propaganda, fear and terror, and the five-year plan.

Market and business analysis of camille bloch

Market and business analysis of camille bloch Camille Bloch is one of the most visionary and creative chocolate manufacturers in Switzerland. It only can be found in European countries such as Canada, Denmark, France, Austria and Italy, etc. There is no market share in Asian countries. Therefore, Camille Bloch needs to extend new market for their product, such as Singapore. Through analyzing external environment, company finds that Singapore is a potential market. The government welcomes any legal business to invest in Singapore. Besides, Singapore is a free port for imported confectionery and snacks. According to World Bank 2010 report, Singapore economy is the easiest to do business and has been awarded the most competitive country in Asia. Facing many competitors, this company can use its competitive advantage to improve its growth potential. Because Singapore is a relatively niche market which have only one city, Camille Bloch will make market segmentation according to the demographic of Singapore and decide to choose 13-29 years old customers as target market. They are reported as one of the most dynamic customers in the market. And teenagers with discretionary spending power, they can choose any kind of product they want without influences from the parents. Camille Bloch will choose direct exporting to let Singaporean distributors put new products in this market. Company will choose to export directly through importer located in Singapore. It gives an opportunity for company to learn Singapore markets before investing and reduces the potential risks of operating overseas, extending the sales potential of existing products and gain information about foreign competition. At the same time, MOUSSES is current product in Camille Bloch. If it want to develop new market, company need to use market development strategy as market expansion strategy. During the process of development, Camille Bloch needs to use marketing mix strategy to make MOUSSES popularized. For product strategy, company will choose indepe ndent little piece packaging to produce and put in Singapore market while its price strategy is making combination with three kinds of pricing strategies. The lower limit of this price is marginal cost while the upper limit of this price is demand price. After that, Camille Bloch will establish good cooperation with Fairprice, Cold Storage Group, Sheng Siong, Carrefour and Giant supermarkets through choosing good distributors possessed high reputation and abundant experience. Once entering into Singapore market, company will continually propagandize this product to enlarge its popularity and obtain market shares through sales promotion, advertising and retail terminal inputs POP. Through these strategies to introduce this brand, we believe that company will have good foreground in Singapore market. 2. Introduction Camille Bloch is one of the most visionary and creative chocolate manufacturers in Switzerland. Camille Bloch is an independent family business. With the rapidly development of epoch, they have a greatest challenge is the balance between the established and the modern. They must connect their recipes and advanced technologies. Besides, they try their new product ideas. However, Camille Bloch products cannot be found all over the world. It only can be found in some European countries such as Canada, Denmark, France, Austria and Italy, etc. There is no market share in some Asian country. Therefore, Camille Bloch should export their product to some Asian countries such as Singapore. 3. External Environmental Analysis Environment is most important part for a company that is in any industry. For a company, they should put a lot concentration on this part. First of all, a company should analyze the macro-environment and it can be analyzed from many areas. There are some main elements can be impacted corporation such as political, economical, social, technological, environment and legal, etc. Singapore is one of the best business environment countries in the world. There are many influences can impact chocolate product import such as government political, importer tax or huge demand, etc. However, some of them are positive and the others may negative. 3.1. Political and Legal Environment Government affects almost every aspect of business life in every single country. Singapore is an enterprise friendly country. The government welcomes any legal business to invest in Singapore. Besides, Singapore is a free port for imported confectionery and snacks. Although, there are 7% tax of goods and service will be charged by the importer before imported products but no import duties are levied on imported confectionery and snacks. This politic can help chocolate company which export to Singapore to reduce cost. However, Chocolate manufacturer who wants to sale the products in Singapore should has high product quality standard because their product should be subject to inspection. 3.2. Economy environment The Singapore economy is active free-market economy and the per-capita income of Singapore also is the highest in ASEAN. According to report, Singapores economic growth was rapidly slowing down than before since third quarter 2008 because of the international financial crisis. However, Singapores economic still very strong. According to World Bank 2010 report, Singapore economy is the easiest to do business. Also, Singapore has been awarded the most competitive country in Asia. 3.3. Social Cultural Singapore is multi-culture country. It also is an eastern country which still has traditional family values, but the young generation has adapted to western culture and values. Currently, the population of Singapore is more than 4 million. Singapore ethnic mix is Chinese (75.2%), Malays (13.6%), and Indians (8.8%). Singaporean are very hard working, therefore, they get a lot of work stresses. So, they need chocolate or candy to reduce pressure. 3.4. Technological Factors With the rapidly development of technology, it can impact many kind of things such as distribution strategies, media strategies, etc. When a brand goes to a foreign country as a new brand, the company must use some method to introduce their product. Media is perfect tool can help them to achieve their goals. In Singapore, there are many media tools can be available such as MRT, bus, taxi, TV or magazines, etc. Also, distribution channels are very important tool for a company. There are many distribution channels can be used. For example, Convenience store is important channel for confectionery. Because, these places always are frequented by younger Singaporeans but it is difficult to increase brand awareness. Therefore, the company can choose some major retailers to sale their products such as Fairprice, ShengSiong and Carrefour, etc or some specialty confectionery shops such as The Cocoa Trees or Umeya chains of outlets 4. Competitor Analysis Competitor analysis is important to a company. It can affect marketing strategies when the company wants to launch the product in the market. In this way the company can find areas of potential competitive advantage and disadvantage. We can use many methods to analyze competitors, first identifying competitors and assessing competitors and then selecting which competitors can become attacker and which competitor can be avoided. 4.1. Main competitor For Camille Bloch chocolate company, there are many direct and indirect competitors in Singapore. More than 30 countries supply confectionery to Singapore such as USA, UK, Netherlands, and Switzerland, etc. Also, there are many different brands can be found in the market such as Nestle, Ferrero, Lindt, Hershey and Haagen-Dazs, etc. But some brands are direct competitors and some of them are indirect. For example, Haagen-Dazs is a famous confectionery company. Their major product is ice-cream. Although, Haagen-Dazs is indirect competitor for Camille Bloch, however, they still can get some market share in confectionery market of Singapore. Also, it can affect the marketing strategy when Camille Bloch products enter market. Direct competitor is most important part which should put more concentration. In Singapore confectionery market, Nestle, Ferrero, Cadbury, KitKat, Cacao, etc are key competitors. These competitors have different products and have different target customer. These competitors products are quite traditional. 4.2. Competitive advantage Singapore chocolate market needs some new product can bring some activities. Therefore, Camille Bloch has a new product is called Mousse mixture can give a fresh filling to Singapore market. The Mousse mixture from Camille Bloch has always been smooth and light. And there are three different flavours can be chose such as Lait Extra for light-coloured, milky extravagance; Lait for traditional connoisseurs and Noir for gourmets who prefer the bittersweet taste of plain chocolate. 4.3. Growth potential Singapore confectionery market is a developing market. There are many opportunities can make company successful. Camille Bloch can use Mousse mixture to enter to market and increase their brand awareness. When this product can get some market share, Camille Bloch can launch some other products into Singapore market. According to Singaporeans habit, Camille Bloch also can do other product except chocolate such as coffee or ice-cream. It is because many Singaporean love these two things. Some Singaporean is coffee drinker, they may drink more than eight cup of coffee per day. So, these are the growth potential for Camille Bloch in Singapore market. 5. Market segmentation and target marketing There is no single way to segment a market. Market segmentation is the process of dividing a market into smaller groups of buyers with distinct needs, characteristics or behaviors who might require separate products. Market segmentation reveals the firms market segment opportunities. After evaluating different market segments, companies must decide on target market to conduct business strategies. A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve. Due to the demographic of Singapore, target market of our product is teenager and young adult age from 13 to 29 year old. Chocolate has been a part of the everyday consumers lives and become a popular product of Singaporean adults and children. They are reported as one of the most dynamic customers in the market. Teenagers with discretionary spending power, they can choose any kind of product they want without influences from the parents because they already have their own allowance. For young adults, they have jobs and income so they can decide for their consumer behavior. They buy chocolate for themselves or they use chocolate as gift item at other celebration such as birthdays, weddings. This has created a situation in the market where there is seasonal demand, with a high proportion of sales being made between November and April. This period includes most of Singapores major festivals or celebrations like Deepavali, Thanksgiving, Christmas, Calendar New Year, Chinese New Year, and Valentines Day. In this period there is quite a high level of spending. 6. Market entry and expansion strategies 6.1. Market entry strategies There are many ways for company to introduce products into foreign markets such as Exporting, Licensing, Franchising, Joint Ventures, Strategic Alliances, Acquisition or Greenfield Operation. Selection method depends on costs, risk and the degree of control which can be exercised over them. The simplest form of entry strategy is exporting because it requires minimum resources while allowing high flexibility and offers substantial financial, marketing, technological and other benefit to the company. Exporting methods include indirect or direct export. Indirect exporting involves the use of independent intermediaries or agents to market the firms product overseas. These agents, known as export representatives, assume responsibility for marketing the firms product through their network of foreign distributors and their own sales force. On the other hand, direct exporting occurs when a manufactures or exporter sells directly to an importer or buyer located in a foreign market. In Singapore, people can be purchased chocolate from hypermarkets, supermarkets, convenience stores, petrol station stores, minimarts, provisions/grocery shops and kiosk-type shops or stalls located in shopping centre, entertainment complexes, tourist locations, airport shops and even at traditional street-side newspaper stalls. There are also some specialty shops, which operate in chains or as single site outlets. Because this is the first time company introduce product into Singapore, we select only mousse chocolate; it is the latest news product mixture from Camille Bloch has always been smooth and light. Company cannot sell products directly to consumers so company will choose to export directly through importer located in Singapore. It gives an opportunity for company to learn Singapore markets before investing and reduces the potential risks of operating overseas, extend the sales potential of existing products and gain information about foreign competition. Some companies spec ialize in importing Singapores Confectioneries are Hong Yi Hao Trading Pte Ltd, Kaimay Trading Pte Ltd, Sing Long Foodstuff Trading Company Pte Ltd, Diethelm Singapore Pte Ltd and etc. Most importers have their own distribution networks, collect cargoes, re-pack in warehouses and deliver to consumers through retailers such as Fairprice, Cold Storage Group, Sheng Siong, Carrefour and Giant. 6.2. Market expansion strategies Current Product New Products Current Market 1. Market Penetration Strategy 3. Product Development Strategy New Market 2. Market Development Strategy 4. Diversification Strategy Figure 6.2.1: The product/ market expansion grid Company has decided to developed new market (Singapore market) for the existing company product (mousse chocolate). It is called market development strategy. Finding new market for the new customer helps company to increase performance by increasing sales and profit. After the company approached the new market, companies must conduct the strategy to expand market so the company to be able to survive long term. The first one is to introducing more products to the market, that way you will be able to get multiple new customer bases. Company is able to launch all kind of Camille Blochs product like Ragusa chocolate, Torino chocolate, Liqueur chocolate and Napolitains chocolate. Since then company can find the best- selling product and focus marketing effort on that product as well as use this bestseller product to gain multiple profits. The second one is to add segment to expand companys market. One way to do so is to decide to target a new segment such as children age from 3 to 12 year old or family consumers. 7. International marketing mix 7.1. Product strategy Camille Bloch releases many kinds of products in Switzerland. Especially, MOSSUE have its special feature. So company will decide to choose it to expand Singapore market, enhancing chocolate categories. Camille Bloch puts MOUSSE into Singapore market in order to generate differentiation with competitors. According to the survey for Singapore retail markets, most of chocolate being sold in Singapore market are imported brand or joint venture brand, their packaging are mainly row block packaging. However, independent little piece packaging is seldom used by chocolate company. Table 7.1.1 shows packaging specifications of major competitors. Brand Row block Gift packaging Cadbury 50k,70k,100k 180k,220k Berly,s 46k,50k,70k,85k 130k,250k Ferrero 40k,60k 200k,300k,375k Toblerone 50k,100k 200k Table 7.1.1: The analysis of packaging specifications of major competitors Through analyzing two kinds of packaging, traditional row block packaging have some obvious shortcomings, such as incommodiousness, insanitation and so on. While the characterization of independent little piece packaging is that every piece of chocolate have its own packaging. Consumers can tear wrapping paper to eat out every piece. This kind of packaging is conveniently used and health for consumers. And the production volume of independent little piece packaging can conveniently be adjusted according to market needs or they can be split into bulk packaging. So Camille Bloch should launch independent little piece packaging of MOUSSES in Singapore market in order to obtain more competitive advantage. 7.2. Price strategy The level of market share in enterprises, speed of market acceptance for new products, the image of enterprises and their products in the market have close relationship with price strategy. Under the fierce competitive environment of chocolate industry, we need to make combination with three kinds of pricing strategies. The lower limit of this price is marginal cost while the upper limit of this price is demand price. Apart from it, company also needs to refer the competitive situation of Singapore market in order to make the reasonable price. Camille Bloch should adopt invasive pricing strategy. When MOUSSES products entered into Singapore market, the pricing for this product is lower than joint ventures and wholly-owned international competitors. Through this pricing strategy, company hopes Singapore customers to know that MOUSSES chocolate is cheap but good Switzerland imported chocolate. Then the position of MOUSSES chocolate will become clear through pricing and brand image like imported products, reasonable price can be clearly established. Through analyzing the retail price of main competitive brands, we obtain the proportion of price competition from main competition brands and have developed suggested retail price of MOUSSES Number Brand Retail price (the smallest unit) 1 Cadbury SGD $1.55 per piece (50k) 2 Berly,s SGD $3.15 per piece (46k) 3 Ferrero SGD $2.7 per piece (40k) 4 Toblerone SGD $2per piece (50k) 5 MOUSSES SGD $2.8 per bag (45k) Table 7.2.1: The analysis of chocolate retail price Notes: the pricing of retail prices will decrease 5%-10% than competitors, which can give customers adequate impulsion of visual, psychological and the value. But the range of price is not greater than 10% of international competitors. Its final price is lower than Berlys chocolate, about 6%. If invasive pricing appears profits loss, company can compensate this through the scale sales. Once this product get a foothold in Singapore market, its retail price will call-back. 7.3. Place strategy 7.3.1. The choice of channels Singapore is a relatively niche market which have only one city. So the choice of distribution channel doesnt consider the differentiation between cities. Camille Bloch firstly cooperates with supermarkets to directly provide this product into Singapore market. At the same time, Camille Bloch should establish good cooperation with Fairprice, Cold Storage Group, Sheng Siong, Carrefour and Giant supermarkets. Moreover, this brand finally spread all over selling point of this country in the right of national network of supermarkets. For example, hypermarkets, convenience stores, provisions/grocery shops and kiosk-type shops or stalls located in shopping centre, entertainment complexes, tourist locations and airport shops. 7.3.2. The choice of distributors For MOUSSES, employing dealers to distribute is an economic and effective way. Dealers send MOUSSES of Camille Bloch to customers, the speed of pass and service quality directly affect the sale of product and market image. So company will select local distributor possessed high reputation and abundant experience, such as Hong Yi Hao Trading Pte Ltd, Kaimay Trading Pte Ltd, Sing Long Foodstuff Trading Company Pte Ltd. 7.4. Promotion strategy The promotion mix for extending MOUSSES as follow: 7.4.1. Sales promotion Promotion persons will send free sample in large person flow and high-end commercial network. The main target customer is 13-29 years old persons. Sales persons strive for letting target consumers taste. Using novel taste and good quality attract customers to buy MOUSSES chocolate. 7.4.2. Retail terminal inputs POP This part contains some means such as posters, flags, special shelves, organizing professional tallymen to tally. They unified the standard of display in the store and make use of neat, orderly and beautiful display to cause the impulsion of customers, inspiring purchasing desire. 7.4.3. Advertising During the period of Singaporean important festival, company should input some advertisement through TV media and make outdoor advertisement putting up air-conditioned vehicle to establish the brand image, cultivating target consumer group loyalty and attracting new customers. 8. Conclusion Through the analysis of external environment and competitors, Camille Bloch will make market segmentation according to the demographic of Singapore and decide to choose 13-29 years old customers as target market. This company will choose direct exporting to let Singaporean distributors put new products in this market. Market development strategy as market expansion strategy will be used for MOUSSES. Apart from that, marketing mix strategy also will be designed to successfully put this new product into Singapore market. Company hopes that this product can be extended as soon as possible.