Q3ai)
Classical Conditioning
What is classical conditioning?
According to Leon G.Schiffman et al (Consumer Behavior, Pearson 10th edition, 2010), classical conditioning is a learning process in which learning is taught through repetition of stimulus, conditioned and unconditioned.
Ivan Pavlov did an experiment by teaching the dog to salivate through classical conditioning, using the meat paste as the unconditioned stimulus and the sound of the bell as a conditioned stimulus. The dog was able to salivate at the ring of the bell.
Using the same theory, Microsoft was doing the same with the marketing campaign of Xbox Kinect in Plaza Singapura.
Plaza Singapura has been a hip place for Singaporean, attracting high volume of crowd as well as all types of crowd, from the young to the executives to the elders in the family. This is in line with the target audience of Xbox Kinect which aims to target consumer across all age group. With this in mind, Plaza Singapore was chosen as the conditioned stimulus. The unconditioned stimulus is Xbox Kinect, and the conditioned response would be the desire or attention for Xbox Kinect. This was done through live demo of the Xbox Kinect by movie stars, popular singers, top hosts and of the public was also invited to try it out for themselves.
From http://sg.offerstation.com/happenings-events/64187/x10--kinect-for-xbox-360-launch-event.htm, (by offerstation.com Nov 2010, accessed on 23 Aug 2011)
Below are the Event Highlights:
17th November 2010
3pm-4pm - Xbox Sports Fiesta
4pm-6pm - Xbox Kinect Happy Family Playtime, special appearance by Edmund Chen
20th November 2010
3pm-4pm - Xbox Sports Fiesta with Allan Wu
4pm-5pm - EA Sports Active 2 with Jaymee Ong
5pm-7pm - Xbox Kinect Happy Family Playtime
21st November 2010
3pm-4pm - Xbox Sports Fiesta with Allan Wu
4pm-5pm - EA Sports Active 2 with Jaymee Ong
5pm-7pm - Xbox Kinect Happy Family Playtime
Media exposure, guess appearances and large scale event are all part of the repeated conditioned stimulus. When people think of Plaza Singapura, people think of the good Xbox Kinect can be, because they have experience it themselves. Even for those who did not get to try it themselves, they would be attracted to the crowd and be curious to find out more about Xbox kinect. In the near future visit to Plaza Singapura, it induces a conditioned response of having a wanting or desire towards Xbox Kinect.
How effective was the launch? According to Nicholas Aaron Khoo, Singapore (http://asia.cnet.com/blogs/singapore-kinect-ed-62114757.htm, Nov 17, 2010, accessed on 23 Aug 2011), on the first day of the launch, which was cater only exclusively to Posb and Dbs card member, almost 2000 consoles was sold and average of 3 game title sold per sale. With higher volume of crowd over the weekend and even more public awareness, it wouldn’t be a surprise to see Microsoft posting a good sales figure for the whole launch campaign.
The only draw back to this would be once the conditioned stimulus (after the event ended), the public will slowly loses the condition response. To avoid extinction, or unlearning of classical condition, Microsoft should also try to stay in the sight of the public.
Leon G.Schiffman et al (Consumer Behavior, Pearson 10th edition, 2010)
http://sg.offerstation.com/happenings-events/64187/x10--kinect-for-xbox-360-launch-event.htm, (by offerstation.com Nov 2010, accessed on 23 Aug 2011)
Nicholas Aaron Khoo, Singapore (http://asia.cnet.com/blogs/singapore-kinect-ed-62114757.htm, Nov 17, 2010, accessed on 23 Aug 2011)
creative writing
Posted by
Samuel
comments (0)
TO: Steven Wong, Director of National Youth Council
FROM: Samuel Goh, Assistant Director (Programme Development and Resources)
DATE: April 7, 2011
SUBJECT: Dilution of Singaporean spirit in youth
As you requested on March 11, I bring to you the findings of my investigation into the recent concern about foreign talent as well as dilution of Singaporean spirit among the young Singaporean.
Lately there have been cases of unhappiness about the increase in number of foreigners in Singapore. One incident was after a speech from Senior Minister Goh Chok Tong, a student raise a sentiment, which he believe that there is a dilution in Singaporean spirit among the youth. Trawling through internet forum and blog, I notice that there is increasing entries, which touch on the issue on the influx of foreigner, mostly in a negative light. I also conducted interviews with students from various tertiary institutions.
Many felt that foreign talents are a threat to fellow Singaporeans. Some common ground sentiments include:
1) Singaporeans’ job is now under threat from foreign talent.
2) Foreigners are bringing their culture over to Singapore
3) Singaporeans are losing our sense of belonging and identity.
4) Foreigners do not contribute to the country.
5) Foreigners will earn their money and leave Singapore when they have earned enough.
6) Foreigners do not need to serve NS yet they still get to enjoy the benefits of a Singaporean citizen.
7) Singaporeans are already facing limited housing as well as congested traffic, the influx of foreigner probably makes it worse.
Influx of foreigner
According to National Population Secretariat, et al, 2010:
1) From 2007 to 2008, there was an increase of 19% of non-resident population.
2) From 2008 to 2009, there was an increase of 11.5% of PRs and 4.8% of non resident population.
According to Singapore Department of Statistics, 31 Aug 2010:
Time Series on Population (Mid-Year Estimates)
Year Total Population ('000) Singapore Residents ('000)
1960 1,646.4
1961 1,702.4
1962 1,750.2
1963 1,795.0
1964 1,841.6
1965 1,886.9
1966 1,934.4
1967 1,977.6
1968 2,012.0
1969 2,042.5
1970 (Census) 2,074.5 2,013.6
1971 2,112.9
1972 2,152.4
1973 2,193.0
1974 2,229.8
1975 2,262.6
1976 2,293.3
1977 2,325.3
1978 2,353.6
1979 2,383.5
1980 (Census) 2,413.9 2,282.1
1981 2,532.8 2,324.4
1982 2,646.5 2,365.7
1983 2,681.1 2,406.2
1984 2,732.2 2,443.7
1985 2,736.0 2,482.6
1986 2,733.4 2,518.6
1987 2,774.8 2,553.9
1988 2,846.1 2,598.5
1989 2,930.9 2,647.6
1990 (Census) 3,047.1 2,735.9
1991 3,135.1 2,794.7
1992 3,230.7 2,849.8
1993 3,313.5 2,904.5
1994 3,419.0 2,959.4
1995 3,524.5 3,013.5
1996 3,670.7 3,068.1
1997 3,796.0 3,123.4
1998 3,927.2 3,180.0
1999 3,958.7 3,229.7
2000 (Census) 4,027.9 3,273.4
2001 4,138.0 3,325.9
2002 4,176.0 3,382.9
2003 4,114.8 3,366.9
2004 4,166.7 3,413.3
2005 4,265.8 3,467.8
2006 4,401.4 3,525.9
2007 4,588.6 3,583.1
2008 4,839.4 3,642.7
2009 4,987.6 3,733.9
2010 (Census) 5,076.7 3,771.7
Source: Singapore Department of Statistics
Notes:
1. Data for 1980 and earlier Censuses refer to all persons present in Singapore and enumerated on Census Day. Data from 2000 onwards are based on the register-based approach. Data from 2003 - 2007 have been revised with effect from Feb 2008.
2. Total population comprises Singapore residents and non-residents. Resident population comprises Singapore citizens and permanent residents.
Last updated: 31 Aug 2010 Extracted from www.singstat.gov.sg
From the statistic above we can see the gradual increase of foreigner over the years. I would like to highlight particularly from 2005-2010, there is a jump of about half a million foreigner in a space of 5 years. Given Singapore size and relatively small population, Singaporeans would definitely felt the impact of such an influx of foreigners, be it education, transport, food, housing, and language. It is also at this period of time the government policy on foreign talent came into the spotlight.
Why Singapore needs foreign talent or workers?
1) Aging population
There are many reasons for the cause of aging population:
- Singaporeans choosing to remains single
- Married couple prefers to enjoy life and have children at a later age
- Due to high living costs, many couple prefer to have 1 children
Singapore needed young foreigner to offset the aging population, in order to support the economy in years to come.
2) Foreign Talent
Singapore does not have any natural resources, we rely a lot on our population to drive upon our economy. Singapore is heading into R&D hub, which will attract many companies to invest in Singapore. We would require the expertise as well as skill set of specially trained foreign talent. The exchange of skill and expertise will value add to our workforce. When our workforce are well equip with the required skill set, this will create job opportunity for our own population.
3) Foreign Worker
There are also certain jobs that Singaporeans are not keen to take up. E.g. Cleaners, domestic workers and hard laborers. Thus we relies alot on foreign to take up these jobs.
Another reason for importing foreign worker is to make Singapore a competitive market. Foreign workers will lower the operating cost for company, thus encouraging companies start up and investment from both local and oversea. As there are more investment and companies start up, there is bound to increase in job opportunity for our own people.
Recommendation
It is important that foreigners are able to blend into our Singapore culture. Instead of coming together and congregating into their own group and culture. It would be good if they can learn about our culture and blend into it. Singapore is never a racist country, most of the Singaporeans does not look at the skin color, as long they accept us, we accept them. Among the people that I interviewed, some mention that they have close friends who are from China, India, Malaysia, Indonesia and also Europe
Singaporeans should also open minded to accept culture from other countries and accept them as part of our population. I believe that the government, school as well media should all play a part in conveying a message across.
At school level, they should organize cultural exchange. This will increase understanding as well as exposure to culture from different countries.
Government should also shed some light on the reason for making certain key policies. Many people do not know about the factors contributing to the government policies, thus they tend to see things in negative light. Media, newspaper and radio, could be one of the channels that they could use.
Summary
We need foreigners, foreigners needs us. Singapore could provide a good living environment as well as good education to the foreigners. Foreigners can also contribute to Singapore’s economy as well as productivity. The key will be striking the balance between the number of foreigner as well as the speed they can integrate into Singapore population. This will prevent the dilution of Singaporean Spirit and make Singapore a better place to stay for everyone.
Reference
National Population Secretariat, Prime Minister’s Office, Singapore Department of Statistics, Ministry of Community Development, Youth & Sports, Ministry of Home Affairs, Immigration & Checkpoints Authority, POPULATION IN BRIEF 2010, Singstat, 2010, http://www.singstat.gov.sg/stats/themes/people/popinbrief2010.pdf, accessed 7th April 2011
Singapore Department of Statistics, Time Series on Population (Mid-Year Estimates) 31 Aug 2010, http://www.singstat.gov.sg/stats/themes/people/hist/popn.html, accessed 7th April 2011
Forums and blogs which I have researched from:
http://www.nowhere.per.sg/?p=1045
http://www.sgforums.com/forums/8/topics/111751
http://politics.sgforums.com/forums/2155/topics/363342?page=1
http://www.singapore-window.org/80301for.htm
http://www.singapore21.org.sg/art_talent.html
FROM: Samuel Goh, Assistant Director (Programme Development and Resources)
DATE: April 7, 2011
SUBJECT: Dilution of Singaporean spirit in youth
As you requested on March 11, I bring to you the findings of my investigation into the recent concern about foreign talent as well as dilution of Singaporean spirit among the young Singaporean.
Lately there have been cases of unhappiness about the increase in number of foreigners in Singapore. One incident was after a speech from Senior Minister Goh Chok Tong, a student raise a sentiment, which he believe that there is a dilution in Singaporean spirit among the youth. Trawling through internet forum and blog, I notice that there is increasing entries, which touch on the issue on the influx of foreigner, mostly in a negative light. I also conducted interviews with students from various tertiary institutions.
Many felt that foreign talents are a threat to fellow Singaporeans. Some common ground sentiments include:
1) Singaporeans’ job is now under threat from foreign talent.
2) Foreigners are bringing their culture over to Singapore
3) Singaporeans are losing our sense of belonging and identity.
4) Foreigners do not contribute to the country.
5) Foreigners will earn their money and leave Singapore when they have earned enough.
6) Foreigners do not need to serve NS yet they still get to enjoy the benefits of a Singaporean citizen.
7) Singaporeans are already facing limited housing as well as congested traffic, the influx of foreigner probably makes it worse.
Influx of foreigner
According to National Population Secretariat, et al, 2010:
1) From 2007 to 2008, there was an increase of 19% of non-resident population.
2) From 2008 to 2009, there was an increase of 11.5% of PRs and 4.8% of non resident population.
According to Singapore Department of Statistics, 31 Aug 2010:
Time Series on Population (Mid-Year Estimates)
Year Total Population ('000) Singapore Residents ('000)
1960 1,646.4
1961 1,702.4
1962 1,750.2
1963 1,795.0
1964 1,841.6
1965 1,886.9
1966 1,934.4
1967 1,977.6
1968 2,012.0
1969 2,042.5
1970 (Census) 2,074.5 2,013.6
1971 2,112.9
1972 2,152.4
1973 2,193.0
1974 2,229.8
1975 2,262.6
1976 2,293.3
1977 2,325.3
1978 2,353.6
1979 2,383.5
1980 (Census) 2,413.9 2,282.1
1981 2,532.8 2,324.4
1982 2,646.5 2,365.7
1983 2,681.1 2,406.2
1984 2,732.2 2,443.7
1985 2,736.0 2,482.6
1986 2,733.4 2,518.6
1987 2,774.8 2,553.9
1988 2,846.1 2,598.5
1989 2,930.9 2,647.6
1990 (Census) 3,047.1 2,735.9
1991 3,135.1 2,794.7
1992 3,230.7 2,849.8
1993 3,313.5 2,904.5
1994 3,419.0 2,959.4
1995 3,524.5 3,013.5
1996 3,670.7 3,068.1
1997 3,796.0 3,123.4
1998 3,927.2 3,180.0
1999 3,958.7 3,229.7
2000 (Census) 4,027.9 3,273.4
2001 4,138.0 3,325.9
2002 4,176.0 3,382.9
2003 4,114.8 3,366.9
2004 4,166.7 3,413.3
2005 4,265.8 3,467.8
2006 4,401.4 3,525.9
2007 4,588.6 3,583.1
2008 4,839.4 3,642.7
2009 4,987.6 3,733.9
2010 (Census) 5,076.7 3,771.7
Source: Singapore Department of Statistics
Notes:
1. Data for 1980 and earlier Censuses refer to all persons present in Singapore and enumerated on Census Day. Data from 2000 onwards are based on the register-based approach. Data from 2003 - 2007 have been revised with effect from Feb 2008.
2. Total population comprises Singapore residents and non-residents. Resident population comprises Singapore citizens and permanent residents.
Last updated: 31 Aug 2010 Extracted from www.singstat.gov.sg
From the statistic above we can see the gradual increase of foreigner over the years. I would like to highlight particularly from 2005-2010, there is a jump of about half a million foreigner in a space of 5 years. Given Singapore size and relatively small population, Singaporeans would definitely felt the impact of such an influx of foreigners, be it education, transport, food, housing, and language. It is also at this period of time the government policy on foreign talent came into the spotlight.
Why Singapore needs foreign talent or workers?
1) Aging population
There are many reasons for the cause of aging population:
- Singaporeans choosing to remains single
- Married couple prefers to enjoy life and have children at a later age
- Due to high living costs, many couple prefer to have 1 children
Singapore needed young foreigner to offset the aging population, in order to support the economy in years to come.
2) Foreign Talent
Singapore does not have any natural resources, we rely a lot on our population to drive upon our economy. Singapore is heading into R&D hub, which will attract many companies to invest in Singapore. We would require the expertise as well as skill set of specially trained foreign talent. The exchange of skill and expertise will value add to our workforce. When our workforce are well equip with the required skill set, this will create job opportunity for our own population.
3) Foreign Worker
There are also certain jobs that Singaporeans are not keen to take up. E.g. Cleaners, domestic workers and hard laborers. Thus we relies alot on foreign to take up these jobs.
Another reason for importing foreign worker is to make Singapore a competitive market. Foreign workers will lower the operating cost for company, thus encouraging companies start up and investment from both local and oversea. As there are more investment and companies start up, there is bound to increase in job opportunity for our own people.
Recommendation
It is important that foreigners are able to blend into our Singapore culture. Instead of coming together and congregating into their own group and culture. It would be good if they can learn about our culture and blend into it. Singapore is never a racist country, most of the Singaporeans does not look at the skin color, as long they accept us, we accept them. Among the people that I interviewed, some mention that they have close friends who are from China, India, Malaysia, Indonesia and also Europe
Singaporeans should also open minded to accept culture from other countries and accept them as part of our population. I believe that the government, school as well media should all play a part in conveying a message across.
At school level, they should organize cultural exchange. This will increase understanding as well as exposure to culture from different countries.
Government should also shed some light on the reason for making certain key policies. Many people do not know about the factors contributing to the government policies, thus they tend to see things in negative light. Media, newspaper and radio, could be one of the channels that they could use.
Summary
We need foreigners, foreigners needs us. Singapore could provide a good living environment as well as good education to the foreigners. Foreigners can also contribute to Singapore’s economy as well as productivity. The key will be striking the balance between the number of foreigner as well as the speed they can integrate into Singapore population. This will prevent the dilution of Singaporean Spirit and make Singapore a better place to stay for everyone.
Reference
National Population Secretariat, Prime Minister’s Office, Singapore Department of Statistics, Ministry of Community Development, Youth & Sports, Ministry of Home Affairs, Immigration & Checkpoints Authority, POPULATION IN BRIEF 2010, Singstat, 2010, http://www.singstat.gov.sg/stats/themes/people/popinbrief2010.pdf, accessed 7th April 2011
Singapore Department of Statistics, Time Series on Population (Mid-Year Estimates) 31 Aug 2010, http://www.singstat.gov.sg/stats/themes/people/hist/popn.html, accessed 7th April 2011
Forums and blogs which I have researched from:
http://www.nowhere.per.sg/?p=1045
http://www.sgforums.com/forums/8/topics/111751
http://politics.sgforums.com/forums/2155/topics/363342?page=1
http://www.singapore-window.org/80301for.htm
http://www.singapore21.org.sg/art_talent.html
Management discussion board 1
Posted by
Samuel
comments (0)
Often promotion is based on one’s performance and contributions. Daniel was promoted base on his sales performances and business generation. He also has in depth knowledge of the company’s products as well as having the initiative to work independently. Daniel seems well equip to take up the new position as a Sales Manager.
Let us see how all this can help Daniel. As a manager Daniel would be expected to lead by example, a role model to his team. Daniel has already display his initiative to work independently. His team will look to Daniel if they are unsure of the company’s product thus Daniel’s product knowledge will be very import to in his new role. Daniel, who was previously a sales executive, will also be able to understand his team’s challenges. He will also be able provide training on sales product and sales technique to his team.
Based on Daniel’s knowledge and experience, it would seem that he is more than capable to succeed as a Sales Manager.
In my posting 2, I will discuss other qualities that would also be required and some of the personal challenge that Daniel might face.
Being a manager you will need to know your job well, as you need to inspire confidence and earn your team’s respect. But that is only half of the job. As the word suggests, a manager would need to manage.
Daniel, despite his knowledge and experience, he is still relatively green in the field of management. He has been in the sales job for quite sometime but in his new role he is expected to deal with subordinates, not client. This is something that he has not done previously.
There will be challenge such as
1) disciplinary issue, how would he deal with an executive who refuses to adhere to company rules and regulations
2) administrative and overhead matters, there will definitely be more paper work involve, as he will need to write reports or account to his higher on his team’s performances.
3) resolving conflict within the team, there might be conflict in sales, e.g snatching of client or simply office politics
4) dealing with his executive personal problems, his team might faces some personal problem and as a manager Daniel will need to be able to address it, at the same time putting company’s interest at foremost.
Daniel definitely has the required knowledge to be a sales manager, but he will need to take the next step up in order to be successful.
Let us see how all this can help Daniel. As a manager Daniel would be expected to lead by example, a role model to his team. Daniel has already display his initiative to work independently. His team will look to Daniel if they are unsure of the company’s product thus Daniel’s product knowledge will be very import to in his new role. Daniel, who was previously a sales executive, will also be able to understand his team’s challenges. He will also be able provide training on sales product and sales technique to his team.
Based on Daniel’s knowledge and experience, it would seem that he is more than capable to succeed as a Sales Manager.
In my posting 2, I will discuss other qualities that would also be required and some of the personal challenge that Daniel might face.
Being a manager you will need to know your job well, as you need to inspire confidence and earn your team’s respect. But that is only half of the job. As the word suggests, a manager would need to manage.
Daniel, despite his knowledge and experience, he is still relatively green in the field of management. He has been in the sales job for quite sometime but in his new role he is expected to deal with subordinates, not client. This is something that he has not done previously.
There will be challenge such as
1) disciplinary issue, how would he deal with an executive who refuses to adhere to company rules and regulations
2) administrative and overhead matters, there will definitely be more paper work involve, as he will need to write reports or account to his higher on his team’s performances.
3) resolving conflict within the team, there might be conflict in sales, e.g snatching of client or simply office politics
4) dealing with his executive personal problems, his team might faces some personal problem and as a manager Daniel will need to be able to address it, at the same time putting company’s interest at foremost.
Daniel definitely has the required knowledge to be a sales manager, but he will need to take the next step up in order to be successful.
Streets of asia
Posted by
Samuel
comments (0)
1. Executive Summary
Vision, by trend setting, entrepeurship
Mission, aspiring entrepeurnear and idea and create opportunities for them to come together and setup their own business
Expression of youth by using their crativity and bring in their own idea products to sell
Beyond boundaries, a fusion of different culture over asia
Recreation, provides activities recreation activities
2 The Opportunity
2.1 Description of Business/Product Idea
To create a place for shoppers in the wee hours. To put together a place blending in culture from all over Asia, through fashion and culinary. I call it the “Streets of Asia”. Streets of Asia will become a popular spot for families, couples and friends to come together for food and shopping. It will also be our very own tourist attraction for Singapore. Walking through Streets of Asia will take you through different places in Asia, from Japan to Korea and Hong Kong. You would be able to shop for items that are normally only available at their respective countries. You would be able to taste the food from all over Asia, all at an affordable price, at a time where most shopping malls have already close, and at a convenient location, right at the heart of orchard road.
2.2 Target Market/Customer Segment: Description
We would be looking at customer segment across all age group, from teenagers, couples, families, working class adults and even tourist. We will be working with Singapore Tourism board to promote Streets of Asia, When you think of Taiwan, you think of Shihling Night Market. When you think of Thailand, you think of weekend market. When you think of Singapore, you will think of the good food and shopping from the Streets of Asia.
2.3 Target Market Trends & Needs Addressed
Normal shopping hours usual end at 10pm, even on weekends. There is a market segment from teenagers to working class adults, who have difficulty finding activities or places to go to after 10pm. Most popular activities would be KTV, Movies, or drinking at pubs or dancing at clubs.
Many cry out for a place where they can eat and shop after the normal shopping hours, especially for weekend where people are more incline to stay out late. There are actually quite a large number of going to cafes not for food but just a place so that they can chill out. You can see that even after midnight movies, many will sit down nearby, go to café to get a drink, and simply hang. They are reluctant to return home yet they have very limited options as to what they can do.
With Streets of Asia, many could come over after movie, after the usual shopping hours, to get a late supper, some casual shopping and a place to chill out after most have close shops.
In Orchard Road alone, we are able to draw crowd from movie goers from Cineleisure, Plaza Singapura and The Cathay. Every 2 hours there would be a movie ending with hundreds of movies goers getting stuck at Orchard Road with no other Shopping Mall open. Especially on weekends, most of the above mentioned movie theatres are filled even to the first row. Nearby there is also people that goes to KTV and LAN gaming. Not forgetting, nearby crowd from Clark Quay, Boat Quay, Demsey Road and Holland Village. For most of them, they will be driving and it would be easy for them to pop by and have some snacks and do some casual shopping before they head home.
2.4 Competition
During Shopping Hours
It might seem that we are competing with Shopping Mall and Restaurant from not just SCAPE and Cineleisure, but we are the only street styled market in Orchard Road. We are not competing with them directly as the food and range of items that we have at Streets of Asia are quite different. In terms of pricing for food as well as fashion, we are also on a different platform compared to the rest of store in Orchard Road.
After Shopping Hours
Most of the shops in Orchard road are close after the shopping hours, nearby SCAPE area only Xin Wang Hong Kong Café and Pasta Mania are open.
2.5 Assessment of Market Opportunity: Size, Growth, Share
Being the first Street Market in Singapore, we are have the luxury of having the whole market to ourselves. In terms of growth, there are plenty of markets to tap into. Especially the tourism sector. Singapore has seen an increase in revenue generated from tourism, the opening of the casinos have attracted many tourist from all over the world. We can also work with international events such Youth Olympic, and also upcoming F1 racing. These would actually draw in quite substantial revenue from tourism on top of our own market
3 Marketing: Strategy, Costs, Investments
3.1 Product/Feature/Benefit/Positioning
We have a street market operating from shopping hour right up till late night and wee hours over the weekends. We have a food from all over Asia, fashion from trend setting country, a one stop station to see not just Singapore but culture from all over Asia. We position ourselves as a spot where you can find a good bargain as well as good food to fill your stomach.
3.1 Product price
Due to the variety of pushcart, most have different prices due the diversity of items sold. As a mission of Streets of Asia, we are here to provide a place for you to find good food and spot a bargain, thus vendors would have to keep to a certain price range for the products sold. This is to ensure Streets of Asia remains on a level different from the rest of the shopping mall in Singapore, to attract customer segment from all across all age group by making the pricing affordable to them.
We would be looking at prices comparable to heartland shopping mall. For a bowl of fishball noodle you would be able to get at around $3.50 to $4. For a dress, you could get for about $10-$20. There would be accessories that you might be able to shop for below $5. That would be the pricing that we are looking at.
3.2 Product Promotion
We would be able to do tie up among ourselves, i.e. if a shopper spends $10 on shopping, he/she can get $1 off food and beverages from any stall.
4 Operations: Strategy, Costs, Investments
4.1 Sourcing, Purchasing-Manufacturing, Service Delivery Cost
Push Carts will be provided by SCAPE. Thus no sourcing cost incurred.
There will be a logistic cost as there will be importing of goods from oversea as well as advertising costs.
Logistic cost would include traveling to oversea to bring in goods or linking up potential supplier with local vendor.
Part of it will also be use for administrative purposes and a bit of renovation works, including tables and chairs.
The main portion of the cost is due to the advertising campaign
Fix cost
Advertising Cost ( Media – MediaCorp) $200,000
Advertising Cost ( Newspaper - SPH ) $100,000
Renovation Cost $20,000
Logistic Cost $30,000
Total cost $350,000
4.2 Distribution/Sales Cost
N.A
5 Organisation/Management
5.1 Organisational Structure
Managing Director
Marketing Director A&P Director
Advisor (Independent)
5.2 Board of Directors and Management Team
Managing Director – Samuel Goh
I will be in charge of the overall planning, finance and operations. I have been with the events industry for the past 5 years and previously have experience in events and sales, including management role.
Marketing Director – Cheng Shu Fen
She will be in charge of sales and marketing. She have 10 years of experience with SPH, dealing with events, marketing and promotions.
Advertising and Promotions Director – Leong Cheng Wei
He will be in charge of events, promotion tie-up, push cart layout and advertising. Mr Leong and Ms Cheng will be working hand in hand together with Tourism Board to draw traffic in. He has been in event and designing role with Music and Movement for the past 8 years. Handling various projects like President Design Award and Major outdoor events.
Business Advisor
Juanita, she will be acting as an advisor for Streets of Asia, in a non-profit position. She has a wealth of experience in pushcart business. She has been in the event and advertising industry for the past 30 years, dealing with pushcart in shopping and heartland mall.
5.3 Remuneration of Management and Employees
All directors are the main shareholders of the company. Advisor will be strictly on a purely advisory role and non-profit basis.
6 Financial Analysis
6.1 Detail Assessment of Profitability/Income Statement
Costing For year 1 - 7 Sales For year 1 – 7
1 pushcart $5,000 1 pushcart $5,500
20 pushcart $100,000 20 pushcart $110,000
Per month rental $100,000 per month sales $110,000
Per year rental $1,200,000 Per year sales $1,320,000
Profit For year 1 - 7
Monthly profit $10,000
Yearly profit $120,000
Additional Profit:
Estimated sales for pushcarts
Year 1
Earning per pushcart
per month $8,000
per year $96,000
Total earning for all 20 pushcart
per month $160,000
per year $1,920,000
5% of Sales from pushcarts = $ 96000
Year 2 Year 5
Earning per pushcart Earning per pushcart
per month $8,500 per month $10,000
per year $102,000 per year $120,000
Total earning for all 20 pushcart Total earning for all 20 pushcart
per month $170,000 per month $20,000
per year $2,040,000 per year $2,400,000
5% of Sales from pushcarts = $ 102000 5% of Sales from pushcarts = $ 120000
Year 3 Year 6
Earning per pushcart Earning per pushcart
per month $9,000 per month $10,500
per year $108,000 per year $126,000
Total earning for all 20 pushcart Total earning for all 20 pushcart
per month $180,000 per month $210,000
per year $2,160,000 per year $2,520,000
5% of Sales from pushcarts = $ 108000 5% of Sales from pushcarts = $ 126000
Year 4 Year 7
Earning per pushcart Earning per pushcart
per month $9,500 per month $11,000
per year $114,000 per year $132,000
Total earning for all 20 pushcart Total earning for all 20 pushcart
per month $190,000 per month $220,000
per year $2,280,000 per year $2,640,000
5% of Sales from pushcarts = $ 114000 5% of Sales from pushcarts = $ 132000
Total Profit
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
$216,000 $222,000 $228,000 $234,000 $240,000 $246,000 $252,000
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Total Profit $216,000 $222,000 $228,000 $234,000 $240,000 $246,000 $252,000
Fix Cost ($350,000)
Profit to date ($134,000) $88,000 $316,000 $550,000 $790,000 $1,036,000 $1,288,000
Note: Electricity and Utility bills are borne by respective pushcart vendor.
6.2 Total Investment to Start & Operate the Business/Balance Sheet
Total Investment to start and operate the business would be $400000. Mainly this sum of money would be use for advertising and marketing purposes as well as initial deposit to SCAPE for the pushcart.
Logistic cost would include traveling to oversea to bring in goods or linking up potential supplier with local vendor.
Part of it will also be use for administrative purposes and a bit of renovation works, including tables and chairs.
Fix cost
Advertising Cost ( Media – MediaCorp) $200,000
Advertising Cost ( Newspaper - SPH ) $100,000
Renovation Cost $20,000
Logistic Cost $30,000
Total cost $350,000
The balance of $50000 will be use as reserve funds, should there be any unforeseen expenses.
6.3 Break even Analysis
Initial investment = $400000
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Total Profit $216,000 $222,000 $228,000 $234,000 $240,000 $246,000 $252,000
Fix Cost ($350,000)
Profit to date ($134,000) $88,000 $316,000 $550,000 $790,000 $1,036,000 $1,288,000
By 3rd quarter in Year 2, the shareholder would have gotten back the initial investment, as the balance $50000 is being held as liquid cash for unexpected expenses.
6.4 Cash Flow Statement
Cash Flow
Year 1
Initial Investment $400,000
Income from Vendor $1,416,000
Less Rental to SCAPE $1,200,000
Less Advertising Cost ( Media - MediaCorp) $200,000
Less Advertising Cost ( Newspaper - SPH ) $100,000
Less Renovation Cost $20,000
Less Logistic Cost $30,000
Net decrease in cash $134,000
Cash at beginning of period $400,000
Cash at end of period $266,000
Year 2
Income from Vendor $1,422,000
Less Rental to SCAPE $1,200,000
Net increase in cash $222,000
Cash at beginning of period $266,000
Cash at end of period $488,000
Year 3
Income from Vendor $1,428,000
Less Rental to SCAPE $1,200,000
Net increase in cash $228,000
Cash at beginning of period $488,000
Cash at end of period $716,000
Year 4
Income from Vendor $1,434,000
Less Rental to SCAPE $1,200,000
Net increase in cash $234,000
Cash at beginning of period $716,000
Cash at end of period $950,000
Year 5
Income from Vendor $1,440,000
Less Rental to SCAPE $1,200,000
Net increase in cash $240,000
Cash at beginning of period $950,000
Cash at end of period $1,190,000
Year 6
Income from Vendor $1,446,000
Less Rental to SCAPE $1,200,000
Net increase in cash $246,000
Cash at beginning of period $1,190,000
Cash at end of period $1,436,000
Year 7
Income from Vendor $1,452,000
Less Rental to SCAPE $1,200,000
Net increase in cash $252,000
Cash at beginning of period $1,436,000
Cash at end of period $1,688,000
6.5 Source of Capital: Proportion of Debt and Equity
Each of the shareholders will come up with $50000, adding up to $150000. The balance of the capital will be obtained from Angel Investor by issuing shares.
6.6 Expected Financial Returns: Valuation, NPV, IRR
Net Present Value
Assuming the cost of equity to be 10%,
Year Cash Flow ($) Discount Factor Present Value ($)
1 (2012) 266000 0.9091 241820.60
2 (2013) 488000 0.8264 403283.20
3 (2014) 716000 0.7513 537930.80
4 (2015) 950000 0.6830 648850
5 (2016) 1190000 0.6209 738871
Total Present Value = 241820.60 + 403283.20 + 537930.80 + 648850 + 738871
= $2570755.60
Less: Initial Investment = $400000
Net Present Value = Total Present Value – Initial Investment
= $2170755.60
6.6 Conclusion: Valuation & Attractiveness/Viability of Business
Streets of Asia is the first street style market with food and fashion from all over Asia, this would most likely to attract various media and coverage, which in turn will draw crowd within our local market.
Working with the tourism board will also enhance our image and set ourselves as a must go tourist attraction. We would tap into the tourism market and gain exposure to international events such as F1 racing.
Looking at the business model, we will be taking a profit from the vendors in terms of rental (10%) and sales (5%). Except for the fix cost, which is a one time cost use to market Streets of Asia, there after majority of the cost are borne by the vendors.
As mention above, we would mostly likely be able to tap into assistance from tourism board, local media coverage and even SCAPE’s own marketing campaign. With the break even point coming in just 3rd quarter of 2nd year, this business opportunity looks extremely viable and substainable.
7 Risk Mitigation
7.1 Financial Risks
As the capital is raise for a one time off cost, mainly for advertising purposes. We do not foresee the need to raise further capital in the future.
7.2 Business Risks
There are a couple of risks that might possibly affect the business proposal
1. Vendor
Vendors are the stars of the show for the project. We need them to be on the stage at all time. When patrons comes to Streets of Asia, we need all 20 vendors to be operating. We cannot afford to have Vendor operating at their own schedule or having a few vendor pulling out at the same time.
The solution will be to have a contract with the vendor clearly stating the terms and operation guidelines. I.e. operating hours, 3-6 months advance deposit in order for the management team to get new vendors to replace them.
2. Cleanliness and hygiene
Although we are a street style market, we cannot allow any lapses in food hygiene as well as the overall cleanliness.
Spot checks by the management will be implemented and for food vendor, daily cleaning is required.
3. SCAPE
Moving forward with SCAPE, we might face situation like rental increment, which will seriously impact our business model.
Since SCAPE is owned by a non-profit organisation, if they decided to increase the rental, there would definitely be a compelling reason for it. If the reason make sense, we would definitely be able to negotiate with the vendors to increase the rental thus covering the cost.
Another solution is to regularly keep in touch with SCAPE management team to evaluate their strategy and current market conditions. We will also enter long term contract with SCAPE, thus if there is a rental increment, we would be able to have time to negotiate with the vendors and should they decide not to stay with us, we can have enough time to search for new vendors.
8 Investment proposal
8.1 Total Capital Required from Investors
As mention previously, $150000 will be raise from the 3 shareholders. The remaining $250000 will be required from investors.
8.2 The Investment deal: % shareholding offered
250000/400000 = 62.5% shareholding
This will represent that the investor is entitled to 62.5% of the company sales.
Vision, by trend setting, entrepeurship
Mission, aspiring entrepeurnear and idea and create opportunities for them to come together and setup their own business
Expression of youth by using their crativity and bring in their own idea products to sell
Beyond boundaries, a fusion of different culture over asia
Recreation, provides activities recreation activities
2 The Opportunity
2.1 Description of Business/Product Idea
To create a place for shoppers in the wee hours. To put together a place blending in culture from all over Asia, through fashion and culinary. I call it the “Streets of Asia”. Streets of Asia will become a popular spot for families, couples and friends to come together for food and shopping. It will also be our very own tourist attraction for Singapore. Walking through Streets of Asia will take you through different places in Asia, from Japan to Korea and Hong Kong. You would be able to shop for items that are normally only available at their respective countries. You would be able to taste the food from all over Asia, all at an affordable price, at a time where most shopping malls have already close, and at a convenient location, right at the heart of orchard road.
2.2 Target Market/Customer Segment: Description
We would be looking at customer segment across all age group, from teenagers, couples, families, working class adults and even tourist. We will be working with Singapore Tourism board to promote Streets of Asia, When you think of Taiwan, you think of Shihling Night Market. When you think of Thailand, you think of weekend market. When you think of Singapore, you will think of the good food and shopping from the Streets of Asia.
2.3 Target Market Trends & Needs Addressed
Normal shopping hours usual end at 10pm, even on weekends. There is a market segment from teenagers to working class adults, who have difficulty finding activities or places to go to after 10pm. Most popular activities would be KTV, Movies, or drinking at pubs or dancing at clubs.
Many cry out for a place where they can eat and shop after the normal shopping hours, especially for weekend where people are more incline to stay out late. There are actually quite a large number of going to cafes not for food but just a place so that they can chill out. You can see that even after midnight movies, many will sit down nearby, go to café to get a drink, and simply hang. They are reluctant to return home yet they have very limited options as to what they can do.
With Streets of Asia, many could come over after movie, after the usual shopping hours, to get a late supper, some casual shopping and a place to chill out after most have close shops.
In Orchard Road alone, we are able to draw crowd from movie goers from Cineleisure, Plaza Singapura and The Cathay. Every 2 hours there would be a movie ending with hundreds of movies goers getting stuck at Orchard Road with no other Shopping Mall open. Especially on weekends, most of the above mentioned movie theatres are filled even to the first row. Nearby there is also people that goes to KTV and LAN gaming. Not forgetting, nearby crowd from Clark Quay, Boat Quay, Demsey Road and Holland Village. For most of them, they will be driving and it would be easy for them to pop by and have some snacks and do some casual shopping before they head home.
2.4 Competition
During Shopping Hours
It might seem that we are competing with Shopping Mall and Restaurant from not just SCAPE and Cineleisure, but we are the only street styled market in Orchard Road. We are not competing with them directly as the food and range of items that we have at Streets of Asia are quite different. In terms of pricing for food as well as fashion, we are also on a different platform compared to the rest of store in Orchard Road.
After Shopping Hours
Most of the shops in Orchard road are close after the shopping hours, nearby SCAPE area only Xin Wang Hong Kong Café and Pasta Mania are open.
2.5 Assessment of Market Opportunity: Size, Growth, Share
Being the first Street Market in Singapore, we are have the luxury of having the whole market to ourselves. In terms of growth, there are plenty of markets to tap into. Especially the tourism sector. Singapore has seen an increase in revenue generated from tourism, the opening of the casinos have attracted many tourist from all over the world. We can also work with international events such Youth Olympic, and also upcoming F1 racing. These would actually draw in quite substantial revenue from tourism on top of our own market
3 Marketing: Strategy, Costs, Investments
3.1 Product/Feature/Benefit/Positioning
We have a street market operating from shopping hour right up till late night and wee hours over the weekends. We have a food from all over Asia, fashion from trend setting country, a one stop station to see not just Singapore but culture from all over Asia. We position ourselves as a spot where you can find a good bargain as well as good food to fill your stomach.
3.1 Product price
Due to the variety of pushcart, most have different prices due the diversity of items sold. As a mission of Streets of Asia, we are here to provide a place for you to find good food and spot a bargain, thus vendors would have to keep to a certain price range for the products sold. This is to ensure Streets of Asia remains on a level different from the rest of the shopping mall in Singapore, to attract customer segment from all across all age group by making the pricing affordable to them.
We would be looking at prices comparable to heartland shopping mall. For a bowl of fishball noodle you would be able to get at around $3.50 to $4. For a dress, you could get for about $10-$20. There would be accessories that you might be able to shop for below $5. That would be the pricing that we are looking at.
3.2 Product Promotion
We would be able to do tie up among ourselves, i.e. if a shopper spends $10 on shopping, he/she can get $1 off food and beverages from any stall.
4 Operations: Strategy, Costs, Investments
4.1 Sourcing, Purchasing-Manufacturing, Service Delivery Cost
Push Carts will be provided by SCAPE. Thus no sourcing cost incurred.
There will be a logistic cost as there will be importing of goods from oversea as well as advertising costs.
Logistic cost would include traveling to oversea to bring in goods or linking up potential supplier with local vendor.
Part of it will also be use for administrative purposes and a bit of renovation works, including tables and chairs.
The main portion of the cost is due to the advertising campaign
Fix cost
Advertising Cost ( Media – MediaCorp) $200,000
Advertising Cost ( Newspaper - SPH ) $100,000
Renovation Cost $20,000
Logistic Cost $30,000
Total cost $350,000
4.2 Distribution/Sales Cost
N.A
5 Organisation/Management
5.1 Organisational Structure
Managing Director
Marketing Director A&P Director
Advisor (Independent)
5.2 Board of Directors and Management Team
Managing Director – Samuel Goh
I will be in charge of the overall planning, finance and operations. I have been with the events industry for the past 5 years and previously have experience in events and sales, including management role.
Marketing Director – Cheng Shu Fen
She will be in charge of sales and marketing. She have 10 years of experience with SPH, dealing with events, marketing and promotions.
Advertising and Promotions Director – Leong Cheng Wei
He will be in charge of events, promotion tie-up, push cart layout and advertising. Mr Leong and Ms Cheng will be working hand in hand together with Tourism Board to draw traffic in. He has been in event and designing role with Music and Movement for the past 8 years. Handling various projects like President Design Award and Major outdoor events.
Business Advisor
Juanita, she will be acting as an advisor for Streets of Asia, in a non-profit position. She has a wealth of experience in pushcart business. She has been in the event and advertising industry for the past 30 years, dealing with pushcart in shopping and heartland mall.
5.3 Remuneration of Management and Employees
All directors are the main shareholders of the company. Advisor will be strictly on a purely advisory role and non-profit basis.
6 Financial Analysis
6.1 Detail Assessment of Profitability/Income Statement
Costing For year 1 - 7 Sales For year 1 – 7
1 pushcart $5,000 1 pushcart $5,500
20 pushcart $100,000 20 pushcart $110,000
Per month rental $100,000 per month sales $110,000
Per year rental $1,200,000 Per year sales $1,320,000
Profit For year 1 - 7
Monthly profit $10,000
Yearly profit $120,000
Additional Profit:
Estimated sales for pushcarts
Year 1
Earning per pushcart
per month $8,000
per year $96,000
Total earning for all 20 pushcart
per month $160,000
per year $1,920,000
5% of Sales from pushcarts = $ 96000
Year 2 Year 5
Earning per pushcart Earning per pushcart
per month $8,500 per month $10,000
per year $102,000 per year $120,000
Total earning for all 20 pushcart Total earning for all 20 pushcart
per month $170,000 per month $20,000
per year $2,040,000 per year $2,400,000
5% of Sales from pushcarts = $ 102000 5% of Sales from pushcarts = $ 120000
Year 3 Year 6
Earning per pushcart Earning per pushcart
per month $9,000 per month $10,500
per year $108,000 per year $126,000
Total earning for all 20 pushcart Total earning for all 20 pushcart
per month $180,000 per month $210,000
per year $2,160,000 per year $2,520,000
5% of Sales from pushcarts = $ 108000 5% of Sales from pushcarts = $ 126000
Year 4 Year 7
Earning per pushcart Earning per pushcart
per month $9,500 per month $11,000
per year $114,000 per year $132,000
Total earning for all 20 pushcart Total earning for all 20 pushcart
per month $190,000 per month $220,000
per year $2,280,000 per year $2,640,000
5% of Sales from pushcarts = $ 114000 5% of Sales from pushcarts = $ 132000
Total Profit
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
$216,000 $222,000 $228,000 $234,000 $240,000 $246,000 $252,000
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Total Profit $216,000 $222,000 $228,000 $234,000 $240,000 $246,000 $252,000
Fix Cost ($350,000)
Profit to date ($134,000) $88,000 $316,000 $550,000 $790,000 $1,036,000 $1,288,000
Note: Electricity and Utility bills are borne by respective pushcart vendor.
6.2 Total Investment to Start & Operate the Business/Balance Sheet
Total Investment to start and operate the business would be $400000. Mainly this sum of money would be use for advertising and marketing purposes as well as initial deposit to SCAPE for the pushcart.
Logistic cost would include traveling to oversea to bring in goods or linking up potential supplier with local vendor.
Part of it will also be use for administrative purposes and a bit of renovation works, including tables and chairs.
Fix cost
Advertising Cost ( Media – MediaCorp) $200,000
Advertising Cost ( Newspaper - SPH ) $100,000
Renovation Cost $20,000
Logistic Cost $30,000
Total cost $350,000
The balance of $50000 will be use as reserve funds, should there be any unforeseen expenses.
6.3 Break even Analysis
Initial investment = $400000
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Total Profit $216,000 $222,000 $228,000 $234,000 $240,000 $246,000 $252,000
Fix Cost ($350,000)
Profit to date ($134,000) $88,000 $316,000 $550,000 $790,000 $1,036,000 $1,288,000
By 3rd quarter in Year 2, the shareholder would have gotten back the initial investment, as the balance $50000 is being held as liquid cash for unexpected expenses.
6.4 Cash Flow Statement
Cash Flow
Year 1
Initial Investment $400,000
Income from Vendor $1,416,000
Less Rental to SCAPE $1,200,000
Less Advertising Cost ( Media - MediaCorp) $200,000
Less Advertising Cost ( Newspaper - SPH ) $100,000
Less Renovation Cost $20,000
Less Logistic Cost $30,000
Net decrease in cash $134,000
Cash at beginning of period $400,000
Cash at end of period $266,000
Year 2
Income from Vendor $1,422,000
Less Rental to SCAPE $1,200,000
Net increase in cash $222,000
Cash at beginning of period $266,000
Cash at end of period $488,000
Year 3
Income from Vendor $1,428,000
Less Rental to SCAPE $1,200,000
Net increase in cash $228,000
Cash at beginning of period $488,000
Cash at end of period $716,000
Year 4
Income from Vendor $1,434,000
Less Rental to SCAPE $1,200,000
Net increase in cash $234,000
Cash at beginning of period $716,000
Cash at end of period $950,000
Year 5
Income from Vendor $1,440,000
Less Rental to SCAPE $1,200,000
Net increase in cash $240,000
Cash at beginning of period $950,000
Cash at end of period $1,190,000
Year 6
Income from Vendor $1,446,000
Less Rental to SCAPE $1,200,000
Net increase in cash $246,000
Cash at beginning of period $1,190,000
Cash at end of period $1,436,000
Year 7
Income from Vendor $1,452,000
Less Rental to SCAPE $1,200,000
Net increase in cash $252,000
Cash at beginning of period $1,436,000
Cash at end of period $1,688,000
6.5 Source of Capital: Proportion of Debt and Equity
Each of the shareholders will come up with $50000, adding up to $150000. The balance of the capital will be obtained from Angel Investor by issuing shares.
6.6 Expected Financial Returns: Valuation, NPV, IRR
Net Present Value
Assuming the cost of equity to be 10%,
Year Cash Flow ($) Discount Factor Present Value ($)
1 (2012) 266000 0.9091 241820.60
2 (2013) 488000 0.8264 403283.20
3 (2014) 716000 0.7513 537930.80
4 (2015) 950000 0.6830 648850
5 (2016) 1190000 0.6209 738871
Total Present Value = 241820.60 + 403283.20 + 537930.80 + 648850 + 738871
= $2570755.60
Less: Initial Investment = $400000
Net Present Value = Total Present Value – Initial Investment
= $2170755.60
6.6 Conclusion: Valuation & Attractiveness/Viability of Business
Streets of Asia is the first street style market with food and fashion from all over Asia, this would most likely to attract various media and coverage, which in turn will draw crowd within our local market.
Working with the tourism board will also enhance our image and set ourselves as a must go tourist attraction. We would tap into the tourism market and gain exposure to international events such as F1 racing.
Looking at the business model, we will be taking a profit from the vendors in terms of rental (10%) and sales (5%). Except for the fix cost, which is a one time cost use to market Streets of Asia, there after majority of the cost are borne by the vendors.
As mention above, we would mostly likely be able to tap into assistance from tourism board, local media coverage and even SCAPE’s own marketing campaign. With the break even point coming in just 3rd quarter of 2nd year, this business opportunity looks extremely viable and substainable.
7 Risk Mitigation
7.1 Financial Risks
As the capital is raise for a one time off cost, mainly for advertising purposes. We do not foresee the need to raise further capital in the future.
7.2 Business Risks
There are a couple of risks that might possibly affect the business proposal
1. Vendor
Vendors are the stars of the show for the project. We need them to be on the stage at all time. When patrons comes to Streets of Asia, we need all 20 vendors to be operating. We cannot afford to have Vendor operating at their own schedule or having a few vendor pulling out at the same time.
The solution will be to have a contract with the vendor clearly stating the terms and operation guidelines. I.e. operating hours, 3-6 months advance deposit in order for the management team to get new vendors to replace them.
2. Cleanliness and hygiene
Although we are a street style market, we cannot allow any lapses in food hygiene as well as the overall cleanliness.
Spot checks by the management will be implemented and for food vendor, daily cleaning is required.
3. SCAPE
Moving forward with SCAPE, we might face situation like rental increment, which will seriously impact our business model.
Since SCAPE is owned by a non-profit organisation, if they decided to increase the rental, there would definitely be a compelling reason for it. If the reason make sense, we would definitely be able to negotiate with the vendors to increase the rental thus covering the cost.
Another solution is to regularly keep in touch with SCAPE management team to evaluate their strategy and current market conditions. We will also enter long term contract with SCAPE, thus if there is a rental increment, we would be able to have time to negotiate with the vendors and should they decide not to stay with us, we can have enough time to search for new vendors.
8 Investment proposal
8.1 Total Capital Required from Investors
As mention previously, $150000 will be raise from the 3 shareholders. The remaining $250000 will be required from investors.
8.2 The Investment deal: % shareholding offered
250000/400000 = 62.5% shareholding
This will represent that the investor is entitled to 62.5% of the company sales.
Fin301 Online discussion 2 22 Aug 2010
Posted by
Samuel
comments (0)
Q1) Discuss in what ways Temasek’s bond issue has helped deepen the bond markets in Singapore.
Temasek holding, being the investment arm of the Singapore Government, credited AAA by Standard and Poor, Aaa by Moody's have been view by many investors as a "well known" corporation. With the current low interest environment, many investor are on the look out for "good buys". Temasek's bond definitely falls into that category.
The bond market in Singapore has existed since 1960s but, Temasek is the first corporation to issue such 40 year bonds. Temasek holding had also issued bond in US dollars, Sterlings and Singapore Dollars.
More investor, locally as well as foreign will be taking an interest in our local bond market. With the overwhelming demand for the bond, there will not be a lack of suitor in the secondary market. This creates liquidity for bond investors.
Temasek holdings also had path way for many corporation to come into the bond market. With more investor interested in the local bond market, as well as the liquidity in the second market, demand will definitely be on the rise. Many corporation will be able to issue bond to cater to the demand and raise cash for their own capital.
Though it might still take sometime for our local bond market to grow, Temasek Holdings have definitely open the door to it.
http://www.fundsupermart.com/main/sgsInfo/sgsIntro.tpl
http://blogs.wsj.com/marketbeat/2010/07/20/temaseks-sterling-bonds-shine/?KEYWORDS=temasek+bond
http://online.wsj.com/article/NA_WSJ_PUB:SB10001424052748704625004575089141725385782.html
Q2) Discuss the various risks that investors should be mindful of when investing in bonds.
Interest rate risk, refers to the value of the bond, increasing or decreasing due to the fluctuation of the interest rate. Whenever the interest rate increase, the bond value will decrease. Conversely when the interest rate decrease, the value of the bond increase.
Inflation risk refers to the risk that income earn from the coupon interest might be eroded by inflation. The coupon interest is fixed but inflation might fluctuate. Inflation risk are higher for longer term bonds.
Currency risk refers to the risk involve when converting the foreign currency-denominated bonds to the local currency. Not all bonds are denominated in Singapore dollars thus if the bonds that you invest in is a foreign currency, you will be exposed to the currency risk.
Risk of default of issuer refers to the risk, when the issuer are not able to repay the coupon interest or the pricinpal value when facing financial problems. This will cause the investor to potentially lose all of the capital invested in the bond.
Source of research : http://www.hsbc.com.sg/1/2/miscellaneous/personal/investments/bonds-risks
Temasek holding, being the investment arm of the Singapore Government, credited AAA by Standard and Poor, Aaa by Moody's have been view by many investors as a "well known" corporation. With the current low interest environment, many investor are on the look out for "good buys". Temasek's bond definitely falls into that category.
The bond market in Singapore has existed since 1960s but, Temasek is the first corporation to issue such 40 year bonds. Temasek holding had also issued bond in US dollars, Sterlings and Singapore Dollars.
More investor, locally as well as foreign will be taking an interest in our local bond market. With the overwhelming demand for the bond, there will not be a lack of suitor in the secondary market. This creates liquidity for bond investors.
Temasek holdings also had path way for many corporation to come into the bond market. With more investor interested in the local bond market, as well as the liquidity in the second market, demand will definitely be on the rise. Many corporation will be able to issue bond to cater to the demand and raise cash for their own capital.
Though it might still take sometime for our local bond market to grow, Temasek Holdings have definitely open the door to it.
http://www.fundsupermart.com/main/sgsInfo/sgsIntro.tpl
http://blogs.wsj.com/marketbeat/2010/07/20/temaseks-sterling-bonds-shine/?KEYWORDS=temasek+bond
http://online.wsj.com/article/NA_WSJ_PUB:SB10001424052748704625004575089141725385782.html
Q2) Discuss the various risks that investors should be mindful of when investing in bonds.
Interest rate risk, refers to the value of the bond, increasing or decreasing due to the fluctuation of the interest rate. Whenever the interest rate increase, the bond value will decrease. Conversely when the interest rate decrease, the value of the bond increase.
Inflation risk refers to the risk that income earn from the coupon interest might be eroded by inflation. The coupon interest is fixed but inflation might fluctuate. Inflation risk are higher for longer term bonds.
Currency risk refers to the risk involve when converting the foreign currency-denominated bonds to the local currency. Not all bonds are denominated in Singapore dollars thus if the bonds that you invest in is a foreign currency, you will be exposed to the currency risk.
Risk of default of issuer refers to the risk, when the issuer are not able to repay the coupon interest or the pricinpal value when facing financial problems. This will cause the investor to potentially lose all of the capital invested in the bond.
Source of research : http://www.hsbc.com.sg/1/2/miscellaneous/personal/investments/bonds-risks
FIN301 Online discussion window 1 070810
Posted by
Samuel
comments (0)
I am suprised by his choice of words use in the article, definitely there were Financial conglomerates like AIG and RBS that have suffered from diversifications and poor investment strategies. The 2008 financial turnoil sparkled by the collapse of Lehman has affected almost all, manufacturing, financial, service sectors were all badly affected.
There are, however, financial conglomerates which have suffered losses but not generally because of diversification. Bing Jie mention about Warren Buffett's Berkshire Hathaway is one prime example. Warren Buffett lost billions during the financial crisis but was it due to diversification or contagion from small part of the business? My opinion is that instead of divesification, it was due to the overall losses suffer during the crisis. Joyce who mentioned about confidence of investor and instuition is probably right. The fall of Lehman brother probably affected the confidence of many, causing a chain reactions from investors to consumers.
In the past it might hold true that the business strategy used on retail customers might have been product driven, emphasising transactions over relationships. In recent, years fiancial conglomerates have move from product driven to building a long term relationship. In the banking sector, you would probably see campaign like serving customer within 8 minutes, follow up within 2days. Insurance agents would probably visit you personally when you met with an accident or have a newborn in the family. All this shows that the shift has move from product driven to customer focused.
In order to keep up with competition, FIs have been offering more than just one service. Is this neccessary seem as a bad move? Take example of banks in Singapore, they are not just serving the retail customers, many of the banks are also targeting the investment and insurance clients.
Traditionally you would go to an insurance agent for insurance, investment company for investment, but the banks are working towards a all in one service provider, a one stop service as Irene call it. Take Standard Charter Bank as an example, they do not have their own insurance subsidary, but they do have a partnership with prudential. The partnership have been going on for years. If Standardard Charter Bank were to buy over Prudential, the resulting fiancial conglomerates would be able to offer clients all 3 form of service, investment, insurance and retail banking. What would you think of that?
Large financial conglomerates might be difficult to manage, but with the right experience proper regulation and supervision, things might just work.
Q2) Should financial conglomerates be allowed to continue as many critics felt that they impede competition by restricting new entrants?
You can choose to discuss one question or both questions in your posts.
You have until Sunday 8 February, midnight, to participate in the discussion. You are expected to do the following:
- Contribute at least 2 posts this week.
- Limit each post to 250 words.
- Write not more than 1 post per day.
- Make more than one point per post.
- Observe netiquette.
I look forward to reading your contributions! Please do not hesitate to e-mail me should you have specific questions on how to participate in the forum.
I hope that you’ll find this article interesting.
See you tomorrow!
All the best,
Marie-Laure
There are, however, financial conglomerates which have suffered losses but not generally because of diversification. Bing Jie mention about Warren Buffett's Berkshire Hathaway is one prime example. Warren Buffett lost billions during the financial crisis but was it due to diversification or contagion from small part of the business? My opinion is that instead of divesification, it was due to the overall losses suffer during the crisis. Joyce who mentioned about confidence of investor and instuition is probably right. The fall of Lehman brother probably affected the confidence of many, causing a chain reactions from investors to consumers.
In the past it might hold true that the business strategy used on retail customers might have been product driven, emphasising transactions over relationships. In recent, years fiancial conglomerates have move from product driven to building a long term relationship. In the banking sector, you would probably see campaign like serving customer within 8 minutes, follow up within 2days. Insurance agents would probably visit you personally when you met with an accident or have a newborn in the family. All this shows that the shift has move from product driven to customer focused.
In order to keep up with competition, FIs have been offering more than just one service. Is this neccessary seem as a bad move? Take example of banks in Singapore, they are not just serving the retail customers, many of the banks are also targeting the investment and insurance clients.
Traditionally you would go to an insurance agent for insurance, investment company for investment, but the banks are working towards a all in one service provider, a one stop service as Irene call it. Take Standard Charter Bank as an example, they do not have their own insurance subsidary, but they do have a partnership with prudential. The partnership have been going on for years. If Standardard Charter Bank were to buy over Prudential, the resulting fiancial conglomerates would be able to offer clients all 3 form of service, investment, insurance and retail banking. What would you think of that?
Large financial conglomerates might be difficult to manage, but with the right experience proper regulation and supervision, things might just work.
Q2) Should financial conglomerates be allowed to continue as many critics felt that they impede competition by restricting new entrants?
You can choose to discuss one question or both questions in your posts.
You have until Sunday 8 February, midnight, to participate in the discussion. You are expected to do the following:
- Contribute at least 2 posts this week.
- Limit each post to 250 words.
- Write not more than 1 post per day.
- Make more than one point per post.
- Observe netiquette.
I look forward to reading your contributions! Please do not hesitate to e-mail me should you have specific questions on how to participate in the forum.
I hope that you’ll find this article interesting.
See you tomorrow!
All the best,
Marie-Laure
Management
Posted by
Samuel
comments (0)
TYPES OF CONTROL
Feed forward control
1) Anticipatory and attempt to identify and prevent deviations before they occur
2) Focuses on human, material and financial resources
3) Ensure input quality is sufficiently high to prevent problems
4) Another type of feed-forward control is forecasting trends in environment and managing risk
Concurrent control
1) Monitors ongoing employee activities to ensure that they are consistent with the performance standards
2) Assesses current work activities
3) Relies on performance standards, rules and regulations for guiding employee task.
4) Includes self-control imposed on behavior because of values
Feedback control
1) Focuses on organization's output.
2) Budgeting is a form of feedback control because managers monitor whether they have operated within their budget targets and make adjustment accordingly.
DIFFERENTIAE BETWEEN MANAGER AND LEADER
Manager promotes stability, order and problem solving within existing organization structure and systems
Leader promote vision, creativity and change, questioning the status quo so that outdated, unproductive and socially irresponsible norms can be replaced
A leader cannot replace a manager. A good manager helps organization meet current commitments. A good leader move the organization into the future
A manager takes care of where your are while a leader takes you to the future
Bureaucratic control
1) Involves monitoring and influencing employee behavior through rules, policies, hierarchy of authority, written documentation and reward system.
2) Bureaucratic methods define explicit rules, polices and procedures for employee behavior
3) Control relies on centralized authority, formal hierarchy and close personal supervision
4) E.g. Responsibility for quality control lies with quality control officers or supervisors rather employee.
5) It can enhance organization effectiveness and efficiency
Decentralized control
1) Relies on shared values and goals to control employee's behavior
2) Manager operate on the assumption that employees are trustworthy and willing to perform efficiently without extensive rules and close supervision
3) The organization places great emphasis on selection and socialization of employee to ensure that workers have the needed values to influence behavior which meets goals.
4) Culture is adaptive and important in uniting individual, teams and organizational goals for greater overall control
TQM and QC
1) TQM is based on the decentralize theory,
2) It infuses quality into every activity through continuous improvement.
3) Organization implement TQM by encouraging managers employees to collaborate across functions and departments as well as with customer and suppliers to identify areas for improvement no matter how small.
4) TQM philosophy focuses on teamwork, increasing customer satisfaction and lowering cost
Quality Circle
1) a group of 6-12 volunteer employees who meets up regularly to discuss and solve problems affecing the quality of their work
2) they meet regularly during work hours to identify problem and find solutions.
3) the reason for using quality circle is to push decision making to a level at which recommendations can be made by those who do the job.
Bench Marking
1) is the continuous process of measuring products, services, and practices against the toughest competitors or industry leaders
2) a company must honestly analyse its current procedures and determine areas for improvement
3) a company carefully selects competitors worthy of copying and emulates their internal process and procedures.
Factors affecting success of TQM
1) Quality circles are most beneficial when job is challenging
2) when it enriches jobs and improves employee's motivation
3) when participation improves employ problem solving skill, productivity us likely to increase
4) when corporate culture, valuea quality and stress on continuous improvement as a way of life
Balaenced score card is a management control system that balances traditional finance measure and operational measure that is relating to the company's critical success. It includes the 4 major perspective
1) Financial performance perspective reflects a concern that organization activities contribute to short and long term financial performance
2) Customer service indicators measure such things as how customer view the organization, customer retention and satisfaction
3) Business process indicators focus on production and operating statistics
4) Potential for learning and growth focus on how well resources and human capital are being manage for the company's future
Managers focus on the various element of the scorecard to set targets, evaluate performance, and guide discussion about what further actions to take.
A key to successful implementation of the balanced scorecard approach is a performance management orientation rathan a performance measurement orientation.
Transformational leader and their behaviour
1) Similar to charismatic leaders
2) Distinguished by their special ability to bring about innovation and change by:
---Recognizing followers' needs and concerns
---Have the ability to change organization mission, structure and human resource
---Helping them look at old problems in new ways
---Encouraging them to question status quo
---Focus on the intangibles such as vision, values, ideas to build relationship, give larger meaning to activities and enlist follower in change
---recent studies show that transformational leaders has a positive impact on follower development and performance
---transformational leadership skill can be learnt and not ingrain in personal characteristics
Hershey and blanchard's theory
Relationship behaviour = supportive behavior
Task behavior = guidance
LRB + LTB = Delegating, turn over responsibility for decision and implementation
Suitable for very high follower readiness, where they are experience and skillful and has readiness to accept responsibility
HRB + LTB = Participating, share ideas and facilitate decision making
Suitable for high follower readiness, where they are experience and skillful enough, the leader would need to provide a general goal, delegates sufficient authority to do the task, and the followers will complete the task as they see fit
HRB + HTB = Selling, explain decisions and give opportunities to clarify
Suitable for moderate follower readiness, where they are might lack some skill and experience for the job, selling gives direction but include seeking input and from others and clarifying task
LRB + HTB = Telling, provide specific instruction and close monitoring
Suitable for low follower readiness, where followers have poor skill and no experience for the job, the leaders tells followers how to do it, what to do and when to do it.
Easier to understand but incorporates the follwer characteristic not those of the situation.
4 types of problem
1) Certainty
- All the information the decision maker needs is fully available
2) Risk
- Decision has clear-cut goals
- Good information is available
- Future outcomes asscociated with each alternative are subject to chance
- however enough information is available to allow the probablity of successful outcome for each alternative to be estimated
3) Uncertainty
- Managers know which goals they wish to achieve
- Information about alternatives and future events is incomplete. E.g. price, production cost and interest rates
- Manager may have to come up with creative approaches to alternatives and use personal judgement to determine which alternatives is best.
4) Ambiguity
- by far the most difficult decision situation
- goals to be acheive or problems to be solve is unclear
- alternatives are difficult to define
- information about outcomes is unavailable
Decision can be programmed or non-programmed
Programmed decision
1) situation has occurs often enough to enable decision rules to be developed and applied in future
2) oce managers formulate decision rules, surbodinates and others can make decisions freeing manager for other tasks
Non programmed decision
1) are response to situations that are unique, poorly defined, largely unstructured and likely to have important consequences for the organization.
2) non programmed decision often involve strategic planning because uncertainty is great and decision are complex
The 6 steps in the managerial decision making process
1. Recognition of decision requirement
2. Diagnosis and analysis of Causes
3. Development of alternatives
4. Selection of desired alternatives
5. Implementation of chosen alternatives
6. Evaluation and feedback
Matrix structure
5 Advantage
1) More efficient use of resource than single hierarchy
2) adaptable to changing environment
3) development of specialist and general management skill
4) expertise available across division
5) enlarge task for employee
5 Disadvantage
1) Dual chain of command
2) high conflict between e 2 side of matrix
3) many meeting to coordinate activities
4) need for human relations training
5) power domination by one side of matrix
Virtual network structure
the idea behind virual network structure is a company can concentrate on what it do best and contract or outsource the other activities to other company. e.g the organization can outsource its distribution, design, transportation, accounting and manufacturing activities to other company. This way the company can do more with less
The 3 advantage is
1) can draw on world wide expertise
2) workforce flexibility, can adjust accordingly to market, demand and also product or marketing plan
3) reduced administrative overhead, most of the activities are being outsource thus the core of organization employs lesser people thus lesser administrative overhead
the 3 disadvantage is
1) lack of control, weakened boundaries, because most activities are being outsource, lesser control and those company tends to act on their own interest
2) increase demand on managers, becos of the weak linkage, greater demand on manager to coordinate activities, manage relationship and define share values.
3) employee loyalty weakened, employee might feel that they can be replaced by a contract serice.
Feed forward control
1) Anticipatory and attempt to identify and prevent deviations before they occur
2) Focuses on human, material and financial resources
3) Ensure input quality is sufficiently high to prevent problems
4) Another type of feed-forward control is forecasting trends in environment and managing risk
Concurrent control
1) Monitors ongoing employee activities to ensure that they are consistent with the performance standards
2) Assesses current work activities
3) Relies on performance standards, rules and regulations for guiding employee task.
4) Includes self-control imposed on behavior because of values
Feedback control
1) Focuses on organization's output.
2) Budgeting is a form of feedback control because managers monitor whether they have operated within their budget targets and make adjustment accordingly.
DIFFERENTIAE BETWEEN MANAGER AND LEADER
Manager promotes stability, order and problem solving within existing organization structure and systems
Leader promote vision, creativity and change, questioning the status quo so that outdated, unproductive and socially irresponsible norms can be replaced
A leader cannot replace a manager. A good manager helps organization meet current commitments. A good leader move the organization into the future
A manager takes care of where your are while a leader takes you to the future
Bureaucratic control
1) Involves monitoring and influencing employee behavior through rules, policies, hierarchy of authority, written documentation and reward system.
2) Bureaucratic methods define explicit rules, polices and procedures for employee behavior
3) Control relies on centralized authority, formal hierarchy and close personal supervision
4) E.g. Responsibility for quality control lies with quality control officers or supervisors rather employee.
5) It can enhance organization effectiveness and efficiency
Decentralized control
1) Relies on shared values and goals to control employee's behavior
2) Manager operate on the assumption that employees are trustworthy and willing to perform efficiently without extensive rules and close supervision
3) The organization places great emphasis on selection and socialization of employee to ensure that workers have the needed values to influence behavior which meets goals.
4) Culture is adaptive and important in uniting individual, teams and organizational goals for greater overall control
TQM and QC
1) TQM is based on the decentralize theory,
2) It infuses quality into every activity through continuous improvement.
3) Organization implement TQM by encouraging managers employees to collaborate across functions and departments as well as with customer and suppliers to identify areas for improvement no matter how small.
4) TQM philosophy focuses on teamwork, increasing customer satisfaction and lowering cost
Quality Circle
1) a group of 6-12 volunteer employees who meets up regularly to discuss and solve problems affecing the quality of their work
2) they meet regularly during work hours to identify problem and find solutions.
3) the reason for using quality circle is to push decision making to a level at which recommendations can be made by those who do the job.
Bench Marking
1) is the continuous process of measuring products, services, and practices against the toughest competitors or industry leaders
2) a company must honestly analyse its current procedures and determine areas for improvement
3) a company carefully selects competitors worthy of copying and emulates their internal process and procedures.
Factors affecting success of TQM
1) Quality circles are most beneficial when job is challenging
2) when it enriches jobs and improves employee's motivation
3) when participation improves employ problem solving skill, productivity us likely to increase
4) when corporate culture, valuea quality and stress on continuous improvement as a way of life
Balaenced score card is a management control system that balances traditional finance measure and operational measure that is relating to the company's critical success. It includes the 4 major perspective
1) Financial performance perspective reflects a concern that organization activities contribute to short and long term financial performance
2) Customer service indicators measure such things as how customer view the organization, customer retention and satisfaction
3) Business process indicators focus on production and operating statistics
4) Potential for learning and growth focus on how well resources and human capital are being manage for the company's future
Managers focus on the various element of the scorecard to set targets, evaluate performance, and guide discussion about what further actions to take.
A key to successful implementation of the balanced scorecard approach is a performance management orientation rathan a performance measurement orientation.
Transformational leader and their behaviour
1) Similar to charismatic leaders
2) Distinguished by their special ability to bring about innovation and change by:
---Recognizing followers' needs and concerns
---Have the ability to change organization mission, structure and human resource
---Helping them look at old problems in new ways
---Encouraging them to question status quo
---Focus on the intangibles such as vision, values, ideas to build relationship, give larger meaning to activities and enlist follower in change
---recent studies show that transformational leaders has a positive impact on follower development and performance
---transformational leadership skill can be learnt and not ingrain in personal characteristics
Hershey and blanchard's theory
Relationship behaviour = supportive behavior
Task behavior = guidance
LRB + LTB = Delegating, turn over responsibility for decision and implementation
Suitable for very high follower readiness, where they are experience and skillful and has readiness to accept responsibility
HRB + LTB = Participating, share ideas and facilitate decision making
Suitable for high follower readiness, where they are experience and skillful enough, the leader would need to provide a general goal, delegates sufficient authority to do the task, and the followers will complete the task as they see fit
HRB + HTB = Selling, explain decisions and give opportunities to clarify
Suitable for moderate follower readiness, where they are might lack some skill and experience for the job, selling gives direction but include seeking input and from others and clarifying task
LRB + HTB = Telling, provide specific instruction and close monitoring
Suitable for low follower readiness, where followers have poor skill and no experience for the job, the leaders tells followers how to do it, what to do and when to do it.
Easier to understand but incorporates the follwer characteristic not those of the situation.
4 types of problem
1) Certainty
- All the information the decision maker needs is fully available
2) Risk
- Decision has clear-cut goals
- Good information is available
- Future outcomes asscociated with each alternative are subject to chance
- however enough information is available to allow the probablity of successful outcome for each alternative to be estimated
3) Uncertainty
- Managers know which goals they wish to achieve
- Information about alternatives and future events is incomplete. E.g. price, production cost and interest rates
- Manager may have to come up with creative approaches to alternatives and use personal judgement to determine which alternatives is best.
4) Ambiguity
- by far the most difficult decision situation
- goals to be acheive or problems to be solve is unclear
- alternatives are difficult to define
- information about outcomes is unavailable
Decision can be programmed or non-programmed
Programmed decision
1) situation has occurs often enough to enable decision rules to be developed and applied in future
2) oce managers formulate decision rules, surbodinates and others can make decisions freeing manager for other tasks
Non programmed decision
1) are response to situations that are unique, poorly defined, largely unstructured and likely to have important consequences for the organization.
2) non programmed decision often involve strategic planning because uncertainty is great and decision are complex
The 6 steps in the managerial decision making process
1. Recognition of decision requirement
2. Diagnosis and analysis of Causes
3. Development of alternatives
4. Selection of desired alternatives
5. Implementation of chosen alternatives
6. Evaluation and feedback
Matrix structure
5 Advantage
1) More efficient use of resource than single hierarchy
2) adaptable to changing environment
3) development of specialist and general management skill
4) expertise available across division
5) enlarge task for employee
5 Disadvantage
1) Dual chain of command
2) high conflict between e 2 side of matrix
3) many meeting to coordinate activities
4) need for human relations training
5) power domination by one side of matrix
Virtual network structure
the idea behind virual network structure is a company can concentrate on what it do best and contract or outsource the other activities to other company. e.g the organization can outsource its distribution, design, transportation, accounting and manufacturing activities to other company. This way the company can do more with less
The 3 advantage is
1) can draw on world wide expertise
2) workforce flexibility, can adjust accordingly to market, demand and also product or marketing plan
3) reduced administrative overhead, most of the activities are being outsource thus the core of organization employs lesser people thus lesser administrative overhead
the 3 disadvantage is
1) lack of control, weakened boundaries, because most activities are being outsource, lesser control and those company tends to act on their own interest
2) increase demand on managers, becos of the weak linkage, greater demand on manager to coordinate activities, manage relationship and define share values.
3) employee loyalty weakened, employee might feel that they can be replaced by a contract serice.
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