Study of Nikon Corporation

Study of Nikon Corporation The Nikon has gone global and divides the globe to six regions of its operation which are the Americas, Europe, Asia, Oceania, Middle East, and Africa. The products have also been grouped in to imaging products (Digital/film cameras, lenses and accessories), precision equipment (IC/LCD steppers and scanners), sport optics (Binoculars, telescopes and laser rangefinders), instrument products (Microscopes and measuring instruments), and ophthalmic lenses (Single vision and progressive addition lenses) (Nikon, 2010). It has a capital of  ¥ 65,475 million as of March 31 2010, where the consolidated net sales were  ¥ 785,498 million as of March 31 2010 while unconsolidated net sales as of March 31 2010 were  ¥ 572,972 million (Nikon, 2010). The numbers of employees in the corporation are approximately 26,125 as of March 31 2010 where the number is not inclusive of employees in subsidiary and associated companies. The company also has five main plants that include the Ohi plant, Yokohama Plant, Sagamihara Plant, Kumagaya Plant, and Mito Plant (Reynolds, p.23). The company has developed products of quality throughout the years where the core technology center, the research and development center and the production technology center are responsible for quality and innovation. Its imaging products (72.5%) contribute to a huge proportion of the sales followed by precision equipment (19.1%), instruments (5.7%) and others (2.7%) respectively (Nikon, 2010). The Nikon philosophy is Trustworthiness and Creativity that presents the unchanging principles that the company are dedicated to. The aspirations include Meeting needs and exceeding expectations where the company does not just stop at meeting the customer needs but also providing the customer with new products of value that exceed expectations; aiming at sustained growth through continuous development of all products; maximizing on the understanding and knowledge on light to produce products that transform and lead the markets currently and in future; and maintaining high integrity so as to contribute to the prosperity of the society (Nikon, 2010). The commitments of Nikon are being firstly being pro active i.e. Be broad-minded and well-informed in order to act quickly and resolutely Second seeking new knowledge i.e. Pioneer new potential through self-study and insatiable curiosity thirdly is effective communication i.e. Harmonize diverse skills by thinking out of the box and communicating effectively with others and last but not least displaying integrity i.e. Work with diligence and sincerity as a responsible individual (Nikon, 2010). The goal is Transforming imagination into creativity (Nikon, 2010). This paper critically examines the Nikon Corporation its history products, markets, goals and philosophy. It continues to scrutinize the company by performing a Strength Weakness Opportunities Threats Analysis which is crucial in matching the companys resources and capacity to the competition it faces in its operating environment; and a 4 P Product Services Pricing Promotion and Placement Mix analysis. It elaborates the position the corporation stands in the market and current and future opportunities that the company has in terms of growth and sustainability. Strength Weakness Opportunities Threats Analysis Nikon has been well placed in the markets in the markets and this gives the company a competitive advantage (Armstrong, p.34). This involves an environmental scan where the internal and external analysis is carried out. The Strengths The patent rights of the brand are high Nikon boasts of a global established brand that sells globally and is demanded by so many customers. The Nikon products are renowned throughout the world and thus give the company a strong basis to establish itself over it competitors and any new entrant in to the markets (Tarcy Et al p.47). This is seen as strength in that the brands are preferred by customers thus more sales are made and hence more revenues to the company. When the patent right is high the company has a lot of goodwill with the company and thus becomes the favorite and hence controls a larger share in the market. High technology in the production of products; Nikon has a reliable brand that is based on high level technological supremacy and resource and development. This has been established by the company since its inception where the products developed suit the market and become leaders in the market because of their level of technology (Nikon, 2010). The company has continued to phase out the products that are out of technology and introduced competitive products in the market that make life convenient and more comfortable. The company has invested a lot in resource and development and alliance, and industrial knowledge so as to keep on producing basic technological products that control the market. The Nikons starring technology is developed in the optics, image processing, materials, precision measurement and manufacturing, software and system technologies. The technology has continued to be unique and superior which offers better performance and functionality. Such technology include Super-Resolution in Non-Linear Optical Lithography, High-Precision Thin films, Ultra-Precision Molds, Image Processing Algorithms, Lead-Free Electronics Technology, Nano Particle Coating, Carbon Nanotubes (CNTs), Computer Aided Engineering (CAE), Vibration-Reduction (VR) and Predictive Focus Tracking System (Nikon, 2010). Quality has also been a strong point for Nikon in that the products produced have always been regarded for their high quality in the market. This makes Nikon products have a competitive advantage over its competitors. The diversification of the products that the company has is also a very strong strategy to remain in business (Tarcy Et al. p.52). This is the case because the company does not rely on a single product to get its revenues thus diversify the risks in the markets. The company has diversified to produce products like microscopes, measurement instruments, binoculars, cameras, and steppers that it has continued to dominate the market and contribute to the companys revenue. Nikon continues to boast of a very wide distribution network. The global dominance in the five regions which are the Americas, Europe, Asia, Oceania, Middle East, and Africa gives it a competitive advantage over those with ineffective distribution mechanisms (Nikon, 2010). Even in each region there is specialty in the products that are more preferred by the customers hence more sales. There is also presence of subsidiaries and affiliate companies that make the products available to the customers easily and in time. The effective distribution network enables the company to study the dynamics of the market in time and respond quickly before the markets are dominated by other competitors. The global presence is strength due to balancing of the currencies where the company can absorb shock from depreciation of currencies in areas that they are operating in (Tarcy Et al. p.71). The global presence can also be important in that when products are not moving in one region they can be transferred to other regions that require the products and thus promote business. Nikon has global and regional presence that enables the company to study the dynamics of each region and apply the best strategy. It is also possible to shift the products to other markets when they are bought at a slower rate in other regions thus save on production. Nikon has also invested a huge amount of finances in its business; the capital of  ¥ 65,475 million invested by the company is a way to lock out investors that cannot raise such an amount hence helps it in dominating the markets. The Nikon D1H camera is known for its solid build where the handling and the ergonomics is very efficient with a strong and fast autofocus. It is also weatherproof and is very fast since it as the 5 fps. It also produces large images that are approximately 40 jpeg fine (Nikon, 2010). Weakness Nikon has a poor marketing strategy where promotion of products has been low and the products have not been known to many consumers. The marketing systems have been reluctant and not aggressive enough to make the products known in all regions. The production of the Nikon scan scanner software that was faulty was a major weakness to detest its products in the market. The Nikon Scan has remained redundant in the number of images it determines in that it only determines 99 images and stops working (Nikon, 2010). For images above 100 the scanner must be restarted to continue its function. This is a very crucial part in that the customer can judge the products quality through one product and lead to rejection of the rest. The scanner software did not also have proper calibration procedures even after the purchase of an IT-8 Target. The Nikon NiMh camera batteries are not user friendly also they are heavy and big while they are sold expensively at shops (Nikon, 2010). They are also bad since they need recharge or be replaced once the camera is put in use for a shorter time than other cameras. There is a global phobia where people detest products from Japan and China and see then as counterfeits or of low quality. Products from these countries may have low sales due to such phenomenon and the company must be able to fight this negative attitude of the products it produces. Opportunities The digital world has numerous chances that have not been exploited the customers are yet to be fulfilled (Bà ¶hm, p.23). Customers still yearn for better digital products as they are produced. Any company that deals in technology has opportunities to control the market share through unique products or products that are user friendly and technologically advanced. In cameras manufacturing better products gives the company a chance to remain competitive. In view of the fact that Nikon has invested heavily in resource and development then it stands a chance to better opportunities. Trade is being liberalized in many regions and thus there are possibilities of governments loosening regulations of operations. This will be instrumental in allowing further development of the company to such countries where it is not yet penetrated (Ferrell, Hartline, p.35). Nikon has the capability to expand its production processes to other countries where there is distribution is done from exports. This will be easier and cheaper to reduce costs of production since the products are will be produced locally hence extra costs are eliminated (Bà ¶hm, p.48). Nikon may prefer mergers with companies like Sony so as to be much effective and build an empire that will control a large market share. a vertical merger will be more effective where the companies do not loose their identity but merge as a necessity to better their business objectives. Threats Nikon faces stiff competition from other globally renowned companies such as Sony, Olympus, Panasonic, Fujifilm, Canon, Kodak, Casio, and Pentax that all deal with the similar products. Such companies pose a threat of controlling the market share that Nikon holds. There is also the threat that the customers may shift their taste and prefer other companys products due to better marketing techniques applied by the other companies. New regulations may appear in different regions that may affect the companys operations in view of the fact that they may be unfavorable or strict. These regulations may include trade regulations that may be a barrier to efficient trade. In the Middle East peace has not been brokered by the warring parties and this political stand off will be a threat to business in the region. 4P strategy The Product Services, Pricing, Promotion, and Placement (Distribution) analysis of Nikon Corporation will be effective in establishing the companys position in the market and the opportunities that may be available for sustainable growth (Ferrell, Hartline, p.39). This gives a customer oriented approach that ensures that the business ventures into the market in a way that it will meet all the customers demands and expectations. The 4P marketing strategy is also known as the SIVA strategy which is translated as the Solution (product), Information (Promotion), Value (Price), and Access (Place) (Ferrell, Hartline, p.39). Product Nikon deals with a range of products that are aimed at maximizing customer satisfaction. The products include imaging products such as the Digital/film cameras, lenses and accessories; precision equipment such as IC/LCD steppers and scanners; sport optics such as the Binoculars, telescopes and laser rangefinders; instrument products such as the Microscopes and measuring instruments; and ophthalmic lenses such as the Single vision and progressive addition lenses. The imaging products are specifically the digital SLR Cameras, Digital compact cameras, speed-lights, software, film scanners, film SLR cameras, and Nikkor lenses. The microscopes include the biological, digital, industrial, stereoscopic and multi-purpose zoom. The precision equipment includes the IC stepper and scanner and the LCD stepper and scanners in different series (Nikon, 2010). The packaging is attractive with different colors and the Nikon brand name on them with each product packed with a user manual so as to enable the user steps of operation. The packaging is also ensured to shock proof to protect the products from any falling or mishandling. A return form is also placed in the packaging that bears the name and address of the company. The company logo is also encrypted in all products. It bears the words handle with care that cautions any person handling them that they are delicate and prone to damage. The customers are also assured of a warranty for every product they buy that is from authorized distributors. Pricing Each product has a specific price and the prices vary in every region and according to the specifications. The price for Digital SLR Cameras is $7,999.95; NIKKOR 50mm f/1.4 is $469.95, AF-S Teleconverter TC-20E III is $499.95; AF DC-NIKKOR 105mm f/2D is $1,199.95, and COOLPIX S640 is $219.95 (Nikon, 2010). The LS-9000 Nikon scanner is sold at $2799.99; while SB-400 Speed-light unit is sold at $149.99; SB-600 Speed-light unit is sold at $249.99; and SB-900 Speed-light unit is sold at $349.99 (Nikon, 2010). Compared to the competitors prices Nikons prices are averagely similar in the markets thus leaving the customer to choose the best product that suits them. Promotion This includes the Advertising, Professional Selling, Sales Promotion, and Publicity of the products by the company (Ferrell, Hartline, p.57). Nikon Corporation in June 2003 dissolved the Nikon sales promotion Co. ltd in view of the fact that it was not affecting its mandates to the corporation. Its mandate was shifted to Nikon Corporation business units that would effectively carryout the marketing and advertising. Nikon has also implemented the CSR strategy that includes several promotional strategies which include the education and awareness, surveying and monitoring, preventions of violations, and a consultative reporting system. The education strategy seeks to educate the employees in the corporation to create a favorable workplace environment through this promotion strategy the employees are able to promote the company to the public. The company also conducts awareness surveys that help gauge the products place in the market this helps promotion in laying the right procedure to advertise the products that have low sales. Nikon also promotes the products through print and advertising. It also holds photo exhibitions like the Photokina that helps in showcasing all the recent products by the company. Photo shootouts are also organized where customers are able to try out the new products and know their operations, availability and prices. Billboards are also used to advertise the products so as to reach the customer more efficiently. Taxi branding where taxis are branded with the company logo and products to promote the products is done globally. Nikon has also been involved in supporting sports such as formula one and advertised during the events (Nikon, 2010). Placement (distribution) Nikon is present globally with all its products being traded world over. The market has been segmented into regions that enable ease of distribution of the products to the customers. There are six regions which are the Americas, Europe, Asia, Oceania, Middle East, and Africa (Nikon, 2010). In each region there are authorized distributors of the products where they are then further sub-divided into sub divisions that help penetrate the market effective and reach the customers in time. Conclusion The general life cycle of the products from Nikon starts from the receiving of raw materials, then to the material, component and product manufacture, then to transport, where it is then used by the customer after which it is then recycled or disposed. Nikon has developed a competitive advantage over other companies and has definitely benefited from the effective marketing strategy it has. Work Cited: Armstrong, Michael. Management Processes and Functions, London: CIPD, 1996 Bà ¶hm, Anja. The SWOT Analysis. Boston: GRIN Verlag, 2009 Tarcy, Brian,. Bradford, Robert and Duncan, Peter. Simplified Strategic Planning: A No-Nonsense Guide For Busy People Who Want Results Fast!. New York: Chandler House Press, 2000 Ferrell, Olive C. Hartline, Michael D. Marketing Strategy. Ed.4, New York: Cengage Learning, 2008 Nikon. Nikon Corp, 2010. http://www.nikon.com/ November 27, 2010 Nikon. Product Assessment, Nikon Corp, 2010. http://www.nikon.com/ November 27, 2010 Reynolds, Clyde. Nikon F Book. New York: Focal Press, 1977

Price Policy

The purpose of this essay is threefold. First,to identify specific factors and the environment affecting an export price policy. Second, to analyse thisthese factors within our firm and to extract the best decisions given our starting point. Finally, to consider the above and to give guidelines governing thatwhat should be applied in the international marketing price. It should be noted that in some cases due to an information deficiency, assumptions should be madee. â€Å"Pricing is the moment of truth† (Stottinger,2001).Probably this affirmation is essentially valid in domestic marketing, even more in international marketing. Surprisingly, the literature in this area is characterized by a gapthere is a gap in the literature in this area. Given theirits importance, pricing havehas not attracted much academic research interest compared with other tools of marketing (Stottinger, 2001). Nevertheless, this should not be and cannot be a barrier for the quality of this essay. Albau m and Duerr (2008) no havehave not given a clear message regarding the level of difficulty about practice of establishing an international price.However, for a large influx of authors export price differs from domestic price, and due to thatthis the environment is sui generis in each country (Jain, 1989). It is the writer? s opinion that an overview of the challenge gives the impression that it is somewhat more difficult than in domestic marketing. Sometimes the pricing affair is too tangled to be pliant to a general sort of description (Diamantipoulous and Mathews, 1995). In summary, despite of finding similar market threats in the international â€Å"arena†, every market havehas non-identical consequences and a â€Å"constellation†of elements (Kublin,1900).All of this leads to talk of international factors affecting pricing. The goal is to analyze the factors and bring them in line with our product. Sometimes these factors are so-called such aslabelled â€Å"Interna l† and â€Å"External† factors (Tellis, 1986). The writer’s intention is not to follow the system of any author concretely and to blend the most important literature and match with the firm. To avoid excessive interminable details, these factors are exclusively factors that differ from domestic factors, or actorsthose such as competition, or buyer’s perception that are present in the domestic market but now are completely unknown in the new scenario. Cost has been and is being one of the most vital factors affecting price determination (Albaum & Duerr, 2008). It is useful because the system cost creates a limit where prices below are not permitted to stayit creates a system where prices are not permitted to stay below a certain limit. (Simon,1995). Historically, the quandary is somewhere between direct cost and full cost.The choice of the cost floor depends on the company's goal. In the futureLater the company'sthis goal will be explained, but so far, it i s enough to say that full costs fits better. The company objectives are to build a new market in the long-run, and using full cost enabling the company to recovered all the cost.. Apart from a â€Å"new† packaging, the new central cost is based on transportation. It is important to take into account theat volume of the product when consideringis another important costs. (Albaum & Dueer).In some cases companies fail due to only takinge into account this factor (Backman, 1953). It given that should we mightis essential that we emphasize other factors. Market conditions: it is time to analyze demand. An important idea of our demand is the concept of elasticity. Should I give as done thatThe elasticity of our customer tends not to be inelasticgreat. A pPerson who owns a pedigree dog or an exotic animal, tends to give allwant the best for their animals, and consequently are less price-sensivitysensitive (or there is less price sensitivity).Broadly speaking, they buy regardless of price, but always in the limits of consumer? s price awareness. â€Å"The better differentiated the product, the more difficult it is to make a comparison between different products and the higher the quality and the prestige image of the product, the lower the price sensivity†. (Nagle, 1987). Theseis three characteristics should beare present in our product, therefore the customer should tend to be â€Å"inelastic† Competition is a pivotal factor and reflects supply in economic theory.Cost draws a minimum price, demand delineates a maximum price, and competitors will condition a final price between these limits. (Albaum & Duerr, 2008). Due to lack of information, it should be assumingassume some level of competition. The firm must expect some degree of competition, but owing to the kind of product (premium product for a pedigree animal) the market should be clearly delimited. Anyway, in this stage the advice for the firm should be to stay aware of our nearest competit ors and extract value information of the background of our competitorsfrom our competitors’ background.Legal or political: widely speaking, after the Treaty of Maastricht and the constitution of the European Community the legal or political issues between European countries have been removed. It Ccan be interesting to mention one aspect of the legislation related with our product, and in last instance it can affect price decision. The European Parliament has passed some regulation concerning to animal feeds, certifying that Community legislation on animal health is properly binding and fulfilling.The law of the EU is directly applicable in UK, therefore, it should be noticed that if our firm has passed the controls for selling in UK there is not going to be a problem achieveing a license to sell around Europe. It is not necessary to argue about economic themes since has been created a homogeneous economic area has been created. Company policies and marketing mix: It is inevit able to speak about the product of the company. Price should be related to product considerations (Albaum & Duer, 2008).The characteristics of the product – i. e type of demand, physical and psychological attributes, packaging, quality, degree to which competitors are considered acceptable substitutes differentiation, state of maturity and so on – influence the prizeprice. (Kaplan, Dirlam, Lanzillotti,). Assuming that Edzell Wood has a product range and product positioning similar to that sold for garden and aviary birds under the Charnwood brand some specifications should be made for relating price and product.If the product range is large and product positioning is premium, this makes it advisable to establish a rather high price. To what extent will depend more or less highon its weighting with other factors. Some studies, under some premises, have showned that â€Å"high price† is associated with â€Å"high quality†( ) It can be interesting to speak a bout the nature of the product that Edzell is selling and to connect this with the buyer’s perception, another relevant factor.Following Nelson (1970) (Darbi and Karni 1973) goods can be divided into two types: experience good and credence goods. † An experience good is one whose features can be ascertained only upon consumption. A second category might be that of credence goods, when quality cannot be determined even after consumption†. With all probability, our product may be among experience goods and credence goods. It is the writer's opinion that in this field the labels brand didn't succeed because it is a kindthe type of good where the brand plays a crucial role.Have you seen animal feeds branded by tesco? The consumers are in part blind and are using non – physical attributes to value the utility of the product and transform this utility in terms of money. It might be a compulsory stop to speak at length about terms such us value and utility but it is beyond the scope of this essay. Suffice it to say that if the consumer is not in a position to judge accurately the value of the product directly, consumers intending to reduce the risk will be willing to pay higher prices as safeto remain safe.Pet owners or Zoological centres want to give all the best for their animals. People don’t eat feeds animalsanimal feed and consequently cannot check the quality of the product. It is the total package including complementary features such as veterinarian advice, delivery, support with any problem related with the animal and food, analysis of components, demonstration about quality, certificates, as well as the symbolic features such as prestige and status that are perceived as delivering more value than our competitors in a pricing point (Hanna & Dodge, 1995).The company should take advantage of this. It is time put on the table matto analyse how the pricing philosophy and pricing objectives play a strong role in this process. In l ine with previous aspects it should be speak about price strategy. It is strongly adviceadvisable to the firm to follow a strategic pricing related to a product differentiation. The firm should stressed differentiation through   product characteristics and position in the industry that are conducive to putting the emphasis on the value of our brand name and enjoying some price premiumpremium prices in consequence.Pricing models can be mixed and matched. Probably there is no a strategy price (skimming,sliding down the demand curve, ando so on) that fsuits perfectly with our task. The price strategy should be a relatively high price related with a high premium product, putting the emphasis in the quality and the complementary features. It should try to implement some promotions to try to encourage the customer to know the product in the first stage. It can be dangerous to play upping or downing the price, becausedue to the quality image can be affected.The objective of our price str ategy should integrated goals such uas, obtaining the highest return on investment, maintaining or increaseing market share, meeting a specified sales goal, meeting a specified profit goal, profit maximisation, meeting competition and so on (Teacher). The objective of our price strategy should integrate goals such as, obtaining the highest return on investment, maintaining or increasing market share, meeting a specified sales goal, meeting a specified profit goal, profit maximisation, meeting competition and so on (Teacher)Firm and management: the international experience of the firm and commitment to the venture are important factors. Assuming that Edzell does not have international experience and it is a small enterprise it should be noticeded that it is important to advise the firm's members about the importance of pricing decisions. Furthermore, the firm should be completely conscious and to have a strong commitment withto go internationalexpanding internationally. This is commo nly forgotten in some companies, especially smaller ones. , Aall of thisthese factors influence setting the right price.It is usual to forget this in some companies, especially in small companies. A crucial place occupies the price decision controlPrice decision control occupies a crucial place – the step within the firm at which the decision is tooktaken. (Myers,Cavusgil, Diamantopoulous, 2002). To verifyied that the person who sets the prices has the skills to do it. It is important not to forget channel distribution as a factor affecting price. A product ishas much more than a physical value,value; it is also on how it is sold and after-sales service and so on.The customer’s willingness to pay is directly influenced by these features. The firm should teach the channel distribution how to give this high quality service. Remembering that animal feed is a very intangible product for the buyer and these details are the key point to give a message in consonance with our price. In our case, assuming that direct export has been choosedchosen the goal should be relatively factibleachievablee(? ). Also regarding channels and distribution our firm should avoid structures tending to result in export-price scalationthe escalation of export price (Cavusgil and Zou, 1994).It is necessary to highlight that a good relationship with the channels is very useful to control the final price. (Bowersox et al, 1992). It is the writer? s opinion that the choice ofto choose a direct mode of exportationing hasis have been influenced by theseis parameters. Our company should weight up the benefits of pricing the goods and services in euros or in sterling. Intuitively, most eurozone customers will prefer to see prices in euros. Using a sterling prices list may lose part of our business. The main disadvantage of making and accepting euro payments is that it exposes our firm to currency risks.One way to hedge against exchange rate movements can be to arrange a forward fore ign exchange contract – this is an agreement initiated by you to buy or sell a specific amount of foreign currency at a certain rate, on or before a certain date. In the field of price quotation, our exportations should use the system definition based on Incoterms (International Commercial Terms). Although the detail of which incoterms should be choosechosen is beyond the scope of this essay, exporters should consider some factors.Between others; shipment, insurance coverage, availability of information, currency convertibility problems, and son on (Albaum ; Duerr, 2008). Ultimately, price quotations should be in a form that customers and channels find suitable, and at least as convenient for the customer as those offered by competitors. Anyway, the price quotations should be reflected in the final price. All of these factors should be complemented with some basic guidelines. Pricing flexibility is a principle that should guide all the decisions. The right placeprice(? today, cannot be the right price tomorrow. The issue, more than to think if our price havehas to be higher, lower or the same level compared with our domestic prices or the competition prices it is to set the right price in the right moment. Probably, some factors hashave been omitted but not forgotten due to limited space. And always remember that setting a price â€Å"It is not a science, but it is an art. †Ã¢â‚¬  (John I. Leahy, Black ; Decker) Bibliography Stottinger, B. (2001) Strategic export pricing: a long and winding road. Journal of International Marketin, 9 (1). 40-55Jain, S. C (1989) â€Å"Standardization of international marketing strategy: some research hyphoteses† Journal of marketing, Vol 53, January, pp. 70-9 Kublin, M. (1990) â€Å"A guide to export pricing†, Industrial Management, Vol. 32 No. 3, pp. 29-32 Diamantopoulos, A. and Mathews, B. (1995), Making pricing decisions: A study of Managerial Practice, Chapman ; Hall, London. Mathews, B. Cavusgil , Diamantopoulos, A. (2002), Antecedents and actions of export pricing strategy: A conceptual framework and research propositions. European Journal of Marketing, Vol. 36, No ? , 2002, pp. 159-188.

The Performance Of European Funded Projects Finance Essay - Free Essay Example

Sample details Pages: 9 Words: 2758 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? The anfractuous integration of Romania in the European Union implies a complex process of modernization and structural reorganization. One of the most important aspects of this process is the economical efficiency. In the perennial context of the economic crises, enterprises, more than ever, have to follow a complex process of reorganization in order to respect the community rules and standards. Don’t waste time! Our writers will create an original "The Performance Of European Funded Projects Finance Essay" essay for you Create order In order to fulfill this objective, the Romanian enterprises are encouraged by the possibility of receiving non-refundable funds from the European Union (80%) and Romanian Government (20%). The lack of any advertising and public relation campaigns about the process of receiving these kinds of funds has often put the final beneficiary in a predicament. Most of the Romanian investors have no idea what their obligations imply, they are focused on the idea that the money they receive neednt be refundable. The present article means to analyze the way the European funded projects are implemented, focusing mainly on the costs and obligations that the investors enter. The non-refundable European funds are an excellent opportunity for the business environment as long as the beneficiaries are aware from the beginning of the social and institutional cost of this process. KEYWORDS: cash-flow, grant, IRR JEL CLASSIFICATION: F35, F36 1.INTORDUCTION Since the 1st of January 2007 Romania has been a full right member of the European Union. Having this position, our country receives non-refundable funds, available through projects, for the development and reducing the socio-economic gaps/disparity in comparison with the other members. Romania presently has several financing programs with different levels of aid intensities (depending on the kind of eligible beneficiaries and the type of investment funded), the most relevant of them are: National program for rural development 2007-2013 The operational program Increase of economic competitiveness The operational program for Human resources development The operational program for environment The operational program for transport The operational program administrative capacity development. The magnitude and complexity of the non-refundable funds do not admit an exhaustive analysis of the problem, only in case of studies involving teams formed by specialists in this issue. For this present analysis we chose a line of funding from the National Program for Rural Development 2007-2013, the third axis Improving the quality of life in rural areas and diversification of the rural economy, 313 Measure Encouragement of tourism. This line sets the overall objective of financing the development of tourism activities in rural areas in order to help increase employment and alternative income, as well as increasing the attractiveness of rural areas (EC, 2009; EC, 2005; MARD, 2009). Given this ample general objective, within the 313 Measure we have four kinds of investments, namely: a) Investment in tourism accommodation infrastructure (this component is broken down in turn into agro-tourism and rural tourism), b) Investments in recreational activities, c) Investment in small-scale infrastructure such as information centers, tourism signs, etc.. and d) development and / or marketing of tourism services relating to rural tourism (PARDF, 2012). Another effect of the extensive overall objective is the diverse range of eligible applicants. Eligible within the 313 Measure are: micro-enterprises, freelancers, local authorities and NGOs. 2. MATERIALS AND METHODS OF RESEARCH In the present material we performed an analysis of a hypothetical project implemented by a micro-enterprise, within the component Investment in tourism accommodation infrastructure (rural tourism). In this example, the non-refundable financial aid is 50% of the eligible value of the project (but no more than ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã… ¡Ãƒâ€šÃ‚ ¬ 200.000). The total value of the project is 496.000 Euros, of which the eligible amount is 400.000 Euros (this value was chosen since it covers the costs of a bed and breakfast of four daisies (the equivalent of four stars) with ten double rooms and a restaurant) and ineligible value 96.000 Euros (which is VAT, which is not funded by the European Union as it is recovered from the National Tax Administration Agency). The implementation period of this hypothetical project is one year. Given the value of the non-refundable financial aid and of the eligible value of the project, the investor would receive 200.000 Euros from structural funds. The problem that is overseen by many potential investors is that the European funding is granted on the principle of reimbursement of expenses made by the beneficiary. Many investors do not take into account the additional costs associated with this principle (short-term financing). Another omission made by potential beneficiaries is related to the monitoring period. A beneficiary who has implemented a project with non-refundable funds within the 313 Measure should keep the bed and breakfast into service and do not to alienate/sell it at least five years after completion. During this monitoring period the beneficiary must maintain all of the jobs foreseen in the project. In this example, (considering the value of 200.000 Euros of the non-refundable financial aid) the appropriate number of jobs created by the project must be eight (given the selection criterion no. 3 non-refundable financial amount / number of jobs created ÃÆ' ¢Ãƒ ¢Ã¢â€š ¬Ã‚ °Ãƒâ€šÃ‚ ¤ 25.000 Euros (PARDF, 201 2). These two omissions generate additional financial efforts for potential beneficiaries that can be considered a cost of the non-refundable financial aid. This article trays to determine the level of these costs and the actual percentage of co-financing of such an investment. To see the differences that arise between the various scenarios with and without the influence of personal costs and the costs of short-term financing, we must take into account two indicators: a) IRR F/(C) financial internal rate of return calculated on the investment, quantified by the formula: (1) ) where: I0 is the initial investment (the eligible value + ineligible value of project); CFi is the value of the cash flows generated by the project in operation (flows from investing activities, financial and operational); VR residual value, estimated at the end of the time horizon taken into consideration. b) IRR F/(K) financial internal rate of return calculated on the value of its own contribution. In this case we use the formula: (2) ) where: K is the private co-financing (financing the eligible amount (50%)) + other ineligible costs incurred during the implementation; CFi is the value of the cash flows generated by the project in operation (flows from investing activities, financial and operational); VR residual value, estimated at the end of the time horizon taken into consideration. (EC, 2008; Hazen, 2003) Ignoring the costs of short-term funding (generated by the principle of reimbursement of expenditure already made) and costs related to the number of jobs to be created and maintained during monitoring period, the investment has a IRR F / (C) -1.95% , which reveals that the project is not attractive for financing from a bank or investor. Also there is an IRR F / (K) of 10.12%, showing that through a 50% non-refundable financial assistance, the project would become viable (two indicators detailed in the Table 1 Variables initial investor). Table 1. Variables initial investor Implementing year Year 1 Year 2 Year 3 Year 4 Year 5 Investment value 2.083.200 Cash-flow 55.785 121.441 124.969 128.497 132.025 Residual value 1.344.000 Flow for IRR F/(C) -2.083.200 55.785 121.441 124.969 128.497 1.476.025 IRR F/(C) -1.95% Flow for IRR F/(K) -1.243.200 55.785 121.441 124.969 128.497 1.476.025 IRR F/(K) 10.12% Source: Own calculations based on data previously presented The data in Table 1 are based on the following assumptions: the analysis was done in constant prices without the effect of inflation and private co-financing of the project relies on a credit for a period of 20 years, with an interest rate of 10% and a period of grace of 12 months (equivalent to project implementation period). The value of this credit is 50% of the eligible value of the project. Staff considered is presented in Table 2. The And management and supply functions will be provided by the sole shareholder of the company. Table 2. Staff minimum variant No. Position Gross monthly salary lei 1 Shareholder 0 2 Chef 2.200 3 Waiter 1.700 4 Maid 1.700 5 Reception staff 1.900 6 Accountant 2.000 Total 9.500 Source: Average estimate Table 3. Staff optimal variant No. Position Gross monthly salary lei 1 Manager 2.500 2 Supply staff 2.000 3 Chef 2.200 4 Waiter 1.700 5 Maid 1.700 6 Reception staff 1.900 7 Accountant 2. 800 Travel Guide 2.000 Total 16.000 Source: Average estimate Based on the specifications in the Guidelines for Applicants on measure 313, in order to get a good score and therefore to be selected for funding a project needed to create jobs in proportion to its value, i.e., for each 25.000 euro received as grant the applicant must be created and maintained for at least five years a full-time job. Table 3 presents the structure of personnel as specified by guide (in quantitative terms). It is also well balanced, covering all activities that might take place in a boarding houses. In Table 4 the two indicators calculation is done, this time taking into account the jobs that must be created. Table 4. Project attractiveness with correction for jobs Implementing year Operating period Year 1 Year 2 Year 3 Year 4 Year 5 Investment value 2.083.200 Cash-flow -44.055 21.601 25.129 28.657 32.185 Residual value 1.344.000 Flow for IRR F/(C) -2.083.200 -44.055 21.601 25.129 28.657 1.376.185 IRR F/(C) -7.52% Flow for IRR F/(K) -1.243.200 -44.055 21.601 25.129 28.657 1.376.185 IRR F/(K) 2.50% Source: Own calculations based on data previously presented Cash Flow Estimation was done based on Annex 1. It appears that after this correction the attractiveness of the project significantly decreased, but not so as to be abandoned and unfunded (IRR F / (K) 0%). Table 5.1. Extract from cash flow during the implementation small credit Period Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Net cash flow for the period 509.600 161.000 -7.000 -330.400 161.000 -330.400 Available cash of the previous month 200 200 509.800 670.800 663.800 333.400 494.400 Available cash at end of period 200 509.800 670.800 663.800 333.400 494.400 164.000 Source: Average estimate Table 6.2. Extract from cash flow during the implementation small credit Period Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total year Net cash flow for the period 161.000 -330.400 161.000 -330.400 161.000 -7.000 -21.000 Available cash of the previous month 164.000 325.000 -5.400 155.600 -174.800 -13.800 200 Available cash at end of period 325.000 -5.400 155.600 -174.800 -13.800 -20.800 -20.800 Source: Average estimate Analyzing the cash flow for the implementation period we can see that in the eighth month, the company runs out of available cash, a delicate problem, most often synonymous with insolvency. Although hypothetically the company would pass over this impasse, because the amount involved is relatively small, in the tenth month the cash requirements to continue are much higher. This situation occurs due to the gap of about a month, between the investment and the reimbursement (the grant). The investment is made in five installments (thus the needs for cash are minimal), during 1, 4, 6, 8 and 10. These invoices are paid in propor tion to the investment company and made ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â€š ¬Ã‚ ¹ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â€š ¬Ã‚ ¹grant aid is granted in months: 2, 5, 7, 9 and 11. Another cost factor is determined for the cash depletion rates. The negative cash flow is covered in the fourth year of the operation period (see Table 6). Table 7. Extract from cash flow from operating period small credit Period Implementing Year Operating period Year 1 Year 2 Year 3 Year 4 Year 5 Net cash flow for the period -44.055 21.601 25.129 28.657 32.185 Available cash of the previous month -20.800 -20.800 -64.855 -43.254 -18.126 10.531 Available cash at end of period -20.800 -64.855 -43.254 -18.126 10.531 42.716 Source: Average estimate In order to implement the project, the company will have to contract a greater loan, which allows it to sustain the interest expenses and differences arising between payments and reimbursements. The second scenario in which the company relies on a credit (under similar conditions: 20 years repayment period, interest of 10% and 12 months grace period), but the higher value of the loan, surmounts the problems outlined above. In this situation, the grater loan allows the company to operate under normal conditions, avoiding liquidity risk without lags during the implementation period (see Table 7.1 and 7.2) or in the first five years of the operational period (see Table 8). Table 8.1. Extract from c ash flow during the implementation high credit Period Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Net cash flow for the period 866.600 158.000 -10.000 -333.400 158.000 -333.400 Available cash of the previous month 200 200 866.800 1.024.800 1.014.800 681.400 839.400 Available cash at end of period 200 866.800 1.024.800 1.014.800 681.400 839.400 506.000 Source: Recalculate from Scenario 1 Table 9.2. Extract from cash flow during the implementation high credit Period Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total year Net cash flow for the period 158.000 -333.400 158.000 -333.400 158.000 -10.000 303.000 Available cash of the previous month 506.000 664.000 330.600 488.600 155.200 313.200 200 Available cash at end of period 664.000 330.600 488.600 155.200 313.200 303.200 303.200 Source: Recalculate from Scenario 1 From Table 7.1 and 7.2 we can see that the available cash at the end of each period is positive, denoting the fact that the company has sufficient cash resources to operate normally. Table 10. Extract from cash flow from operating period high credit Period Implementing Year Operating period Year 1 Year 2 Year 3 Year 4 Year 5 Net cash flow for the period -97.080 -29.624 -24.296 -18.968 -13.640 Available cash of the previous month 303.200 303.200 206.120 176.496 152.199 133.231 Available cash at end of period 303.200 206.120 176.496 152.199 133.231 119.591 Source: Recalculate from Scenario 1 As a side effect of the higher credit we can observe (see Table 8) that the cash flows generated by the investment are lower than those caused by lower loan (see Table 6), this being blamed on higher interest rates Table 11. Annual rates of both loans Large Credit Small Credit Differences Loan Value 1.200.000 840.000 360.000 The value of annual installments 60.000 42.000 18.000 Source: Own calculations based on data previously presented The two credits are obtained in similar conditions, both repayment periods are 20 years, but because of amounts differ, the values of the annual rates differ as well. Table 12. Annual interest of both credits Amount of interest Implementing year Operating period Year 1 Year 2 Year 3 Year 4 Year 5 Large Credit 120.000 116.750 110.750 104.750 98.750 92.750 Small Credit 84.000 81.725 77.525 73.325 69.125 64.925 Differences 36.000 35.025 33.225 31.425 29.625 27.825 Source: Own calculations based on data previously presented Interest calculation was performed by applying 10% annual margin outstanding of the loan (the amount remaining to be paid). Table 13. The additional cost of the higher credit Discount rate 5% Period (Years) 0 1 2 3 4 5 Difference in credit 54.000 35.025 33.225 31.425 29.625 27.825 Discount factor 1 0,95238 0,90702 0,86383 0,82270 0,78352 Difference in loan discounted 54.000 33.357,14 30.136,05 27.146,1 24.372,56 21.801,62 Discounted total costs 190.813,47 Source: Own calculations based on data previously presented In terms of time, the costs of credit will be carried forward, to ensure the unit of analysis, they are discounted (the discount rate used is 5% without the effect of inflation). Table 14. Project attractiveness after correction for jobs and correction for necessary credit Variant 1 Implementing year Operating period Year 1 Year 2 Year 3 Year 4 Year 5 Investment value 2.083.200 Cash-flow -97.080 -29.624 -24.296 -18.968 -13.640 Residual value 1344000 Flow for IRR F/(C) -2.083.200 -97.080 -29.624 -24.296 -18.968 1.330.360 IRR F/(C) -10.30% Flow for IRR F/(K) -1.243.200 -97.080 -29.624 -24.296 -18.968 1.330.360 IRR F/(K) -1.26% Source: Own calculations based on data previously presented Recalculating the IRR F / (C) and IRR F / (K) taking in to account the high credit (see Table 12) we can see that the attractiveness of the project has fell drastically, both indicators have negative valuesÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â€š ¬Ã‚ ¹ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â€š ¬Ã‚ ¹. This requires a rethinking of the entire project, the most viable solution is the reduction of the investment value, introducing new products that bring additional income or finding more attractive funding sources). III. Research results Plotting the evolution of the two indicators before and after making the corrections, it appears that both indicators registered a strong downtrend. Figure 1. Evolution IRR/ C and IRR/K Source: own representation of the results The analysis of the indicators illustrates the fact that the project initially seemed viable, but now it has to be rethought because even with the non-refundable financial support it cant be profitable. Investors who do not know the system of awarding grant can reach difficult situations such as: projects blocked because the beneficiary has no more financial resources, facilities constructed through grant projects that have to be kept in operation although no profit is being made etc. Table 15. Actual percentages of co-financing Category Value Percentage Eligible value 1.680.000,00 100.00% Grant 840.000,00 50.00% Private contribution 840.000,00 50.00% Real Grant 840.000,00 33.28% Real Private contribution 1.120.813,47 66.72% Source: Own calculations based on the scenarios previously presented If we consider the additional cost generated by a higher loan necessary for covering the gap between the investment and the reimbursement of expenses, the grant aid intensity (expressed as percentage) decreases from 50% to 33.28%. This new value can be called the actual grant aid. A counter argument could be that the investor has sufficient financial resources and a credit is not needed. However, in this case he blocks a certain amount of money for a determined period of time, during which he cant use it. Although this cost is difficult to place in a cash flow, as an opportunity cost, it exists, and interferes on a long-term perspective, the investor renouncing the use of those amounts, which could generate income. IV. Conclusions Grants are an opportunity for all businesses and a diverse pallet of investors. The decision to start such a project must be analyzed very well, because all sources of capital even grants have a specific cost, sometimes hard to quantify explicitly. In the case of grants, the cost derives mainly from the social side and the process of reimbursement. However, through a detailed economic and financial analysis of the project that takes into account of all the elements, both obvious and most discreet, the success of the investment can be ensured and thus fulfill all the objectives and commitments of the grant recipient.

Nature Vs. Nurture Nature Versus Nurture - 1678 Words

Nature Versus Nurture Personality development expands far past the environment. Environment contribute to most of the personality development when it comes to nature versus nurture. Nature versus nurture is a trait that is typically inherited in the human society. Humans see things good or bad within the environment and mimic it. There are questions that still remain about nature versus nurture and the environment. Research is still ongoing and theories are still being made or developed. Scientists argue that while the nature part of the equation deals with the environment, it is the nurture part that determines how relationships are handled. Whether the relationship is healthy or unhealthy and how the relationship will be in the future. Some scientists agree the relative influences of genotypic and environmental effects vary among people and is controlled largely by environment. The Unconscious Sigmund Freud is the father of the unconscious, he theorized the Id, Ego and Superego. He was far more brilliant than many of the post-Freudian psychologists. The unconscious mind is still viewed by many psychological scientists as the shadow of a â€Å"real† conscious mind, though there now exists substantial evidence that the unconscious is not identifiably less flexible, complex, controlling, deliberative, or action-oriented than is its counterpart. The Freudian model of the unconscious is still with us and continues to exert an influence over how many people think of â€Å"theShow MoreRelatedNature Vs. Nurture : Nature Versus Nurture Essay1939 Words   |  8 PagesNature versus Nurture You got your dark brown hair from your father and you got your looks from your mother, but where did you get your excitement for sports and your love for all animals? A person’s physical characteristics lean more towards genes and heredity, but our genes are not mentioned as much when behavior is the topic. This is how the nature versus nurture debate first began. 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