Classical Theory of International Trade

Classical Theory of International Trade The purpose of this chapter is to review the existing body of knowledge about foreign direct investment and the studies on strategies adopted to attract FDI. It attempts to present a summary of the relevant theories, hypotheses and schools of thought that contribute to the understanding and fundamental motivation of FDI flows. An exploration of these theories will assist in the study and it will support arguments to be used in empirical estimation and discussion. Additionally the aim of this chapter is to review the theoretical approaches to the determinants of FDI, also known as private foreign investment. Various theories have been developed since the World War II to explain FDI. These theories state that a number of determinants both at micro and macro level could explain FDI flows in a particular country or a particular region. Various studies have also been published on the assessment of the key determinants of FDI. However, there is no general agreement insofar, especially that in different context, specific factors may vary significantly in their degree of importance as regards to FDI. 2.2 Definition of FDI Foreign direct investment (FDI) is a category of investment that reflects the objective of establishing a lasting interest by a resident enterprise in one economy (direct investor) in an enterprise (direct investment enterprise) that is resident in an economy other than that of the direct investor. The lasting interest implies the existence of a long-term relationship between the direct investor and the direct investment enterprise and a significant degree of influence on the management of the enterprise. The direct or indirect ownership of 10% or more of the voting power of an enterprise resident in one economy by an investor resident in another economy is evidence of such a relationship (OECD, year 2008 Benchmark Definition of Foreign Direct Investment 4th Edition). The Benchmark Definition is fully compatible with the underlying concepts and definitions of the International Monetary Funds (IMF) Balance of Payments and International Investment Positions Manual, 6th edition (BPM6) and the general economic concepts set out by the United Nations System of National Accounts (SNA). In accordance with the Organisation for Economic Co-operation and Developments (OECD) Benchmark Definition, Foreign Direct Investment (FDI) is said to be an investment which entails a long duration equation and is an indication of sustained interest and authority by a hosted firm in an economy (foreign direct investor or origin firm) in a firm hosted in a country other than that of the foreign direct investor (FDI firm or associated firm of foreign affiliate). FDI entails both the initial dealing between two enterprises and all following money dealing between them and amid the associated firm, both integrated and non-integrated (OECD, 2008). The concept of FDI took prominence in 1962 following the publication of an article- Development Alternatives in an Open Economy by Hollis Chenery and Michael Bruno wherein a two-gap analysis of capital requirements was formulated. They pointed out that foreign investment apart from foreign aid and foreign trade was important to fill the resource gap needed to finance economic development especially for countries where their imports exceed their exports. FDI stimulates larger flows of private capital for the development of the recipient countries. Increase in FDI is not enough. It must ensure that the said increase is meeting the development objectives of the recipient countries. FDI must go beyond private while government must ensure that risks are not too high or the return on investment is not too low. Being given that private capital offers some special advantages over public capital, there must be a mutual interest for both private foreign investors and the host country. The latt er will have to assist in securing information on investment opportunities and establish economic overhead facilities such as industrial estates, protective tariffs, exemption from import duties and tax concessions schemes. 2.3 Theories of FDI Over the past few decades, extensive research have been conducted on the behaviour of multinational firms and determinants of FDI and many authors have put forward various theories (and complementary) to explain them. Theories and contexts that are being developed are challenging established facts, systems and knowledge bases. Though many theories have been developed to explain various dimensions of FDI, the current chapter will endeavour to examine the following paradigms considering the scope of the present study namely: the classical international trade theory, the neoclassical location theory, the market imperfection theory, the OLI paradigm and Porters Diamond theory. Broadly speaking the theories could be classified as international trade theories dealing with comparative advantage for nations to go for trade and foreign direct investment theories relating to corporate advantage for foreign corporations  entering the host countries. 2.3.1 Classical Theories of International Trade The concept of FDI cannot be disassociated with the basis of why countries trade and the latter has been pioneered by the famous classicists namely Adam Smith (1776) with his Absolute Advantage theory and David Ricardo (1819) with his Comparative Advantage theory of trade. Adam Smith, the founder of economic theory, was the first to broach in Wealth of Nations that business would grow internationally for real economic growth. Both Smith and Ricardo concluded that countries would benefit from international trade if they have an absolute and comparative advantage in those products that they would be exporting and they should import those goods for which they have an absolute and comparative disadvantage. Consequently they were of the opinion that there should be complete specialisation by the countries involved in international trade based on the same principle as that of division of labour. They based their reasoning on the labour theory of value. The labour theory of value states that the value or price of a commodity is equal to or can be inferred from the amount of labour time going into the production of the goods. It, however, assumes that labour is the only factor of production and that it is also homogeneous. Because of these restrictive assumptions, the labour theory of value was contested and replaced by the opportunity cost advantage propounded by G.Haberler in 1936. The latter emphasised more on how a country has a comparative advantage rather than on what are the determinants of comparative advantage. It says that the cost of a commodity is the amount of a second commodity that must be given up in order to release just enough factors of production or resources to be able to produce one additional unit of the first  commodity. Consequently labour will not be the only factor of production and will not be homogeneous. 2.3.2 The Heckscher-Ohlin (HO) Theory The HO theory also known as factor endowment model was put forward by Heckscher (1919) and Ohlin (1933) and was among the modern theories of international trade showing the causes of international trade. Adam Smith and David Ricardo remained silent on the causes of trade and on how trade affects factor prices and the distribution of income in each of the trading nations. The HO theorem postulates that each nation will export the commodity intensive in its  relatively abundant and cheap factor and import the commodity intensive in its relatively scarce and expensive factors of production. It implies that a country must have the necessary resources to export goods. Some of the assumptions of the model again act as its own limitations on its effectiveness namely when it comes to free trade with no transport costs, tastes are similar across countries, perfect competition in factor and commodity markets, factors immobility internationally, use of same technology in the production of the two goods andtwo factors of production and two countries model (2x2x2 model). There has been extensions to the HO model namely through the Stolper-Samuelson model (1949) and Rybczynski theorem (1955). These theorems postulate that trade leads to the equalisation of relative and absolute factor prices between nations so that there will be internationalisation of prices and wages based on still the restrictive assumptions as those under the HO model. As Faeth (2009) and Seetanah and Rojid (2011) highlight, the first explanations of FDI were based on the models propounded by Heckscher-Ohlin (1933), according to which FDI was motivated by higher profitability in foreign markets with the possibility to finance these investments at relatively low rates of interest in the host country. Ohlin also observed that availability and securing sources of raw materials, flexible and business friendly trade policies as well as accessibility and availability of factors of production were the components influencing FDI inflows into the country. 2.3.3 Modern International Trade Theories There have been empirical tests concerning the traditional trade theories namely the Ricardian and HO models. Some tests have gone according to the theories while others have disproved them. For instance Sir Donald MacDougall in 1951 tested the Ricardian theory using the 1937 data for the USA and UK for 25 industry groups whereby it was found that US wages were twice as those for UK resulting in the USA being capital intensive while UK being labour intensive. However, according to Dougall there is incomplete specialisation as opposed to complete specialisation proposed in the Ricardian model. This is based on the fact that tastes are different, products are non-homogeneous, transport costs matter and industry groups are highly aggregated where we can have different model for a particular products like cars and cigarettes. The USA may have comparative advantage in cars but this does not prevent the UK from exporting one or two different models. Sir Donald MacDougall has also in 1960 talked about the benefits and costs associated with private investment from abroad. He pointed out that an increase in FDI will lead to an increase in real income based on the fact that value added to output by foreign capital is greater than the amount appropriated by the foreign investor as foreign capital raises overall productivity in the host country. With FDI, social returns are far greater than private returns based, inter alia, on the  following: (a) Domestic labour having a higher real wages; (b) Consumers having better choice with lower prices; (c) Host Government getting higher tax revenue; (d) Realisation of external economies of scale; (e) An alternative to labour migration from the poor country; (f) Increase in managerial ability and technical personnel; (g) Transfer of technology and innovation in products; and (h) Serving as a stimulus for additional domestic investment. However, Sir Dougall also warned that there is need for the host country to have the right additional public expenditure as foreign investors are likely to be less interested in receiving an exemption after a profit is made than in being sure of a profit in the first instance. Wassily Leontief tested the HO theory in 1951 and 1956 and found that the USA imports competing were about 30% more capital intensive than its exports. Since the USA was the most capital abundant nation, this result was the opposite of what the HO theory predicted and this became known as the Leontief paradox. Although subsequently the Leontief paradox was partly resolved in the 1980s, it led to the spring ball of modern theories of trade namely Linders thesis (Similar Preference Model or Spillover Theory), Posners Model (Technological Gap Model or Innovation -Imitation Model) in 1961 and the Product Cycle theory of Vernon in 1966. The HO model is inappropriate in explaining trade between countries with the same level of development while with the Spillover theory especially concerning manufactured goods, industrialised countries which have similar factor abundant can trade together. The Linders thesis rests on the belief that a country will export a particular commodity if it has a domestic market for the goods. In fact, domestic market is exploited first. If there are economies of scale in the domestic market, there will be a cost advantage to make export possible. Goods will be exported to countries with similar tastes and similar level of development so that trade will take place with countries of similar living standards. The technological gap theory is typical for the industrialised countries. It states that new products are likely to emerge in the market as a result of innovation. At first production is made for the domestic market. Then firms which bring forth these products have economic rent so that they have strong monopoly position. This makes it easier to tap international market. But this product in question is imitated overseas after some time period. Therefore, there is a shift in comparative advantage. So, we can say that there is an innovation-imitation process. We talk of technological gap because there is a gap between the country which invent the product and those which imitate them. The product life cycle model is an extension of the technological gap model. It states that any product moves through different stages or cycles and comparative advantage keeps shifting during these stages. There are four stages namely: Stage I New product for domestic market only Stage II If product is successful, there is overseas demand so that exportation will be possible Stage III Exports decline because overseas firms produce the goods due to innovation-imitation theory Stage IV Because of comparative advantage, the second country export the product to the first country, that is, the latter will start importing the goods which only a few years back was exporting it. Vernon (1966) explained that FDI will occur when the product enters its mature stage in the product life cycle hypothesis. Vernon (1979) re-examined his own theory and came to the conclusion that the cycle has shortened considerably whereby multinational companies are now more geographically diffused. 2.3.4 Market Imperfections Theories The suggestion that FDI is a product of market imperfection was first discussed by Hymer (1976). He also confirms that investment abroad involves high costs and risks inherent to the drawbacks faced by multinationals because they are foreign. The model was later extended by Caves (1971) and Buckley and Casson (1976) into the internationalisation theory. Hymer shifted the theory of FDI out of the neoclassical international trade theories and into industrial organization (the study of market imperfections). He also argued that there are two factors motivating FDI, namely: (i) the attempt to reduce and/or remove international competition among firms; and (ii) the desire of Multinational Corporations (MNCs) to increase their returns from the utilization of their special advantages. Foreign firms face disadvantages compared to domestic firms, mainly due to the extra costs of doing business in an alien territory and given the information on cost disadvantages, a foreign firm will engage in FDI activity only if it enjoys offsetting advantages such as superior/newer technology, better products or simply firm-level economies of scale. Buckley and Casson (1976) talked about the internalization theory of foreign direct investment. An important pre-requisite for internalisation whether being executed vertically or horizontally, is the existence of an imperfect market. They stated that there are two ways in which a firm can internalise namely by replacing a contractual relationship with unified ownership and secondly by internalising an advantage such as production knowledge through the establishment of a market where there is initially an absent of the said market. Together with the internalisation theory, there is the transaction cost theory put forward by Williamson (1975). He investigated whether a firms transactions are governed by hierarchy or the market. He identified three dimensions to this problem, namely (i) the frequency with which a transaction occurs; (ii) asset specificity; and (iii) uncertainty in the presence of uncertainty and also as uncertainty increases, it is better to govern through a hierarchy rather than through the market and vice versa. Caves (1982) also developed the rationale for horizontal integration (specialised intangible assets with low marginal costs of expansion) and vertical integration (reduction of uncertainty and building of barriers to entry). 2.3.5 The OLI Paradigm John Dunning (1988) in his Explaining International Production proposed an eclectic paradigm also known as the ownership-location-internalisation (OLI) paradigm. The OLI paradigm argued that FDI activity is determined by a composite of three sets of forces namely: Foreign firms enjoying ownership advantages in the form of better technology, product quality, or simply brand name, and other organizational knowledge that are not available to local firms. In other words, it refers to the competitive advantages which firms of one country possess over firms of another country in supplying a particular market or set of markets through product differentiation. These advantages may accrue either from the firms privileged ownership of assets or from their ability to co-ordinate these assets (common management strategy with a global scanning capacity) with other assets across national boundaries in a way that benefits them relative to their competitors;   Foreign firms can benefit from location advantages. This will make FDI activity more profitable than exporting. Examples can be: availability of cheap labour or other factors of production; market size, lower transportation cost, and trade barriers. This refers to the extent to which firms choose to locate value-adding activities outside their national jurisdictions; Foreign firms may seek internalisation advantages which arise when ownership advantages are best exploited internally rather than when offered to other firms through contractual arrangements, i.e. franchising, management contract etc. In other words, we here refer to the extent to which firms perceive it to be in their best interests to internalise foreign markets for the generation and/or use of their assets with a view to add value to them and reduce the high information costs. The significance of the eclectic paradigm, however, varies across industries, countries and firms. Another problem with the eclectic paradigm is that each of the Ownership, Location and Internalisation variables tends to be interdependent. For instance, a firms response to the independent locational variables may influence its ownership advantages and also its willingness to internalise markets. This is well known as the problem of multicollinearity among exogenous variables which can reduce the empirical validity of the model. 2.3.6 Porters Diamond Theory Porters Diamond Theory (1990) emphasises global patterns of FDI based on different country characteristics. He explained why certain countries tend to become leaders in some activities by using examples of sophisticated industries. According to him, firms that have successfully globalised their production activities have done so because of their ability to carry their home-based advantages in foreign market. Taking from the shape of a diamond, Porter (1990) maps out that there are four endogenous variables that would affect the decision of the multinational firms to compete internationally. These factors are: Factor conditions the countrys position in terms of factors of production such as infrastructure and skilled labour necessary to compete in a given industry; Demand conditions the nature of home demand for the industrys product or service; Related and supporting industries the presence or absence in the country of supplier industries and related industries that is internationally competitive; and Firm strategy, structure and rivalry the conditions in the country governing how companies are created, organized, and managed, and the nature of domestic rivalry. The role of government and chance are taken as exogenous variables in the model which can influence to a great extent any of the four endogenous variables. Government policy can either impede or help a firms progress and innovation. Chance events can come in the form of technological advancements that create a national competitive advantage for a firm. Porter (1990) stated that different dynamics may exist between the endogenous and exogenous variables, depending on what drives FDI flows namely factor-driven, innovation-driven and wealthdriven. The factor-driven and innovation-driven can be associated with continuous improvement of a countrys competitive advantages that contribute to the development of an economy. On the other hand, the wealth-driven cause can be associated with stagnation and continuous decline that perpetuate a countrys declining economy. The components identified by Porter (1990) are to some extent similar to the host-country characteristics that Dunning (1988) ou tlined in his OLI paradigm. 2.4 Determinants of FDIs Empirical Survey There has been an extensive body of empirical studies trying to explain why some countries were more successful than others in attracting FDI (Moosa Cardak 2003). This plethora of empirical studies have tested and explored the effect of a range of macroeconomic determinants including GDP, GDP growth rate, real GDP per capita, exchange rate policy, openness of the economy, financial stability and physical infrastructure among others. There have also been studies dealing with the impact of socio-political factors such as political stability, education, corruption, political freedom etc., on FDI flows (Dar et al., 2004). The empirical investigation in this paper focuses more on the macroeconomic determinants (pull factors) that will influence the FDI flows in the host country in particular Mauritius by using a time series analysis. Although there have been diverse methodologies used for the determinants of FDIs, it has also been controversial (especially when it comes to the causality effect between FDI and economic growth) so that it is difficult to have a simple model or any strong theoretical foundation to guide an empirical analysis on these issues. Kok, R and Ersoy B A in 2009 have stated that A large number of studies have been conducted to identify the determinants of FDI but no consensus has emerged, in the sense that there is no widely accepted set of explanatory variables that can be regarded as true determinants of FDI. While some parameters are comprehensively discussed and of high relevance, it remains unclear how these interact. However, the results of past studies be it panel data or t ime series analysis for a specific category of countries or regions have been employed as an imperfect but useful guide. Given the vast amount of empirical literature on the determinants of FDI especially during the last few decades, the present section will elaborate on those studies which take on board Mauritius be it as small island economies or as a regional economic community namely SADC, Sub-Saharan African countries. Also those studies will be taken on board where time series analysis have been undertaken for specific countries using almost the same key determinants for FDI as those being proposed in the model of this paper. Wint and Williams (2002), Thomas et al (2005) and Wijeweera and Mounter (2008) have been using economic factors such as the target countrys market size, income level, market growth rate, inflation rates, interest rate and current account positions to explain the determinants of FDI. They found that a positive interest rate differential assist in attracting FDI inflows as MNCs get the incentive to invest in foreign countries with positive interest rate differential barring the fact that there is no major fluctuation in the exchange rate. In the same vein, Cleeve  (2008) using a multivariate regression model for 16 Sub Saharan Countries and trying to capture economic stability through the proxy (nominal exchange rate adjusted deflator), has shown that this variable is statistically effective. Rogoff and Reinhart (2002) and Wint and Williams (2002) show that a stable country attracts more FDI implying that a low inflation environment is desirable to promote capital inflows. Ali and Guo (2005) and Choudhury and Mavrotas (2006) have indicated that there is a strong relationship between the money growth acting as a proxy for financial stability in the host country and its effects in attracting FDI. Asiedu (2006) using a panel data for 22 Sub Saharan African countries has also shown that inflation rate depicts a negatively and statistically significant effect. However, under Mhlanga et al (2010) multivariate regression model for 14 SADC countries (Southern African Development Community), the inflation rate independent variable does not have any effect as it is statistically insignificant. In terms of the importance of capturing human capital development, both Asiedu (2006) and Cleeve (2008) made use of the percentage of adult literacy and secondary school education index respectively. Both indicators have proved to be not only positive (that is higher stock of human capital will increase FDI) but also statistically significant. According to Helleiner (1998), investment incentives by host country such as tax holiday appear to play a limited role to attract the MNCs as those incentives are believed to compensate for other comparative disadvantages. On the contrary, it is generally believed that removing restrictions and providing good operating conditions will positively affect FDI inflows. This has been reinforced through Cleeve (2008) whereby he found that proxies like temporary tax incentives, tax concessions and profit repatriation when used to capture financial and economic  incentives are statistically insignificant. It goes without saying that in order to attract FDI, economic liberalization is important both internally and externally. This has been translated in several empirical studies even for SADC countries and Sub Saharan African countries from Cleeve (2008) and Mhlanga et al (2010). The famous proxy used for openness of the economy, remains the total value of exports plus imports divided by the level of national income (GDP) although Asiedu (2006) uses an openness index from the International Country Risk Guide which also proved to be positive and statistically significant. In 2008, D.Ramjee Singh, Hilton McDavid, A.Birch and Allan Wright used a linear cross-sectional model of 29 small developing countries having a population of less than 5 million to test for the statistical significance of the determinants of FDI. They found that several of the traditional variables such as infrastructure, economic growth and openness to trade do promote the flow of FDI to small developing nation states. The focus of tourism has also been highlighted in the study. Contrary to expectation the role of market size as a determinant was found to be insignificant basically as the sample taken being small economies. With regard to infrastructure per se, Asiedu (2006) and Mhlanga et al (2010) have pointed out that the proxies (number of phone lines per 1,000 inhabitants and number of landline and mobile subscribers per 1,000 inhabitants) did matter for the 22 Sub Saharan African countries and 14 SADC countries respectively. There has been previous research done with regards to the determinants of FDI in  Mauritius (Seetanah B and Rojid S; 2011) applying a reduced-form specification for a demand for inward direct investment function using dynamic framework and a differenced vector autoregressive model using data from 1990 to 2007. The variables used were size of the country, wage rate, trade/GDP, the secondary education enrolment rate and tax rate. The findings revealed that the most instrumental factors appear to be trade openness, wages and quality of labour in the country. Size of market is reported to have relatively lesser impact on FDI. The present research would use more independent variables in view of capturing a maximum variation of the model and also using data from year 1976 to 2011 which would enable the capturing of the impact of the global financial crisis of 2007/2008. There were also important policy decisions taken in the period post 2006 and the present model would try to capture the effect of those important policies. New explanatory variables would supplement the existing literature on the determinants of FDI in Mauritius and trying to use those independent variables would capture the maximum variation in the FDI inflows.

Platos Republic Essay -- Philosophy Justice Plato Papers

In reading the Republic, there is no reason to search for arguments which show that Platonic justice ('inner justice' or 'psychic harmony') entails ordinary justice. The relationship between inner justice and ordinary justice is of no importance in Plato's Republic. We note that Plato tries to argue from the very first book that the true source of normativity lies in knowledge attained by philosophical reason. What is crucial, then, is the relationship between inner justice and acts which brings about a just polis. I. The Unimportance of Ordinary Justice The issue of the relationship between inner justice and ordinary justice has been the subject of critical discussion since it was famously raised by David Sachs. (1) In this essay, I shall argue that the relationship between inner (or 'Platonic') justice and ordinary justice (conceived as doing acts which Glaucon, Adeimantus and the rest of the gathering consider to be just) was of no importance in Plato's Republic. (2) What was important, rather, was the relationship between inner justice and acts which bring about a just polis. My claim about the unimportance of ordinary justice in relation to inner justice is pre-empted to some degree by Gregory Vlastos and Julia Annas. Vlastos distinguished two senses of ordinary justice:(3) (a) the degenerate morality of those who see it as a path to gratification, and (b) the common morality of those who respect virtue and have a firm disposition to act justly ('justice' as Cephalus possessed, for example). Vlastos rejected any connection between inner justice and ordinary justice in the sense of (a), but assumed that inner justice entailed ordinary justice in the sense of (b) and argued for the connection. However, at least the... ...eligion, New York, 1971. (2)I have used the Jowett translation. (3) Gregory Vlastos, Platonic Studies, Chapter 5: "Justice and Happiness in the Republic", Princeton, 1981 (2nd edition), esp. pp. 135-136. (4)Julia Annas, An Introduction to Plato's Republic, Oxford, 1981, see esp. Chapter 6. (5) There are three different ways of dividing the soul in the Republic: i) the division into reasonable, feeling and appetitive parts; ii) the simile of the line which groups its cognitive capacities into understanding and reasoning on the one hand, and belief and imagination on the other; iii) the division in Book X between the knowing part and the perceptive part. The divisions of the line correspond to the divisions in Book X. In Book III, the feelings and appetites are contrasted with reason, so they naturally rely on perception and imagination and not on knowledge.

Feedback Loops to Enhance Software Capability Essay

Feedback loops are a part of the systems we examine in systems thinking. Our first text book Thinking in Systems tells us we can see the existence of a feedback loop when â€Å"the consistent behavior pattern over a long period of time† is observed. My own interpretation is that feedback loops provide information in real time (or something close to real time) to provide the opportunity to make adjustments, pushing toward improvement. Even more simply stated action= information=reaction. Systems thinking is a methodology for us to analyze and predict behavior by developing an in-depth understanding of the underlying components in the system. The majority of real world problems are complex, and due to this complexity the systems models for these problems will be complex as well. It will be impossible to formulate solutions to complex issues without understanding the feedback loops that influence the systems we are studying. For example, the Internet is an information system with feedback loops. I began to notice feedback loops at work on the internet this week while I was on my Facebook page. Earlier in the day I had been looking at Hotel options in Las Vegas as I will be travelling to Nevada for a trade show in April. One of the hotels I looked at via their website was the Golden Nugget on Fremont Street. A few minutes later when I visited my Facebook page, one of the ads on the side of my page was for the Golden Nugget hotel in Las Vegas. Obviously there is some correlation between the ads on your Facebook page and websites you have visited, I just had never noticed it before. This has to be based on a feedback loop where Facebook is receiving information as to your browsing habits and then customizing advertising based on these habits. If we take this a step further this could also be used as a predictive tool as well. If you think you might like the Golden Nugget, you’ll really love the Mirage. That sort of suggestive selling could be a major revenue generator for Facebook assuming they receive a fee when a consumer purchases based upon their ads. I’d have to say this is a reinforcing feedback loop. The more Facebook knows about you the more it can customize your ads and this will continue to build upon itself with ni limitation other than your own habits. Feedback loops are also being used to enhance software capability. Patikirikorala stated â€Å"The feedback control loop has been one of the key concepts used in building self-adaptive software systems to manage their performance among other quality aspects† (2678). All of us who use and depend on software on a daily basis know that it is unpredictable. It can also at times be unstable, sometimes due to user error and other times due to real product deficiencies. The concept with using feedback loops is to help the software be able to fine tune itself in order to help create better performance and also reduce on going administrative costs. It appears one of the major stumbling blocks with this approach at the moment is that software systems are complex and their problems are not easily reproduced through modeling and systems thinking. Patikirikorala explores this issue when he says â€Å"For instance, an e-commerce system may face sudden intensive workloads when promotional offers are run or when referenced by a high-traffic site (the so-called ‘slash-dot’ effect). The workloads may also vary dramatically depending on the time of day (e.g., stock market applications) or the time of year (e.g., tax office sites). Third, if the application evolves due to new feature additions, bug fixes or system configuration changes, the constructed model has to be changed as well for accurate representation. The resultant behavior of the software application therefore depends on a combination of the operating states or conditions of the underlying software layers, the current environmental workloads, and the current configuration of the application architecture. Depending on what combination of the above factors occurs, the behavior of the software application can be characterized by a number of distinct operating regions. However, the complexity of interactions between these factors means that creating a single model of the system is very difficult if not virtually impossible.† (2679). One may only need to examine the stated issues above however to see the potential benefits by software that can self-regulate through a feedback loop. For instance, what if the system software used for on-line trading of stocks could execute a scenario during peak hours to allow the maximum number of users higher throughput, in order to execute their trades quickly and accurately without a slowdown in performance? This must have been the effect Windows was looking for when it enabled the real time reporting of bugs and crashes into its operating systems. The next logical evolution will be when the software itself tracks these issues and makes the adjustments without user intervention or reporting. This methodology need not be limited to software either, the race appears to be on from network hardware providers such as Cisco and Enterasys to provide network infrastructure that is self-healing, self-configuring, and self-adapting. Networks that can distinguish between different types of threats, discriminate between devices attempting to connect and self-install patches or security measures are the next generation of hardware. This is also all accomplished through the use of feedback loops. One thing is certain, without the feedback loop, and our ability to understand them. Our ability to formulate solutions via the use of Systems Thinking is severely limted. References: Patikirikorala, T., Colman, A., Han, J., & Wang, L. (2012). An evaluation of multi-model self-managing control schemes for adaptive performance management of software systems. Journal Of Systems & Software, 85(12), 2678-2696. doi:10.1016/j.jss.2012.05.077 Boehmer, W. (2012). Toward a target and coupling function of three different Information Security Management Systems. Concurrency & Computation: Practice & Experience, 24(15), 1708-1725. doi:10.1002/cpe.1873 Meadows, Donella H., (2008), Thinking in Systems. White River Junction, Vermont: Chelsea Green Publishing

Essay on The Metamorphosis Use Of Comedy And Irony

To what extent did Kafka use comedy/irony to develop his tragic, cynical view of society and family?Gregor Samsa, a young traveling salesman who lives with and financially supports his parents and younger sister, Grete, wakes up one morning to find quot;himself changed in his bed into a monstrous verminquot; or insect. At first, to my surprise, he is preoccupied with practical, everyday concerns: How to get out of bed and walk with his numerous legs? Can he still make it to the office on time? Most persons would be devastated to find themselves in such a position as Gregor, but he did not seem to care much about himself, but only about his obligations, instead of panicking, he starts cursing his job : quot;If I did not hold back for my†¦show more content†¦But it is not the metamorphosis itself that is relevant, it is the reaction of the world around it. Gregor’s family might not change overnight or change their behavior towards Gregor and his new form but definitely as time goes by, they slowly become strangers to him. quot;at that moment a lightly flung object hit the floor right near him and rolled in front of him. It was an apple; a second one came flying right after it; Gregor stopped dead with fear; further running was useless, for his father was determined to bombard him.quot;.Now in this scene, Gregor scurries out into the living room and his father starts throwing apples at him to chase him away. This is all because Gregor’s quot;breakoutquot; from his room made his mother faint. So a giant beetle is seeking refuge on his little legs from his own father who is bombarding him with fruit. This must be the most tragic part of the book.Desperation must have taken Gregor’s father, for what father would bombard his own son? This is the moment when the family starts to rebel against Gregor.Show MoreRelatedEssay about The Metamorphosis: Use of Comedy and Irony1019 Words   |  5 PagescenterbTo what extent did Kafka use comedy/irony to develop his tragic, cynical view of society and family?/b/centerbrbrGregor Samsa, a young traveling salesman who lives with and financially supports his parents and younger sister, Grete, wakes up one morning to find himself changed in his bed into a monstrous vermin or insect. At first, to my surprise, he is preoccupied with practical, everyday concerns: How to get out of bed and walk with his numerous legs? Can he still make it toRead MoreThe Metemorphosis Essay1402 Words   |  6 PagesThe Metamorphosis The Metamorphosis is a novel written by Kafka Franz and published in 1915. The story is about a travelling sales man by the name Samsa Gregor who wakes up to find himself transformed into an insect. The main characters include Gregor Samsa, Grete Samsa, Mr. Samsa, Mrs. Samsa and Samsa. The theme of change is conspicuous on the novel when Gregor Samsa wakes up to find himself transformed into an insect. The theme of economic effects on human relationships is also evident when weRead MoreRole of Humour in Franz Kafka ´s The Metamorphosis, The Trail, and Ameria2643 Words   |  11 PagesEssay Role of Humour in Franz Kafka’s ‘The Metamorphosis’, ‘ The Trial’ and ‘Amerika’ â€Å"Humour is the tendency of particular cognitive experiences to provoke laughter and provide amusement.† The term Humour has been derived from the Greek language, which teaches that humour is the balance of fluids in the human body. Humour is savoured by different taste-buds like: Anecdotal, Blue, Dark/Gallows/Morbid, Epigrammatic, Hyperbolic, Ironic, Satirical, Satirical, Situational and Slapstick. Franz KafkaRead MoreComedy and Tragedy in Kafkas The Metamorphosis2608 Words   |  11 Pagesc The subtle yet powerful combination of comedy and tragedy in Franz Kafka’s The Metamorphosis was not an accident. Kafka combined these genres in order to convey the mixture of emotions that accurately mirrors the cruelty of life. The main character, Gregor Samsa, is used to illustrate the betrayal that can exist in a family unit as well as a place of employment. Together, Kafka is making a strong commentary on life in order to express his own feelings of desolation and cynicism regarding societyRead MoreAbsurdity Between Kafka and Camus4307 Words   |  18 PagesThis paper seeks to compare and contrast the philosophical views of two great philosophers, namely Albert Camus and Franz Kafka. The works involved in this argument are Kafkas The Metamorphosis and Camus The Outsider. The chief concern of both writers is to find a kind of solution to the predicament of modern man and his conflict with machines and scientific theories. Death, freedom, truth and identity are themes to be studies here in the sense of absurdity.    Kafka was born in Prague in 1883.Read MoreEssay on Snow White2913 Words   |  12 Pagesgratification. However, is there more to this story in terms of emotion and moral conflicts than Walt Disney was prepared to admit? Previous to this time ?Cartoon characters? were given simple slapstick roles play involving gag after gag to generate comedy and entertainment. Disney broke the boundaries; first by creating a character that people cared about, the world famous Mickey Mouse. But early on in his career he saw the greater potential of animated characters, and so Snow White was born. It wasRead MoreWilliam Shakespeare s Tragicomedy The Tempest1935 Words   |  8 PagesLiterary texts rarely stand alone, frequently including elements from other influences. William Shakespeare’s tragicomedy The Tempest (c:1611) is a play that uses intertextuality to enhance ideas about natural order. Banished to an island, Prospero, the rightful Duke of Milan, conjures up a tempest that brings him his usurping brother, Antonio in an attempt to restore his Dukedom. The play’s amalgamation of tragicomedy and the pastoral genre allows Shakespeare to warn his audience about unbalanceRead MoreEssay on A Midsumme r Nights Dream: Critical Analysis3103 Words   |  13 Pagesromantic of Shakespeares comedies. The themes of the play are dreams and reality, love and magic. This extraordinary play is a play-with-in-a-play, which master writers only write successfully. Shakespeare proves here to be a master writer. Critics find it a task to explain the intricateness of the play, audiences find it very pleasing to read and watch. quot;A Midsummer Nights Dreamquot; is a comedy combining elements of love, fairies, magic, and dreams. This play is a comedy about five couples whoRead More A.M.Holmes Music For Torching, Seth MacFarlanes Family Guy, and Tony Kushners Angels in America1948 Words   |  8 Pagesidentities of the past. References to primarily American popular culture and literature create a discourse investigating the merits of our nation’s development. Each text employs comedy at Sigmund Freud’s tendentious level of jest to challenge personal and social reticence without appe aring antagonistic to any specific group. The use of intertexuality condenses the length of the works and lends to the humor of the subject matter by alluding to already familiar people, places, and events in American cultureRead MoreLanguage : Tool Of Empowerment Essay2280 Words   |  10 Pageshumanity. The method of what and how we communicate in writing or speech can have profound impacts on the receiver. At its best, language is not only limited to communicating our deepest emotions but to also convey abstract concepts. Nonetheless, the use of language can contain deeper implications and may often be intentionally or unintentionally ambiguous. Words with positive connotations may conjure up feelings associated with joy, inspiration or even empowerment. On the other hand, words that convey

Capital Punishment Should Be Abolished - 1135 Words

On behalf of the state of California the people have spoken , and your number has been chosen to be next in the execution chamber , so take a shower , eat a good meal , because the grim reaper has your name -unknown. Nobody should ever have to hear these words. Especially coming from their own state the one that is supposed to protect their rights no matter what. Capital punishment should be abolished from the United States. The number one goal of the constitution is to protect the life of an individual and the death penalty passes by this. The death penalty is an easy way out of the crime, it is expensive, philosophers and even psychologists disagree with capital punishment and most important it is the denial of the rights of an individual. Capital punishment is an easy way out because a criminal gets killed yet nothing changes. As mentioned in the article Death Penalty Cons; Logically an entire life in prison is a better punishment than a death penalty. This is true because they suffer more being in prison their whole life, than just a few seconds of pain when being killed. Many criminals prefer death penalty rather than life in prison because it is how they get away from suffering. Most of the time a terrorist s objective is to die and kill, if they know that their punishment is death, they are not going to second guess their crime. Because they would be getting what they want. Crime has not deterred since capital punishment (Fact). Why keep on doingShow MoreRelatedCapital Punishment Should Be Abolished965 Words   |  4 PagesHaesemeyer Advanced Studies English 9 7 April 2017 Capital Punishment Over the centuries, capital punishment has fallen in and out of public support. In several countries, the practice has been overruled by law. In others, it is simply not exercised. More than half of U.S. states still practice capital punishment for capital crimes. Often, innocent people are sentenced to death because of circumstantial evidence. Capital punishment should be abolished in all fifty U.S. states because of the severalRead MoreCapital Punishment Should Not Be Abolished1541 Words   |  7 Pagestime, if a person committed a severe crime, like murder or rape, they were executed to maintain peace in the community and to bring comfort to those who knew the victim. Capital punishment has been used in almost every part of the world, but in the last few decades many countries have abolished it. The issue of capital punishment has been a sensitive topic for nations attempting a careful balancing act between prisoner’s rights and legal defense teams and society’s la ws on cases of extreme gravityRead MoreCapital Punishment Should Not Be Abolished901 Words   |  4 Pagesgovernment (â€Å"Capital Punishment in the United States†). Capital punishment is being debated all over the world whether it is murder or justice for the crime they have committed. Statistics show that murderers often kill again after releasement from prison. The Bureau of Justice gives relevant statistics pertaining to murderers who were released from prison: in 1994 40.7% of murderers were arrested for a new crime within three years of release (United States Department of Justice). Capital punishment shouldRead MoreCapital Punishment Should Be Abolished1115 Words   |  5 Pagesjail time, house arrest, and/or having to pay fines. Crimes that are severe can lead to greater punishment, like spending life in prison. The most severe crimes can lead one to an equally severe punishment known as capital punishment. Capital punishment is the authorization to kill someone fo r the crime he or she has committed. Capital punishment, commonly referred to as the death penalty, should be abolished in all states because it can put innocent lives at risk, it costs millions of dollars each yearRead MoreCapital Punishment Should Not Be Abolished750 Words   |  3 PagesCapital Punishment Should Not be Abolished There are many reasons why the United States of America keeps capital punishment. These reasons include the deterrence theory, the idea of retribution, cost of prisons, and general safety of the public. First of all, I’m sure that you have heard of the deterrence theory. Deterrence is basically the fear of punishment; and even though it doesn’t prevent all crimes, the results are still undeniable. The deterrence theory is when criminals thinkRead MoreCapital Punishment Should be Abolished883 Words   |  4 Pages Capital punishment is the punishment of death for a crime given by the state. It is used for a variety of crimes such as murder, drug trafficking and treason. Many countries also have the death penalty for sexual crimes such as rape, incest and adultery. The lethal injection, the electric chair, hanging and stoning are all methods of execution used throughout the world. Capital punishment has been around since ancient times; it was used in ancient Rome, and one of the most famous people to be crucifiedRead MoreCapital Punishment Should Be Abolished1137 Words   |  5 PagesThe case for capital punishment Topic: why capital punishment should continue General purpose: To argue Specific purpose: my main aim is to convince the audience that capital punishment should be upheld. In other, the advantages of capital punishment outweigh its disadvantages. Introduction Capital punishment is also known as death penalty and it has been in existence since time immemorial. Throughout history, the death penalty has been used to punish a number of crimes that include murderRead MoreCapital Punishment Should Be Abolished1955 Words   |  8 Pagesit has become apparent that capital punishment should be abolished worldwide. Around the world, various countries continue to practice this brash, inhumane punishment. The legal system is intended to regulate citizen’s behaviour which aims to provide a smooth functioning society. When someone is sentenced to death, the legal system loses the â€Å"fair† aspect of the proceedings, as under no circumstances is the death penalty â€Å"fair†. Capital punishment should be abolished because it violates Section 12Read MoreCapital Punishment Should Be Abolished Essay1293 Words   |  6 PagesApproaching the topic of capital punishment is difficult when looking at society as a whole. In the opinion s tated by my class group, capital punishment should be entirely abolished due to the possibility of mistakes while sentencing. This idea relies on the basis that capital punishment has absolutely no purpose or benefit. Members of my group mistakenly used a utilitarianist point of view to argue their case, even though this view can be stretched to fit almost any argument. This paper will exploreRead MoreCapital Punishment Should Be Abolished1439 Words   |  6 Pagesto outlaw capital punishment in America completely. We are meant to be better and bigger than this then why do w still have this barbaric law in practice it is inhumane, morally wrong and expensive. In my paper I will try to cover the taboo topic of capital punishment and why it should be abolished because if we as a society want to grow and advance in a sophisticated society we must abolish the death penalty all across the land. To begin with I must explain what capital punishment really is and

All about Ronald Raegan - 932 Words

The American dream is not that every man must be level with every other man. The American dream is that every man must be free to become whatever God intends he should become.†- Ronald Raegan (Hawkins, 2012). This is just one of the amazing quotes that lead Ronald Raegan to be known as the â€Å"Great Communicator.† Marilyn Brayton stated, â€Å"Ronald Raegan was known as one of the most popular, and best presidents we have ever had in our country!† He was known for being very strong willed, and fought to achieve â€Å"peace through strength† (The White House, â€Å"Ronald Raegan†), and he did just that! Ronald Raegan was born on February 6, 1911 in Tampico, Illinois (The White House, â€Å"Ronald Raegan†). He was the son of Nelle and John Reagan (Baker, 19). He was like any other American boy. He attended high school in Dixon, Illinois (The White House, â€Å"Ronald Raegan†). Once, he graduated high school, he went on to study, econo mics and sociology, at Eureka College (The White House, â€Å"Ronald Raegan†). Besides studying at college, Raegan, was a football player, and loved to be in theatre. This is where his career as an actor began to succeed! In 1937, Raegan took a screen test and it caused him to win a career in Hollywood (The White House, â€Å"Ronald Raegan†). Raegan was in his twenties when he became an actor. Some movies and films he starred in were, Bedtime for Bonzo, Knute Rockne, and Dark Victory. These are just some of the movies he played in. All together Raegan was in 53 different filmsShow MoreRelatedThe Rebirth Of American Conservatism1123 Words   |  5 PagesCommunism. They also felt that Communism was the single greatest threat to national security and personal freedom. â€Å"The West won’t contain Communism. It will transcend Communism.† (D’Souza) this conservative view of Communism was said by President Ronald Raegan in 1981. With the rebirth of the conservative movement came new foreign policy ideas. Throughout the Cold War, conservatives such as William F. Buckley Jr., denounced the foreign policy of the Cold War presidents and that containment was failingRead MoreRonald Reagan And The Struggle For Black Dignity1067 Words   |  5 PagesIntroduction Stephen Vaughn, author of â€Å"Ronald Reagan and the Struggle for Black Dignity in Cinema, 1937-1953,† wrote an informative article about Ronald Reagan as an actor during an important period in time. In this article, written for The Journal of African American History, Vaughn gives a detailed illustration of Ronald Reagan’s involvement in overcoming racial discrimination in the film industry. The author starts with giving background information on the state of racial issues in America inRead MoreWhat I Learned About My Life During The Decade Of The 1980 S1683 Words   |  7 Pagesdifferent background to their early lives. 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This is a metaphor manifestingRead MoreAnalysis Of The Article Mexico 915 Words   |  4 Pages The article Mexico talks about the way Mexicans migrated to the United States through the four waves of immigration. The following article describes about presidential candidate Donald Trump’s proposal for building a wall along US – Mexico border. During the first great wave of immigration which was in 1910, Mexicans crossed US borders in small numbers which was around 1.5 million people. Civil wars in Mexico caused people to migrate. Most of them entered through Texas towns and cities. SomeRead MoreThe Formation Of Americ The American Dream Essay1407 Words   |  6 Pagesfound in many books, presentations, and speeches. Both President Reagan and President Obama used these ideas to invoke strong feelings of patriotism while reaching out to the American people. In 1974 Ronald Reagan gave a speech to welcome back American prisoners from North Vietnam. 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With a distinguished resume, Scalia went on to teach at the University of Chicago. It would only be a matter of time before President Ronald Reagan appointed him to the United States Court of Appeals for the District of Columbia Circuit. Many believed that it was here where it all began for Scalia. He became notorious within the American society for his adherence to judicial restraint and his natural ability for writing keen opinions. What is more, ScaliaRead MoreRonald Reag A Hero2072 Words   |  9 PagesRonald Reagan was our 46th president of the United States and a true hero to many Americans. His strong belief’s helped him become a strong president, who cared for his country and proved it in many ways. For instance, he helped end the cold war and shape the U.S. government. He also helped many immigrants become citizens of the United States. Reagan also became a hero to many citizens by fixing the American economy that wasn’t doing so well after the Great Dep ression. Ronald Reagan is consideredRead MoreCentral Intelligence Agency And The Cold War1821 Words   |  8 Pagesmedical treatment. Iranians were outraged and Carter’s generosity caused the Iran hostage crisis (922). Following this, Ronald Raegan aimed to please Iran and authorized the CIA to secretly arrange the sale of arms to Iran during the Iran-Contra scandal, without Congress’s knowledge, reverting back to bad practiced which had ended the consensus in the first place (934). Raegan supported the CIA very well during this time period as did the Identities Protection Act of 1982 (Rhule, Derek). Raegan’s

Marvel Enterprises Inc. Case free essay sample

Cuneo also wondered if Marvel should venture past is current business operations to invest in content creation, rather than licensing the rights to others to do so. Marvel is currently competing in a red ocean, attempting to exploit existing demand and outperform its rival competitor, DC Comics, vying to obtain a greater market share. In order to do this Marvel should consider creating two divisions of character development. The first will focus solely on maintaining popularity and profitability of well-known characters such as Spiderman, while the second will focus exclusively on developing lesser known characters. This will allow Marvel to uphold the reputations and sales of its most profitable characters, while also bringing its unknown ones to superhero status. It is also recommended that Marvel stays true to its production of only publishing and toys, instead of expanding into other areas of content creation. Marvel’s lack of expertise in other areas may lead to lower quality products, inefficient production, and expensive sunk costs that will be lost regardless of the product’s success. Rather than investing in creating new supply chain operations, it is recommended that Marvel invest in digitalizing the Marvel Universe in accordance with growing consumer technological trends. Why Digital Media? Marvel’s comic books are targeted at male teenagers and young adults between 13 to 23 years old, with an extended readership established within adults in their mid-30s. Its toy division is targeted towards a younger sector, primarily aimed at boys from 4 to 12 years old. Young adults constantly utilize technology and online media tools, and the children are growing up in a day and age where digital technology is an integral aspect of everyday life. In order to continue effectively reaching these consumers, Marvel must take a digital approach in its future. Ever-evolving technologies are increasingly empowering consumers and altering the dynamics of effective advertising and marketing strategies. These changes are redefining how products are sold, created, consumed, and tracked. In order to succeed in this innovative market, Marvel will have to be responsive to these dynamic changes, adjusting its strategies in accordance with technological trends and the impacts they have on consumer behaviours. Today’s consumers seek customization of their digital experiences, combining a variety of media tools to satisfy their preferences. A recent MTV study showed that the average adolescent is a media multi-tasker, constantly accessing a variety of media tools simultaneously, consuming 30 hours of media and entertainment in one day. To maintain Marvel’s leadership in this marketplace, it is essential to digitalize operations and gain a time slot in its consumers’ 30 hour days. By doing so, Marvel will be able to effectively connect with its consumers. Implementation: Digitalizing the Marvel Universe Marvel can digitalize its operations though technological innovation. Its operations will transition from analog to digital distribution platforms through a three phase process: digital formatting, technology integration, and transformation. Media and entertainment has been almost entirely transferred to digitally compatible formats such as MPEG, DVD, and CDs. Offering products in these formats increases channels of accessibility to consumers. Marvel needs to adapt to this trend, and begin selling digitalized versions of its comic books in Portable Document Format (PDF), allowing users to read them on the computer and easily purchase them online. This will save Marvel manufacturing and printing costs, while also offering a sustainable and environmentally-friendly product. In the next step, it is important to enhance the digital formats through technological integration. Following the increasing online shopping trends, Marvel needs to develop its own official online store to sell its products. The website will offer users a variety of updates including new releases, discounts, and comic book signings, as well as forums which will act as an online marketplace for users looking to buy or sell products. In the last stage, transformation, Marvel needs to take this digital transition one step further, creating a virtual-reality, superhero universe as an extension of its website. This online community will include character specific profiles and interactive games, allowing consumers to connect with their favourite superheroes, sharing their emotions and experiences. There will be profiles for the majority of Marvel’s known and unknown characters, including a summary of their background, interests, powers, relationships, and statistics. Users can browse the profiles of their favourite characters, or they could also use the Create Your Own Superhero application and make their own profile. Consumers seek customization, and this application gives them complete design control, allowing the creation of their ideal superhero. Marvel can even host competitions online, in which the winner’s avatar will be featured in a comic book. The games will allow consumers to use their personalized superhero to interact with fellow cyber travelers, express their personality and experience superpowers for themselves. This online community can also act as a form of customer relationship management for Marvel, collecting â€Å"individual purchasing information to improve its ability to understand and respond to customer desires and buying patterns. † Marvel can obtain demographical information from consumers through registration processes, and then begin cool-hunting, following their movement throughout the website to analyze trends and purchasing behaviours of particular market segments. Understanding its consumers enables Marvel to develop targeted campaigns to increase marketing effectiveness and will be especially important when developing Marvel’s lesser known characters in order to raise awareness and create a fan base. Implementation: Developing Lesser Known Characters Marvel’s large content library is home to over 4,700 characters, which means there are plenty of profitable opportunities ahead of them. However, as the majority of them are relatively unknown, Marvel will have to be strategic in the way it launches each one. As was previously stated, Marvel can analyze trends through its online superhero community to determine which characters will be able to most effectively connect with audiences, and prove most profitable. Once it is determined which character to launch, it is recommended that Marvel continue with its long term development strategy of devising a personalized, five-year career plan for its characters, including an outlined storyboard and marketing plan. Throughout these five years, Marvel should take advantage of the popularity of its well known characters by integrating lesser known ones into their comic books and online platforms through guest appearances. If consumers see that these new characters are being associated with some of their favourites, they may be more inclined to purchase these new products. Marvel could even unite several of its most profitable characters with some lesser known ones, into one power team, standing up and fighting together. The use of digital media and the online superhero community provides a wider variety of channels to reach the consumer. When launching a new character, they can have promotional advertisements on the website and other online platforms. Users could even have the opportunity to play the games with that superhero as their avatar. This will allow them to familiarize themselves with the character and its powers allowing them to feel more involved with the superhero’s experience. Various other digital promotions could also be ensued such as product giveaways, signed comic books or movie premier invitations to stimulate interest and awareness of the characters. The Future of Marvel Marvel is a thriving corporation, whose success has been greatly due to its remarkable understanding of its consumers’ preferences. Digitalizing the Marvel Universe will allow an even closer connection with its consumers, creating an intimate bond with them and giving Marvel insight into the popularity of its characters and which lesser known ones to develop. By following the recommended strategies Marvel will be able to extend its reputation of a sustainable, iconic brand that will last for generations to come. Question Analysis: Marvel Enterprises, Inc. ___________________________________ Question 1: In your view, what strategic direction should Marvel Enterprises’ Vice Chairman Peter Cuneo and his colleagues pursue? Why? How? There are two main predicaments that Peter Cuneo and his colleagues are trying to decide upon. First being how to most effectively use its library of characters, and secondly, whether to expand into more capital-intensive activities in the value chain for its entertainment products. Marvel can either continue to focus on a small set of its most popular characters or shift their focus to a larger set of lesser-known characters with the potential to become the next world-wide phenomenon. Continuing to capitalize on the strength of a select few characters is not a sustainable strategy, as there is no way to tell the lengths to which their popularity will persist. Marvel’s vast content library provides it with endless opportunities to develop lesser known characters, but this also runs great risks as these characters are generally unknown. It is recommended to take a cooperative approach, marketing its known characters to a lesser extent, and shifting the excess resources to developing new characters. Many consumers associate big superheroes like Spiderman and X-men with Marvel, and this brand recognition is crucial, but not many of its characters have actually achieved â€Å"superhero† status. By appropriately allocating resources to both sets of characters, Marvel will be able to create new profitable superheroes, improving revenues and brand equity in the long term. Secondly, Marvel must decide whether to expand operations, creating a wider variety of content or remain faithful to their current business model. Marvel currently has the capital required to invest in costly ventures such as making its own movies rather than licensing its rights. Already involved in the scriptwriting process, ensuring the reputation of the character is upheld, Marvel could produce the films themselves, yielding even higher returns. However, the production processes for these activities are quite complicated, and by entering into them without full knowledge or experience, the profitability of these ventures is questionable. The quality of the products may not be on the same level as those created by companies with experience and the very costly production fees will be sunk regardless of whether the products are successful not. Marvel’s limited experience in different sectors proves these new ventures to be very risky. Instead, Marvel should continue to focus on what it is known for, its comic books and toys, and should allocate the excess funds that would have been devoted to these expansions, to the development of its lesser-known characters and digitalizing the Marvel Universe. Question 2: Why was Marvel’s turnaround so successful? Would you characterize that success as a fluke? Or do you view it as sustainable? Why? How? Marvel’s recovery was most certainly not a fluke; in fact, its success was largely due to the sustainable nature of its clever turnaround strategy through monetizing its content library, building long term careers for each character and ensuring quality of licensed products. Marvel’s first key focus was to monetize its content library by licensing characters for use in media products. Over the last decade, the exponential growth of technology has increased channels of information and media distribution, making it essential to utilize more than just one media tool (publishing) to expand Marvel’s influence to consumers. Comic books were aimed at a rather limited market of males between the ages of 13 to 23, and without the use of multiple products, expanding past this traditional market would be quite difficult. However, by licensing character rights through the use of movies, video games, and other consumer products, Marvel will be able to more effectively reach a wider variety of consumers. Having an assortment of goods available in different product categories also reinforces the sales of one another, as there is a high likelihood that if consumers truly enjoy a movie, they will also be interested in the coinciding video games or comic books. The second dimension involved is developing long-term value for each of Marvel’s prominent characters. Marvel focused on building its characters’ future careers rather than focusing on their short-term success. Individual five year plans were devised for each of the main characters to establish direction, credibility, and to ensure sustainable growth. For instance, â€Å"Spiderman’s career over the next five years†¦includes two more movies, DVDs, toys, a video game, a promotion with Burger King, and so on. † The third strategic element was to retain control over the creative process, ensuring that any content featuring Marvel characters would be of high quality and emphasizing consistency between the characters and their stories. Well-known artists and writers were hired to lead Marvel’s creative efforts in their publishing division, as comic books were their initial source of credibility and it was necessary to re-establish that integrity to rejuvenate their arket share. By associating products of high quality, creativity, and originality with their characters, consumers will subsequently attach similar values to the Marvel brand itself, increasing its sustainable competitive edge in the long term. Marvel’s turnaround strategy was successful due to the improved management of assets, focusing on re establishing quality and credibility rather than the former model of rapidly increasing the number of titles published. They shifted their focus to emphasize quality over quantity, and in turn, developed a sustainable business model. There is and will always be a large market for comic books, and by licensing their character rights, they now also have the ability to gain market share in a variety of other product categories as well. Question 3: How important are each of Marvel’s 3 divisions (comic books, toys, licensing) to its past and future performance? Marvel’s publishing business is a key aspect of the company’s performance. Established in the 1930s, Marvel’s sole focus was on publishing comic books, and its great success in this industry has allowed Marvel to gain credibility and integrity as a corporation. Since 1997, the comic book industry has been very stable, with total U. S. retail sales of approximately $300 million per year. Marvel had a 40% market share, 5% higher than its biggest competitor: DC Comics. In recent years the net sales of Marvel’s publishing have been increasing; however, as of 2003, these sales accounted for only 21. 08% of Marvel’s total sales and 14. 54% of its gross profit; making publishing the lowest financial contributor of the three divisions. Nevertheless, it is still crucial to Marvel’s future performance, because what it lacks in financial contributions, it will make up for in its influence on brand equity. Marvel may be yielding greater returns in other divisions, but its publishing sector is essential to sustaining its reputation and loyal consumers, as comic books are what Marvel is known for and what it should stay true to. Marvel’s toy division has been a significant division in the past, and will continue to be in the future. In 2001, 10% of Marvel’s net revenue was due to the line of toys sold in relation to the first Spiderman movie alone. Net sales have been inconsistent over the past few years, but these differences may be due to the timing of movie launches associated with the products or due to tough competition (Hasbro, Mattel, and Bandai). By 2003 the toy division had become Marvel’s second most profitable sector, yielding 24. 5% of total net sales and 14. 91% of gross profits. This division is also very important to future growth and performance, not only financially, but also in terms of drawing in young children as new consumers, introducing them to the realm of superheroes and to the Marvel universe. Marvel’s licensing division has also been very important to its success, licensing its characters to a variety of media outlets including movies, television programs, and video games, and seeking the best licensing partners in all major product categories. â€Å"Product licensing of cartoon and fantasy characters†¦is proving so lucrative that some companies are even designing characters†¦for the express purpose of licensing them. † Marvel didn’t have to go to this extent, but this trend did allow Marvel to successfully monetize its content library. By 2003, Marvel had signed 128 new licensees, guaranteeing income of $348,000 – a 148% since 2000. This sector was also Marvel’s most profitable division, making up 54. 42% of total net sales and 70. 54% of gross profit. Looking to the future, Marvel’s large collection of characters implies that these revenues will continue to grow, as there are many opportunities to license unown characters. Licensing its characters into an assortment of media categories also enables Marvel to expand its product range and influence a wider variety of consumers and improving brand equity. Question 4: To what extent is Marvel’s success due to only one character, Spiderman? How can Marvel develop its lesser known characters? Without a doubt, Spiderman is Marvel’s most popular character, greatly contributing its success. The first Spiderman motion picture was the highest grossing film of 2002, generating revenues of $404 million domestically and $822 million worldwide, and that was just the beginning. The Spiderman character has consistently thrived in every market he has been placed into including video games, movie sequels, collectibles and toys. However, during the 1990s, the company struggled and went bankrupt despite such a successful superhero. Spiderman is a popular and marketable asset, but individually, he was not enough to rescue Marvel from its ominous downfall. The success or failure of a corporation is not solely dependent on a single employee, but rather on a large network of employees working together. Similarly, Spiderman is not solely responsible for Marvel’s success, but rather a well-rounded portfolio of characters building off of one another and working as a team. Marvel prides itself in its extensive content library and the endless possibilities the future holds for its lesser known characters. In order to develop these unknown characters, Marvel must continue with its strategy of formulating a long-term, individualized, career plan for each character it prepares to launch. In addition, Marvel should utilize its well-known characters to promote its lesser known ones, through guest appearances in comic books or television shows, stimulating curiosity and interest. As was previously mentioned, when it comes to launching new characters, emphasizing quality is more effective than quantity. Marvel should only focus on a couple characters at time, until they are successfully integrated into and identified with the Marvel Universe. Marvel can even take this one step further by uniting several of its popular characters with a few lesser known ones in a single comic book or motion picture. The revenue these characters produce individually is astounding, but who knows what they could accomplish together.