Lufthansa airlines bankruptcy to profitable airline

Lufthansa airlines bankruptcy to profitable airline This report will take a closer look at the turnaround of Lufthansa airlines which went from near bankruptcy in 1991 to a now profitable airline. The evolutionary patterns of strategy and structure are identified in this report as well as how strategic leadership and German culture contributed to the turnaround. Furthermore, this paper will analyse the airline industry in terms of Porters five forces and will also take an extensive look at Lufthansas current situation by means of a SWOT and TOWS analysis. Additionally, Lufthansas business-level and corporate-level strategy will be identified and the Star Alliance, the worlds most important airline alliance, will be discussed in detail. 2.0   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Company Background The Lufthansa Aviation Group is considered to be one of the worlds leading air transport corporations. It includes a number of independent group and affiliated companies with business segments in passenger airlines, logistics, aircraft maintenance, catering, tourism and IT services. Lufthansas headquarter is located in Cologne, Germany and its operational centre for passenger and cargo services is situated in Frankfurt (Key data on environmental care and sustainability at Lufthansa 2002/2003). Lufthansa is 78 years old and has currently about 93,000 employees worldwide and in 2003-reported revenue of about 16 billion Euros (Lufthansa Key Figures 2003- see also Appendix I). In terms of traffic performance, Lufthansa is in third position in worldwide passenger transport. For many years the company has also been the market leader in international cargo traffic. In 2002, Lufthansas 368 aircrafts operated on routes to 327 destinations, carrying 50.9 million passengers and 1.63 million tons of airfreight. Lufthansa was also one of the founding members of the Star Alliance in 1997, when 16 partners joined into the worlds largest airline alliance (Key data on environmental care and sustainability at Lufthansa 2002/2003). 3.0 The Industry Background The organization also has to deal with cyclical risks. General economic fluctuations as well as geopolitical developments can have a large impact on the performance of the Lufthansa Group. As good examples serve the events of September 11, the Iraq conflict and the outbreak of SARS in Asia along with a stagnating global economy which seriously influenced the business activity of the entire airline industry in a negative way (Heerkens 2003). Lufthansa is also confronted with some capital market risks as its international business activities expose it to exchange rate and interest rate fluctuations in the international money, capital and also the foreign exchange markets (Zea 2003). A substantial threat is the price of fuel since fuel consumption remains one of the main cost items for the whole airline industry. In 2003, it contributed 7.6% to Lufthansas total operating expenses. Fluctuations in fuel prices can have a significant affect on the organizations operating result (Lufthansa Annual Report 2003). Furthermore there is the threat of higher costs of insuring Lufthansas fleet. Insurance costs increased dramatically after the events of September 11 and since then stayed at a very high level. The reason for that are the massive additional premiums that are being charged for insuring against war and similar events. In case of more wars and terrorist attacks the premiums are likely to increase even further (Zea 2003). There are also a number of infrastructure risks that Lufthansa will have to deal with. There are plans for an extension of the runway system at Frankfurt Airport, which is a major hub for Lufthansas operations, and is extremely important for the long-term competitiveness of the German airline. The extension project is also crucial for securing Frankfurt Airports future as an international air traffic hub, which also applies to the building of the maintenance hangar for the new Airbus A380 super jumbo that will be used from 2007 onwards. Nonetheless, a range of operational restrictions on extending the airport has recently been debated which would hinder its efficient use. In case a solution cant be found, Lufthansa would have relocate part of their business to alternative hubs. Additionally, bottlenecks in many European air traffic control systems cause many flight delays. The infrastructural limitations are a huge burden on the profitability of all European air carriers. On top of t hat, they are inhibiting the industry to keep up with the growing demand for air transport services (Lufthansa Annual Report 2003). There are also a few risks relating to the development of alliances. One of the foundations for Lufthansas commercial success was its integration into the Star Alliance, the worlds leading airline partnership system. Currently, many of the airlines worldwide are in a loss-making situation which, in the case of a few of Lufthansas partners like United Airlines and Air Canada, reached proportions that threatened their existence and also affects Lufthansa negatively. In regards to the Star Alliance, there are also challenges of coordinating and incorporating strategic activities like the establishment of a common global brand, a shared technology platform as well as joint training and personnel development (Lufthansa Annual Report 2003). Being part of the Star Alliance also poses the threat that Lufthansa might lose its identity. It is vital for them to preserve the Lufthansa brand (Bruch Ghoshal 2002). Labour unions are an additional threat; especially in Germany they have a lot of power. Labour unions can initiate strikes, which in the past have already led to delays of departures and substantial costs to Lufthansa (Steinborn 2003).   4.0 The Company Objectives Structural analysis of an industry is a useful way of determining a companys long-term profitability. Comprehending the dynamics of the competitive forces in an industry can give an insight whether an industry is attractive and whether there are any chances for returns on capital. Michael Porter, a professor at Harvard Business School, created a framework for understanding the structure of an industry. According to Porter, the five competitive forces that can have an impact on an industry are threat of new entrants, bargaining power of suppliers, bargaining powers of buyers, competitive rivalry, as well as the threat of substitutes (Analysis of industries 2003). 4.1   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Threat of new entrants The threat of new entrants offers the possibility that new firms are going to enter the industry, which will consequently lead to a reduction of industry returns by generally passing more value to consumers in terms of lower prices and also increasing the cost of competition. Factors like economies of scale, capital requirements, product differentiation, access to distribution channels, switching costs as well as brand value determine the threat of entry (Analysis of industries 2003). From my point of view it currently seems very difficult to enter the airline industry as this area of business as well as the world economy is facing a period of recession. Due to large product differentiation the entry barriers are fairly high. There is a range of flag carriers, charter airlines as well as a number of low-fare airlines in the industry. All these different types of airlines offer an extensive range of products that seem to satisfy most customers needs. Additionally, entering the aviation industry requires very high capital investments because aircrafts, technical support and IT services need to be purchased or leased. This industry is also very labour and fuel intensive which requires a lot of funds. Companies with an interest in entering the market also require access to distribution channels. This means that it is necessary to gain trust within the industry so as to get access to take-off and landing spots. This can be quite challenging as national policies still p lay a major role in the aviation industry. Furthermore it is a requirement to obtain permission from governments to enter airspace. Moreover once the market is entered, it is very difficult to exit which raises switching costs to a high level. Throughout the last decade the market opened due to the deregulation policy, which provided low budget airlines with an opportunity to enter the industry. The first entrants like Ryanair and Easyjet utilized this opportunity and developed strong brand names due to their first-mover advantage. Airlines that recently entered the market that have a similar price and cost structure generally find it more difficult to generate the traffic that is required to fill the seats in their aircrafts (Jacob Jakesova 2003). All in all it can be said that the threat of new entrants is not that high in the airline industry in the current business environment. 4.2   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Bargaining power of suppliers Factors that are connected with the bargaining power of suppliers include the threat of forward integration as well as the concentration of suppliers in the industry. Supplier power decreases the ability for competitors in the industry to earn higher profits (Wheelen Hunger 2000, p. 64). The main suppliers within the airline industry are the manufacturers of aircrafts like Airbus and Boeing, fuel suppliers such as Shell, British Petroleum and Chevron Texaco. Furthermore there are technical support and IT services as well as the catering services. Suppliers are very concentrated in the airline industry as Boeing and Airbus supply most commercial fixed-wing aircrafts. The concentration of suppliers makes it difficult for the airlines to exercise leverage over the two manufacturers and negotiate lower prices or play one supplier against the other. Moreover, at the current stage, aircrafts for long distance travel cannot be substituted by any other product, which strengthens the bargaining power of the suppliers even more. Fuel providers have an excellent bargaining position as they can increase fuel prices without regarding the airlines as an important customer group. Forward integration, which is the expansion of a business products or services to related areas in orde r to directly satisfy the customer needs, is fairly low. The reason for this is that it can be assumed that neither aircraft manufactures, fuel providers nor technical support companies will purchase an airline and staff it with flight attendants, commercial pilots, a maintenance crew and operate flights across the world (Jacob Jaksova 2003). Nevertheless, the strong position fuel suppliers as well as the relatively strong position of manufacturers of aircrafts need to be taken into account when operating an airline. 4.3   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Bargaining power of buyers Buyers can have significant power, as they are able to push down prices, and negotiate for better quality and service. Buyer power is determined by relative volume of purchase, switching cost, standardization of the product, brand identity, elasticity of demand as well as quality of service (Del Vecchio 2000). Since customers are not very concentrated and generally dont purchase plane tickets in large volumes they do not have a strong bargaining position. A single purchase of an airline ticket does not represent a significant fraction of the amount offered. Switching costs are quite low as consumers have a range of choices when selecting an airline. Due to the Internet, information about prices is also less fragmented and much easier to compare. Quite frequently, a customer can find price differences for the same flight and one seat is generally not any better, since everyone arrives at the destination at the same time. Considering the worldwide recession as well as the psychological effects of September 11, airline companies are under substantial pressure as customers switch to alternative transportation like trains. Vacation travelers also tend to shop around for the best price. Traveling by plane is quite expensive and can make up the largest part of the expense of a family vacation. For that reason, demand is quite elastic for some buyers. As soon as the price drops, the demand increases. However, airlines can move their prices in tandem with other airlines, which forces customers to purchase tickets for the market price until a price war starts (Analysis of Industries 2003). Nevertheless, all in all it can be said that the bargaining power of buyers is relatively low. 4.4   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Threat of substitute products The airline industry is threatened by a number of substitutes. This threat is quite substantial within Europe, where Lufthansas main customer base is located. Many European countries have an excellent railway system with high-speed trains like the ICE in Germany and the TGV in France. These trains can travel up to 300km/h fast and can cover large distances within the countries in just a few hours. Trains can be considered the largest threat as they offer a variety of advantages over flying. From my point of view it seems that flying is much faster, but on a domestic flight in a European country there is not much of a difference in comparison to trains. The reason for that is that it always takes a while to get to the airport, as they are mostly located further away from cities; check-in and security checks usually require being there at least an hour before take-off. After the plane has landed, it usually takes at least another 30 minutes to get out of the plane, claim the baggage an d organise transportation to leave the airport. Railway stations on the other hand can be much more easily accessed than airports, there is no check-in and security check required and the destination railway station is generally in a very central location close to hotels or offices that need to be visited on a business trip. Furthermore, trains offer generally great scenery while travelling and also offer more legroom. Most importantly the prices are generally lower than those of prestigious airlines like Lufthansa. Alternatively, travellers could use their own car, which would be more time consuming, but would have the advantage of increased flexibility and having transportation at the destination location and not having to use public transportation or taxis. Depending on the distance, this substitute can be either more costly or less expensive (Jacob Jaksova 2003). Moreover, short international trips to major European capitals are often done by bus and also by ferry if it is a tr ip to the United Kingdom. From my experience this is the most inexpensive way of travelling throughout Europe. However, there is no real substitute to flying if the desired destination is overseas. The only alternative to planes would be ships and unless the customer is looking for a relaxing trip on the oceans, it will just take too long to reach the destination. Recently there is also a tendency of larger companies towards purchasing corporate jets rather than flying first class. According to Costa et al. (2002) corporate jets might reduce first class traveller by 10% by 2005. 4.5   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Competitive rivalry Highly competitive industries are generally less profitable as the cost of competition is high or customers are receiving the benefits of lower prices. Competitive rivalry is affected by industry growth, brand identity, fixed costs, as well as barriers to exit (Wheelen Hunger 2000, p. 63). It can be said that the airline industry is highly competitive and that industry growth is fairly moderate with airlines struggling in taking away market share from each other. The barriers to exit are considered to be very high. Planes that are grounded dont earn any returns and it is quite complicated to dispose of these assets. Due to bankruptcy laws, airlines that are in financial stress can often remain competitors for a long time (Del Vecchio 2000). In Lufthansas home market, the European airline industry has seen some recent changes with the development of low budget airlines that compete with the more mature airlines. Additionally, recent airline crises like September 11 put even more pressure on all competing airlines. This leads to a process of consolidation and the creation of strategic alliances. Airlines within one alliance dont tend to compete directly with each other anymore, which lead to a slight decrease of the pressure (Jacob Jakesova 2003). By utilizing a range of strategies a company can have an effect on the five forces of competition and thus reform the attractiveness of an industry. Historically, various strategies shifted the principles of competition and future events like war or new inventions are likely to reshape the airline industry again. Lufthansas ability to be very cost effective is also of advantage. As part of its strategic change, Lufthansa implemented Program 15, a strategic cost management program. The goals of this program included an improvement of the competitive position through a reduction in cost, internationalisation of cost-structure and making staff conscious of reducing costs in their daily work. This cost management contributed substantially to Lufthansa making profits again in 1999 (Bruch Goshal 2000). Generally it can be said that Lufthansas change management during its crisis was outstanding. Its management was able to identify the signals for the potential problems, showed great strategic leadership through CEO Jà ¼rgen Weber and transformed the organization into a profitable company. This experience in strategic change management is very valuable and will surely help the organization with any challenges in the future (Bruch Sattelberger 2001b). Furthermore, Lufthansas management is very conscious of the need for innovation and customer service. They developed the brand ambassador concept where employees with use of personality and dedication create brand loyalty through day-to-day interactions with the customer (Rubens 2004). They recently also introduced a range of innovations and quality improvements at their passenger airlines and some innovations will be implemented in the near future. A special focus is on the business class on long-haul routes as this segment is the most profitable one. The key feature of Lufthansas new business class is a technically sophisticated seat that converts into a flat bed, which is 2 meters long, the longest bed in this class (Manuelli 2003). Lufthansa is also the first airline in the world that offers broadband Internet access on board its planes (Anonymous 2003). On the ground, they are also improving procedures for their status customers with Lufthansas Priority Service by relying on the Internet, mobile phones and check-in terminals simplify reservations and ticket sales as well as to reduce check-in times. A good example of Lufthansas innovative strength is their new terminal at Munich Airport, which was build to optimise operational procedures. In accordance with the best international standards they reduced the minimum connecting time to 30 minutes (Lufthansa Annual Report 2003). An additional strength of Lufthansa is that it has a policy of operating a young and modern fleet. They recently started a fleet renewal program in 2003 and by 2005 they will replace older aircrafts with ten new Airbus A340-600 jets, as well as ten new Airbus A330-300s. By 2007 the new Airbus A380 super jumbo will go into service that can carry 40% more passengers than the currently largest aircraft. The average age of Lufthansas fleet is just under 9 years, which puts them into a good position in comparison to airline world average of almost 15 years (Lufthansa Annual Report 2003). Another strength, which gives Lufthansa a comparative advantage, is the use of a premium executive jet service on North Atlantic routes like Dà ¼sseldorf-Newark and Munich-Newark. This involves flights in Boeing and Airbus aircrafts that were remodelled so they fit 48 business class seats only and no economy class. Lufthansa introduced this service, because they identified that these routes were in high demand for business class travellers (Ghazvinian Fragala 2002). Lufthansa also offers a very good website that has a lot of features the customers can utilize. Online bookings have more than doubled in 2003. Lufthansa are also constantly expanding their destinations, which can be reached with etix, the companys electronic tickets that offer convenient paperless travel. The number of passengers that use etix is gradually increasing as it can be used to fly to 70 per cent of Lufthansa destinations (Lufthansa Annual Report 2003). Lufthansas Miles More customer loyalty program is also a great tool to encourage customers to fly Lufthansa again. The program has grown in popularity since it was introduced ten years ago and developed into the leading frequent flyer program in Europe (Miles More). Furthermore, Lufthansa is one of the founding members of the Star Alliance, the worlds leading airline alliance. The alliance was voted Alliance of the Year in 2003 on three different occasions (Lufthansa Annual Report 2003). The Lufthansa group consists of seven independent subsidiaries. Lufthansa centrally coordinates their strategy development process. A principal element of the Lufthansa group is clear customer-supplier-relationships between the seven companies. However, the relationships between the individual companies are a weakness, as they dont function as planned. Lufthansa has not reached the required relationships for a market-based internal coordination. So far, the internal customers dont act as normal customers yet since the demand conditions, which they would never demand with other external business partners (Bruch Ghoshal 2000). Another weakness is that the openness for change has almost vanished since Lufthansas amazing turnaround was achieved. During the turnaround, changes were implemented very quickly, but today it takes a very long time for small innovations to take place. Lufthansa also admits not to be perfect in the areas of punctuality, luggage safety, waiting periods, technical reliability and telephone availability, but is in the process of improving this situation (Bruch Ghoshal 2000). Another weakness could be that Lufthansa does not do anything about their low-budget competitors in the European market. Lufthansas management claims that they would not start a low-fare airline under its name, as it would cannibalize its own traffic and damage its brands (Anonymous 2002). 5.0 Economic strategy of Lufthansa According to Hitt (2003, p. 122), a Economic strategy is an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets. The literature suggests that there are a number of different business-level strategies. However, I believe that in the case of Lufthansa an integrated cost leadership/differentiation strategy is used. The reason for this is that Lufthansa operates globally and therefore it is vital for them to implement cost leadership strategies as well as differentiation strategies in order to develop competitive advantages. Lufthansas Program 15 serves as a good example of a cost leadership strategy. After Lufthansa had undergone privatization they implemented this extensive strategic costs management program with the goal of reducing overall unit cost by 20% within five years (Bruch Sattelberger 2001a). In terms of a differentiation strategy, Lufthansa constantly tries to come up with a range of innovative ideas to stay ahead of the competition. A list of these ideas could be seen in the strengths section of my SWOT analysis of Lufthansa. It can be concluded that Lufthansa has made the right decision to implement an integrated cost leadership/differentiation strategy, since the literature also suggests that there is a relationship between the successful use of this strategy and above-average returns (Hitt 2003, p. 135). 5.1   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Corporate-level strategy of Lufthansa According to Hitt, a corporate level strategy involves specific actions by a company to gain a competitive advantage by having a group of different businesses competing in several industries (2003, p. 183). In the case of Lufthansa, the organisation consists of seven economically independent subsidiaries that include LH Passenger Service, LH Cargo AG, LH Skychef, LH Ground Services, LH Technical Services, Thomas Cook Travel Agency and LH IT services. The individual Lufthansa companies are quite successful. LH Technical services, LH Skychef and LH Ground Services are number one in their market (Bruch Ghoshal 2000). Product diversification, a primary corporate-level strategy deals with the scope of the industries and markets in which the company competes in addition to how managers buy, establish and sell different businesses to equal skills and strengths. In regards to Lufthansa, the organisation uses a related diversification corporate-level strategy which means that Lufthansa generates more than 30% of its sales revenue outside a dominated business and its businesses are related to each other since Lufthansa centrally coordinates their strategy development process. Lufthansas motives for such a corporate level strategy are likely to be issues such as taking advantage of economies of scope, sharing activities, transfer of core competencies, and an increase in market power as well as blocking competitors through multipoint competition (Hitt 2003, p. 187). 5.2   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Strategic Alliances While concentrating on internal costs and structural redevelopment, Lufthansa also worked on its external relationships by implementing the strategy: growth through partnerships (Bruch Sattelberger 2001b). While in other industries globalization triggered a wave of mergers of companies that operate internationally; airlines had to look for alternatives because national ownership regulations do not allow cross-border mergers. No airline worldwide has the capacity infrastructure to offer a suitable network by itself. Only through cooperating and alliances can the industry cater for the mobility requirements of the world economy. Therefore, founding the Star Alliance was a logical consequence and Lufthansa was one of the key-founding members of the first airline network in the world (Global Network Five years of Star Alliance). The purpose of the Star Alliance is to realize higher revenues and decrease costs by exploiting synergy effects. The synergies range from shared use of ground facilities like check-in-counters, a city office in Paris and also airport terminals. At the airports in Frankfurt, Copenhagen, Shanghai and Beijing the Star Alliance has its own check-in area with staff member of partner airlines. In addition the first Star Alliance Lounge went into service 2001 at Zà ¼rich airport. Other advantages include common frequent flyer programs, joint travel agency contracts collective market research and joint purchasing of materials and equipment (Economic effects for the airlines). Alliance members can also use code sharing a system by which two or more airlines agree to use the same flight number for a flight in order to attract more business by means of extending their networks through partner airlines (Collis 1998). Besides cost-saving synergies, the combined networks of Star Alliance members also offer many customer benefits. In comparison with other industry alliances, the Star Alliance is the recognized market leader (see Appendix 2). For 82 % of all offered flight connections, the Star Alliance is the fastest network. Every four seconds an aircraft of the Star Alliance starts or lands somewhere in the world and it possible to fly once round the world in 36 hours with Star Alliance airlines. Other fundamentals of its brand value include the presence of its members in important home markets and large international hubs, a high degree of customer recognition, excellent service and good cooperation between the frequent-flyer programs of the individual airlines. Furthermore each airline has its individual strengths with a strong market position in its home bases and regional hubs like Lufthansa in Germany. Due to the good cooperation, a whole network of these hubs was established and regional str engths complement each other (see Appendix 3). Additionally, most members also have regional alliances with smaller airlines, which improve the Star Alliance network even further (Global Network Five years of Star Alliance). Research has also shown that alliances result in lower ticket prices and more flight connections. It is suggested that there is a price advantage of an average 6% in comparison with conventional tariffs. In terms of the Star Alliance this leads to estimated passenger savings of between 50 and 82 million dollars per year. Additionally due to the sharing of terminals service counters of the airlines are more easily seen and found and walking distances are decreased. Having counters in the same area at airports also creates a single contact point and improves changes and baggage loading. Staff members of partner airlines can also help and advise customers with enquiries on behalf of the entire alliance. For the alliance to work properly certain level of quality needs to be ensured. This is achieved through frequent mutual quality checks. Jointly agreed quality standards in the areas of security, services and environmental protection are checked on a regular basis (Global Network Five years of Star Alliance). 5.3 Strategic Leadership and German Culture Strategic leadership, which is the ability to anticipate, envision, maintain flexibility and empower others to create strategic change as necessary (Hitt 2003, p. 386) was extremely important in Lufthansas turnaround. The main responsibility for effective strategic leadership generally rests at the top, especially with the CEO, but also with other recognized strategic leaders like members of the board of directors and the top management team. In the case of Lufthansa, the formulation and implementation of strategies was also in the hands of the top-level management, in particular Dr. Jà ¼rgen Weber, who was Lufthansas CEO at the time. In 1992 Jà ¼rgen Weber realized the full extent of Lufthansas problems and called for a crisis management meeting with 20 carefully selected senior managers. The outcome of this meeting was Program 93, 131 key actions aimed at drastically cutting about 8,000 jobs, lowering non-personnel costs, reducing the aircraft fleet as well as increasing revenues by DM 700 million to reduce the losses of DM 1.3 billion. The Executive Board then appointed a number of different teams that had the task to achieve the implementation of these 131 projects. Line management was responsible for the implementation of the staff cuts. It was seen as important for the success of Program 93 that line managers took that responsibility to realize the unavoidable cuts, on the one hand, but also to motivate the remaining employees, on the other hand. Jà ¼rgen Weber also created the OPS team (Operations Team) as a forceful engine in the process of implementing the 131 actions. They constantly monitored, created activities, advised and supported the line managers who were ultimately responsible for the implementation process. Weber showed his total support for the OPS team and personally supported them in many ways. He also implemented visible actions like a 10% reduction of the salaries of all Executive board members (Bruch Ghoshal 2000). Furthermore, to convey and spread these actions, Lufthansa implemented Town Meetings, which were initially an idea by General Electric. A typical agenda of a Town Meeting would mainly involve a talk with the particular Lufthansa units management about problems a

Report on wide screen displays

A widescreen image is a movie, computing machine, or telecasting image with a width-to-height facet ratio greater than the standard 1.37:1 Academy facet ratio provided by 35mm movie. Screen Aspect Ratio is fundamentally a step of the horizontal length of a telecasting ( or movie ) screen, in relation to its perpendicular tallness. In other words, a traditional telecasting has a Screen Aspect Ratio of 4Ãâ€"3. This means that a traditional telecasting has a screen that is four units long for every three units in tallness. Converting these units into inches would ensue in measurings of 4-inches by 3-inches or 8-inches by 6-inches, and on-and-on. By the same item, on widescreen telecasting ( such as today ‘s HDTVs ) , the Screen Aspect Ratio is 16 units long for every 9 units in tallness, or 16-inches by 9-inches, 32-inches by 18-inches, etc†¦ A 16Ãâ€"9 screen aspect ratio therefore consequences in a wider image show that a 4Ãâ€"3 facet ratio. This wider image show allows both films originally filmed in widescreen and new, widescreen telecasting scheduling, to be displayed more accurately.Latest development in widescreen show:Widescreen LCD shows:BARCO ‘s LC series of High-Resolution LCD shows has been specifically designed for usage in a broad assortment of professional applications. The LC household nowadayss chip, clear and color-accurate images on 42 † , 47 † and 56 † screen sizes. Dedicated versions with HD-SDI inputs are available. Having some of the most advanced LCD engineering available today, BARCO ‘s LC series stands for the ultimate in item. The LC series consists of a 42 † and 47 † show in native full high definition ( 1920Ãâ€"1080 pels ) and a 56 † show in quad full high definition ( 3840Ãâ€"2160 pels ) .Benefits:High brightness High contrast, even in high ambient visible radiation environments High declaration and pel denseness Frame lock and firing mechanism functionality Low power ingestion Long life-timeExamples:56 † quad full High Definition LCD show LC-5621 42 † native High Definition LCD show LCN-42 47 † native High Definition LCD show LCN-47 42 † native High Definition LCD show with extra HD-SDI inputs LCS-42 47 † native High Definition LCD show with extra HD-SDI inputs LCS-47Technology used in broad screen show merchandise:Plasma screen engineeringLED engineeringCRT ( cathode beam tubing )Liquid crystal displayPlasma screen engineering:Flat panel plasma show is the latest show engineering and the best manner to accomplish shows with first-class image quality and big, level screen sizes that are easy viewable in any environment. Plasma panels are an array of cells, known as pels, which are composed of three bomber pels, matching to the colourss red, green, and blue. Gas in the plasma province is used to respond with phosphors in each bomber pel to bring forth coloured visible radiation ( ruddy, green, or blue ) . These phosphors are the same types used in cathode beam tubing ( CRT ) devices such as telecastings and standard computing machine proctors. You get the rich dynamic colourss that you expect. Each bomber pel is separately controlled by advanced electronics to bring forth over 16 million different colourss. All of this means that you get per fect images that are easy viewable in a show that is less than six inches thick.LED engineering:There are many consumer advantages to LEDs over incandescent or fluorescent visible radiation bulbs. LED lights consume much less energy. They are 300 per centum more efficient than a compact fluorescent visible radiation ( CFL ) , and 1,000 per centum more efficient than an candent bulb. They have a really long life, about 50,000 hours of usage at 70 per centum of their original power. ( LEDs do n't fire out or spark, they merely melt. ) This works out to eight hours a twenty-four hours for 13 old ages at 70 per centum power. A typical 60-watt incandescent bulb may last about 1,000 hours. LED lighting contains no quicksilver or other toxins. LEDs emit no extremist violet ( UV ) visible radiation, so they do n't pull bugs. They do n't bring forth heat, so they are cool to the touch. They do n't bring forth wireless frequence moving ridges, so they do n't interfere with wirelesss or telecasting broadcasts. They besides are immune to quivers and dazes.CRT ( cathode beam tubing ) :The Cathode Ray Tube ( CRT ) is a vacuity tubing incorporating an negatron gun ( a beginning of negatrons ) and a fluorescent screen, with internal or external agencies to speed up and debar the negatron beam, used to make images in the signifier of light emitted from the fluorescent screen. The image may stand for electrical wave forms ( CRO ) , images ( telecasting, computing machine proctor ) , radar marks and others. The CRT uses an evacuated glass envelope which is big, deep, heavy, and comparatively delicate.LCD ( Liquid-crystal show ) :Liquid-crystal show telecastings ( LCD Television ) a re telecasting sets that use LCD engineering to bring forth images. LCD telecastings are thinner and lighter than CRTs of similar show size, and are available in much larger sizes. This combination of characteristics made LCDs more practical than CRTs for many functions, and as fabrication costs fell, their eventual laterality of the telecasting market was all but guaranteed. In 2007, LCD telecastings surpassed gross revenues of CRT-based telecastings worldwide for the first clip, and their gross revenues figures relative to other engineerings are speed uping. LCD TVs are rapidly displacing the lone major rivals in the large-screen market, the plasma show panel and rear-projection telecasting. Liquid crystal displaies are, by far, the most widely produced and sold telecasting engineering today, forcing all other engineerings into niche functions.Benefits of the WidescreenWhen used for amusement, a widescreen show is in its component when demoing widescreen DVD films in their intended 16:9 facet ratio. This means a bigger image more comfort and less otiose infinite ( less or no black bands on either side of the image ) . The widescreen show besides makes it easier to redact and see bird's-eye images and may extinguish troublesome horizontal scrolling wholly. Another benefit of the widescreen show is apparent when it comes to serious work – the ability to expose two Windowss side by side and to drag and drop ( or copy Ns ‘ paste ) information without holding to exchange between them is invaluable.

To What Extent Is the Labour Party Still Committed to Its Traditional Principles?

The Labour party was founded on the principles of social democracy, which is a traditionally centre left ideology. It has been Britain’s major democratic socialist party since the 20th century and since then has been committed on basing its ideologies on advancement for the working class. Until the 1980’s, Labour had kept its principles consistent, but with the development of Michael Foot’s ‘loony left’ movement which was based largely around the irrational minority issues and racial problems.It was Tony Blair in 1994 that came through with a revised ‘new-labour’ ideology that helped dominate the election polls yet again and stay victorious until 2010. But, did new-labour still resemble old-labour in terms of its principles? This is what i aim to evaluate. Old-Labour has always been seen as the party for working classes. This was demonstrated through the development of the welfare state where economic wealth is redistributed in the forms of tax benefits, job seekers allowance etc. to help people unable to work. But, when ‘new-labour’ was created under Tony Blair in 1994, Labour became more of a catch-all party.This meant that benefits were cut, in order to make middle and upper classes feel less discriminated against. Now, the focus is on ‘economic well-being’ and less on the formidable effects of poverty. Clause 4 was created to exhibit Labour’s affiliation with people from a working background. It stated things like â€Å"To secure for all the workers by hand or by brain the full fruits of their industry† and â€Å"equitable distribution† which shows its strong ties with the working man. In 1997 it was reformed, it changed from a predominantly ‘working class’ themed ideology to a more catch all. that by the strength of our common endeavour we achieve more than we achieve alone† This is a revised passage from the post Tony Blair clause 4. You can te ll that it no longer is concentrated on one specific class, it is now generalising to everyone and saying that we are all in it togther. Which is obviously not solely concerned with one group of people. The Labour party belived in the provision of universal benefits to citizens who had no other means of income and/or supporting a familiy. Unfortunately over the past decade, the economy has taken a turn for the worse and Tony Blair identified this.That is why he came to the decision of reserving benefits more and focusing on ecnomic growth. Old-labour were far more concerned with the prevention of poverty but, new-labour seem to be more concerned with stability of the economy. Some may even say their slightly capitalist characteristics may align them more with their opponents, the Conservative party. It is now apparent that the Labour party are far less scrutinious towards who they want to aid in society and are showing a certain prgamatism towards their ideologies in order to fit in more effectively with todays society.The Third way which takes old-labour, thatcherism and liberal democrarcy is definately more pro-active than wiping out just under half of the voting population with your political views. Ed Milliband’s take on the third way is even said to be moving slightly right, which proves that Labour no longer prioritise with the working class and they are aligning themselves more fully with all classes and situatuions in the U. K. This is good for democrarcy, not good for the preservation of Labours traditional socialist values.

Swot Analysis And Recommendation Finance Essay - Free Essay Example

Sample details Pages: 9 Words: 2686 Downloads: 7 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? This report is going to evaluate ITV PLC strategically using the SWOT analytical framework. This will need to highlight and evaluate the major strengths, weaknesses, opportunities and threats facing the company at the moment with appropriate key recommendation(s) as to future policy objectives. Contents Terms of reference: This report is going to be prioritised on the well-known British media establishment known as the Independent Television Authority (ITA) PLC; nowadays known as ITV. There will be research gathered from various reliable sources that can document the past as well as the present performance. This will be net based sources such as the ITV website itself or using Google scholar search engine to find relevant articles that may cover good points. Libraries with up to date knowledge on the topic will be utilised also. The report shall highlight their major strengths, weaknesses, opportunities and threats when using the SWOT analytical framew ork. All data gathered and research done shall be up to date; giving the reader a more relative intake on the current happenings. After summing up all findings; suggestions for positive impacts in the future for the business will be noted. Introduction: Due to the Television Act becoming law in 1954, it triggered the opportunity for commercial television service in the United Kingdom; producing the Independent Television Authority. (History ITV plc, 2012). The broadcasting act of 1990 made it possible for regional companies following both acts to start merging. In 1994 is when ITV first merged and it was with Grenada bought LWT. (History ITV plc, 2012). This report is going to be investigating the well-known broadcasting firm ITV PLC. The report will be investigating what their strengths, weaknesses, opportunities and threats are. The research carried will mainly be from primary sources; such as, surveys, questionnaires, cases etc. However there will be some secondary sourc es also. Their past performance up till now will be presented along with an analysis of how their strengths and weaknesses have played a part in their overall performance. The opportunities will be closely assessed to see how ITV PLC can better their performances. In contrast the threats will be closely looked at as well since this may jeopardize their performance rates. This report will then have recommendations on what should be done to maximise the well-being of the plc. Methodology: This report is going to be of a short structure mainly. This means that the findings and data will be mostly secondary for ITV plc. Although the statistics and information gathered will be secondary they would need to be relevant hence the latest data will be utilized. The initial source of info was retrieved from ITV PLC website. The companys history, what its specialises as well as competition involved was highlighted in this source. The majority of figures mentioned in this report are straig ht from ITV PLC Annual report; however the website also provides financial reports from the media sales section which is very handy. Unbiased sources were used when looking at ITVs strengths, weaknesses, opportunities and threats. These included: fame report on ITV, Market line ITV, media websites, journals and media competitors etc. Findings and Analysis Since the television act of 1954 it made it possible for ITV to start broadcasting in 1955 on channel 3 London based (ITV PLC). ITVs net advertising revenue (NAR) has increased by 1% according their annual financial report; pound;1496m in 2010 to pound;1510m in 2011 for online broadcasting. Their total revenue concerning ITV studios has increased by 10%; from pound;554m to pound;612m over the years 2010 and 2011. ITVs profit before taxation increased from 2064 to 2140 according to their profit and loss sheet (ITV plc, Fame 2012); evident in their greater profit margin from 13.86 to 15.28. However their fixed assets have be en decreasing since 2005 according to their financial report presented by FAME. The Strengths ITV PLC is recognised for its good reputation since it started broadcasting television right from the beginning. It is well known across the UK since they broadcast nationally generating a vast amount of profits according to their annual financial reports conveyed above. Media industry market report conveys that ITV is the biggest commercial television network in the United Kingdom. ITV plc attracts the greatest audience in comparison to any other broadcaster in the UK. They control a great share of the advertising market in the UK (Media industry Market Report); increased from 44.7% in 2009 to 45.1% in 2010. In the year 2010 they stood out in comparison to the entire televising advertising market by 1% since their revenues grew by 16% mean whilst the whole industry grew by 15%. ITVs seamless operations model enables synergies. They benefit from the continuity of the business as th e company, producing content that is distributed via various platforms. ITV operates over a vast range of channels that are portrayed along multiple platforms; including ITV.com and ITV player. ITV is available anywhere; whether it be, analogue, digital satellite, cable and Freeview. Through itv.com, ITV player enables the audience to have another opportunity to watch missed programs on demand. The company content has now been made available to games consoles such as; XBOX and PlayStation. The channels of ITV continue to launch more channels; itv2, itv3 and itv4 (itv plc). Due to technology advancements ITV have produced HD quality content for the majority of their channels. This is a key advantage since the cost for the content is the same but it is addressing a more diverse customer base. ITV has key shows that are key brands for their advertisements. For example; this involves X-Factor and Im a celebrity. These shows did not perform as well as they did in 2010(ITV Annual Repor t, 2012). However they are still important brands since they still appeal to a large diverse audience; this gives great appeal for to advertisers. The average audience for X-Factor over the period of the series is 12.3 million (ITV Annual Report). This increases revenue for the company. The company has made sure that they work hard to decrease debt which has aided there being a stronger balance sheet as well as developing a leaner cost structure. Fame, stating ITVs balance sheet shows that the net debts position decreased from pound;612 million to pound;188 million over years 2009 and 2010. Another positive from these records is that adjusted cash flow rose from pound;345 million to pound;517 million during the same period. This rooted from their bettered profits as well as their strong quality profit to cash recording at 127%. The lower debts highlight good position of the company to expand at feasible rates due to these newly recorded funds. Their positive net cash position of pound;92 million (ITV plc interim, June 2012). Weaknesses Even though ITV is the most dominant in the television industry it still haves it negatives. ITV is very vulnerable to the instability of the structure of the television market advertising. The company mostly depends on the television advertising market which is very unstable and that is ITVs main source of revenue. Their success financial via other streams has been limited. Although their revenues have heightened, they stay subscale compared to ITVs studios and its broadcasting businesses revenues declined, underlining how the extent that they depend on television advertising market. ITV have witnessed the steady erosion of their free-to-air broadcasting scheme. This is evident on the ITV1s share of viewing as well as commercial influences steadily decline over a vast amount of years. Moreover the company was lacking technology wise and the digital platform scheme was underdeveloped. It was only until the fourth qua rter in 2010 that ITV gained access to the pay TV market (media market, 2012). The actual television market is also experiencing a structural deficit since it is more competitive mean whilst the television is being viewed on alternate sources more and more. Subsequently audiences have parted according to their individual tastes; challenging the effectiveness of the advertising. Moreover ITV has no firm source of incomes when considering the subscription, and have restricted accessibility to the robust pay TV market; highlighting the vulnerability to the instability that partners the television advertising market. ITV has a lack of scale when it comes to competing effectively with its rivals; for example BBC and Sky. ITVs revenue figures conveyed pound;2,064 million FY2010 mean whilst employing 3,947 people (ITV plc, 2011). In contrast, Sky, documented revenues of pound;5,912 million during the summer period of 2010; employing 16,439 people. Similarly, BBCs revenues were report ed to be at pound;4790.4 million for year 2010, employing 22,861 people (Media Marketline, 2012). A huge scale empowers these competitors advance their technologies so that can access a higher level of resources. Lack of scale means that the company ability to contend efficiently in accomplishing economy of scale. Opportunities ITV is capable of growing their advertisements via the web. The industry estimations state that the online advertising market will be valued at pound;5 billion by the end of 2012. Out of the whole of the United Kingdoms spending done for advertising purposes, 25% is done online. In comparison 2010 shows that the market was 23% and but the end of 2011 it recorded a rise by 12.8%. Online advertisements have boosted directly proportionally to the UKs active online user base growth to 40.6million by the time 2011 finishes. The strong growth progresses as long as the advertisements that are done online continue to outdo the whole market. Reflecting the indus try trends, revenues gained by ITV online mainly contain income sourced from web advertising increased in 2011 by 17% (ITV plc Interim, 2012). The fresh stream of revenues as well as overall strong growth witnessed in the market will have a positive influence on the companys top line growth. Considering ITVs competitors BBC and Sky; ITV has a lack of scale. (BusinessWeek Bloomberg, ITV, 2012) They employed 3,958 people whilst having revenue figures of pound;2,064 million mean whilst Sky and BBC have greater revenues due to their larger scales; hence both competitors having greater amount of employees. ITV could capitalise on this and employ more workers in an attempt to raise revenue. Rather than solely depending on their online advertisements (Hudson, 2011). On the ITV annual report it states that ITV2 and ITV3 remains largest digital channel in UK because of their customers taste. ITV may make them channels require subscription; especially since ITV2 won the digital channel of the year. It terms of competition they could make the channel cheaper in comparison to Sky but still show the same content. ITV does not do 3D coverage; which is essential due to the latest technological advancements. ITV may tap into their pay TV market in an attempt to raise their revenues. ITV have made a few attempts to break into the pay TV market. The initial attempts for this move into pay television were with ITV2, 3 and 4 high definitions; launched during the pay wall of Sky in 2010 (Media Marketline, 2011). This is a very profitable three year deal for ITV from the beginning, although it is only one footstep into pay television. ITV has showed that making a pay scheme for the future is a main part of the eight work goals. ITV is prioritising its efforts on creating an improved and restructured itv.com begins payment trials online. Moreover, its YouView is to initiate consumer trials in the early period of 2011 and was said to properly start-off in 2012. It did, and b y five years time ITV will source half of their income from varied places rather than advertising. Meaning the vulnerability to the unstable advertising market will be diminished. The industry estimates there to be a forecast of 63 billion pounds in 2012 hence ITV may capitalize on this opportunity and grab a share (ITV annual report, 2012). The company will then be able to diverse their sources of revenue and enhance the generation of revenue potential. Threats ITV is involved in an intense competition against other broadcasting, production and media companies. Due to the greater variety of choice for customers it has put great stress on ITV networks ratings as well as revenue from advertisements. Their main rival players are Sky, Channel 4, BBC, and RDF media group. There are even competitors that are from non-conventional players such as Vivo and YouTube, which also offer amusement online. The actions of rival competitors may potentially have an influence on ITVs market sha re as well as their revenue growth. There have been various technological advancements in this industry. The company operate in swiftly altering media and entertainment markets. A few of ITVs businesses rely greatly on their capability in acquiring, developing and exploiting new technologies to differentiate their services from rival companies. This process may be very time consuming and necessitate substantial capital investments. If the company was to pick undeveloped technologies that were less effective, cost-inefficient and unattractive to customers. Their competitive edge in the industry will decline; having a knock on effect on their financial results having a negative impact. Due to the volatility of the economy it is most likely to enforce a slow growth in advertising. The undefined forecasts of the macro economic developments have influenced advertising expenditure negatively. The affects have been experienced in the revenues depreciated by 2.2% with the overall mark et dropping by 1.1% in the latter part of 2011. Nonetheless, online expenditure rose by 6.4%. The entire deficit is the initial point in where the market contracted in 2009, showing that the idea of recovery was not going to occur. From research, the United Kingdom advertisement spending is now estimated to increase by a mere 0.9% in 2011, a disappointment in terms of the initial forecast of 1.4% (BussinessWeek Article, 2011). This year the majority of the media are expected to be contracted in reference to their predictions. ITV solely depends on advertising for revenue and this will be greatly influenced by the advertising expenditure according to Hudson (2012). Conclusion ITVs reputation and great ethics have permitted the business to exceed in their industry. They dont only advertise online but they have a range of channels for the diverse audience in the United Kingdom. The variety of channels allows them to target a wide range and expand their business. Due to ITV 2 winn ing the digital channel of the year; this could be the platform for Pay TV to raise revenue for the company. Their services are international due to itv.com which has ITV player enabling consumers to watch content on demand. The companys lack of scale didnt give them the competitive edge they needed on BBC and Sky. The amount of employees surpassed the amount of ITVs hence their revenue figures reflected this. Their tactical business model has been seen to be prioritised solely on the identified opportunities. Although they may come against a few threats the vast amount of opportunities accessible anticipate a positive future for the company. Recommendations Judging from the weaknesses and opportunities above, personally I believe there are a few suggestions that can be brought up to better the future for ITV plc. For example; one of their main weaknesses is the fact they have a lack of scale; especially in comparison to their competitors BBC and Sky. The opportunity that I be lieve will counteract this is by them employing more and branching out rather than just depending solely on their advertisements to for revenue and growth. Another weakness is the fact that they depend mainly on their advertisements as a source of revenue. This is bad due to the instability of the advertising market hence I suggest that they use their digital awarded channel of the year, ITV2 to step into the Pay TV prospect. That way, consumers will pay to subscribe giving them another source for revenue. Sky has its own viewing box, perhaps if ITV was to capitalise and create their own viewing box for a cheaper price it would steer some demand in their direction, dependent on the content shown on the channels. The main strengths of ITV that I think should be identified is the fact they are a well-known in their industry and funding wise they are in the position to expand. The threat of them depending too much on the volatility of the advertisement market for revenue may be decapit ated if they expand and capitalise on other sides of the businesses. This may mean them having their own movie channel; broadband or even their own pay TV box. Don’t waste time! Our writers will create an original "Swot Analysis And Recommendation Finance Essay" essay for you Create order