Q.NO ==1

HELSINKI— Corp.'s emergence in the early 1990s as one of the world's leading mobile- phone makers lifted Finland from Cold War obscurity, transforming it into a European technology hub and helping to triple its economy between 1993 and 2008.

Nokia's headquarters in Espoo, Finland. The cellphone maker has played a key role for the Finnish economy and its woes have been deeply felt.

Now Finland is feeling Nokia's pain. On Tuesday, the company warned that it might not book a profit in its core cellphone business this quarter, the latest in a series of dire announcements that have laid bare Nokia's weak and rapidly eroding position in the smartphone market.

Nokia was caught sleeping in 2007 when Apple Inc.'s iPhone redefined the cellphone as a PC- like device with a touchscreen and sleek software. Since then, the Finnish company, while still the world's largest handset manufacturer by volume, has lost 75% of its market value as it struggles to catch up to Apple and now Google Inc.'s Android, a perhaps even more threatening rival.

The problem for Finland is that Nokia has pervaded nearly every facet of the Finnish economy. It remains by far the most significant company in Finland, generating 14% of exports and 1.6% of the country's GDP in 2009, down from 4% in 2000, according to the Research Institute of the Finnish Economy.

In Finland, "Nokia has been an exceptionally large player—a large duck in a small pond—and that is always a double-edged sword," said , founder and chairman of F-Secure Corp., a Helsinki technology security firm, and a Nokia board member

Nokia's misfortunes don't represent the kind of economic cataclysm that Iceland's banking collapse spelled for that Nordic island, and Finland's economy is even smaller than that of debt- troubled Greece, but the mobile phone maker's woes are being deeply felt: Finland's service exports fell 7% last year. In 2009, the tax revenue Nokia generates plunged to as low as an estimated €100 million, less than a tenth of the roughly €1.3 billion ($1.86 billion) it paid in 2007.

As a result, towns across Finland have had to adjust. In Salo, 60 miles north of Nokia's headquarters, officials say they have had to cut some health-care services and recreational programs to cope.

Faced with the demise of Finland's largest private employer by far, with roughly 20,000 employees in 2010, government officials and others are frantically trying to spur new technology start-ups, some centered around Google's Android system. But a dearth of venture-capital funding and a risk-averse Finnish culture have stalled a number of efforts.

"The trick is how to convince [potential entrepreneurs] when the big N isn't behind them," says Will Cardwell, head of the Aalto Center for Entrepreneurship at Finland's Aalto University, which last year created a program modeled on Stanford University's efforts to parlay campus research into commercial innovations for tech companies such as Google and Sun Microsystems Inc.

Nokia, founded in 1865 as a paper-mill company, expanded over the decades into rubber and electrical cables, the foundation of its mobile business. But the 1991 collapse of the Soviet Union, Finland's primary trading partner, pushed the country into a deep recession. A year later, Nokia's current chairman and then-chief executive, , decided to refocus the business around telecommunications. The strategic move gained Nokia global dominance in cell phones, in part through the streamlining of its manufacturing and supply chains, lifting Finland's wealth and self-image in the process. Finns, though, still walk in boots made by Nokia's former rubber business.

But for too long, some Finns now argue, the country rode the back of a single tech company, failing to use the bubble it created as a springboard to build a broader, more diversified tech economy. Though Nokia provides billions of euros annually on outside research and development in Finland, Finnish tech ventures have largely supplied Nokia's business instead of cracking new markets.

"Nokia's ecosystem is emphasized too much. There must be a market for something different," says Teemu Polo, a 36-year-old former Nokia software strategist. After accepting a buyout in 2009, he began a start-up that now builds applications and services for Google's Android smartphone system instead. But he says his move to work with a Nokia rival is still a rarity in Finland.

Many here worry that Nokia, even if it recovers, will shift its focus to North America. Indeed, after taking his position in September, Nokia's Chief Executive —a former Microsoft Corp. executive who is Nokia's first non-Finnish chief—decided to phase out Nokia's own operating system, Symbian, in favor of Microsoft software, which will trigger 7,000 global job cuts.

Nokia also helps fund hundreds of Finnish technology subcontractors, a practice Mr. Elop has said is too expensive.

"The relationship between Nokia and the people of Finland and the country of Finland is very special and I would say probably unique in the world," Mr. Elop said in a February interview. He added, "it's our fundamental belief that the best thing for Finland is a healthy Nokia."

The Finnish government is now scrambling to cultivate more technology start-ups to help fill Nokia's growing void through its technology funding agency Tekes, which spends €600 million annually. But Finnish start-ups still face tremendous hurdles, particularly a dearth of private funding.

Still, the country has had some notable, albeit small, successes, including Rovio Mobile Ltd., which makes the smartphone game Angry Birds. The game consists of angry-looking birds that catapult themselves through barricades built by pigs who have stolen their eggs. Since its debut on the iPhone in 2009, the Angry Birds franchise has amassed over 200 million downloads. "The goal is to change the culture in Finland," says Mikko Kuusi, a student at Aalto University and chairman of its entrepreneurship society. Marketing principles of NOKIA There are many priorities within a business, but in a marketing orientated company like Nokia, many of the following principles will be high on the agenda: 1. Customer satisfaction: Market research must be used to find out whether customers' expectations are being met by current products or services. 2. Customer perception: this is based on the images consumers have of the organization and its products, this can be based on; value for money, product quality, fashion and product reliability. 3. Customer needs and expectations: This is anticipating future trends and forecasting for future sales. This is vital to any organization if they wish to keep their entire current market share and develop more. 4. Generating income or profit: This principle clearly states that the need of the organization is to be profitable enough to generate income for growth and to satisfy stakeholders in the business. Although satisfying the customer is a big part of a companies plans they also need to take into account their own needs, such as: 5. Making satisfactory progress: Organizations need to make sure that their product is developing along with the market, if a product is developing well, then income should increase, if not then the marketing strategy should be revised. 6. Be aware of the environment: An organization should always know what is happening within their designated market, if it is changing, saturation, technological advances, slowing down or rapidly growing, being up to date on this is essential for companies to survive.

Price Psychological pricing

 Consider the psychological approach rather than economic approach

 LV is a high-end brand

 Therefore, people are willing to spend on one a “LV-branded” mobile phone Market-Skimming Pricing

 Set a high price

 Skim the maximum revenue

 Decrease the price gradually

 Intiailly we will set a high price around $1200, gradually decrease and replaced by a newer model  Maintain a high profit margin Promotion

 Printed advertisement

 Goal: to create a new reason to buy our new cell phone

 Focus on masculine and feminine magazine, etc  Car

 Audio/Video products

 Cosmetics

 Fashion

 Online - Advertisement

 Bid on cell-phone before the launch of our product

 TV advertisement

 Demonstrate its outlook and style

 Encourage people to bid our product online

Conclusion • Nokia currently still the no.1 in mobile industry • Its growth in profit not comparable to main competitor - Motorola • New series of phone: “exquisite” series • Target on wealthy young adults • To maintain leadership position and generate more profit to Nokia STRENGTH -The Leader in the Industry -Strong Financial Support for

Investment

-Strong R&D Unit

-Strong Customers Relation OPPORTUNITIES -Close cooperation with Suppliers and

Intermediaries

-Tax Reduction

-New Demand Created From the Advancement of Technology WEAKNESS -Lack of Innovation -Human Resources Management THREATS

-Keen and Strong Competitors

-Saturation in Current Market

-Challenges of Continuous Technological Development

Q.NO =2

JUTE

Jute, a natural fiber, has been in use for various purposes over the centuries throughout the world. It is the bark of a slender tropical plant belonging to Tiliaceae family with two species Corchorus capsularis and Corchorus olitorius. Breakthrough in textile technology during the industrial revolution helped jute emerges as an amazing fabric from its traditional image of a raw material for cordage and rope. Since then the innumerable additions, modifications and innovations in manufacturing process turned jute into as indispensable material for an unconventional uses. The process of developing diversified use of jute still goes on unabated despite the challenge and threat from its synthetic substitutes.

Jute dicotyledenous fiber-yielding plant of the genus Corchorus, order Tiliaceae. Jute was once known as the golden fibre of Bangladesh, since it was the most important cash crop for the country. Jute fibre is produced mainly from two commercially important species, namely White Jute (Corchours capsularis), and Tossa Jute (Co chorus olitorius). The centre of origin of white jute is said to be Indo-Burma including South China, and that of tossa Africa. The word jute is probably coined from the word jhuta or jota, an Orrisan word. However, the use of jutta potta cloth was mentioned both in the Bible and Monushanghita-Mahabharat. This indicates the ancient uses of jute materials by the people of these areas. There is evidence of the trade of jute cloth in the 16th century.

The study was carried out by the Centre for Policy Dialogue (CPD) in Bangladesh. It analyses the trend in Bangladesh’s export of raw jute and jute goods to the world market over the past years. It also highlights the current challenges of jute trade and highlights its future prospects. The paper highlights the difficulties faced by Bangladesh’s jute export including tariff and non tariff barriers. It analyses the challenges offered by jute substitutes and their potential to replace jute items to the consumers. It also studies the global environment of jute trade and offers policy recommendations to enhance jute exports from Bangladesh. Jute is the golden fiber of Bangladesh. Bangladesh exports a lot of jute products which is exceptional, nice looking and fashionable. Jute fiber now again get the prime attention of the world market because of its environment friendly & bio-degradable grade which is the best replacement of synthetic fiber. Jute made bag, mat, Carpets, wall hangings etc have received all around appreciation throughout the world due to their durability and elegancy. They are well woven in fast colors and having textures beauty, pliability and sheen of golden fibers with a flood of creative ideas.

TEA

When New Englanders speak historically about TEA, probably nine out of ten of them remember the Boston tea party of December 1773. Although Deerfield, Massachusetts, is one hundred miles west of Boston -- a three-day ride on horseback - news of the "big dish of tea brewed in Boston Harbor" traveled to that Connecticut Valley town as quickly as David Field, who was in Boston that night could urge his horse to his home in Deerfield. His news was met with jubilation by fellow Whigs and it was reported that they convened at David Saxton's tavern near the common for a "jollification" meeting the evening Field arrived. You may be sure that stronger drink than tea was served that night!

Considered an exotic beverage when it first made its way onto the tables of the wealthiest Europeans and American colonials, tea was valued in the west as a "very expensive medicine." Believed to cure the respiratory ailments, headaches, giddiness, heaviness, colds, and dropsy, tea was reputed to be a restorative against the loss of body fluids caused by excessive sweating and purging, two common medical curatives of the day.

,LATHER

We are a leading exporter of Leather and leather articles from Bangladesh to all over the world. Our export capacity is over 2,00,000 sq.ft. Per month including Crust and Finished leather. No mater about color and finishing quality as well as tanning quality. We have well qualified leather engineers who gathers enough technical knowledge know how to meet the international requirements. Very often they are visiting all popular leather fairs as well as leather industries all like Italy Hong Kong and Vietnam. We can make 100% same quality and color as you may needed.

The arts and crafts of Bangladesh manifest the artistic expression of our rich cultural heritage. Our fashionable leather products have inherited that glorious tradition. Utilizing the state of the art technology with abundant raw materials and skilled labor, these leather goods play an important role in world’s fashion market.

An excellent selection of superfine-quality leather gift items are offered at competitive price. Our Leather gift items has earned a prized position for its intricate design and innovative style.

Fashionable leather gift items of Bangladesh have already attractive attention of the world for their superb quality and smooth grain texture. We invite you to explore our potentials. You will not be disappointed. Modern facilities in the shoe factories and ready availability of finished leather of international standard have enabled Bangladesh as a successful exporting country of Leather Footwears. We have reliable backward linkage with all renowned footwear manufacturers in Bangladesh.

We are capable to supply world class foorwear like Men's casual and formal shoes, sports shoes, sandals and slippers for Men's, Ladies and Kids.

At now Bangladesh has been successfully exporting Leather Footwear’s to Canada, USA, UK, Japan, Middle East and Africa region. Export items include men’s casual & formal shoes, and men’s and ladies’ sandals and slippers. Developments in leather industry

LEATHER is one of the most prospective industries in Bangladesh. It has enough scope for both vertical and horizontal expansion in terms of economic return and social benefits. Leather making is capital-intensive, with labour costs in the region of 10 percent to 15 percent. A tanner has limited opportunities to isolate any high labour cost and shift it to a low-cost area. European and North American tanners and manufactures have introduced computerisation and robotics to reduce the labour input, rationalise selection and production control, and improve effluent quality and discharge volumes.

In Bangladesh, the manufacturing of wet blue, the chrome tanned semi-processed leather, was featured in 1965. Out of 35 medium to large tanneries, 30 partly mechanised units were owned by non-Bangalees.

With the emergence of Bangladesh, the experienced non-Bangalee tanners abandoned their plants, and a vacuum was created in the leather industry. Despite such a situation, the resilient Bangalees have been able to advance fairly well in the sector during the last three decades.

The major problems affecting the Bangladesh leather industry are:

-Inadequate grading of raw hides and skin, collection and curing facilities, and raw stock supply;

-Difficulties in obtaining quick advice on chemical formulas, applications and techniques;

-Lack of R & D facilities, inadequate supply of trained technologists and laboratories for physical and chemical testing; and

-Uncertainties in government strategies, bureaucratic delays and disposal of effluent.

High-grade goatskin and bovine hides provide an excellent base for developing the leather industry.

In addition to existing governmental aid, new measures that need to be adopted for the sector are:

-Providing special training for the high-profile technologists;

-Declaring a long-term policy (covering at least 10 years) for the industry to allow its development without uncertainty;

-Facilitating rapid delivery and providing special facilities to the export of high-value leather and its products.

There are some extreme opinions about the future utilisation of natural leather. Some scientists and economists think that raw hides and skins, which have plenty of protein and, thus, are badly needed in the world for food, are too luxurious to use for footwear. Their share in leather products will, therefore, be minor. For opposing experts, hides and skins will remain relatively cheap by-products. They see the tannery industry as the only economic user that has developed very tolerant processing methods at a fairly sophisticated technical level. They forecast a slight increase in leather utilisation for footwear uppers and leather governments.

As indicated earlier, the leather industry has a very bright future in Bangladesh. What is important for Bangladesh is adopting measures to remove post-mortem defects due to inadequate healthcare and improper handling of materials during and after flaying. Furthermore, the Bangladesh government may consider encouraging tanners to computerise and use robotics in their factories to reduce labour input, and even amortise their micro-electronic equipment to significantly reduce processing costs.

Computerisation helps in rationalising selection and production control. It also improves effluent quality and discharge volumes to obtain control over quality and performance specifications, to monitor inputs and machine performance, to reduce wastage, to stabilise production and above all, to give the basic properties that the manufacturer regards as essential, uniformity within and across the piece, from piece to piece, from batch to batch, and even from tanner to tanner, as well as conformity wih specifications and standards.

Leather and its products are major export items for Bangladesh. Due to the global recession, our exports earnings have fallen during the last quarter. However, indications are seen that we shall recover from this slump within a short time.

We should bear in mind that our people are unhappy about the concentration of the leather industry in Hazaribag, and the poor disposal of effluent from the industry, which creates serious environmental hazards. The government must be up and doing to shift the leather factories from Dhaka residential areas at the earliest. Along with the leather industry, the government may try for a rapid improvement in a leather substitute industry because of the high price of natural leather and rapid urbanisation.

READY MADE GARMENTS ITEM

Ready made garment sector plays a very significant role in the socio economic development of Bangladesh. In Bangladesh, the total contribution of ready made garment sector in export is more than 76 % of total export earnings. With the timely policy support from the government , entrepreneurs talent and efforts as well as the labor of the work force, the RMG industry could impressively succeed and the buyer got confidence in it. With a huge supply of cost effective labor force, country’s economic factors are in favor of development in this relatively low capital and high labor intensive industry along with cheap energy source like huge natural gas reserve.

Although Bangladesh is not developed in industry, it has been enriched in Garment industries in the recent past years. In the field of Industrialization garment industry is a promising step. It has given the opportunity of employment to millions of unemployed, specially innumerable uneducated women of the country. It is making significant contribution in the field of our export income.

History of our cloth Industry: Once the cloth of Bangladesh achieved worldwide fame. Muslim and Jamdani cloth or our country were used as the luxurious garments of the royal figures in Europe and other countries. The British rulers in India didn’t develop our cloth industries at all. Rather they destroyed them and imported cloths from England.

Garment industries at present Bangladesh: After the emergence of Bangladesh radical change has come to our garment sector. Garment industries started working from the 10's of the late century. At present there are about 3000 garment industries in the country and 75 percent of them are in Dhaka. The rest are in Chittagong and Khulna. These Industries have employed fifty lacks of people and 85 percent of them are illiterate rural women. About 76 percent of our export earning comes from this sector.

Reason of Development: The prime reason why garment industries have come out to be the champion in the field of export is obviously the cheap labor. Labor is not as cheap anywhere in the world as it is in Bangladesh. Women contribute to the working force in these garment factories, as they are relatively cheaper than men. A worker works here long hour’s free or cheap meals. But this has not prevented thousands of women from work. It has given them a steady income, economic independence, self-reliance and dignity, because they are earning their own living and managing their family expenses.

Garments of Bangladesh in the world-market: Over the last twelve years or so the garments industries have emerged as the largest source of earning foreign currency. About half of the foreign currency from the ready-made garments is earned from European Union and the U.S.A. Besides, Canada, Japan, Australia, New Zealand; Russia etc. also are other garments importing countries. At present about 20 countries of the world are importers of our garments. Its market is being expanded in the Middle East, Russia, Japan, Australia and many other countries.

Export income of different fiscal years: In 1977-78 fiscal year Bangladesh exported forty thousand shirts in Germany and earned one million U.S. dollar. At the beginning of the 80's this industry flourished rapidly. In 1983-84 fiscal year the income from garments rose to 6 crores 50 lacs US dollar. In 1998-99 it became 420 crores U.S. dollar. By 2003-2004 the factories multiplied three times. Simultaneously the export has also increased. The amount of export income in 2003-2004 increased to 568 crores US dollar.Items of exportable garments: Among the garments of Bangladesh are shirt, pajama, jeans-pant, jacket, trouser, hats, laboratory coat, sweater, pullover, jumper, jacket, trousers, gloves, sports dress, nightdress etc.

Problem behind garments: This promising industry has some problems impeding its development. Bangladesh imports raw materials for garments like cotton, thread colour etc. This dependence on raw materials hampers the development of garments industry. Moreover, foreign suppliers often supply low quality materials, which result in low quality products. Most of the illiterate women workers employed in garments are unskilled and so their products often become lower in quality. Insufficiency of loan in time, uncertainly of electricity, delay in getting materials, lack of communication, problem in taxes etc. Often obstruct the industry. In the world market 115 to 120 items of dress are in demand where as Bangladesh supplies only ten to twelve items of garments. India, south Korea, Hong Kong, Singapore, Thailand, Taiwan etc, have made remarkable progress in garments industries. Bangladesh is going to challenge the garments of those countries in the world market.

Garments industries often pay dearly for political unrest, hartal and terrorism etc. The international market has withdrawn quota advantage over garments export form Bangladesh since December 2005.

Bangladesh has to advance cautiously for getting better position of her garments in the world market. Finally destruction of twin tower in 11 September 2001. invasion on Afghanistan and Iraq and depression in world Economy have seriously affected the export trade of Bangladesh.

Things to do: In spite of having a number of problems, prospects of garments industries in Bangladesh with her cheap labour and less capital are fair. In order to hold profitable position for garments in the world market we should keep in mind the following things.

1) production of sufficient raw materials in the country. 2) imparting training to make skilled workers. 3) Reduction of VAT and taxes 4) Assurance of safety, salary and other facilities of the workers 5) More advanced of EPZ 6) Proper advantage of water houses 7) Removal of export problems etc.

CERAMIC TABLE WARE

Bangladesh ceramic tableware is rated as one of the best in the world for its high quality, fashionable and hygienic at a reasonable price tag. Almost all the producing units have succeeded in establishing their brand names in the international ceramic tableware market. To ensure proper quality and goodwill , the ceramic table ware producing units use high quality raw materials. At present, Bangladesh is exporting ceramic tableware to more than 30 countries, the most important of which are the USA, the UK, Italy, Spain, France, Newzealand, the Netherlands, Australia and Sweden.

Ceramic Industry manufacture of useful and ornamental articles from clay by shaping and hardening it in high temperature. The industry is basically a development of indigenous pottery works. Broadly, ceramics denote the manufacture of any product made from a non-metallic mineral hardened at high temperatures. Industrial ceramics comprise all industrially used solid materials that are neither metallic nor organic. Major ceramic products include glass, earthenware, porcelain, and white-ware, porcelain enamels, brick tiles and TERRACOTTA, refractories, CEMENT, LIME and gypsum and certain abrasives.

The art of POTTERY is perhaps as old as human civilisation. Initially, it started with clay and then passed through stages of moulding various media like WOOD, stone, shell and metal before reaching the age of ceramic and porcelain. Bengal passed through all these stages before reaching the ceramic age. Ceramic industry took a formal start in this country in 1958 with the establishment of Tajma Ceramic Industries Ltd. at BOGRA. It is the oldest modern ceramic manufacturing plant in Bangladesh and is also the only ceramic factory located in North Bengal. Its production was very small and the quality of the product was not good. The Pakistan Ceramic Industries Ltd. was established in early 1960s and it went into production in 1966. It manufactured ceramic products for the domestic market. It was renamed as Peoples Ceramic Industries Ltd after the independence of Bangladesh.

In 2001, Bangladesh had ten ceramic industry units. Five of them are fairly large and these are Monno Ceramic Industries, Shinepukur Ceramic Industries, Bengal Fine Ceramic Industries, Standard Ceramic Industries and Peoples Ceramic Industries. These companies produce high quality ceramic and porcelain wares. The annual production is about 15,000 tons of ceramic items. About 5,000 tons is exported to 45 countries. The remaining amount is consumed locally. Initially, all ceramic industries catered to the domestic market only.

The Tajma Ceramic Industries has a showroom and an export department in DHAKA. It has been manufacturing porcelain tableware since 1958. Although it is the oldest producer of ceramics, the factory manufactures only about 12,000 pieces (4 tons) of assorted tableware per day, which is about half the capacity of other major ceramic tableware manufacturing plants. The company has been catering mainly to the domestic market. The Peoples Ceramic Industries, located in Tongi Industrial Area, about 20 km north of Dhaka, is one of the oldest and largest ceramic companies in Bangladesh.

The factory went into production in 1966. The production capacity of the factory is about 28,000 pieces of assorted tableware per day. The company however, has had little success in the export markets. Recently, the company has developed a new brand 'Super China', which is drawing the attention of foreign buyers. Bengal Fine Ceramics Ltd. is the first industry in the country to make soft porcelain, which the company calls 'stoneware'. This is an off-white product manufactured by using local Mymensingh clay. The factory went into production in 1986. It produces about 24,000 pieces (6 tons) of stoneware per day. From the very beginning, the company concentrated its trading activities in the international market and has been quite successful in its endeavour. Recently, the company has established a sister concern, Standard Ceramic Industries Ltd., near GAZIPUR, about 30 km north of Dhaka. The largest and most successful ceramic company in Bangladesh is the Monno Ceramic Industries Ltd, which started production in 1985 and manufactures very high quality porcelain tableware. This company has done well in the export market with its sales office in London and a permanent stall in the Frankfurt House-wares show. Shinepukur Ceramics Ltd was incorporated in 1997 with the aim of establishing a world class bone china and porcelain tableware industry.

The company is located at Beximco Industrial Park, Gazipur. It started its porcelain and bone china units in April 1999 and November 1999 respectively. Since the beginning of its commercial operations in 1999, the company has distinguished itself as the fastest growing concern in the sector. It has captured about 60% of the domestic market share and is doing well in the global ceramic tableware markets.

About 95% of raw materials for making quality and exportable ceramic products in Bangladesh are imported from abroad. The materials are imported mainly from Japan, Germany, New Zealand, South Korea and India. The prime raw materials of ceramic products are white clay and sand. The largest deposit of white clay in Bangladesh was first discovered in 1957 at Bijoypur of MYMENSINGH. The total reserve of white clay from this region is estimated to be 2.57 million tons. Clay was also found in jaflong of SYLHET. But there is no clay or sand treatment plant at these places.

To ensure proper quality and goodwill all ceramic tableware producing units use high quality raw materials. The machinery and equipment are also modern and conform to the latest technology and standard. Each of the units has its own in-house laboratory facility, quality control and testing mechanism. The products that are being marketed now are: dinner sets, tea sets, coffee sets, soup sets, fruit sets, plates, bowls, flower vases, mugs and various types of souvenir items. Most ceramic products are ovenproof, chill-proof and dishwasher-proof and free from any chemical hazards.

At present, Bangladesh is exporting ceramic tableware to more than 45 countries, including the USA, Italy, Spain, France, New Zealand, the Netherlands, Australia and Sweden. [Zakir Hossain Bhuiyan]

Q.NO=3

As we begin the twenty-first century, the manufacturing industry in the United States is in transition. Some would even say that a crisis is at hand by pointing to the loss of 2.8 million manufacturing jobs between 2000 and 2003, and the mass layoffs that occurred in 2005. More than 14.5 million people still worked in manufacturing at the end of 2005, accounting for about 14 percent of the country's total output of goods and services. However, while the overall unemployment rate slowly declined between 2003 and 2005, from 6.0 to 5.1 percent, manufacturing's recovery from the 2000 recession continues to be the slowest on record. It remains to be seen how soon the manufacturing industry can regain its former strength.

Many reasons are given for the current decline of the U.S. manufacturing industry. Increased global competition, rising energy costs, overregulation, high taxes, and cuts in government funding of manufacturing research are cited. Another factor is burdensome health care costs and pension obligations—General Motors (GM) predicted its health care costs would rise from $5.2 billion in 2004 to $5.6 billion in 2005. The "crushing burden" of health care costs threatens the overall well-being even of industry "giants" such as GM.

The auto industry will have to adapt to the new global economy. Rebates, foreign competition, and skyrocketing gas prices jarred the industry in the early years of the new century. In April 2005 GM announced it lost $1.1 billion in the first quarter of 2005, its worst quarterly loss since 1992. Losses such as these often result in more cuts in jobs and health care benefits. Furthermore, domestic auto makers will face even more challenges in the coming years, including currency exchange rates, government regulations, competition from China and India, and product development costs.

The biggest challenge to U.S. manufacturing may be the country's transition from an industrial economy to an information economy. As more factory jobs are sent overseas, more service-sector jobs replace them at home. To be sure, there are bright spots. During the 1990s the production output for all of manufacturing increased by more than one-third, even as the number of workers employed decreased. New technologies and management theories may once again infuse new life into U.S. manufacturing. The manufacture of electronic equipment and medical instruments and supplies is thriving.

Some experts expect a full recovery for the manufacturing industry and suggest that it will accompany an improvement in the U.S. economy. However, the U.S. Bureau of Labor Statistics forecasts a 5 percent decline in manufacturing employment for the decade 2004–2014. While this is less than the 16 percent decline of the previous decade, some experts caution that nevertheless the supremacy of U.S. manufacturing may be a thing of the past, lost in the transition to a service-based economy. In any case, manufacturing will need to retool for a new world. These are exciting and uncertain times for the manufacturing industry.

A LOOK BACK

Modern manufacturing began with the Industrial Revolution, a series of economic and scientific

The goal of mass production is to increase efficiency in the manufacturing process by increasing the number of identical items produced in a specific time period. (© Martha Tabor/Working Images Photographs. Reproduced by permission.) changes that began in eighteenth-century Great Britain and brought about the replacement of manual labor by machines. In the late 1700s British inventors developed several machines—the flying shuttle, spinning jenny, water frame, and machine loom, among others—that improved and facilitated the production of cotton textiles. Driven by steam power, the new machines enabled one person to accomplish tasks that had previously required many workers. These developments ushered in the modern factory system, a system that brought with it profound economic and social change. Manufacturing replaced agriculture as the economic core of Britain and many other nations. This in turn contributed to the growth of cities, as more people left the farm for the factory.

Global View: Manufacturing

Like other sectors of the U.S. economy, manufacturing is seeing an increase in global competition that is resulting in significant changes in the way manufacturers do business. These include new ways of dealing with customers, suppliers, and competitors, as well as modifications in the internal structure and corporate culture of the companies themselves.

The emergence of rapid worldwide communications networks is helping to open up markets to global competition. Some companies are finding that small specialized markets they once dominated are now being discovered by international competitors. Of course, this works both ways. While foreign firms are finding more opportunities to sell manufactured goods in the United States, U.S. companies are exploring new markets overseas. For example, one New York company runs a videoconferencing program that allows small U.S. manufacturers to hold face-to-face conferences with potential foreign customers. Other small manufacturers are finding sites on the Internet to be an inexpensive and efficient way to make contact with new international clients.

For many manufacturers, going global once simply meant exporting their products to foreign countries. As global competition increases, many are now turning to new ways to break into overseas markets. Some are establishing joint ventures and alliances in which they form a partnership with an overseas firm that already has manufacturing and distribution facilities in place. By eliminating the need to build new plants and set up distribution networks in an unfamiliar environment, this arrangement dramatically lowers the cost of entering foreign markets. In addition, an overseas firm's familiarity with local tastes and customs gives its U.S. partner an advantage in marketing its products.

Global competition is also leading many manufacturers to streamline their corporate structures and change the way decisions are made. Because customers from different cultures have different needs and expectations, decision making must be more flexible. Upper management has to be more willing to listen to what sellers and distributors are telling them about the needs of different markets.

The long-term shift from farms to factories caused a profound change in the character of life in the United States. More and more people moved to the nation's cities, where most of the factories were located. They earned more money than ever before, and they bought a wide range of low-cost, mass- produced consumer goods that once only the wealthy could afford. Emergence of a Global Marketplace

The end of World War II marked the emergence of the United States as an industrial superpower. Many manufacturers earned record profits, and the high unemployment rates that had defined the Great Depression subsided. The prosperity continued for most of the next two decades. In the 1970s and 1980s, however, a changing economic picture forced U.S. manufacturers to alter the way they had been doing business.

With the emergence of a global economy, U.S. firms were faced with foreign competitors who could manufacture goods at a much lower cost. In response, some U.S. manufacturers decided not to invest capital in building or improving factories in the United States but instead to build overseas manufacturing plants. They did this for two reasons. First and foremost, in most foreign countries employees are paid far less than U.S. factory workers, many of whom belong to powerful labor unions. Second, foreign nations usually have fewer regulations concerning worker and environmental safety. U.S. manufacturers sought to escape the cost of complying with rules set down by the Occupational Safety and Health Administration and the Environmental Protection Agency.

Over time, the developing global economy had a devastating impact on U.S. workers and businesses. Factories in the United States became outdated and unable to compete with foreign plants, which often were newer operations using advanced technology and automation. As prices for U.S.-made products increased, demand for these goods declined sharply, both here and abroad. The steel and auto industries were especially hard hit. In the 1950s the United States had provided more than 50 percent of the world's steel; by 1989 that figure had fallen to about 11 percent. During the 1970s foreign automakers' share of the U.S. auto market skyrocketed from 17 to 37 percent, and in 2003 Toyota eclipsed Ford as the world's number-two automaker in global annual sales. In 2004, for the first time in its forty-seven-year history, Toyota sold over 2 million vehicles. Some industry experts predict that it is even possible for Toyota to overtake GM by 2010. Moreover, Chinese manufacturers could take their first significant bite out of the U.S. market by 2010. In this economic climate, many U.S. businesses— especially those making cars, steel, textiles, and shoes—could be forced to lay off even more workers and shut down factories, or go out of business altogether. QQ==.4

The make-or-buy decision is the act of making a strategic choice between producing an item internally (in-house) or buying it externally (from an outside supplier). The buy side of the decision also is referred to as outsourcing. Make-or-buy decisions usually arise when a firm that has developed a product or part—or significantly modified a product or part—is having trouble with current suppliers, or has diminishing capacity or changing demand.

Make-or-buy analysis is conducted at the strategic and operational level. Obviously, the strategic level is the more long-range of the two. Variables considered at the strategic level include analysis of the future, as well as the current environment. Issues like government regulation, competing firms, and market trends all have a strategic impact on the make-or-buy decision. Of course, firms should make items that reinforce or are in- line with their core competencies. These are areas in which the firm is strongest and which give the firm a competitive advantage.

The increased existence of firms that utilize the concept of lean manufacturing has prompted an increase in outsourcing. Manufacturers are tending to purchase subassemblies rather than piece parts, and are outsourcing activities ranging from logistics to administrative services. In their 2003 book World Class Supply Management, David Burt, Donald Dobler, and Stephen Starling present a rule of thumb for out- sourcing. It prescribes that a firm outsource all items that do not fit one of the following three categories: (1) the item is critical to the success of the product, including customer perception of important product attributes; (2) the item requires specialized design and manufacturing skills or equipment, and the number of capable and reliable suppliers is extremely limited; and (3) the item fits well within the firm's core competencies, or within those the firm must develop to fulfill future plans. Items that fit under one of these three categories are considered strategic in nature and should be produced internally if at all possible.

Make-or-buy decisions also occur at the operational level. Analysis in separate texts by Burt, Dobler, and Starling, as well as Joel Wisner, G. Keong Leong, and Keah-Choon Tan, suggest these considerations that favor making a part in-house:

• Cost considerations (less expensive to make the part) • Desire to integrate plant operations • Productive use of excess plant capacity to help absorb fixed overhead (using existing idle capacity) • Need to exert direct control over production and/or quality • Better quality control • Design secrecy is required to protect proprietary technology • Unreliable suppliers • No competent suppliers • Desire to maintain a stable workforce (in periods of declining sales) • Quantity too small to interest a supplier • Control of lead time, transportation, and warehousing costs • Greater assurance of continual supply • Provision of a second source

Buyer behavior - The decision-making process

How do customers buy?

Research suggests that customers go through a five-stage decision-making process in any purchase. This is summarised in the diagram below:

This model is important for anyone making marketing decisions. It forces the marketer to consider the whole buying process rather than just the purchase decision (when it may be too late for a business to influence the choice!)

The model implies that customers pass through all stages in every purchase. However, in more routine purchases, customers often skip or reverse some of the stages.

For example, a student buying a favourite hamburger would recognise the need (hunger) and go right to the purchase decision, skipping information search and evaluation. However, the model is very useful when it comes to understanding any purchase that requires some thought and deliberation.

The buying process starts with need recognition. At this stage, the buyer recognises a problem or need (e.g. I am hungry, we need a new sofa, I have a headache) or responds to a marketing stimulus (e.g. you pass Starbucks and are attracted by the aroma of coffee and chocolate muffins).

An “aroused” customer then needs to decide how much information (if any) is required. If the need is strong and there is a product or service that meets the need close to hand, then a purchase decision is likely to be made there and then. If not, then the process of information search begins.

A customer can obtain information from several sources:

• Personal sources: family, friends, neighbours etc • Commercial sources: advertising; salespeople; retailers; dealers; packaging; point-of-sale displays • Public sources: newspapers, radio, television, consumer organisations; specialist magazines • Experiential sources: handling, examining, using the product

The usefulness and influence of these sources of information will vary by product and by customer. Research suggests that customers value and respect personal sources more than commercial sources (the influence of “word of mouth”). The challenge for the marketing team is to identify which information sources are most influential in their target markets.

In the evaluation stage, the customer must choose between the alternative brands, products and services.

How does the customer use the information obtained?

An important determinant of the extent of evaluation is whether the customer feels “involved” in the product. By involvement, we mean the degree of perceived relevance and personal importance that accompanies the choice.

Where a purchase is “highly involving”, the customer is likely to carry out extensive evaluation.

High-involvement purchases include those involving high expenditure or personal risk – for example buying a house, a car or making investments.

Low involvement purchases (e.g. buying a soft drink, choosing some breakfast cereals in the supermarket) have very simple evaluation processes.

Why should a marketer need to understand the customer evaluation process?

The answer lies in the kind of information that the marketing team needs to provide customers in different buying situations.

In high-involvement decisions, the marketer needs to provide a good deal of information about the positive consequences of buying. The sales force may need to stress the important attributes of the product, the advantages compared with the competition; and maybe even encourage “trial” or “sampling” of the product in the hope of securing the sale.

Post-purchase evaluation - Cognitive Dissonance

The final stage is the post-purchase evaluation of the decision. It is common for customers to experience concerns after making a purchase decision. This arises from a concept that is known as “cognitive dissonance”. The customer, having bought a product, may feel that an alternative would have been preferable. In these circumstances that customer will not repurchase immediately, but is likely to switch brands next time.

To manage the post-purchase stage, it is the job of the marketing team to persuade the potential customer that the product will satisfy his or her needs. Then after having made a purchase, the customer should be encouraged that he or she has made the right decision.

Many of today's products are so complex that no single company has all the necessary knowledge about either the product or the required processes to completely design and manufacture them in-house. As a result most companies are dependent on others for crucial elements of their corporate well-being. Typically, however, companies have some choice as to whom they become dependent upon and for what sorts of skills and competences. That is, although few companies can "do it all," most have significant influence over the strategic choice of corporate identity and what businesses to be in. What is the range of choices they face? How are different companies making those choices? Can we make sense of the variety of decisions we can observe now in different industries or different parts of the world? What are the skills that companies must retain?

In this paper we address the challenge of making these choices rationally. We give examples in which similar companies, facing similar choices, select make/buy patterns in very different ways, resulting in very different patterns of interdependencies along companies' supply chains. These choices are not restricted to skills related to the product, but include choices related to key design and manufacturing issues. To make sense of these differences, we propose a framework that ties together the following engineering and management concepts into one coherent view:

• core competencies • the product development process • systems engineering • product architecture and modularity • supply chain design and seek to show that the technical and managerial skills required for each of these are highly overlapping if not the same.

Q. ==5. What Actions Can a Firm Take to Minimize Its Global Tax Liability?

Corporations try to maximize the return to their shareholders and minimize their corporate tax liability. Countries tax profits at different rates, so companies structure their operations to pay the least tax. They may create affiliated but separate companies in low-tax jurisdictions. They may guarantee loans to those affiliates to transfer cash without paying tax. They may return profits to high-tax jurisdictions through royalty or dividend payments rather than income and they may generate profits abroad rather than at home. The key is to control nominally independent foreign operations.

General Strategies

A company in a high-tax country can reduce its global tax liability by carrying out highly profitable operations in low-tax jurisdictions while maintaining operations that cost money at home. It must develop strategies for financing such foreign operations without using its own, often already taxed resources. The new, foreign affiliate can then sell what it produces back to the head office, further reducing the mother company's profits.

Foreign Affiliates

When starting up a foreign company in a low-tax jurisdiction, the mother company must ensure that it creates a completely separate corporation that will be taxed as a local company. At the same time, the mother company must retain control of the new entity and ensure its financing without transferring money that may already have been taxed or may be taxed when transferred. One way of accomplishing this is to guarantee a loan to the new entity at a foreign bank. The new company will then be self-financing and can start operations and generate profits under a low-tax regime.

Transfer Pricing

One of the best ways for a company to reduce global tax liabilities is to let a foreign operation in a low-tax jurisdiction manufacture products it sells back to the mother company for selling in the home market. The foreign affiliate generates substantial profits that are taxed at a low rate. Companies employing this tactic must be careful to document that the pricing of such transactions, called transfer pricing, is reasonable. The IRS conducts transfer pricing audits to ensure that such pricing is not inflated to avoid tax.

Repatriating Profits

Companies can successfully transfer operations and profits to low-tax foreign locations but, at some point, some of these profits must be brought back to the home country to finance local operations, pay dividends and support acquisitions or other financial operations. Revenue classified as income from operations is often taxed at a higher rate than other revenue. As a result, foreign affiliates may pay royalties or dividends to the mother company, allowing it to reduce its tax liability in its own jurisdiction. Companies often hire specialized service providers to advise them on the optimal structures to achieve such benefits.

Reduce Your Global Tax Liability

Let CCH products point the way to lower international tax liability

The ripple effect of the Great Recession here in the U.S. has led tax jurisdictions all over the world to hunt for ways to overcome revenue shortfalls. Upticks in income tax rates, withholding tax rates and value-added tax rates are the inevitable result. That makes staying on top of complex international tax laws and changing rates more important than ever.

“The name of the game for any multinational corporation is to reduce the overall global effective tax rate,” says Jerry Nestor, managing editor of international tax products at CCH, a Wolters Kluwer business. He points to two primary ways companies can achieve that objective:

• Understanding the way tax treaties between countries impact the cost of doing business worldwide.

• Staying current on tax rates in order to weave together a global structure that reduces the overall effective tax rate.

“The CCH International Tax Treaty Expert Library™ [ITTL] collects all of the income tax treaties and amending documents together in one place so that companies can see not only the potential income tax on business profits and withholding tax rates on payments, such as dividends, in effect between two countries, but exceptions to those rates as well,” Nestor says. “An understanding of how those treaties work is the first step to reducing your effective tax rate.”

The ITTL contains English translations of income tax treaties that exist between all the countries in the world. A second component is an authoritative treatise on tax treaties by Klaus Vogel, a recognized treaty expert, and the third ingredient is the explanatory commentary from authorities such as the Organisation for Economic Co-operation and Development, the United Nations and the U.S. Treasury.

“That provides the bedrock you need to begin to develop an international tax strategy,” Nestor says. “It also includes Smart Charts™ that pull out and compare withholding tax rates, as well as permanent establishment rules.”

With a solid understanding of tax treaties, the next step is to get a grip on local tax rates. The CCH resource that meets that need is Worldwide Tax Rates and Answers (WWTRA), which keeps companies up to date on ever-changing tax rates and rules around the world. It lets the user compare tax jurisdictions side by side using Smart Charts technology, and a separate but related tool includes an income and withholding tax calculator function for efficient “what-if” analysis essential to driving overall tax rates down to the lowest possible effective rate.