A Lesson From Oliver Essays - Scoop, , Term Papers

A Lesson From Oliver by David Jorgensen Like any other morning I was up at four, the day Oliver met with his violent death. At four in the morning the grass is wet. Now, it's still wet at 6 a.m. and even at seven, and these tend to be the hours of choice for most people wishing to appreciate the phenomenon of grass wetness. But it's a tragedy of economics that, when work starts at 5 a.m., one is not afforded the same time-options for grass appreciation as members of the sane world. Nor was this tragedy confined to my having to appreciate the wet grass while in a metabolic state more suited to hibernation. Four a.m. was my only chance to absorb all of northern Ontario's summer morning treasures. These were numerous and shamefully underrated by my dormant faculties, so rudely aroused before their time. But here was nature, determined to be wonderful with or without my participation, and somehow at some subconscious level, stored for future reference, I seem to have imbibed her subtle stimuli. Along the eastern shores of the night-sky a splash of colour would emerge. The all-night cricket band would reluctantly wane under the first gentle reveille from those "early-birds" of epigram fame. And then would come the most striking sensation of all: the smell of fresh dew on the grass - I think the terms "exhilarating" and "intoxicating" were coined by someone who'd just taken their first breath of northern morning air (though they likely did so between 6 and 7 a.m. when one is better primed to wax poetic and the passage of sensory information from one's nostrils to the brain is not so hopelessly clogged - as is the case at 4 a.m.). All these sensations I can fully appreciate only now, in retrospect (since at this moment I assure you it is not 4 a.m.). At four o'clock that morning of June 26, 1979, as I trudged across the acre-sized lawn to the old shed outside my parents' modest rural home - situated along the English Bay sideroad, overlooking the secluded, sparkling waters of Blue-Pine Lake, some six miles west of the small tourist town of Thistle, Ontario - the only sensation permeating my groggy consciousness was the bite of that long wet grass seeping through the seams of my ancient running shoes. And even this twigged only one, unpoetic image at 4 a.m.: "Mom's gonna make me cut the lawn when I get home." The truth of this semi-depressing insight was reinforced as I pulled up my pant leg to snap an elastic band over the cuff: my ratty jeans were wet up past the ankle. No doubt about it...the grass length had now officially surpassed my mother's tolerance of things long and grassy. This lawn would be cut. I would be the executioner elect. I hopped on my ten-speed: second-gear to get up the driveway, a rather formidable incline from the bike-shed; sixth-gear over the gravel road, roughly two miles. Then hit the highway, pop her into tenth and cruise the last four miles to town on glorious pavement. As usual, though, I'd barely pumped my way out of the driveway before the breeze from my own modest jet-stream began making my grass dampened feet start wishing for thermal socks - an annoying irony, considering the broiler of a sky under which I'd always pedal home later in the day. That's one point in favour of 4 a.m., all wet feet aside, it's the friendliest time of day in the hot summer months to go long-distance bike riding. In the dim, flat pre-dawn light I could make out only three distinct forms. There was the blue-black sky hanging overhead like some bottomless, gravity-defying lake; there was the ghostly grey strip of gravel tenuously marking my pathway; and there were the two ominous black walls, shapeless and unbroken, flanking either side of the road. The cool air licked at my face and began to wash the throbbing numbness from my head. It also cleared my eyes and I began to distinguish for the first time the individual trees - mostly birch, poplar and pines of several variety - of which those unending roadside walls were built. I was beginning to wake up. Accordingly, my thoughts progressed to the next stage of their traditional morning jog which took them daily from the bed of utter incoherence, to the streets of trivial musing and - usually, eventually - to the offices of constructive organization. For those

10 Jobs That Pay More Than $80k And How To Get Them

10 Jobs That Pay More Than $80k And How To Get Them You want to choose a career that will challenge you and nurture your strengths, as well as fulfilling you in the long term. But a great salary doesn’t hurt either, right? Check out a few of these top paying jobs and see if they might be right for you. Some don’t even require you to have a college degree! 1. Information Security Architect: $114kThis job requires a great deal of experience and qualifications, but if you can line yourself up for it, you can make great money. Look to get certified in A+, Net+, and Security+. If you have the hands-on experience and the expertise to do this job (vetting security, working with firewalls, streamlining processes and solutions), then you could be all set.2. Systems Admin: $83kThe typical medial salary for this position is a bit lower, but the more experience you have, the higher up the pay scale you will be. It’s also in great demand. So if you are a whiz at technology, this job might be for you.3. Art Director: $95kAre yo u super talented and into art but people keep asking you how you plan to pay the bills? Go into art direction, creating the style and image of a publication, theatrical production, ad campaign, even window display! You’ll need to be able to design and follow a budget, as well as lead a team, but if you have the talent, training, creativity, and the eye, you’ll do great.4. Lawyer: $130kThis is one of those instantly respected positions. No one will ever give you trouble at a cocktail party again. You’ll have to go to law school and go into a lot of debt, but if it suits you, you’ll be almost guaranteed a competitive salary- depending on your specialization.5. Sales Manager: $116kYou’ll have to sell a lot to be a sales manager, but once you’re at that level, you won’t be doing as much of the actual selling. Instead you’ll be establishing territories, setting goals, and guiding a team that does the selling. If you’ve got fi ve years of sales experience under your belt, this might be something you could think about. It’s good steady work at good steady pay- with less travel.6. IT Manager: $125kTechnology is such an integral part of today’s workforce and world. IT Managers are generally very well paid because they keep technology running for the companies they work at. They are the lifeline when things go wrong!7. Business Operations Manager: $119kKeep your company running- by negotiating contracts, hiring new talent, building and leading teams, and making strategy decisions. The growth for this field is projected to be 7% through 2024. Look for jobs on the east coast, in Connecticut, New York, and New Jersey.8. Financial Manager: $134kOversee the money in your company, control the checkbook, make profit projections, manage cash flow, and coordinate accounting. It’s a very detail-oriented and highly confidential position, requiring great skill with numbers, but the pay is undeniably good.9. Marketing Manager: $116kConduct research and use it to shape a successful advertising campaign. Design skills won’t hurt you here, and neither will leadership and team-building skills. Live in your own personal Mad Men for a living.10. Supply Chain Manager: $81kThis job tends to lead to high satisfaction and high pay- the high end can net you up to $123k. You’ll have to work your way up to this position, which will require a lot of dedication, sweat and time, but particularly if you don’t have a college degree, it’s an excellent option.

Exponential technology Essay Example | Topics and Well Written Essays - 750 words

Exponential technology - Essay Example Medical technology has changed the view of common people. With the use of medical technology, it is easy to cure complex diseases. For example, the contaract surgery used to take three to five days but now due to technology, it can easily be cured in day care hospitals. Use of medicines has made it possible to fight with dangerous diseases like kidney failure, heart attack, cancer, hepatitis, etc. The cancer can be cured with medicines if detected in early stages. The only destination of cancer patient was death before this medical technology. Genetic changes are now also possible by the use of modern medical technology. The gene mutation can cause all the genome of a person. With the use of cloning, animals and plants of desired characters are produced now a day’s who are more productive and beneficial for mankind. It is the medical technology by the use of which, eye sight problem can be permanently cured by the use of laser technology. Due to medical advancement, a greator number of patients are cured in less time. The number of patient’s shifts has increased, so more people can get health in less time. These methods are easy, fast and accurate (Eucomed). Use of medical technology in the field of health has brought many benefits but there are also certain harms that are coming along with advantages’. There are instruments like ventilators, dialysis units and infusion pumps that sound in case of emergency. That alarm is now widely used that the hospital staff can ignore it due to its more use. As after a certain limit, we can forget the actual meaning of an alarm because we become used of it. Another main disadvantage of medical technology is the use of radiations for taking tests or to cure diseases. The use of radiations that limited dose can cause gene mutation of cancer. They can also damage healthy tissue while destroying cancerous cells. Although the instruments in hospitals are so much advance but there is

In depth news assignment Research Paper Example | Topics and Well Written Essays - 500 words

In depth news assignment - Research Paper Example Since the fund will also be used for recapitalizing existing large private funds, it is therefore important that the private funds should channel such funds in activities which can generate export revenue for the country. Over the period of time, domestic pool of private funds has actually declined thus making it extremely difficult for the private and new ventures to have an access to such pool of funds. An increase in the pool of funds therefore would further result into availability of new funds which can further bolster the economy. The new trends are increasingly suggesting the rapid increase in the technology based ventures with strong probability to become international businesses. New start-ups have actually grown into large and profitable international businesses because of getting local funding support. It is also critical to allow provinces to make their own strategies too in order to ensure that they can take greater benefit of the new proposed plan. Some argue that the overall size of pool of the funds to be made available is relatively small and may not create the required stimulus for the private sector to actually develop the new businesses which can make their name at the international level. For expansion into the international markets and to capture the larger base of customers through forming international joint ventures and strategic alliances, Canadian firms will require lot more capital and resources to be successful at the international level. (The Canadian Press , 2013) It is also considered that the overall business environment in Canada is risk averse and private sector is actually not been able to achieve the kind of investment it must require in order to thrive at the international level. In order to effectively form good strategic alliances as well as the joint ventures, it is extremely important that private sector must also develop the ability to generate its equity funds. The government’s efforts to mobilize

Cas a Constant Struggle Essay Example | Topics and Well Written Essays - 750 words

Cas a Constant Struggle - Essay Example However, aside from simply being able to give each person the capability of doing things that they ought to complete as individual beings in the community, liberty has also paved way to a wider and more diverse society that is populated by individually aspired population who wants to make a name of their own within the society that they are living in. THE United States Bill of Rights has generated so much interest that in 50 years, some 700 books have been written about it-over 40 of them this year alone. Since 1991 is the 200th anniversary of the adoption of the Bill of Rights, people were even more interested in this subject. Yet, a poll revealed that 59 percent of the American public do not know what the Bill of Rights is. When the Constitution of the United States was ratified in 1788, it allowed for amendments that would clarify positions not clearly defined in the Constitution. In 1791 the first ten amendments were added to the Constitution. These ten amendments had to do with liberty and became known as the Bill of Rights, for they guarantee to the people of the United States certain individual liberties. The word freedom in its broad sense as used in the Bible and in the field of government means merely "acting at will". "Freedom is the state of being free; liberty; self-determination. The power of acting, in the character of a moral personality, according to the dictates of the will, without other check, hindrance, or prohibition than such as may be imposed by just and necessary laws and the duties of social life." The word "liberty", as generally used, is practically synonymous with the word "freedom". "Liberty is freedom; exemption from extraneous control. The power of the will to follow the dictates of its unrestricted choice, and to direct the external acts of the individual without restraint, coercion, or control from other persons is the main idea supported by the thoughts of applying liberty in the human society. The capability of human individuals to act upon what they want and to react upon what they see the way that they want to is a clear depiction of the actual applicat ion of liberty today. According to some social psychologists, the want of being free and being able to do what they want is innate in humans. It is a major part of the human behavior that sets people apart from the being that animals follow. Everybody in the society wants to appear better than what is usually seen from others. The initial want for fame is an undeniable cause for such thinking. This is primarily the reason why the dream of having an equal society is most likely believed to have been hindered by the forces implied through the application of individual liberty. So as soon as the news spread that a constitution was in the making, freedom-loving people began a movement for a national bill of rights that would guarantee their liberties and would separate Church from State. If the people were in such fear of a centralized national government, why would they create it After the Declaration of Independence was signed in 1776, a new governmental system was needed. British rul e in each colony came to an end. The states then adopted the

Synergies of Product Diversification Strategy

Synergies of Product Diversification Strategy Introduction Nowadays large firms have to survive in the face of economic competition. They have to keep an eye on the competitors performance. Managers try to progress and run their businesses well in order to grow and be competitive. When a large firm has reached a mature life-cycle stage it often has to explore the possibility of how to still grow. Ansoff (cited by Johnson, Scholes and Whittington, 1998) presents four basic growth alternatives: a) increased market penetration, b) market development, c) product development and d) diversification. Choosing the right path is major decision for managers. Finding out if there are reasons which may lead a large firm to prefer diversification, more specific, product diversification as the growth alternative strategy instead of other strategies is a main question. Firms who spread their activities and businesses across different product markets that are more or less related between each other are said to follow a product diversification strategy. (Pils, 2009, p.10) Product diversification strategy definition has evolved during the last decades. Some definitions are evolutional and complementary but some others contradict each other (Goold and Luchs, 1993). Therefore, it is important for managers to have a clear definition. The benefits of product diversification have been divided into two categories depending on the type of diversification: related or unrelated. Related product diversification refers to entries into new products or service businesses that have a connection to the firms existing markets (Peng, 2008). Researches (Hoskisson, 2007) and business experiences (such as Mondi AG, Procter Gamble, CHR plc., etc.) have proven that some of the benefits of this type of diversification are: Operational synergy: economies of scale Utilizing excess productive capacity Reinvesting earnings Unrelated product diversification refers to the development of products or services beyond the current capabilities and value network (Johnson et al. 2008). Some of the benefits and reasons for this type of diversification are: Financial synergy: economies of scope Increasing market power Spreading risk across a range of businesses The challenge for any large firm, once product diversification is chosen as the growth path, is to decide which type of diversification is most appropriate and what strategic plan to follow. Product diversification gives also other challenges to managers such as the need of new skills to manage a wider group of businesses, new techniques, sometimes new facilities, large capital to test the viability of the new product, produce it and market the product, hire and train new employees, etc. Therefore, diversification has some inconveniences as it involves taking a step into a territory where the parameters are unknown to the firm (Peng, 2008). Product diversification can be achieved by acquiring an existing firm in the business it wants to enter, starting up a new business subsidiary or entering into joint ventures. For large firms knowing the different growth strategies including its benefits and inconveniences is fundamental to giving managers practical recommendations. For a better understanding of these fundamental issues this research will analyze whether related or unrelated product diversification strategy leads large firms to exploit more synergies and creates more value for the firm. Based on this research question, the following sub-questions are going to be addressed in this research: Should large firms, such as Mondi AG, aim to focus on related or unrelated businesses to exploit operational synergies? How is Mondis life cycle related to the right time of diversifying? Which recommendations on product diversification strategy can be given to large firms regarding financial synergy? To answer the above questions, I will present a detailed and methodical literature review on product diversification strategy concept, categories, synergies, its relation with large firms life cycle and explore the effects of a financial crisis on large firms who have chosen this type of diversification to identify the appropriate strategy for the research goal. This research is based on the hypothesis that related product diversification is the right strategy to be chosen if operational synergies are to be achieved while for financial synergies, unrelated product diversification strategies are more appropriate. The strength of this hypothesis is tested through a case study of a large firm: The Mondi Group. The Mondi Group has been chosen as the large firm to be explored in this research because it is an international firm with one of its largest teams and headquarters in Austria. Trend, an Austrian financial magazine, ranked Mondi as the 13th top Austrian large firm out of 500 firms in 2008 having 5.159,00 Mio. Euro net sales and 26.425 employees worldwide. Product Diversification In the 20th century many researchers have written about product diversification strategy (PDS). This research will analyse how PDS is seen by managers because of the larger experience there is nowadays. Diversification has been specially growing after the whole post-war period. Whereas in 1950 only around one third of large firms in France, Germany, and the United Kingdom were diversified, by the 1990s it increased to two thirds or more (Whittington and Mayer 2003). Size and Product diversification strategy This research is focused on how large firms have reacted to the different paths of growth. The firm size: small, medium or large is an important parameter while analysing a firm strategy. In the financial and economical studies and researches the relation between size and firm variables remains a controversial subject. Some argue that size is the primary factor that determines structure whether others say that size is irrelevant (Jackson and Morgan, 1978). In my opinion, it is true that product diversification can be applied both by small and large firms, but I believe that a small firm has more limitations and can not fully develop this strategy in its organization due to limited resources: human, financial and technological. I also believe that as a consequence a firm applying product diversification strategy will increase its size. With larger number of products, the complexity of processes and production is greater. Therefore the craft needed is greater. As mentioned before, some researchers agree with this point of view like the study realized by Dewar and Hage (n.d., cited by Jackson and Morgan, 1978) which suggests that large firms facilitate changes in structure in a way that small firms can not afford. On the other hand, Woodward, Zwerman and Harvey (n.d., cited by Jackson and Morgan, 1978) concluded that instead of size, the production systems used by the firms are more connected and explain better the firm structure and feature. In other words, an efficient production system can explain the success of one large or small firm and therefore the relationship between size and differentiation is not linear. Diversification and Product Diversification Strategy Terminology Diversification The root of the word is, obviously, diverse. Pitts and Hopkins (1982) define it as literally meaning different, unlike, distinct, and separate (p.620). Therefore, if this definition is applied to the context of product diversification, we can say that it means firms having their products in various and different lines. Pils (2009) also confirms this definition as he points out that product diversified firms are understood to be active in multiple, distinct product-markets (p.10). The various definitions, forms and ways of managing diversification are the main topics of this research. Product diversification strategy There is a common denominator in the way product diversification is defined in the literature. For instance, Pils (2009) defines it as firms spreading their activities and products across different product-markets that are more or less related between each other. He also affirms that product diversification strategy determines which businesses a corporation should be in, defining the scope of the firms activities and being of high relevance for creating value for the firm. Berry (1971, p.380) defines product diversification as an increase in the number of industries in which firms are active. However, he does not point out that it can be also increasing the number of products in the current industry. Pitts and Hopkins (1982, p.620) consider firms product diversification if operating multiple different businesses at the same time. Hoskisson (2007), on the other hand, says that the firms level of diversification is a function of decisions about the number and type of businesses in whic h it will compete as well as how it will manage the business. These definitions have surely been influenced by the work of Ansoff (1957) in which he presented diversification as a possible growth strategy as mentioned in the introduction. Ansoff presented two ways of diversification: market diversification and product diversification. Although this research only focuses on the product diversification side, few lines are dedicated to explain the difference and characteristics of these two strategies. Market diversification is a strategy that takes the firm from its existing market to new ones. It exploits the current products and capabilities in new markets looking for geographical spread. This strategy is more and more used in the current times where globalization is facilitating the firms internationalisation. It also presents some challenges like cultural barriers, adding management costs and government restrictions among others. Product diversification is about adding new product to the firms portfolio whereas market diversification is about entering in new markets offering the firms current products. Reasons and Challenges Reasons and Motivations for Diversification: Any firm has a start. Normally starting as a small business it focuses on a single product. This is known as a single business strategy. The natural reasons are commonly due to a lack of cash, experience and know-how. Over time, the resources, capabilities and core competences are rooted and stabilized. At that point, firms may choose product diversified strategy, with two broad categories (related or unrelated). Large firms use product diversification strategy for a variety of reasons. Pearce and Robinson, (2005) and Hoskisson ( 2007) mention among others, the following reasons: To increase the growth rate of the firm For a better use of the companies funds than investing them into internal growth To balance the product line Diversifying the product line when the firm has reached its mature life cycle To increase efficiency and profitability, especially, if there is operational or financial synergy To increase the firms value by improving its overall performance To increase revenues or reduce costs To match and neutralize competitors market power To reduce managerial risk To increase the firms size and thus managerial compensation Product diversification challenges The above mentioned reasons and motivations for PDS can also bring along challenges and costs. One could say that PDS needs new facilities, technologies, skills, know-how, employee and managerial training, etc. It is important to know that it can have a great negative impact on the firms current products if a new product is launched with the firms brand name and the product is not well accepted in the market. The reasons for the market rejection can be e.g. lower quality than expected from the firm, high price, poor distribution, etc. At that point, the whole company will be negatively affected by a bad move. This argument is also supported by various authors such as Hoskisson, (2007); Grant, Jammine, and Thomas (1998); Goold and Luchs (1993), (cited by Pils, 2009). They state that some of the challenges are information processing, coordination, and control problems due to increase of information asymmetries difficult for a single business to deal with. In case of applying a PDS a fi rm has to change its structure and adopt new systems. Moreover Hoskisson (2007) elaborates that the data and information a firm using PDS requires is substantially greater. Furthermore increasing portfolio diversity may involve inefficiencies due to growing conflict on top management and a lack of adaptability to environmental change. Product Diversification Strategy Categories: Related Unrelated Product Diversification Strategy As mentioned before, there are two broad categories of PDS: Related and Unrelated. Some authors such as Richard Rumel (cited by Lovallo and Mendoca, 2007), Peng (2008) also categorize PDS as: focused, moderately and highly diversified. These three categories are not deeply explored in this research. But to dedicate some words, it should be mentioned that Richard Rumelt, in 1972, was the first person to statistically prove the linkage between corporate strategy and profitability. He concluded that moderately diversified firms outperform more diversified ones. Lovallo and Mendoca (2007) sustain that this finding has been valid more than 30 years of research. Moreover, a contemporary author, Peng (2008), also points out that some moderate level of diversification is the most optimal. The main focus of this research is whether a related or unrelated strategy is more suitable for large firms while diversifying. Therefore, in the following lines a definition and a detailed explanation of both is presented. Related product diversification can be defined as a strategy that firms can choose as a growing path. As the word related signals, this diversification strategy is focused on products that have a correlation between each other and are related in some way, especially in their core competences. Normally, firms that choose related product diversification as a strategy are sharing a common factor such as the raw material, the technology or the know-how needed to produce different products. Moreover, the products offered by the firm do not necessarily need to be similar. For instance, a firm running a cinema complex and also offering soft-drinks to be sold at the movie theatres is using a related PDS. Even if their products may not be related, they must share some common ground on their value or supply chain. In this case, the customers targeted are the same. Pearce and Robinson,(2005) confirm this by defining related businesses as those relying on same or similar capabilities in order to have success and achieve competitive advantage in their product markets. Major advantages of related PDS are: concentration of strength, exploitation of a market niche, and the development of synergies. A good example, of a firm applying this strategy is CRH, an Irish company who operates in 35 countries with more than 93.500 employees. The CRH Corporate Social Responsibility Report (2007) states that the firm is a diversified building materials group which manufactures and distributes building material products from the fundamentals of heavy materials and elements to construct the frame, through value added products that complete the building envelope, to distribution channels which service construction fit-out and renewal. CRH has three closely related core businesses: primary materials (aggregates, cement, asphalt and ready mixed concrete); value-added building products (pre-cast, architectural, construction accessories, clay, gas, insulation, building envelope products); and specialist building materials (CRH, 2009). CRH initially decided to diversify to gain economies of scope and also to stretch the corporate parenting capabilities. While CRH diversified its market its power i ncreased and consequently it could afford to cross-subsidise one business from the surpluses earned by another, in a way that competitors could not. As an effect, it could drive out competitors. Before going into further details regarding related PDS, a definition of Unrelated Product Diversification is given. In this case, as the word unrelated points out this diversification strategy focuses on firms offering products that have no relation, are not complementary between each other and do not have necessarily the same raw material as their prime and main composition. Moreover, they do not need to share any part of their supply chain (customers, distributor, manufacturer, logistics, etc). For instance, the Easy Group Company is present in several industries and services that have actually no relation. Some of them are: travel companies, car rentals, internet-cafes, cinemas, cosmetics, etc. Stelio Haji-Ionannou, the founder of the company has developed a cost strategy that pretends to apply in all its businesses. It seems that he believes that his formula is valid for any business. Normally the reason why firms choose this path is known to reduce their financial risks. Peng (2008) refers to unrelated PDS as firms entering into industries new lines that have no evident connections to the present firm line of businesses. Furthermore, Hoskisson (2007) says that unrelated PDS occurs when there are no overlapping capabilities other than financial resources. This strategy is also known in the financial literature as conglomerates (Hoskisson, 2007; Peng, 2008; Pearce and Robinson, 2005) It has been widely discussed whether related is more successful or unrelated. To be able to answer this fundamental question the following pros and cons are explored: Human resources: Related product diversification is characterized by the ease of human resources relocation because the skills and capabilities needed for the introduction of the new products are very similar. On the other hand, unrelated PDS requires recruiting new personnel or training current employees in the new fields. (Tallman, 2003) Technologies Obviously, if a firm chooses unrelated PDS, it will probably not be able to share technologies. Therefore, the investment needed to apply this kind of diversification is greater than by applying a related one. Related PDS is characterised by sharing technologies needed to produce the new products. For example, a firm which produces shampoo and introduces hair conditioner may use the same technology. In that way it reduces the investment costs for the new production and gain economies of scope (also see 2.5). Tallman (2003) confirms that related products can increase the use of existing fixed investments and existing capacity for more purposes and more intensively, gaining efficiencies that reduce costs. Additionally, he says that it can improve the efficiency of its existing resource infrastructure by increasing the flow of product to a wider range of customers. Management For managers it is easier to introduce related products than unrelated ones because they are familiar to the industry and can apply the same or similar strategies. For unrelated ones, managers have to learn about the new products and often the strategy used for the current products is not applicable for the new ones. Therefore, managers should experience new strategies which at the beginning may fail. Prahalad and Hamel (1990), said that it is likely that firm managers of unrelated products may be ineffective because the routines and capabilities they have already developed are not applicable one to one to the entire range of businesses. On the other hand it could be argued that it can be effective as top management can concentrate on financial management and costs controls while leaving operational control with each business unit. Competitors It is easier for competitors to imitate the financial economies of a firm than the operational synergies derived from a related PDS. This is due to the fact that operational synergies derived from the use of current know-how, facilities, capabilities and experiences are more difficult to imitate than realizing that a firm is diversifying into new unrelated products based on the percentage of the revenue it can gain. Therefore, it is less likely that competitors will imitate a firm which introduces new related products. Peng and Delios, (2006), and Khanna and Palepu, (2005), (cited by Hoskisson, 2007) sustain that competitors find it easier to imitate financial economies than replicating the value gained by related PDS from the economies of scope developed through operational relatedness. Control Mechanism The principle control mechanism for related diversification is strategic control with rich communication between corporate and business units managers. Financial results are obviously not a fair means to measure the functioning of each business unit. One business unit may have low revenues but its main function is to support the others. For unrelated products, the best way to control is exactly the opposite. The emphasis has to be on financial control (return and investment) to evaluate the units performance. (Peng, 2008) Market saturation When the product a firm is offering is close to a market saturation or obsolescence, the best thing a firm can do is to enter into another market offering unrelated products. In that way the company has an opportunity to grow. It would be a great mistake in a saturated market to introduce related products because the competition is already very high and to get a profitable market share is unlikely. Stabilize Earnings Another reason would be to stabilize the earnings and dividends of a firm in a cyclical industry. In that case, the firm should diversify into an industry with complementary cycles independent of the relation with the current products. Independency Firms that are uncomfortable to be dependent on one product line should diversify into other businesses or industries. In that way the risk is spread and all the weight is not in one product line. All in all the benefits of both categories of diversification do not appear as the result of a magic formula that just happens but as Tallman (2003) and Peng (2008) also sustain it is the result of an active management of resources and capabilities with potential for broader application. Product diversification synergies need to be explored in more detail. Therefore the following section is dedicated. Product Diversification Synergies Pils (2009) explains that the word synergy is derived from the Greek word synergos and literally means working together. In business terminology, synergy is used to describe the ability of two or more business units or firms to make greater value working together than they would do independently (Goold and Campbell, 1998, p.133). Diversifying a large firm is considered economically positive only if synergetic effects between the different businesses units are achieved. As a consequence, the idea of maximizing synergies as the main objective of diversification strategy is presented below. Operational Synergies The emphasis of product related diversification is on operational synergies because in this strategy production resources are shared to have a cost competitive advantage. In the financial literature, the term operational synergy has been used as a synonym for economies of scope (Tanriverdi and Vendkatraman, 2005). Economies of scope and/or operational synergies are the result of two or more business units that share and transfer factors of production, its resources and capabilities. As a consequence the shared production costs will be lower than production costs of each one separately. Peng (2008) defines it as competitiveness increase beyond what can be achieved by engaging in two product markets separately. In other words, firms benefit from lowering unit costs by gaining advantage from product relatedness, i.e. 2+2=5. Some sources of operational synergy are (Peng, 2008): Technologies, such as common platforms Marketing, such as common brands, and Manufacturing, such as common logistics Conscious of these possible synergies, Zodiac a French large firm who in 1930 was focused on inflatable boats and had strong ties to the French army started to introduce new related products to its portfolio. Zodiac created 5 different divisions having inflatable materials as a common denominator. These divisions have been: marine division (recreation, military, professional, safety of life at sea, environmental solutions); pool division (pool sector and pool care and water cleaning, heating, pumps, filters); airline equipment division (passenger seats and on-board toilets and sanitation systems); aerosafety systems division (aircraft escape slides, parachute systems, helicopter floats, and flexible fuel tanks); technology division and aircraft system division. (Zodiac Aerospace, 2009) Zodiac has benefited from the operational synergies through the use of inflatable products technology and has also used market synergies because it has supplied the same customers with different produc ts. Conversely, unrelated diversification does not need to have advanced levels of operational relatedness. Rather, each business unit has its own strategic and operational responsibility and the management can focus on the financial synergies. (Tallman, 2003) Investment synergies are very much related to the operational synergies. It can be argued that one is the consequence of the other or that they are developed hand in hand. Investment synergies are the result of products sharing the same plant, resource and development (RD) and machinery. This is more probable to happen with a related product diversification because of the previous explanations. For unrelated products, the machinery is improbable the same and each product need its own RD. Financial Synergies The means obtaining financial synergy is different from obtaining operational synergies. The key role of firms is to identify and find profitable investment opportunities. The parameter to measure if financial synergies are to be achieved is whether managers can exceed the job of identifying and taking advantage of profitable opportunities compared to external capital markets (Peng, 2008). Hoskisson (2007) defines financial synergies as cost savings realized through a better use of financial assets based on investments inside or outside the firm. Competent internal capital distribution can lead to financial synergies and reduces risk between the firms businesses (Higgings and Schall, 1975). A firm using unrelated PDS may grow, but only internally in each business unit and will not reach operational efficiencies but financial ones. That means, the revenue of each business unit will be greater when functioning as a conglomerate rather than functioning independently. This idea is supported by Peng (2008) who states that competitiveness increases for each unit financially further than what can be achieved by each unit competing independently as an individual firm. Many different products that are not necessarily related offer opportunities of high returns. If a firm is only interested in the returns, unrelated product diversification may be a right path of growth. Sales synergies: These occur from sharing salespeople, warehouses, distribution channels, and advertising. Salespeople have more chances to be able to sell to the same customer a wide range of related products than unrelated ones. Salespeople will try to sell a complete pack of product to the same customer and in that way take advantage of the sales synergies that related product diversification presents. Imagine a company selling sport shoes and refrigerators, in a selling process it is more unlikely to be able to sell both products to the same customer than if he would offer sport shoes and sport clothes. On the other hand, if a firm has developed a well-known brand, the use of the brand-name in other products, related or unrelated, can increase and facilitate sales because it can have build before customer loyalty to the brand. For example, Mars chocolate confectionery successful launched ice-creams. Much of it success could be related to the brand name. So, sales synergies do not occur only withi n related products but also within unrelated ones if the brand name is positively perceived and recognized by the customers. Management synergies It arises from managers accumulating experiences from handling problems in one business unit that can be applied and used to solve problems in a related business unit. Even more, the accumulated experience and know-how allows answering faster to the industry trends and challenges. Managers are able to transfer their skills, experiences and strategies (Enz, 2009, p.222). Contrarily, unrelated product managers can not apply the experience gained from solving the problems of one unit to the other in most cases because the problems are specific for each product. All these synergies can be undermine due to additional layers of management, delays due to organization and information complexity, communication costs for coordination, imaginary synergies that in fact do not exist, incompatible production processes, etc. Therefore while choosing between related and unrelated PDS the mentioned synergy risks have to be taken into account. Research Methodology In this section an explanation of how the data for the case study was collected and how it was analyzed is presented. It is important to know how the data was collected because the method chosen affects the final findings. The information and content of The Mondi Group Case Study was obtained through an expert interview with Mr. Wolfgang Kropiunik, Mondis Marketing Manager of Uncoated Fine Paper. A questionnaire was sent as a guide and overview of the face-to-face interview questions. A meeting for a 40 minutes exploratory semi-structured interview was organized on the 24th of November 2009 at Mondi Headquarter, Vienna. Mondi Group was chosen as the large firm to be analyzed as it is a large firm with more than 33.000 employees worldwide and has its headquarter in Vienna (Mondi, 2009). Therefore the results presented in this research are very much related to Mondis functioning and successful method. It might be possible that if the studied firm had been another one, the results of the research question could have been different. The interview was recorded and the data obtained was transcribed (see appendix). The transcription of the interview allowed a deeper comprehension of Mondis product diversification strategy, synergies and challenges. Moreover, the recommendations presented to the company (see 4.7) are inspired from the challenges Mr. Kropiunik mentioned during the interview. The interview gave a number of information about Mondis life cycle, PDS and challenges especially during the current financial crisis The Mondi Group Case Study Mondi is a large and international packaging and paper firm represented in around 35 countries. In 2008, it had revenues of 6.3 billion EUR and about 33.400 employees (Mondi, 2009). It has a strong presence in Western Europe, Russia and South Africa. Mondis Europe and International Division has its headquarter in Vienna while the corporate headquarter is located in Johannesburg. In Vienna, there are three businesses: Uncoated Fine Paper, Corrugated and Bags Specialties. Mondi has reached to be fully integrated having the control of its supply chain. It grows trees, manufactures pulp and paper and converts packaging paper into corrugated packaging an Synergies of Product Diversification Strategy Synergies of Product Diversification Strategy Introduction Nowadays large firms have to survive in the face of economic competition. They have to keep an eye on the competitors performance. Managers try to progress and run their businesses well in order to grow and be competitive. When a large firm has reached a mature life-cycle stage it often has to explore the possibility of how to still grow. Ansoff (cited by Johnson, Scholes and Whittington, 1998) presents four basic growth alternatives: a) increased market penetration, b) market development, c) product development and d) diversification. Choosing the right path is major decision for managers. Finding out if there are reasons which may lead a large firm to prefer diversification, more specific, product diversification as the growth alternative strategy instead of other strategies is a main question. Firms who spread their activities and businesses across different product markets that are more or less related between each other are said to follow a product diversification strategy. (Pils, 2009, p.10) Product diversification strategy definition has evolved during the last decades. Some definitions are evolutional and complementary but some others contradict each other (Goold and Luchs, 1993). Therefore, it is important for managers to have a clear definition. The benefits of product diversification have been divided into two categories depending on the type of diversification: related or unrelated. Related product diversification refers to entries into new products or service businesses that have a connection to the firms existing markets (Peng, 2008). Researches (Hoskisson, 2007) and business experiences (such as Mondi AG, Procter Gamble, CHR plc., etc.) have proven that some of the benefits of this type of diversification are: Operational synergy: economies of scale Utilizing excess productive capacity Reinvesting earnings Unrelated product diversification refers to the development of products or services beyond the current capabilities and value network (Johnson et al. 2008). Some of the benefits and reasons for this type of diversification are: Financial synergy: economies of scope Increasing market power Spreading risk across a range of businesses The challenge for any large firm, once product diversification is chosen as the growth path, is to decide which type of diversification is most appropriate and what strategic plan to follow. Product diversification gives also other challenges to managers such as the need of new skills to manage a wider group of businesses, new techniques, sometimes new facilities, large capital to test the viability of the new product, produce it and market the product, hire and train new employees, etc. Therefore, diversification has some inconveniences as it involves taking a step into a territory where the parameters are unknown to the firm (Peng, 2008). Product diversification can be achieved by acquiring an existing firm in the business it wants to enter, starting up a new business subsidiary or entering into joint ventures. For large firms knowing the different growth strategies including its benefits and inconveniences is fundamental to giving managers practical recommendations. For a better understanding of these fundamental issues this research will analyze whether related or unrelated product diversification strategy leads large firms to exploit more synergies and creates more value for the firm. Based on this research question, the following sub-questions are going to be addressed in this research: Should large firms, such as Mondi AG, aim to focus on related or unrelated businesses to exploit operational synergies? How is Mondis life cycle related to the right time of diversifying? Which recommendations on product diversification strategy can be given to large firms regarding financial synergy? To answer the above questions, I will present a detailed and methodical literature review on product diversification strategy concept, categories, synergies, its relation with large firms life cycle and explore the effects of a financial crisis on large firms who have chosen this type of diversification to identify the appropriate strategy for the research goal. This research is based on the hypothesis that related product diversification is the right strategy to be chosen if operational synergies are to be achieved while for financial synergies, unrelated product diversification strategies are more appropriate. The strength of this hypothesis is tested through a case study of a large firm: The Mondi Group. The Mondi Group has been chosen as the large firm to be explored in this research because it is an international firm with one of its largest teams and headquarters in Austria. Trend, an Austrian financial magazine, ranked Mondi as the 13th top Austrian large firm out of 500 firms in 2008 having 5.159,00 Mio. Euro net sales and 26.425 employees worldwide. Product Diversification In the 20th century many researchers have written about product diversification strategy (PDS). This research will analyse how PDS is seen by managers because of the larger experience there is nowadays. Diversification has been specially growing after the whole post-war period. Whereas in 1950 only around one third of large firms in France, Germany, and the United Kingdom were diversified, by the 1990s it increased to two thirds or more (Whittington and Mayer 2003). Size and Product diversification strategy This research is focused on how large firms have reacted to the different paths of growth. The firm size: small, medium or large is an important parameter while analysing a firm strategy. In the financial and economical studies and researches the relation between size and firm variables remains a controversial subject. Some argue that size is the primary factor that determines structure whether others say that size is irrelevant (Jackson and Morgan, 1978). In my opinion, it is true that product diversification can be applied both by small and large firms, but I believe that a small firm has more limitations and can not fully develop this strategy in its organization due to limited resources: human, financial and technological. I also believe that as a consequence a firm applying product diversification strategy will increase its size. With larger number of products, the complexity of processes and production is greater. Therefore the craft needed is greater. As mentioned before, some researchers agree with this point of view like the study realized by Dewar and Hage (n.d., cited by Jackson and Morgan, 1978) which suggests that large firms facilitate changes in structure in a way that small firms can not afford. On the other hand, Woodward, Zwerman and Harvey (n.d., cited by Jackson and Morgan, 1978) concluded that instead of size, the production systems used by the firms are more connected and explain better the firm structure and feature. In other words, an efficient production system can explain the success of one large or small firm and therefore the relationship between size and differentiation is not linear. Diversification and Product Diversification Strategy Terminology Diversification The root of the word is, obviously, diverse. Pitts and Hopkins (1982) define it as literally meaning different, unlike, distinct, and separate (p.620). Therefore, if this definition is applied to the context of product diversification, we can say that it means firms having their products in various and different lines. Pils (2009) also confirms this definition as he points out that product diversified firms are understood to be active in multiple, distinct product-markets (p.10). The various definitions, forms and ways of managing diversification are the main topics of this research. Product diversification strategy There is a common denominator in the way product diversification is defined in the literature. For instance, Pils (2009) defines it as firms spreading their activities and products across different product-markets that are more or less related between each other. He also affirms that product diversification strategy determines which businesses a corporation should be in, defining the scope of the firms activities and being of high relevance for creating value for the firm. Berry (1971, p.380) defines product diversification as an increase in the number of industries in which firms are active. However, he does not point out that it can be also increasing the number of products in the current industry. Pitts and Hopkins (1982, p.620) consider firms product diversification if operating multiple different businesses at the same time. Hoskisson (2007), on the other hand, says that the firms level of diversification is a function of decisions about the number and type of businesses in whic h it will compete as well as how it will manage the business. These definitions have surely been influenced by the work of Ansoff (1957) in which he presented diversification as a possible growth strategy as mentioned in the introduction. Ansoff presented two ways of diversification: market diversification and product diversification. Although this research only focuses on the product diversification side, few lines are dedicated to explain the difference and characteristics of these two strategies. Market diversification is a strategy that takes the firm from its existing market to new ones. It exploits the current products and capabilities in new markets looking for geographical spread. This strategy is more and more used in the current times where globalization is facilitating the firms internationalisation. It also presents some challenges like cultural barriers, adding management costs and government restrictions among others. Product diversification is about adding new product to the firms portfolio whereas market diversification is about entering in new markets offering the firms current products. Reasons and Challenges Reasons and Motivations for Diversification: Any firm has a start. Normally starting as a small business it focuses on a single product. This is known as a single business strategy. The natural reasons are commonly due to a lack of cash, experience and know-how. Over time, the resources, capabilities and core competences are rooted and stabilized. At that point, firms may choose product diversified strategy, with two broad categories (related or unrelated). Large firms use product diversification strategy for a variety of reasons. Pearce and Robinson, (2005) and Hoskisson ( 2007) mention among others, the following reasons: To increase the growth rate of the firm For a better use of the companies funds than investing them into internal growth To balance the product line Diversifying the product line when the firm has reached its mature life cycle To increase efficiency and profitability, especially, if there is operational or financial synergy To increase the firms value by improving its overall performance To increase revenues or reduce costs To match and neutralize competitors market power To reduce managerial risk To increase the firms size and thus managerial compensation Product diversification challenges The above mentioned reasons and motivations for PDS can also bring along challenges and costs. One could say that PDS needs new facilities, technologies, skills, know-how, employee and managerial training, etc. It is important to know that it can have a great negative impact on the firms current products if a new product is launched with the firms brand name and the product is not well accepted in the market. The reasons for the market rejection can be e.g. lower quality than expected from the firm, high price, poor distribution, etc. At that point, the whole company will be negatively affected by a bad move. This argument is also supported by various authors such as Hoskisson, (2007); Grant, Jammine, and Thomas (1998); Goold and Luchs (1993), (cited by Pils, 2009). They state that some of the challenges are information processing, coordination, and control problems due to increase of information asymmetries difficult for a single business to deal with. In case of applying a PDS a fi rm has to change its structure and adopt new systems. Moreover Hoskisson (2007) elaborates that the data and information a firm using PDS requires is substantially greater. Furthermore increasing portfolio diversity may involve inefficiencies due to growing conflict on top management and a lack of adaptability to environmental change. Product Diversification Strategy Categories: Related Unrelated Product Diversification Strategy As mentioned before, there are two broad categories of PDS: Related and Unrelated. Some authors such as Richard Rumel (cited by Lovallo and Mendoca, 2007), Peng (2008) also categorize PDS as: focused, moderately and highly diversified. These three categories are not deeply explored in this research. But to dedicate some words, it should be mentioned that Richard Rumelt, in 1972, was the first person to statistically prove the linkage between corporate strategy and profitability. He concluded that moderately diversified firms outperform more diversified ones. Lovallo and Mendoca (2007) sustain that this finding has been valid more than 30 years of research. Moreover, a contemporary author, Peng (2008), also points out that some moderate level of diversification is the most optimal. The main focus of this research is whether a related or unrelated strategy is more suitable for large firms while diversifying. Therefore, in the following lines a definition and a detailed explanation of both is presented. Related product diversification can be defined as a strategy that firms can choose as a growing path. As the word related signals, this diversification strategy is focused on products that have a correlation between each other and are related in some way, especially in their core competences. Normally, firms that choose related product diversification as a strategy are sharing a common factor such as the raw material, the technology or the know-how needed to produce different products. Moreover, the products offered by the firm do not necessarily need to be similar. For instance, a firm running a cinema complex and also offering soft-drinks to be sold at the movie theatres is using a related PDS. Even if their products may not be related, they must share some common ground on their value or supply chain. In this case, the customers targeted are the same. Pearce and Robinson,(2005) confirm this by defining related businesses as those relying on same or similar capabilities in order to have success and achieve competitive advantage in their product markets. Major advantages of related PDS are: concentration of strength, exploitation of a market niche, and the development of synergies. A good example, of a firm applying this strategy is CRH, an Irish company who operates in 35 countries with more than 93.500 employees. The CRH Corporate Social Responsibility Report (2007) states that the firm is a diversified building materials group which manufactures and distributes building material products from the fundamentals of heavy materials and elements to construct the frame, through value added products that complete the building envelope, to distribution channels which service construction fit-out and renewal. CRH has three closely related core businesses: primary materials (aggregates, cement, asphalt and ready mixed concrete); value-added building products (pre-cast, architectural, construction accessories, clay, gas, insulation, building envelope products); and specialist building materials (CRH, 2009). CRH initially decided to diversify to gain economies of scope and also to stretch the corporate parenting capabilities. While CRH diversified its market its power i ncreased and consequently it could afford to cross-subsidise one business from the surpluses earned by another, in a way that competitors could not. As an effect, it could drive out competitors. Before going into further details regarding related PDS, a definition of Unrelated Product Diversification is given. In this case, as the word unrelated points out this diversification strategy focuses on firms offering products that have no relation, are not complementary between each other and do not have necessarily the same raw material as their prime and main composition. Moreover, they do not need to share any part of their supply chain (customers, distributor, manufacturer, logistics, etc). For instance, the Easy Group Company is present in several industries and services that have actually no relation. Some of them are: travel companies, car rentals, internet-cafes, cinemas, cosmetics, etc. Stelio Haji-Ionannou, the founder of the company has developed a cost strategy that pretends to apply in all its businesses. It seems that he believes that his formula is valid for any business. Normally the reason why firms choose this path is known to reduce their financial risks. Peng (2008) refers to unrelated PDS as firms entering into industries new lines that have no evident connections to the present firm line of businesses. Furthermore, Hoskisson (2007) says that unrelated PDS occurs when there are no overlapping capabilities other than financial resources. This strategy is also known in the financial literature as conglomerates (Hoskisson, 2007; Peng, 2008; Pearce and Robinson, 2005) It has been widely discussed whether related is more successful or unrelated. To be able to answer this fundamental question the following pros and cons are explored: Human resources: Related product diversification is characterized by the ease of human resources relocation because the skills and capabilities needed for the introduction of the new products are very similar. On the other hand, unrelated PDS requires recruiting new personnel or training current employees in the new fields. (Tallman, 2003) Technologies Obviously, if a firm chooses unrelated PDS, it will probably not be able to share technologies. Therefore, the investment needed to apply this kind of diversification is greater than by applying a related one. Related PDS is characterised by sharing technologies needed to produce the new products. For example, a firm which produces shampoo and introduces hair conditioner may use the same technology. In that way it reduces the investment costs for the new production and gain economies of scope (also see 2.5). Tallman (2003) confirms that related products can increase the use of existing fixed investments and existing capacity for more purposes and more intensively, gaining efficiencies that reduce costs. Additionally, he says that it can improve the efficiency of its existing resource infrastructure by increasing the flow of product to a wider range of customers. Management For managers it is easier to introduce related products than unrelated ones because they are familiar to the industry and can apply the same or similar strategies. For unrelated ones, managers have to learn about the new products and often the strategy used for the current products is not applicable for the new ones. Therefore, managers should experience new strategies which at the beginning may fail. Prahalad and Hamel (1990), said that it is likely that firm managers of unrelated products may be ineffective because the routines and capabilities they have already developed are not applicable one to one to the entire range of businesses. On the other hand it could be argued that it can be effective as top management can concentrate on financial management and costs controls while leaving operational control with each business unit. Competitors It is easier for competitors to imitate the financial economies of a firm than the operational synergies derived from a related PDS. This is due to the fact that operational synergies derived from the use of current know-how, facilities, capabilities and experiences are more difficult to imitate than realizing that a firm is diversifying into new unrelated products based on the percentage of the revenue it can gain. Therefore, it is less likely that competitors will imitate a firm which introduces new related products. Peng and Delios, (2006), and Khanna and Palepu, (2005), (cited by Hoskisson, 2007) sustain that competitors find it easier to imitate financial economies than replicating the value gained by related PDS from the economies of scope developed through operational relatedness. Control Mechanism The principle control mechanism for related diversification is strategic control with rich communication between corporate and business units managers. Financial results are obviously not a fair means to measure the functioning of each business unit. One business unit may have low revenues but its main function is to support the others. For unrelated products, the best way to control is exactly the opposite. The emphasis has to be on financial control (return and investment) to evaluate the units performance. (Peng, 2008) Market saturation When the product a firm is offering is close to a market saturation or obsolescence, the best thing a firm can do is to enter into another market offering unrelated products. In that way the company has an opportunity to grow. It would be a great mistake in a saturated market to introduce related products because the competition is already very high and to get a profitable market share is unlikely. Stabilize Earnings Another reason would be to stabilize the earnings and dividends of a firm in a cyclical industry. In that case, the firm should diversify into an industry with complementary cycles independent of the relation with the current products. Independency Firms that are uncomfortable to be dependent on one product line should diversify into other businesses or industries. In that way the risk is spread and all the weight is not in one product line. All in all the benefits of both categories of diversification do not appear as the result of a magic formula that just happens but as Tallman (2003) and Peng (2008) also sustain it is the result of an active management of resources and capabilities with potential for broader application. Product diversification synergies need to be explored in more detail. Therefore the following section is dedicated. Product Diversification Synergies Pils (2009) explains that the word synergy is derived from the Greek word synergos and literally means working together. In business terminology, synergy is used to describe the ability of two or more business units or firms to make greater value working together than they would do independently (Goold and Campbell, 1998, p.133). Diversifying a large firm is considered economically positive only if synergetic effects between the different businesses units are achieved. As a consequence, the idea of maximizing synergies as the main objective of diversification strategy is presented below. Operational Synergies The emphasis of product related diversification is on operational synergies because in this strategy production resources are shared to have a cost competitive advantage. In the financial literature, the term operational synergy has been used as a synonym for economies of scope (Tanriverdi and Vendkatraman, 2005). Economies of scope and/or operational synergies are the result of two or more business units that share and transfer factors of production, its resources and capabilities. As a consequence the shared production costs will be lower than production costs of each one separately. Peng (2008) defines it as competitiveness increase beyond what can be achieved by engaging in two product markets separately. In other words, firms benefit from lowering unit costs by gaining advantage from product relatedness, i.e. 2+2=5. Some sources of operational synergy are (Peng, 2008): Technologies, such as common platforms Marketing, such as common brands, and Manufacturing, such as common logistics Conscious of these possible synergies, Zodiac a French large firm who in 1930 was focused on inflatable boats and had strong ties to the French army started to introduce new related products to its portfolio. Zodiac created 5 different divisions having inflatable materials as a common denominator. These divisions have been: marine division (recreation, military, professional, safety of life at sea, environmental solutions); pool division (pool sector and pool care and water cleaning, heating, pumps, filters); airline equipment division (passenger seats and on-board toilets and sanitation systems); aerosafety systems division (aircraft escape slides, parachute systems, helicopter floats, and flexible fuel tanks); technology division and aircraft system division. (Zodiac Aerospace, 2009) Zodiac has benefited from the operational synergies through the use of inflatable products technology and has also used market synergies because it has supplied the same customers with different produc ts. Conversely, unrelated diversification does not need to have advanced levels of operational relatedness. Rather, each business unit has its own strategic and operational responsibility and the management can focus on the financial synergies. (Tallman, 2003) Investment synergies are very much related to the operational synergies. It can be argued that one is the consequence of the other or that they are developed hand in hand. Investment synergies are the result of products sharing the same plant, resource and development (RD) and machinery. This is more probable to happen with a related product diversification because of the previous explanations. For unrelated products, the machinery is improbable the same and each product need its own RD. Financial Synergies The means obtaining financial synergy is different from obtaining operational synergies. The key role of firms is to identify and find profitable investment opportunities. The parameter to measure if financial synergies are to be achieved is whether managers can exceed the job of identifying and taking advantage of profitable opportunities compared to external capital markets (Peng, 2008). Hoskisson (2007) defines financial synergies as cost savings realized through a better use of financial assets based on investments inside or outside the firm. Competent internal capital distribution can lead to financial synergies and reduces risk between the firms businesses (Higgings and Schall, 1975). A firm using unrelated PDS may grow, but only internally in each business unit and will not reach operational efficiencies but financial ones. That means, the revenue of each business unit will be greater when functioning as a conglomerate rather than functioning independently. This idea is supported by Peng (2008) who states that competitiveness increases for each unit financially further than what can be achieved by each unit competing independently as an individual firm. Many different products that are not necessarily related offer opportunities of high returns. If a firm is only interested in the returns, unrelated product diversification may be a right path of growth. Sales synergies: These occur from sharing salespeople, warehouses, distribution channels, and advertising. Salespeople have more chances to be able to sell to the same customer a wide range of related products than unrelated ones. Salespeople will try to sell a complete pack of product to the same customer and in that way take advantage of the sales synergies that related product diversification presents. Imagine a company selling sport shoes and refrigerators, in a selling process it is more unlikely to be able to sell both products to the same customer than if he would offer sport shoes and sport clothes. On the other hand, if a firm has developed a well-known brand, the use of the brand-name in other products, related or unrelated, can increase and facilitate sales because it can have build before customer loyalty to the brand. For example, Mars chocolate confectionery successful launched ice-creams. Much of it success could be related to the brand name. So, sales synergies do not occur only withi n related products but also within unrelated ones if the brand name is positively perceived and recognized by the customers. Management synergies It arises from managers accumulating experiences from handling problems in one business unit that can be applied and used to solve problems in a related business unit. Even more, the accumulated experience and know-how allows answering faster to the industry trends and challenges. Managers are able to transfer their skills, experiences and strategies (Enz, 2009, p.222). Contrarily, unrelated product managers can not apply the experience gained from solving the problems of one unit to the other in most cases because the problems are specific for each product. All these synergies can be undermine due to additional layers of management, delays due to organization and information complexity, communication costs for coordination, imaginary synergies that in fact do not exist, incompatible production processes, etc. Therefore while choosing between related and unrelated PDS the mentioned synergy risks have to be taken into account. Research Methodology In this section an explanation of how the data for the case study was collected and how it was analyzed is presented. It is important to know how the data was collected because the method chosen affects the final findings. The information and content of The Mondi Group Case Study was obtained through an expert interview with Mr. Wolfgang Kropiunik, Mondis Marketing Manager of Uncoated Fine Paper. A questionnaire was sent as a guide and overview of the face-to-face interview questions. A meeting for a 40 minutes exploratory semi-structured interview was organized on the 24th of November 2009 at Mondi Headquarter, Vienna. Mondi Group was chosen as the large firm to be analyzed as it is a large firm with more than 33.000 employees worldwide and has its headquarter in Vienna (Mondi, 2009). Therefore the results presented in this research are very much related to Mondis functioning and successful method. It might be possible that if the studied firm had been another one, the results of the research question could have been different. The interview was recorded and the data obtained was transcribed (see appendix). The transcription of the interview allowed a deeper comprehension of Mondis product diversification strategy, synergies and challenges. Moreover, the recommendations presented to the company (see 4.7) are inspired from the challenges Mr. Kropiunik mentioned during the interview. The interview gave a number of information about Mondis life cycle, PDS and challenges especially during the current financial crisis The Mondi Group Case Study Mondi is a large and international packaging and paper firm represented in around 35 countries. In 2008, it had revenues of 6.3 billion EUR and about 33.400 employees (Mondi, 2009). It has a strong presence in Western Europe, Russia and South Africa. Mondis Europe and International Division has its headquarter in Vienna while the corporate headquarter is located in Johannesburg. In Vienna, there are three businesses: Uncoated Fine Paper, Corrugated and Bags Specialties. Mondi has reached to be fully integrated having the control of its supply chain. It grows trees, manufactures pulp and paper and converts packaging paper into corrugated packaging an

Pyramids :: Symbolism History Spirit Essays Research

Pyramids The image of the pyramid with the sun shinning behind it was taken from a 1996 brochure advertising a weekend seminar with Robert Kirby, an international speaker and author. Kirby's weekend seminar is titled "Manifesting Your Life - Purpose, Prosperity and Abundance." His self proclaimed fields of expertise include Corporate Negotiation, Accelerated Learning, Transformational Psychology, Kinesiology, Emotional-Spiritual Revitalism, and Energy Field Research, among others. The brochure states, "Newly researched evidence now permits you to unleash enormous latent creative capabilities through your body's dynamic electrical energy field." Robert Kirby is one of the many people currently making a living utilizing information associated with the new age spiritual movement. The new age spiritual movement is a very broad ideological umbrella covering the terminology Kirby uses, and much more. The new age movement seems to signal above all, an interest in the mind-body-spirit connection. People are pursuing the idea that the knowledge is within each individual to unite the physical, emotional, mental, and spiritual aspects of themselves to create wholeness. The pyramid seems to have been adopted as a powerful symbol for these ideas. The pyramid of the 90's is a spiritual icon for health, power, abundance, and purpose. In our country riddled by me ntal and physical health-care crisis's, where traditional western medicine clearly lacks answers, the spiritual movement is becoming increasingly wide spread, and the pyramid carries the message. The pyramid symbol carries the traditional coding of the spiritual trinity. Each side of a pyramid is a triangle and the triangle stands for the trinity of the Father, Son, and Holy Ghost. The new age trinity is a somewhat different way of looking at the traditional religious trinity ideology. The difference is in the extension of the definition. The trinity in this case is the father (spirit), mother (matter), and son (consciousness, Christ). Interaction of father spirit, with matter (mother), creates the son. The belief is that this is true of everything that exists - - all life is formed within that trinity. So ultimately the pyramid is the symbol of creation, and the symbol of God. The new age spiritual movement of the 1990's definitely includes the notion that individuals have access t o God. Interestingly enough, the meaning of the pyramid in the 1990's is not that far removed from the meaning of the original pyramids of Giza. When first looking at the two images and deciding exactly what each represents, it seems at first as if the entire meaning of the original structure is lost in today's use; however, there is a connection of meaning on a deeper level on close examination.