Business Plan for Small Business Essay

Introduction While food trucks are very popular in the U.S, it seems under the strict by-laws in Ottawa as well as other cities in Canada as the government want to protect its citizens. With a growing demand for food trucks, the City of Ottawa has been forced to loosen restrictions on the mobile eateries, much to the approval of locals as well as chefs trying to make a mark on the culinary environment. In 2012, City Council approved the New Street Food Vending Program to encourage new, convenient and culturally diverse fare on City streets. There are now a total of 61 street food vendors permitted on Ottawa’s streets (32 trucks & 29 carts). In the spring of 2013, there was an addition of 17 new vendors (10 trucks & 7 carts). From oriental cuisine to Mexican treats, seasonal creations to sustainable seafood, these new vendors will complement the existing mix of street foods vendors and satisfy the diverse appetites of residents and tourists alike. According to the Ottawa’s new street food vending program, a food truck cannot be greater than 10 meters in length (33 feet), by 2.6 meters in width (8.5 feet), by 4.3 meters in height (14 feet). Refreshment trucks must: be clean and sanitary all the times be in compliance with size regulations be safe and stable condition and state of good repair have recycling and trash receptacles outside of the unit have a trade name written on both sides of vehicle with letters no smaller than 7cm in height be removed from City streets during non operating hours (11pm – 5:30am) not be left unattended for longer than 30 minutes during operating hours In addition, all licenses and permit holders must: dispose of grease and water in accordance with all laws and regulations ensure trash/recyclables resulting from the vending activity are collected and removed from the vending area before leaving for the day. Street Vending Insurance Information As a condition of being issued a mobile refreshment vehicle or cart license, you are required to obtain and maintain General Commercial Liability Insurance coverage which meets the following requirements: insurance for Public Liability and Property Damage for vehicles with a limit of not less than $2,000,000 per occurrence insurance for Public Liability and Property Damage for carts with a limit of not less than $1,000,000 per occurrence the City of Ottawa is named as an additional insured the policy must contain an endorsement to provide the City with 30 days prior notice of cancellation or change that would diminish coverage A mobile refreshment vehicle or cart license will not be issued until sufficient proof of insurance has been received and approved. Arrange for a vehicle or cart inspection Prepared to schedule for final inspection in time through By-law and Regulatory Services Branch. Contact Officer Jacqueline Mundy at 613 580 2424 EXT 33340 or by e-mail at jacqueline.mundy@ottawa.ca to arrange your on-site inspection. Food service inspection across Canada is generally carried out by these organizations: provincial governments, municipalities and regional health authorities Executive Summary The business is the restaurant/service industry. It is important for us to understand that customers are our top priority, and for this reason our business is entirely devoted to serving their needs There was recently an article in globe and mail about food allergies in Canada: â€Å"It is estimated that 5 to 6 per cent of young children and 3 to 4 per cent of adults suffer from food allergies. Nearly 1 per cent of the population is affected by celiac disease; for them, the consumption of foods containing gluten can lead to long-term complications.† (Galloway, 2012) The general public should not be worried for their health when they go out to enjoy a meal with loved ones, they should not have to concern themselves with counter-active measures every time they dine away from home. The Food Truck is a limited partnership and has both limited and general partners. The Food Truck will strive to provide the highest quality of food and service to their customers. This business idea had been put together by five people from different parts of the world, making a total contribution of $54543. The Food Truck targets a wide variety of markets, people from all parts of the world. Our number one goal is to make customers happy, no matter the cost, so that they feel happy, confident and motivated to recommend us to their friends, family and colleagues The Food Truck specializes in allergy free food. The menu that ‘The Food Truck’ has is all allergy-free products. However, we target all the potential customers but our biggest target market is people with food allergies or intolerance and these individuals are definitely going to love this food. People on limited diets experience challenges finding food that they can enjoy and The Food Truck will provide a simple and convenient dining experience. According to the analysis, a rough sketch of costs and expenses that are going to occur after selling 200 menu items a day will be: Due to the nature of our product, and the service our business provides to the community, our target market can be both broad and focused at the same time. It is broad in the sense that we will be serving the entirety of the Ottawa region on a region-by-region basis, a population that can be narrowed demographically to only an estimate of those people who have a food allergy or intolerance. For the first six months of business operations, we are simply looking to breakeven in terms of profitability. Any extra earned above and beyond our costs can be used to improve or upgrade our business, so that when our pricing objectives change, we can be one step ahead in terms of our ability to offer a better, more inclusive product. As our price objectives increase, we can further use the projected increase in profitability to both upgrade our primary location, and begin planning for  expansion. Based on initial investments by the management team, to create our start-up ownership spread in the business’ shares, we have $20,000 to apply to our beginning costs in this business venture (100 shares x $200/share). This will cover around half of the purchase of a food truck to use (Lagorio, 2010), or the total licensing fees and partial inventory needed to get started. This brings us up short around $60,000-$75,000 to cover our start up costs and first year expenses to ensure our business runs smoothly and has the time to begin showing its own profit. This report will analyze the very crucial information for the allergy food truck business. The information will be divided into different categories for better illustration. We will first discuss how our food truck business is unique and different from other types of food truck business. This report will give each individual or grouped investor better understanding of our unique food truck business and demonstrate great potential and opportunity that the allergy food truck has. And since the funding covers 90% of the start-up cost, it shouldn’t be hard for the owners to easily cover any unexpected expenses that can happen in business. And in case the funding is not granted, we have a backup plan (Plan B). So then we will be looking for other forms of financing, beginning with business loans from banks, and other investors. Manufacturing and Operation Plan The first step in our plan will be getting licensed from the City of Ottawa. Food truck design is also crucial. It’s almost like designing a new kitchen for a new restaurant. Because the food truck is smaller than most of restaurant kitchens, every inch of the space has to be utilized. A designated area for cooking, storing, and serving is needed. Dry goods, paper goods and other perishable items will be stored in the cabinets and cupboards which will be secured while driving. Built-in prep counter will be made of stainless steel and all the hazardous materials will always be kept away from food and serving utensils. Since we only serve specific items in our menu, we’ll use a medium size truck that can give us enough space to prep and serve. The serving window and the kitchen prep area will be made of stainless steel. All the freezers and coolers will be bolted for safety. In summer the ideal places are beaches and the Byward market. This truck will give enough space for employees to do their jobs and will also allow customers to order and get their food with ease. According to my analysis, a rough sketch of costs and expenses that are going to occur after selling 200 menu items in a month will be: Once the menu and business hits the market, the company will expand its business by buying a bigger truck which will have larger kitchen and serving area and where people can enjoy their food in the truck. So basically, it will be a mobile restaurant. Customers will have two choices, either enjoying their food on the roof or take out. The units will be equipped with proper ventilation and electrical outlets. The outside counter will hold sausages, napkins and all stuff like that as shown in first image. An awning over the window will also be handy in case of rain or bad weather (Mealy). The ownership and shares will cover the expenses for the first year and the licensing cost. The government funding will cover the cost of the truck and other expenses that cannot be covered by owners. And in case government funding is not granted, plan B will cover the cost of truck and other expenses. Once the business is up and running, the target is to sell between 7200-8000 items over the year, which means 15-20 items per day on average, which is easily achievable. After selling 7200 items, projected net profit after paying wages are calculated around $35000 which can be divided between the owners. Human Resources Plan The Key members of our business team are Suzanne Crabtree, Brent Grinstead, Phuong Anh Phan, Ding Sun and Amrinder Singh. Each member holds a varying number of shares for the company as detailed below: Name# Shares Held% Ownership Suzanne Crabtree40[40%] Brent Grinstead 30[30%] Phuong Anh Phan10[10%] Amrinder Singh10[10%] Ding Sun10[10%] Phuong Anh Phan graduated from Interior Decorating Program iscurrently completing Small and Medium Enterprise Management Program. Phuong Anh has worked 1 year as a designer at UMA, a design company. After that, 2 years of work experience were completed as an office administrator and designer at Markham Center Realty. Amrinder Singh completed high school in India before deciding to go overseas for higher studies and chose Algonquin College. He has worked as a cashier in a bank in India. In Canada, he has done roofing, worked in warehouses, mac’s as well as security positions. From all of this experience he has learnt how to run a business and things that we should and shouldn’t do. Ding Sun was originally born in China and at the age of fifteen came to Canada. Elementary and middle school was completed in China. High school was completed in Canada. Ding transferred from the University of Ottawa to Algonquin College for post-secondary studies. After an unhappy experience at the University of Ottawa, Ding decided to take business administration with a major in accounting. Ding Sun has worked in a dollar store as a store worker and cashier for one summer also as an assembler for a small factory. Outside of school Ding enjoys listening to music and playing video games. Brent Grinstead has switched educational goals twice in the last five years. Because of this, he has a diploma in Radio Broadcasting, a semester’s worth of pre-design courses, and his current program is Business Administration with a major in Accounting. Through his work in the Radio Broadcasting program, he has learned how to juggle multiple tasks at once. During his time as a radio station manager he was responsible for creating the structure for how the material was played over the air, scheduling students for air time, and both scheduling and approving commercial and music content. Business Administration has helped him learn new ways of looking behind the scenes of the business world, as well as providing many opportunities to gain new skills with those things in mind. He has learned how to do a wide range of new tasks such as writing fund proposals, how to write a variety of business reports, creating and presenting marketing strategies to help existing companies, and learning how to properly present financial statements at the end of fiscal periods. In his varied work experience with a mix of duties, Brent has learned a variety of skills including time management in an office setting, how to manage tasks according to importance, how to deal with the post public, and how client records and receivables were maintained. Suzie Crabtree completed her early education in the gifted program in Ottawa which helped teach her valuable learning and communications skills. After high school she began her post secondary education with three years at Carleton University. When she discovered that it was not the right fit, she transferred over to Algonquin College to complete Business Administration. In terms of work experience, she has worked for the City of Ottawa, the Federal Government, a toy store and McDonald’s. All of these experiences have provided her with exposure to a variety of different tasks. She has an excellent understanding of human resources and how to manage a successful team. She is a great communicator and is able to provide excellent customer service. These work experiences have also allowed her to have an inside look at the finances and other procedures involved in running a business such as inventory and payroll. Before we begin to hire staff for The Food Truck, each member of the management team will need to undergo some training in food allergies and intolerances so that they are better prepared to run the business and help  hire and train new staff. Due to a lack of relevant experience, menu creation and planning will have to be outsourced. As well, outside help will have to be brought in to train staff on new menu items. The Food Truck will require a total of eight (8) employees’ altogether. There will be one (1) full-time Manager, one (1) full-time Assistant Manager, one (1) full-time cook, one (1) full-time cashier, two (2) part-time cooks, and two (2) part-time cashiers. This balance of staff will allow The Food Truck to offer a reasonable range of working hours while still working to control labour costs. The Manager and Assistant Manager will be responsible for all of the day-to-day activities of the business and the business team listed above will oversee the overall running of the business. Our job application for The Food Truck is provided below. We are looking for employees with experience as a cook or cashier depending on the position applied for. Our Manager and Assistant Manager will need to have previous managerial experience in a food-related business. They should possess excellent administrative and analytical skills. They should be planning-oriented, cautious and focused on the short term. Our cooks and cashiers should have some previous experience in their related area and should be open to receiving training related to food allergies and intolerances. Experience is not mandatory and we are willing to train new individuals. Our cashiers must be friendly and outgoing and must possess excellent customer service skills. Experience handling money would be an asset for the cashiers. All individuals must be willing to work as a part of a team and must understand the close quarter’s nature of the food truck business. The cooks should also be friendly in nature since they will be working as a part of a team in a cramped space. All individuals must be responsible and committed to coming to work on time and doing a great job. To evaluate employees there will be periodic performance review sessions. The first review session will be a probationary session and will take place 60 days after hire. This session will determine whether or not the employee has a future with the organization. After the initial probationary session,  performance reviews will occur every 6 months. These performance reviews will allow employees’ to discuss ideas, questions, complaints and job expectations. Employee behaviour and attitudes will also be monitored on a daily basis and discussions regarding performance may take place at any point between review sessions. Wage increases will occur on a yearly basis with a performance review session at the end of the fiscal year. Employees will start off with a competitive wage varying from minimum wage to higher levels based on their experience, training and performance. Employees will be offered bonuses and incentives for working special events and help to attract and retain customers. Marketing Plan The Concept Our product is specifically targeted at people who have an allergy or intolerance to certain foods or food ingredients. We are striving to give them an alternative, healthy, safe option with respect to their needs with regards to these intolerances when they are looking for food options away from home. Because allergies are not a limited condition to a particular age group, the beginnings of our targeting will revolve around the population of Ottawa, from families with young children at home to college students to the elderly, anyone with an allergy or intolerance will fall within the realm of our market. We are looking to target those that are health conscious and looking for an alternative to the regular run-of-the-mill take-out food options in the city. Market Breakdown Due to the nature of our product, and the service our business provides to the community, our target market can be both broad and focused at the same time. It is broad in the sense that we will be serving the entirety of the Ottawa region on a region-by-region basis, a population that can be narrowed demographically to only an estimate of those people who have a food allergy or intolerance. The total population of the city of Ottawa was projected at  roughly 920,178 people for 2011, based on three possible scenarios the city officials examined, and an average taken of the results (City of Ottawa, 2001-13). Taking this number, we can further narrow our market by only targeting those that self-report an allergy or food intolerance, which is roughly 7% of Canadians (Health Canada, 2012). Using this percentage, we can limit our target market to around 64,412 people in the Ottawa region. Now, further, according to a study done by Statistics Canada, roughly a quarter of people in Ontario (26.8%) consume food from a fast food outlet on a regular basis (Garriguet, 2004), which further narrows our potential target market to around 17,262 regular users. The rest of the projected market (the remaining 47,150) can still be sought after as occasional users, but can’t be relied upon for a regular consumer or income base. Advantages and Disadvantages Because we will be operating a food-based business, there are a few advantages and disadvantages to consider, which include the following: Advantages Disadvantages We offer a unique product, and it is the sole product we market, making our niche market fill very focused We have analyzed and are trying to fill a very specific consumer need We can broaden our consumer base by reaching out to people who don’t have allergies, strictly on the premise that our food is a healthier alternative to regular take-out We are able to modify our menu as needed to better represent what our consumers are asking for or looking for in this kind of setting Alternatively, we can modify our menu based on profitability of items, trying new options with more inexpensive ingredients There are a wide range of food providers currently on the market (with some restaurants already offering allergy and intolerance alternatives) Allergy alternatives (making the same dishes with allergy conscious ingredients) can be more expensive to supply Starting up with one location may make it difficult to reach the broadest possible consumer base, until the foundation is reached and the business expands Proximity to other food providers may provide unnecessarily high levels of competition, making it difficult to  make an impact when starting up Environmental Analysis On top of these advantages and disadvantages, there are also a number of other environmental factors to be considered when evaluating our ability to make a strong market entry. Factors such as the competing businesses currently in the market, the legal climate and regulations specific to our business type, the political climate in the city (if relevant to our business), technological progress that may impact our business, the economic stability of the region, and any socio-cultural factors that may influence our target consumers either for or against our offerings. Some of the main points for each of these factors are summarized in the table below: Factor Description/Details Competition Based on a look at the food trucks around Ottawa that have reportedly been open recently (and can be considered our direct competition, due to the nature of business), only one in 22 boasts having gluten-free and vegetarian alternatives (and at least three are strictly dessert/snack style foods) (Street Food App, 2013), which further strengthens our niche, as consumers would need to venture into a restaurant to find other options. As well, 22 food trucks serving all of Ottawa makes it both an obviously lucrative venture, and a rather thinly spread one. Legal There are many regulatory acts in Canada concerning the sale of food, which is understandable, due to the consumable nature of food products, and the ramifications of bad foods. From acts concerning dairy products, to those concerning agriculture, to those that cover the licensing of food sales (Canadian Food Inspection Agency, 2013), all would need to be considered in beginning the start-up plans for our business. Political N/A Economic The average income of an Ottawa family in 2010 was $94,700 (Statistics Canada, 2012), which, when tied into the previous stated market size numbers, we can easily state with confidence that there are around 16,000 targetable families in the Ottawa region with this average income level. In addition, when tying the similar food economy to this, when taking into account that there are only 22 similar businesses open in Ottawa at any given time (most of which don’t offer allergy alternatives), the demand for a product similar to our own is fairly high, with a low supply. Technological The main technological factors that impact our business are any advances in allergy treatment. Elizabeth Landau of CNN reported that new experiments involving gradual exposure to allergens for people with severe allergies to foods such as peanuts has shown promise in increasing the tolerance of these people to the reaction-inducing foods (2010). With time, advances such as this could make allergy-free foods unnecessary, causing our business model to become obsolete. However, there is still no true cure for allergies. Socio-Cultural We are aiming to provide a location where the clientele can feel as though their allergies are understood as allergies and not as preferences (Hadley, 2006). As well, we are providing the assured cleanliness that people with allergies will come to expect, being assured that their food hasn’t come into contact with any risk factors, ensuring their comfort in dining out at our locations. The Plan We are looking to fill a very noticeable gap in the food market of the Ottawa region with a business that provides allergy conscious foods, foods that are provided with the guarantee that they have not come into contact with our individual consumers’ intolerances or allergies. We intend on doing this from a food truck style location, something that can be moved from location to location to better provide for our broadly spaced consumer base. This will also provide us with a higher ease of expanding the business as it begins to gain traction in the community, as we can simply purchase a new truck as the funds become available to better provide for our clientele. Pricing In terms of pricing, upon market entry, we intend on pursuing a penetrative pricing strategy, ensuring our prices fall slightly below the market average in order to encourage consumers to approach our business to satisfy their needs. As our client base increases, we can adopt a more aggressive pricing strategy like status quo to begin to increase our profitability as a business. Projections for this switch will fall around the six month after opening mark, in order to give our business the time it needs to properly establish a presence in both the market and the community it serves. Further down the line, we may adopt an even higher pricing strategy, leaning for towards premium pricing, to ensure we can offer the best product possible to our consumers. As we gain consumer base, and as their individual needs become prevalent, it may become clear that we aren’t equipped to satisfy all of their needs at the current cost point. Increasing our pricing in such a way shouldn’t discourage loyal consumers, but will enable us to better approach a broader, more inclusive menu of products that has the potential to vastly increase and improve our client relations. For the first six months of business operations, we are simply looking to breakeven in terms of profitability. Any extra earned above and beyond our costs can be used to improve or upgrade our business, so that when our pricing objectives change, we can be one step ahead in terms of our ability to offer a better, more inclusive product. As our price objectives increase, we can further use the projected increase in profitability to both upgrade our primary location, and begin planning for expansion. Distribution Our distribution plan is purely a point-of-sale endeavour. Consumers would come to our location, and we would serve them allergy free dishes there. As our business grows, however, we may begin to consider catering opportunities to help businesses with staff lunches and similar events. As well, we could delve into simply catering family events for families looking to be able to meet the needs of relatives, children, and so on who have food allergies or intolerances when planning larger family functions. These ideas would be pursued after a proper evaluation of the business model two or three years  into operations, based on how profitable the business is, where the demand for our product stands, how far our business has been able to expand, and whether we have the resources to pursue a venture such as this in addition to our standard operations. Advertising/Promotion Advertising efforts should be focused in the month prior to opening, for a huge push towards the grand opening of the business. The following outlines some of the standard rates available for advertising in Ottawa and the area: Advertising Method Costs Associated Newspaper Standard advertising with a newspaper such as the Ottawa Citizen ranges up to $60 an ad for their online site (Ottawa Citizen, 2013), something that would be worth considering as the online movement for news and newspapers has been fairly large, as traditional print media has started to decline in popularity. This would make it fairly easy to run an effective newspaper campaign for around or under $500 in the weeks leading up to the opening of our business. Radio Based on a contact at KISS FM in Ottawa, a standard rate for a 30 second radio commercial is $115, and they often offer one free for every one purchased (Tompkins, 2013). Because this is more expensive than newspaper advertising, within the last week before opening, we could run an effective campaign for $1150 (4 commercials per day x 5 days) Word of Mouth Word of mouth advertising is often the most important form that can be used, as people are far more willing to believe and trust what their friends have done or experienced than what an advertisement tells them. Following opening the business, it would be profitable to offer small incentives to the initial wave of consumers in order to encourage them to bring their friends out to the food truck (for example, offering 20% off their next dish if they bring a friend with them). The results of this marketing push can easily be determined through an assessment of weekly revenues when weighed against costs. If weeks go by consecutively where there is minimal or no profits showing, then it would be crucial to reassess the plan and make changes where necessary or able to. Though, when there are significant profits showing in the books, it may be wise at that point to continue as planned, to ensure the plan continues to be an effective means of profit generation. Financial Plan Based on initial investments by the management team, to create our start-up ownership spread in the business’ shares, we have $20,000 to apply to our beginning costs in this business venture (100 shares x $200/share). This will cover around half of the purchase of a food truck to use (Lagorio, 2010), or the total licensing fees and partial inventory needed to get started. This brings us up short around $60,000-$75,000 to cover our start up costs and first year expenses to ensure our business runs smoothly and has the time to begin showing its own profit. Funding we are expecting to receive include small business grants from the Government of Canada. This grant and loan system offers to cover up to 90% of the financing required to get a new small business started (Industry Canada, 2013). However, this funding isn’t guaranteed, so we will be looking for other forms of financing, beginning with business loans from banks, and other investors. According to our operating budgets, our two weeks first year costs will run at around $3,940, which will be more than covered with our projected sales numbers, which allow for peak season in the spring and summer months, and a slow season in the late fall and winter months (when people aren’t out on the street as much and running a food truck becomes costly and slightly impractical). In order to break even, we would have to sell 7200-8000 4,124 meal items over the course of the year, at a cost of $5 per item, or an average of 15-2011 items per day, which is a completely feasible goal to meet. With summer months bringing in more customers than the winter, the overflow would easily balance out those slow months, ensuring our goal was met and likely garnering some profits to put towards expansion and annual costs for our second year of business. And if the target is met, we can easily be able to pay a huge part of our debt or use the money in taking the business to the next level . The total projected yearly net income after paying wages are calculated to be around $35000 which can be divided by owners in their respective shares. Exit Strategy Our food truck concept is offering food alternatives without the reaction–including ingredients. Our service is serving the Ottawa communities from all range of different customers and different cultures as well. We hope to raise awareness of food allergies in the city, and demonstrate our own working solution to combat the shortage of allergy-friendly alternatives in the Ottawa area. As the business grows, we plan to turn our food truck shop into a franchise. According to Ottawa Public Health regulations related to food handling and storage, there are currently no restrictions on the types of food that may be sold on the street. On-street food vendors require a mobile refreshment vehicle business license and designated space permit issued by the City of Ottawa. The total annual fee for truck ranges from $4,703 to $6,748. The breakdown of these fees is as follows: Annual Business License Fee for Trucks: $2,981 6 Month Business License Fee for Trucks: $1,945 Annual Designated Space Permit Fee: Truck (Downtown Core): $3,767 Truck (Outside Core): $1,722 Permits and business licenses are issued annually and expire on May 15th. After the initial issuance of the permit and license, it is required to renew the permit and business license within the renewal period of April 25th to May 15th each year. Furthermore, we are aware of policies relating to food truck business as following: Public health oversight of food truck operations The operation of food trucks in public right-of-ways Policy statements pertaining to mobile food vending Economic development programs applicable to food trucks such as financial incentives, social media/technology tools or training Program for encouraging/promoting innovation in food trucks The Food Truck is a Corporation owned by five members. A Corporation Agreement is included to allocate the profits or losses in any ratio agreed to between the partners. Each partner will consult a separate attorney at the outset, and all members should agree on the set terms and conditions of the corporation. We believe that a food truck is a unique business niche; therefore we come up with a mini business review based on our business strategy, competitive landscape analysis, menu fit to consumer demographics, financial performance, management roles and responsibilities, employee qualifications, and community connection. We hope to expand our business to franchise in the next 3 years. However, we also look in consideration if there is an exit scenario for our business during the period or afterward. Because of this, we are focusing our energy on creating a business that buyers will want. We are working on our profitability, competitive edge, sustainability, scalability and corporate culture. In term of selling or passing on our business, we plan to hire the financial, legal tax and business advisor to help shepherd the sale through. This will prevent us  from stressful, time-consuming process fraught with moving parts and paperwork. Along with the financial, legal tax and business advisor, we will also find a business broker banker in the area. This will help us to set a realistic asking price and assembling the necessary marketing materials for our business. The broker will discreetly contact potential buyers on our behalf. When it comes to risks, we are looking into the matters with close focus to identify the current and future problems for further analysis and desired actions required to close the gap. There are vehicle risks, operation risks, and liability risks. For vehicle risks, the risks include auto accidents, fire, theft, flood, wind damage, hail damage and electrical breakdowns. These risks can be lessened through education and training. A commercial auto insurance coverage will help to mitigate the cost of damage and loss of operational readiness due to the physical structure of our business. For operator risks, we are faced with slips, falls, cuts, burns, smoke inhalation and back injury from all the heavy lifting that is required during the workload of the day. We are aware that our employees are our biggest asset and can also be our biggest liabilities. It is important to have them well trained for their jobs and duties. Worker’s compensation insurance will be added in their working contracts. For liability risks, food trucks pose liabilities to employees in many ways. Not only that they may hurt themselves during work, they are also at risk of food-related illnesses and auto accidents that are somewhat unique to food trucks. We are carefully considering investing in business insurance for liability, spoilage insurance, business automobile insurance and worker’s compensation in order to adequately cover their bases. We have also analyzed our competitive landscape that includes competitive food trucks, restaurants, and food carts in the regions of Ottawa. This will keep us up to date of the marketplace and our competitors. Beside the risks, we are building up our business strategy: Business physical location is the priority pick. We are in the process of choosing our business location. There are some options such as near office complexes, downtown urban areas, along busy roads, recreation destinations. We also cater private and public events if we can get the contract. Business physical design is an eye-catch for the first sight customers. Keeping the  menu simple that customers can read easily Keeping the menu at a degree of flavor familiarity which contain locally grown and allergy free ingredients Charging competitive prices. Budget discounts for bad weather (sales can falls up to 50%) Establishing a regular customer base by providing the same quality food and products Keeping a clean and welcoming business environment Having competent leaders and managers who guide the effort and monitor results Being flexible, with a willingness to re-evaluate based on performance feedback and to make necessary changes throughout the process in order to get the desired results As important as business strategy, marketing techniques are a must in this society of social and network. Using word of mouth Using social media (today’s special, chef tips, social only discounts, online to offline social gatherings), network to advertise our business (email marketing) Investing in business cards Hosting a grand opening event to establish our food truck as a member in the local community Having loyalty program for returning customers (Buy 10 get 1 free) Creating awareness by joining in charity funds Serving for holiday parties We are aware that customer service is the most signification investment that we should pay attention to in our business. We will show people that we love what we do. We will try to maintain a great product for a great price. Bibliography Canadian Food Inspection Agency. (2013, April 26). Acts and Regulations. Retrieved July 10, 2013, from Canadian Food Inspection Agency: http://www.inspection.gc.ca/about-the-cfia/acts-and-regulations/eng/1299846777345/1299847442232 City of Ottawa. (2001-2013). 1.4 Projection Results. Retrieved July 10, 2013, from Ottawa: http://ottawa.ca/en/city-hall/get-know-your-city/statistics/14-projection-results City Of Ottawa. (n.d.). New street food vending program. Retrieved from http://ottawa.ca/en/business/business-licenses-applications-and-permits/business-licensing/new-street-food-vending City of Ottawa. (n.d.). Ottawa’s new street food vending program . Retrieved from http://ottawa.ca/sites/ottawa.ca/files/attachments/ottpage/nsf_vend_info_en_0.pdf Garriguet, D. (2004). Overview of Canadians’ Eating Habits. Retrieved July 10, 2013, from Statistics Canada: http://publications.gc.ca/Collection/Statcan/82-620-M/82-620-MIE2006002.pdf EMBO Reports: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1679775/ Hadley, C. (2006, November 11). Food allergies on the rise? Determining the prevalence of food allergies, and how quickly it is increasing, is the first step in tackling the problem. Retrieved July 10, 2013, from Health Canada. (2012, August 22). Food Allergies and Intolerances. Retrieved July 10, 2013, from Health Canada: http://www.hc-sc.gc.ca/fn-an/securit/allerg/index-eng.php Industry Canada. (2013, April 2). Canada Small Business Financing Program. Retrieved July 17, 2013, from Industry Canada: http://www.ic.gc.ca/eic/site/csbfp-pfpec.nsf/eng/h_la00007.html Lagorio, C. (2010, May 12). How to Open a (Successful) Food Truck. Retrieved July 17, 2013, from Inc.: http://www.inc.com/guides/2010/05/opening-a-successful-food-truck.html Landau, E. (2010, February 19). ‘Exciting’ advance reported in peanut allergy therapy. Retrieved July 10, 2013, from CNN: http://www.cnn.com/2010/HEALTH/02/19/aaas.food.allergies/index.html Mealy, L. (n.d.). Food truck design . Retrieved from http://restaurants.about.com/od/restaurantconcepts/a/food_truck_design.htm Ottawa Citizen. (2010-2013). Specs & Guides: Rate Card. Retrieved July 10, 2013, from Ottawa Citizen: http://www.ottawacitizen.com/about-ottawa-citizen/advertising/specs/rate-card.html Statistics Canada. (2012, June 27). Median total income, by family type, by census metropolitan area . Retrieved July 10, 2013, from Government of Canada: http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil107a-eng.htm Street Food App. (2011-2013). Ottawa Food Trucks. Retrieved July 10, 2013, from Street Food App: http://streetfoodapp.com/ottawa Street food ottawa. (n.d.). Retrieved from http://streetfoodott.com/trucks-2/ Tompkins, J. (2013, May 21). quote (Email communication). Ottawa, ON, Canada.

Reactive Power Based Rotor Resistance Estimation Engineering Essay

Abstract-In this paper, a elaborate survey on the Model Reference Adaptive Controller ( MRAC ) using the reactive power is presented for the on-line appraisal of rotor opposition to keep proper flux orientation in an Indirect Vector Controlled Induction Motor Drive. Choice of reactive power as the functional campaigner in the MRAC automatically makes the system immune to the fluctuation of stator opposition. Furthermore, the alone formation of The MRAC with the instantaneous and steady-state reactive power wholly eliminates the demand of any flux appraisal in the procedure of calculation. Therefore, the method is less sensitive to integrator-related jobs like impetus and impregnation ( necessitating no integrating ) . Simulation consequences have been presented to corroborate the effectivity of the technique. THE indirect field oriented ( IFO ) -controlled initiation motor ( IM ) thrust is widely used in high public presentation industry applications [ 1 ] , [ 2 ] due to its simpleness and fast dynamic response. However, feedforward accommodation of the faux pas frequence, which requires rotor opposition, makes this scheme dependant on machine parametric quantities. Of all the parametric quantities, the rotor opposition undergoes considerable fluctuation and if attention is non taken to counterbalance for the alteration, the flux orientation is lost, ensuing in matching between the d- and q-axes variables. As is good known, the yoke makes the public presentation of the thrust system sulky. Attention is focused to implement field orientation through on-line appraisal of the machine parametric quantities [ 3 ] – [ 6 ] . Many on-line parametric quantity appraisal strategies are available in literature [ 7 ] – [ 20 ] . They are loosely classified as follows Spectral analysis technique Observer based techniques Model mention adaptive system based techniques Heuristic methods Reactive power based technique In one category of method, appraisal of rotor clip changeless is done utilizing the spectral analysis techniques. This group of methods is based on the measured response to a intentionally injected trial signal or an bing characteristic harmonic in the voltage/current spectrum. Stator currents and electromotive forces of the motor are sampled and the parametric quantities are derived from the spectral analysis of these samples. The 2nd categorization of rotor opposition designation strategy used observer based techniques. Most of the methods have used the Extended Kalman Filter, which is a computationally intensive technique [ 11 ] and [ 12 ] . Loron and Laliberte describe the motor theoretical account and the development and tuning of an drawn-out Kalman filter ( EKF ) for parametric quantity appraisal during normal runing conditions without presenting any trial signals. The proposed method requires terminal and rotor velocity measurings and is utile for car tuning an indirect field-oriented accountant or an adaptative direct field-oriented accountant. Zai, DeMarco, and Lipo propose a method for sensing of the reverse rotor clip changeless utilizing the EKF by handling the rotor clip changeless as the 5th province variable along with the stator and rotor currents. The drawbacks are that this method is computationally intensive. The 3rd group of online rotor opposition version methods is based on rules of theoretical account mention adaptative control. This is the attack that has attracted most of the attending due to its comparatively simple execution demands [ 13 ] and [ 14 ] . In add-on to the above methods, there are besides a few techniques proposed which can non be classified in the above three classs. These may be based on the measuring of steady province stator electromotive force, current and motor velocity, the rotor opposition can so be calculated algebraically from the equations derived. These methods are grouped to be Heuristic methods. The chief drawback for the above techniques is that the Rotor Resistance depends on vitamin D and q axis axis rotor flux which in bend depends on Stator Resistance. Therefore if any mistake occurs in the Stator Resistance, the truth of rotor flux deteriorates which in bend affects the truth of estimated Rotor Resistance. Reactive power based rotor opposition calculator [ 1 ] overcomes the disadvantage of above job. Choice of reactive power as the functional campaigner in the Model Reference Adaptive Controller ( MRAC ) automatically makes the system immune to the fluctuation of Stator Resistance. The alone formation of the MRAC with the instantaneous and steady-state reactive power eliminates the demand of any flux appraisal in the procedure of calculation. 2. MRAS based rotor opposition appraisal for vector controlled initiation motor thrusts The parametric quantity can be calculated by the theoretical account mention adaptative system ( MRAS ) , where the end product of a mention theoretical account is compared with the end product of an adjustable or adaptative theoretical account until the mistakes between the two theoretical accounts vanishes to zero. The mistake signal is used to drive an adaptative mechanism ( PI or I controller ) which provides rectification of the rotor opposition. In MRAS, the works ‘s response is forced to track the response of a mention theoretical account, irrespective of the works ‘s parametric quantity fluctuation and burden perturbation consequence. Such a system is defined as a robust system. The mention theoretical account may be fixed or adaptative. Choice of reactive power as the functional campaigner in the Model Reference Adaptive Controller ( MRAC ) automatically makes the system immune to the fluctuation of Stator Resistance. The alone formation of the MRAC with the instantaneous and steady-state reactive power wholly eliminates the demand of any flux appraisal in the procedure of calculation. Therefore, the method is independent of Stator Resistance appraisal and integrating impetus jobs. Fig 1 Basic construction of MRAS In the proposed MRAC ( Fig. 1 ) , the mention theoretical account and adjustable theoretical account compute instantaneous reactive power ( ) and steady-state reactive power ( ) severally. Note that the mention theoretical account is independent of slip frequence ( ) whereas the adjustable theoretical account depends on ( ) . The mistake signal ( ) is fed to the version mechanism block, which yields estimated slip velocity ( ) . Rotor opposition ( ) is so computed from ( ) . 2.1 Theoretical Development of the Proposed Scheme The vitamin D and q axis electromotive forces for IM mentioning to the synchronously revolving ( I†°e ) mention frame can be expressed as ( 1 ) ( 2 ) The instantaneous reactive power ( Q ) can be expressed as ( 3 ) Substituting ( 1 ) and ( 2 ) in ( 3 ) , the new look of Q is ( 4 ) It is worthwhile to advert that the above looks of Q are free from stator opposition, which is a noteworthy characteristic of any reactive power-based strategy. In steady province the derivative footings are zero. Therefore, the look of estimated reactive power ( ) is obtained as reduces to ( 5 ) 2.2 Evaluations and Parameters of Induction Motor The parametric quantities of the initiation machine used for simulation are given in the Table shown below. Table 2.3 Parameters of 2.2KW 150V, 50Hz 6 Pole Induction MachineParametersValuessStator Resistance ( Rs ) Rotor Resistance ( Rr ) Magnetizing Inductance ( Lm ) Stator Inductance ( Ls ) Rotor Inductance ( Ls ) Inertia Jtot Clash B Rated Current Rated Torque 6.03I © 6.085I © 0.4893H 0.5192H 0.5192H 0.007187Kgm2 0.0027Kgm2/s 2.9Amps 7.5Nm 2.3 Simulation Consequences The Performance of MRAS based rotor opposition calculator utilizing reactive power method for vector controlled initiation motor thrusts is analyzed with assorted alterations in rotor opposition for the operating status of 415V/50Hz with rated burden torsion of 7.5Nm With 100 % measure alteration in Rotor Resistance. With 100 % incline alteration in Rotor Resistance. With 100 % trapezoidal alteration in Rotor Resistance Fig 2 Actual and Estimated Rotor Resistance for 100 % measure alteration Rr Fig 3 Actual and Estimated Rotor Resistance for 100 % incline alteration Rr Fig 4 Actual and estimated rotor opposition for 100 % trapezoidal alteration Rr From the consequences, it is observed that estimated rotor opposition is tracking with existent rotor opposition. MRAS based Rotor opposition calculator utilizing reactive power method is studied and designed for vector controlled initiation motor thrusts. The public presentation of rotor opposition calculator utilizing reactive power is analyzed extensively for assorted alterations in rotor opposition. From the consequences obtained, it is observed the mistake between that existent and estimated rotor opposition is ever found to be less than 0.9 % and the subsiding clip is found to be about 1 sec. 3. Analysis of vector controlled drive public presentation with and without calculator Vector control is besides known as the â€Å" field oriented control † , â€Å" flux oriented control † or â€Å" indirect torsion control † . Using field orientation ( Clarke-Park transmutation ) , three-phase current vectors are converted to a planar rotating mention frame ( d-q ) from a 3-dimensional stationary mention frame. The â€Å" vitamin D † constituent represents the flux bring forthing constituent of the stator current and the â€Å" Q † constituent represents the torsion bring forthing constituent. These two decoupled constituents can be independently controlled by go throughing though separate PI accountants. The end products of the PI accountants are transformed back to the 3-dimensional stationary mention plane utilizing the opposite of the Clarke-Park transmutation. The corresponding shift form is pulse breadth modulated driving a Voltage beginning Inverter. This control simulates a individually exited DC motor theoretical account, which provides an first-class torque-speed curve. The transmutation from the stationary mention frame to the revolving mention frame is done and controlled with mention to a specific flux linkage infinite vector ( stator flux linkage, rotor flux linkage or magnetising flux linkage ) . In general, there exists three possibilities for such choice and hence, three different vector controls. They are: Stator flux oriented control, Rotor flux oriented control and magnetising flux oriented control. As the torsion bring forthing constituent in this type of control is controlled merely after transmutation is done and is non the chief input mention, such control is known as â€Å" indirect torsion control † . The most ambitious and finally, the confining characteristic of the field orientation, is the method whereby the flux angle is measured or estimated. Depending on the method of measuring, the vector control is divided into two subcategories: direct and indirect vector control. In direct vector control, the flux measuring is done by utilizing the flux feeling spirals or the Hall devices. This adds to extra hardware cost and in add-on, measuring is non extremely accurate. Therefore, this method is non a really good control technique. The more common method is indirect vector control. In this method, the flux angle is non measured straight, but is estimated from the tantamount circuit theoretical account and from measurings of the rotor velocity, the stator current and the electromotive force. One common technique for gauging the rotor flux is based on the faux pas relation. This requires the measuring of the rotor place and the stator current. With current and place detectors, this method performs moderately good over the full velocity scope. The most high-performance VFDs in operation today employ indirect field orientation based on the faux pas relation. The advantages of the vector control are to better the torsion response compared to the scalar control, full-load torsion near to zero velocity, accurate velocity control and public presentation nearing DC thrust, among others. This chapter gives complete inside informations about indirect vector control strategy. Fig 4 Vector controlled Induction Motor Drives The indirect field oriented control presented here is rotor flux oriented control. Figure 4 shows the complete schematic of rotor opposition appraisal for indirect field oriented control of initiation motor thrusts. The torsion bid is generated as a map of the velocity mistake signal, by and large processed through a PI accountant. The torsion and flux bid are processed in the computation block. The three stage mention current generated from the functional block is compared with the existent current in the hysteresis set current accountant and the accountant takes the necessary action to bring forth PWM pulsations. The PWM pulsations are used to trip the electromotive force beginning inverter to drive the Induction motor.3.3 Simulation ConsequencesThe IFOC thrust public presentation is analyzed without and with calculator for the operating status. Reference speed = 100rad/sec Reference rotor flux = 0.9wb Load torsion = 7.5Nm ( invariable ) Rotor Resistance = 100 % measure alteration in rotor opposition is given at 1 2nd.3.3.1 Simulation consequence for decoupled stator current for runing status I with and without rotor opposition calculatorFig 3.3 vitamin D and q axis of stator current for runing status I without Rr calculator Fig 3.4 vitamin D and q axis of stator current for runing status I with Rr calculator3.3.2 Simulation consequence for torsion for runing status I with and without rotoropposition calculatorFig 3.5 Actual and mention torsion for runing status I without Rr calculator Fig 3.6 Actual and mention torsion for runing status I with Rr calculator3.3.3 Simulation consequence for rotor flux for runing status I with and withoutrotor opposition calculatorFig 3.7 Actual and mention rotor flux for runing status I without Rr calculator Fig 3.8 Actual and mention rotor flux for runing status I with Rr calculator3.5 Significance of Estimation clip on the thrust public presentationIn the execution of the calculators, the clip taken for appraisal is an of import parametric quantity. Faster tracking will take to better dynamic public presentation. The cost of the calculator should be low to maintain the cost of the thrust system within the allowable degrees. Hence a survey on the thrust public presentation has been done for assorted appraisal times and the torsion and the flux responses are observed. The consequences are tabulated in Table 3.2 and 3.3. The appraisal clip decides the transeunt public presentation indices like settling clip and peak wave-off in both torsion and flux responses of the vector controlled thrust. The appraisal mistake has less impact on the transeunt public presentation. However the steady province mistake in both torsion and flux response chiefly decided by the appraisal mistake. The thrust public presentation is analyzed with assorted calculators in which the appraisal mistake is kept changeless at 1 % and clip of appraisal is varied. The appraisal mistake and appraisal clip of the vector controlled initiation motor thrust is analyzed for the operating status for mention velocity 100rad/sec, mention rotor flux 0.9wb, the rated burden torsion ( 7.5Nm ) is reduced to 5.5Nm,40 % measure alteration in rotor opposition is given at 2 second.From this the transeunt response in torsion and flux are studied. Table 3.3 Flux Response for Various Estimation Times Table 3.2 Torque Response for Various Estimation Times ESTIMATION TIME ( sec ) Settling TIME ( sec ) PEAK OVERSHOOT( % )No hold––8*10-3 0.2 0.4520*10-30.231.5530*10-3 0.25 4.95 80*10-3 0.27 6.75 100*10-3 0.55 8.29 1 1.2 11.25 ESTIMATION TIME ( sec ) Settling TIME ( sec ) PEAK OVERSHOOT( % )No hold––8*10-3 0.11 2.9520*10-30.146.5530*10-3 0.17 10.72 80*10-3 0.2 16.33 100*10-3 0.55 16.55 1 1.15 16.65 Table 3.5 Flux Response for Various Estimation Mistakes Table 3.4 Torque Response for Various Estimation Mistakes ESTIMATION ERROR ( % ) Steady STATE ERROR ( % ) 0 0 0.4 0 1 0.261.50.442 0.65 3 0.71 5 1.03 ESTIMATION ERROR ( % ) Steady STATE ERROR ( % ) 0 0 0.4 0 1 0.391.50.502 0.70 3 0.95 5 1.11 Similarly with same runing conditions the steady province analysis of the torsion and flux response of the thrust can be done by holding the appraisal clip as changeless with assorted appraisal mistakes. The public presentation is studied with a changeless appraisal clip of 20ms. The Torque and the flux responses for the above conditions are tabulated in Table 3.4 and 3.5. The bold Numberss shown in table 3.2, 3.3, 3.4 and 3.5 are the optimal allowable values of the appraisal clip and appraisal mistake. It is obvious that as the appraisal clip and the appraisal mistake are increased the thrust public presentation is being deteriorated. However it is quiet appealing to settle down with the maximal allowable appraisal clip and appraisal mistake, so that the thrust public presentation is satisfactory. Therefore from the consequences it can be concluded that the public presentation of the thrust is satisfactory with the maximal appraisal clip of 20ms and an appraisal mistake of 1.5 % .4. DecisionThe MRAS based Rotor opposition calculator utilizing reactive power method is studied and designed for vector controlled initiation motor thrusts. The public presentation of rotor opposition calculator utilizing reactive power is analyzed extensively for assorted alterations in rotor opposition. From the consequences obtained, it is observed the mistake between that existent and estimated rotor opposition is ever found to be less than 0.9 % and the subsiding clip is found to be about 1 sec. The public presentation of Vector Controlled Induction Motor Drive with and without Rotor Resistance calculator is studied. From the consequences, it is observed that the without rotor opposition calculator, the decouple control is lost which leads to important deteriorates in the public presentation of vector controlled initiation motor thrusts while with rotor opposition calculator, the decouple control is achieved and the public presentation of IFOC is truly enhanced. The maximal allowable appraisal mistake and appraisal clip for rotor opposition appraisal that does non deteriorate the public presentation of IFOC is found to be 1.5 % and 20ms severally.

Significant Inventors of the Industrial Revolution

Significant Inventors of the Industrial Revolution The inventions and innovations of the Industrial Revolution transformed the U.S. and Great Britain in the 18th and 19th centuries. Tremendous gains in science and technology helped Britain become the worlds dominant economic and political power, while in the U.S. it fueled a young nations westward expansion and built vast fortunes.   A Revolution Twice Over British innovations harnessed the power of water, steam, and coal, helping the U.K. dominate the global textile market of the mid-1770s. Other advancements made in chemistry, manufacturing, and transportation allowed the nation to expand and fund its empire around the globe. The American Industrial Revolution began after the Civil War as the U.S. rebuilt its infrastructure. New forms of transportation such as the steamboat  and the railroad helped the nation expand trade. Meanwhile, innovations such as the modern assembly line and electric light bulb revolutionized both business  and personal life. Transportation Water had long been used to power simple machines such as grain mills and textile spinners, but Scottish inventor James Watts refinements to the steam engine in 1775 launched the revolution in earnest. Up until that point, such engines were crude, inefficient, and unreliable. Watts first engines were used primarily to pump water and air into and out of mines. With the development of more powerful, efficient engines which would operate under higher pressure and increased output, came newer, better forms of transportation.  Ã¢â‚¬â€¹Robert Fulton  was an engineer  and  inventor who had become fascinated with Watts engine while living in France at the turn of the 19th century. After several years of experimenting in Paris, he returned to the U.S. and launched the Clermont in 1807 on the Hudson River in New York. It was the first commercially viable steamboat line in the nation.  Ã¢â‚¬â€¹Ã¢â‚¬â€¹ As the nations rivers began opening to navigation, commerce expanded along with the population. Another new form of transportation, the railroad, also relied on steam power to drive the locomotives. First in Britain and then in the U.S., rail lines began appearing in the 1820s. By 1869, the first transcontinental rail line linked the coasts. If the 19th century belonged to steam, the 20th century belonged to the internal combustion engine. American inventor George Brayton, working on earlier innovations, developed the first liquid-fueled internal combustion engine in 1872. During the next two decades, German engineers including Karl Benz and Rudolf Diesel would make further innovations. By the time Henry Ford unveiled his Model T car in 1908, the internal combustion engine was poised to transform not just the nations transportation system but also spur 20th-century industries like petroleum and aviation. Communication As the populations of both the U.K. and the U.S. expanded in the 1800s and Americas boundaries pushed westward, new forms of communication that could cover great distances were invented to keep pace with this growth. One of the first significant inventions was the telegraph, perfected by Samuel Morse. He developed a series of dots and dashes that could be transmitted electrically in 1836; they came to be known as Morse Code, though it wouldnt be until 1844 that the first telegraph service opened, between Baltimore and Washington, D.C. As the rail system expanded in the U.S., the telegraph followed along, literally. Rail depots doubled as telegraph stations, bringing news to the far-flung frontier. Telegraph signals began flowing between the U.S. and the U.K. in 1866 with Cyrus Fields first permanent transatlantic telegraph line. The following decade, Scottish inventor Alexander Graham Bell, working in the U.S. with Thomas Watson, patented the telephone in 1876.   Thomas Edison, who made a number of discoveries and innovations during the 1800s, contributed to the communications revolution by inventing the phonograph in 1876. The device used paper cylinders coated with wax to record sound. Records were first made of metal and later shellac. In Italy, Enrico Marconi made his first successful radio wave transmission in 1895, paving the way for the  radio to be invented in the next century. Industry In 1794, the American industrialist Eli Whitney invented the cotton gin. This device mechanized the process of removing seeds from cotton, something that had previously been done largely by hand. But what made Whitneys invention particularly special was its use of interchangeable parts. If one part broke, it could be easily replaced by another inexpensive, mass-produced copy. This made processing cotton cheaper, in turn creating new markets and wealth. Although he did not invent the sewing machine, Elias Howes refinements and patent in 1844 perfected the device. Working with Isaac Singer, Howe marketed the device to manufacturers and later consumers. The machine allowed for the mass production of clothing, expanding the nations textile industry. It also made housework easier and allowed the growing middle class to indulge in hobbies like fashion. But factory work- and home life- still were dependent upon sunlight and lamplight. It wasnt until electricity began being harnessed for commercial purposes that industry truly was revolutionized. Thomas Edisons invention of the electric light bulb in 1879 became the means by which large factories could be illuminated, extending shifts and increasing manufacturing output. It also spurred the creation of the nations electrical grid, into which the many inventions of the 20th century from TVs to PCs would eventually plug. Person Invention Date James Watt First reliable steam engine 1775 Eli Whitney Cotton ginInterchangeable parts for muskets 17931798 Robert Fulton Regular steamboat service on the Hudson River 1807 Samuel F.B. Morse Telegraph 1836 Elias Howe Sewing machine 1844 Isaac Singer Improves and markets Howe's sewing machine 1851 Cyrus Field Transatlantic cable 1866 Alexander Graham Bell Telephone 1876 Thomas Edison PhonographIncandescent light bulb 18771879 Nikola Tesla Induction electric motor 1888 Rudolf Diesel Diesel engine 1892 Orville and Wilbur Wright First airplane 1903 Henry Ford Model T FordLarge-scale moving assembly line 19081913

Case Nestle

In 1905, the company merged with the Anglo-Swiss Condensed Milk, thereby broadening the company’s product line to include both condensed milk and infant formulas. Forced by Switzerland’s small size to look outside’ its borders for growth opportunities, Nestle established condensed milk and infant food processing plants in the United States and Britain in the late 19th century and in Australia, South America, Africa, and Asia in the first three decades of the 20th century. In 1929, Nestle moved into the chocolate business when it acquired a Swiss chocolate maker. This was followed in 1938 by the development of Nestle’s most revolutionary product, Nescafe, the world’s first soluble coffee drink. After World War 11, Nestle continued to expand into other areas of the food business, primarily through a series of acquisitions that included Maggi (1947), Cross Blackwell (1960), Findus (1962), Libby’s (1970), Stouffer’s (1973), Carnation (1985), Rowntree (1988), and Perrier (1992). By the late 1990s, Nestle had 500 factories in 76 countries and sold its products in a staggering 193 nations-almost every country in the world. In 1998, the company generated sales of close to SWF 72 billion ($51 billion), only 1 percent of which occurred in its home country. Similarly, only 3 percent of its- 210,000 employees were located in Switzerland. Nestle was the world’s biggest maker of infant formula, powdered milk, chocolates, instant coffee, soups, and mineral waters. It was number two in ice cream, breakfast cereals, and pet food. Roughly 38 percent of its food sales were made in Europe, 32 percent in the Americas, and 20 percent in Africa and Asia. Management Structure Nestle is a decentralized organization. Responsibility for operating decisions is pushed down to local units, which typically enjoy a high degree f autonomy with regard to decisions involving pricing, distribution, marketing, human resources, and so on. At the same time, the company is organized into seven worldwide strategic business units (SBUs) that have responsibility for high-level strategic decisions and business development. For example, a strategic business unit focuses on coffee and beverages. Another one focuses on confectionery and ice cream. These SBUs engage in overall strategy development, including acquisitions and market entry strategy. In recent years, two-thirds of Nestle’s growth has come from acquisitions, so this is a critical function. Running in parallel to this structure is a regional organization that divides the world into five major geographical zones, such as Europe, North America and Asia. The regional organizations assist in the overall strategy development process and are responsible for developing regional strategies (an example would be Nestle’s strategy in the Middle East, which was discussed earlier). Neither the SBU nor regional managers, however, get involved in local operating or strategic decisions on anything other than an exceptional basis. Although Nestle makes intensive use of local managers to knit its diverse worldwide operations together, the company relies on its â€Å"expatriate army. †Ã‚   This consists of about 700 managers who spend the bulk of their careers on foreign assignments, moving from one country to the next. Selected primarily on the basis of their ability, drive and willingness to live a quasi-nomadic lifestyle, these individuals often work in half-a-dozen natiosn during their careers. Nestle also uses management development programs as a strategic tool for creating an  esprit de corps  among managers. At Rive-Reine, the company’s international training center in Switzerland, the company brings together, managers from around the world, at different stages in their careers, for specially targetted development programs of two to three weeks’ duration. The objective of these programs is to give the managers a better understanding of Nestle’s culture and strategy, and to give them access to the company’s top management. The research and development operation has a special place within Nestle, which is not surprising for a company that was established to commercialize innovative foodstuffs. The RD function comprises 18 different groups that operate in 11 countries throughout the world. Nestle spends approximately 1 percent of its annual sales revenue on RD and has 3,100 employees dedicated to the function. Around 70 percent of the RD budget is spent on development initiatives. These initiatives focus on developing products and processes that fulfill market needs, as identified by the SBUs, in concert with regional and local managers. For example, Nestle instant noodle products were originally developed by the RD group in response to the perceived needs of local operating companies through the Asian region. The company also has longer-term development projects that focus on developing new technological platforms, such as non-animal protein sources or agricultural biotechnology products. A Growth Strategy for the 21st  Century Despite its undisputed success, Nestle realized by the early 1990s, that it faced significant challenges in maintaining its growth rate. The large Western European and North American markets were mature. In several countries, population growth had stagnated and in some, there had been a small decline in food consumption. The retail environment in many Western nations had become increasingly challenging and the balance of power was shifting away from the large-scale manufacturers of branded foods and beverages, and toward nationwide supermarket and discount chains. Increasingly, retailers found themselves in the unfamiliar position of playing off against each other – manufacturers of branded foods, thus bargaining down prices. Particularly in Europe, this trend was enhanced by the successful introduction of private-label brands by several of Europe’s leading supermarket chains. The results included increased price competition in several key segments of the food and beverage market, such as cereals, coffee and soft drinks. At Nestle, one response has been to look toward emerging markets in Eastern Europe, Asia and Latin America for growth possibilities. The logic is simple and obvious – a combination of economic and population growth, when coupled with the widespread adoption of market-oriented economic policies by the governments of many developing nations, makes for attractive business opportunities. Many of these countries are still relatively poor, but their economies are growing rapidly. For example, if current economic growth forecasts occur, by 2010, there will be 700 million people in China and India that have income levels approaching those of Spain in the mid-1990s. As income levels rise, it is increasingly likely that consumers in these nations will start to substitute branded food products for basic foodstuffs, creating a large market opportunity for companies such as Nestle. In general, the company’s strategy had been to enter emerging markets early – before competitors – and build a substantial position by selling basic food items that appeal to the local population base, such as infant formula, condensed milk, noodles and tofu. By narrowing its initial market focus to just a handful of strategic brands, Nestle claims it can simplify life, reduce risk, and concentrate its marketing resources and managerial effort on a limited number of key niches. The goal is to build a commanding market position in each of these niches. By pursuing such a strategy, Nestle has taken as much as 85 percent of the market for instant coffee in Mexico, 66 percent of the market for powdered milk in the Philippines, and 70 percent of the markets for soups in Chile. As income levels rise, the company progressively moves out from these niches, introducing more upscale items, such as mineral water, chocolate, cookies, and prepared foodstuffs. Although the company is known worldwide for several key brands, such as Nescafe, it uses local brands in many markets. The company owns 8,500 brands, but only 750 of them are registered in more than one country, and only 80 are registered in more than 10 countries. While the company will use the same â€Å"global brands† in multiple developed markets, in the developing world it focuses on trying to optimize ingredients and processing technology to local conditions and then using a brand name that resonates locally. Customization rather than globalization is the key to the company’s strategy in emerging markets. Executing the Strategy Successful execution of the strategy for developing markets requires a degree of flexibility, an ability to adapt in often unforeseen ways to local conditions, and a long-term perspective that puts building a sustainable business before short-term profitability. In Nigeria, for example, a crumbling road system, aging trucks, and the danger of violence forced the company to re-think its traditional distribution methods. Instead of operating a central warehouse, as is its preference in most nations, the country. For safety reasons, trucks carrying Nestle goods are allowed to travel only during the day and frequently under-armed guard. Marketing also poses challenges in Nigeria. With little opportunity for typical Western-style advertising on television of billboards, the company hired local singers to go to towns and villages offering a mix of entertainment and product demonstrations. China provides another interesting example of local adaptation and long-term focus. After 13 years of talks, Nestle was formally invited into China in 1987, by the Government of Heilongjiang province. Nestle opened a plant to produce powdered milk and infant formula there in 1990, but quickly realized that the local rail and road infrastructure was inadequate and inhibited the collection of milk and delivery of finished products. Rather than make do with the local infrastructure, Nestle embarked on an ambitious plan to establish its own distribution network, known as milk roads, between 27 villages in the region and factory collection points, called chilling centres. Farmers brought their milk – often on bicycles or carts – to the centres where it was weighed and analysed. Unlike the government, Nestle paid the farmers promptly. Suddenly the farmers had an incentive to produce milk and many bought a second cow, increasing the cow population in the district by 3,000 to 9,000 in 18 months. Area managers then organized a delivery system that used dedicated vans to deliver the milk to Nestle’s factory. Although at first glance this might seem to be a very costly solution, Nestle calculated that the long-term benefits would be substantial. Nestle’s strategy is similar to that undertaken by many European and American companies during the first waves of industrialization in those countries. Companies often had to invest in infrastructure that we now take for granted to get production off the ground. Once the infrastructure was in place, in China, Nestle’s production took off. In 1990, 316 tons of powdered milk and infant formula were produced. By 1994, output exceeded 10,000 tons and the company decided to triple capacity. Based on this experience, Nestle decided to build another two powdered milk factories in China and was aiming to generate sales of $700 million by 2000. Nestle is pursuing a similar long-term bet in the Middle East, an area in which most multinational food companies have little presence. Collectively, the Middle East accounts for only about 2 percent of Nestle’s worldwide sales and the individual markets are very small. However, Nestle’s long-term strategy is based on the assumption that regional conflicts will subside and intra-regional trade ill expand as trade barriers between countries in the region come down. Once that happens, Nestle’s factories in the Middle East should be able to sell throughout the region, thereby realizing scale economies. In anticipation of this development, Nestle has established a network of factories in five countries, in the hope that each will, someday, supply the entire region with different products. The company, currently makes ice-cream in Dubai, soups and cereals in Saudi Arabia, yogurt and bouillon in Egypt, chocolate in Turkey, and ketchup and instant noodles in Syria. For the present, Nestle can survive in these markets by using local materials and focusing on local demand. The Syrian factory, for example, relies on products that use tomatoes, a major local agricultural product. Syria also produces wheat, which is the main ingredient in instant noodles. Even if trade barriers don’t come down soon, Nestle has indicated it will remain committed to the region. By using local inputs and focussing on local consumer needs, it has earned a good rate of return in the region, even though the individual markets are small. Despite its successes in places such as China and parts of the Middle East, not all of Nestle’s moves have worked out so well. Like several other Western companies, Nestle has had its problems in Japan, where a failure to adapt its coffee brand to local conditions meant the loss of a significant market opportunity to another Western company, Coca Cola. For years, Nestle’s instant coffee brand was the dominant coffee product in Japan. In the 1960s, cold canned coffee (which can be purchased from soda vending machines) started to gain a following in Japan. Nestle dismissed the product as just a coffee-flavoured drink rather than the real thing and declined to enter the market. Nestle’s local partner at the time, Kirin Beer, was so incensed at Nestle’s refusal to enter the canned coffee market that it broke off its relationship with the company. In contrast, Coca Cola entered the market with Georgia, a product developed specifically for this segment of the Japanese market. By leveraging its existing distribution channel, Coca Cola captured a 40 percent share of the $4 billion a year, market for canned coffee in Japan. Nestle, which failed to enter the market until the 1980s, has only a 4 percent share. While Nestle has built businesses from the ground up, in many emerging markets, such as Nigeria and China, in others it will purchase local companies if suitable candidates can be found. The company pursued such a strategy in Poland, which it entered in 1994, by purchasing Goplana, the country’s second largest chocolate manufacturer. With the collapse of communism and the opening of the Polish market, income levels in Poland have started to rise and so has chocolate consumption. Once a scarce item, the market grew by 8 percent a year, throughout the 1990s. To take advantage of this opportunity, Nestle has pursued a strategy of evolution, rather than revolution. It has kept the top management of the company staffed with locals – as it does in most of its operations around the world – and carefully adjusted Goplana’s product line to better match local opportunities. At the same time, it has pumped money into Goplana’s marketing, which has enabled the unit to gain share from several other chocolate makers in the country. Still, competition in the market is intense. Eight companies, including several foreign-owned enterprises, such as the market leader, Wedel, which is owned by PepsiCo, are vying for market share, and this has depressed prices and profit margins, despite the healthy volume growth. Discussions: 1. Does it make sense for Nestle to focus its growth efforts on emerging markets? Why? 2. What is the company’s strategy with regard to business development in emerging markets? Does this strategy make sense? From an organizational perspective, what is required for this strategy to work effectively? 3. Through your own research on NESTLE, identify appropriate performance indicators. Once you have gathered relevant data on these, undertake a performance analysis of the company over the last five years. What does the analysis tell you about the success or otherwise of the strategy adopted by the company? 4. How would you describe Nestle’s strategic posture at the corporate level; is it pursuing a global strategy, a multidomestic strategy an international strategy or a transnational strategy? 5. Does this overall strategic posture make sense given the markets and countries that Nestle participates in? Why? 6. Is Nestle’s management structure and philosophy aligned with its overall strategic posture? Case Nestle In 1905, the company merged with the Anglo-Swiss Condensed Milk, thereby broadening the company’s product line to include both condensed milk and infant formulas. Forced by Switzerland’s small size to look outside’ its borders for growth opportunities, Nestle established condensed milk and infant food processing plants in the United States and Britain in the late 19th century and in Australia, South America, Africa, and Asia in the first three decades of the 20th century. In 1929, Nestle moved into the chocolate business when it acquired a Swiss chocolate maker. This was followed in 1938 by the development of Nestle’s most revolutionary product, Nescafe, the world’s first soluble coffee drink. After World War 11, Nestle continued to expand into other areas of the food business, primarily through a series of acquisitions that included Maggi (1947), Cross Blackwell (1960), Findus (1962), Libby’s (1970), Stouffer’s (1973), Carnation (1985), Rowntree (1988), and Perrier (1992). By the late 1990s, Nestle had 500 factories in 76 countries and sold its products in a staggering 193 nations-almost every country in the world. In 1998, the company generated sales of close to SWF 72 billion ($51 billion), only 1 percent of which occurred in its home country. Similarly, only 3 percent of its- 210,000 employees were located in Switzerland. Nestle was the world’s biggest maker of infant formula, powdered milk, chocolates, instant coffee, soups, and mineral waters. It was number two in ice cream, breakfast cereals, and pet food. Roughly 38 percent of its food sales were made in Europe, 32 percent in the Americas, and 20 percent in Africa and Asia. Management Structure Nestle is a decentralized organization. Responsibility for operating decisions is pushed down to local units, which typically enjoy a high degree f autonomy with regard to decisions involving pricing, distribution, marketing, human resources, and so on. At the same time, the company is organized into seven worldwide strategic business units (SBUs) that have responsibility for high-level strategic decisions and business development. For example, a strategic business unit focuses on coffee and beverages. Another one focuses on confectionery and ice cream. These SBUs engage in overall strategy development, including acquisitions and market entry strategy. In recent years, two-thirds of Nestle’s growth has come from acquisitions, so this is a critical function. Running in parallel to this structure is a regional organization that divides the world into five major geographical zones, such as Europe, North America and Asia. The regional organizations assist in the overall strategy development process and are responsible for developing regional strategies (an example would be Nestle’s strategy in the Middle East, which was discussed earlier). Neither the SBU nor regional managers, however, get involved in local operating or strategic decisions on anything other than an exceptional basis. Although Nestle makes intensive use of local managers to knit its diverse worldwide operations together, the company relies on its â€Å"expatriate army. †Ã‚   This consists of about 700 managers who spend the bulk of their careers on foreign assignments, moving from one country to the next. Selected primarily on the basis of their ability, drive and willingness to live a quasi-nomadic lifestyle, these individuals often work in half-a-dozen natiosn during their careers. Nestle also uses management development programs as a strategic tool for creating an  esprit de corps  among managers. At Rive-Reine, the company’s international training center in Switzerland, the company brings together, managers from around the world, at different stages in their careers, for specially targetted development programs of two to three weeks’ duration. The objective of these programs is to give the managers a better understanding of Nestle’s culture and strategy, and to give them access to the company’s top management. The research and development operation has a special place within Nestle, which is not surprising for a company that was established to commercialize innovative foodstuffs. The RD function comprises 18 different groups that operate in 11 countries throughout the world. Nestle spends approximately 1 percent of its annual sales revenue on RD and has 3,100 employees dedicated to the function. Around 70 percent of the RD budget is spent on development initiatives. These initiatives focus on developing products and processes that fulfill market needs, as identified by the SBUs, in concert with regional and local managers. For example, Nestle instant noodle products were originally developed by the RD group in response to the perceived needs of local operating companies through the Asian region. The company also has longer-term development projects that focus on developing new technological platforms, such as non-animal protein sources or agricultural biotechnology products. A Growth Strategy for the 21st  Century Despite its undisputed success, Nestle realized by the early 1990s, that it faced significant challenges in maintaining its growth rate. The large Western European and North American markets were mature. In several countries, population growth had stagnated and in some, there had been a small decline in food consumption. The retail environment in many Western nations had become increasingly challenging and the balance of power was shifting away from the large-scale manufacturers of branded foods and beverages, and toward nationwide supermarket and discount chains. Increasingly, retailers found themselves in the unfamiliar position of playing off against each other – manufacturers of branded foods, thus bargaining down prices. Particularly in Europe, this trend was enhanced by the successful introduction of private-label brands by several of Europe’s leading supermarket chains. The results included increased price competition in several key segments of the food and beverage market, such as cereals, coffee and soft drinks. At Nestle, one response has been to look toward emerging markets in Eastern Europe, Asia and Latin America for growth possibilities. The logic is simple and obvious – a combination of economic and population growth, when coupled with the widespread adoption of market-oriented economic policies by the governments of many developing nations, makes for attractive business opportunities. Many of these countries are still relatively poor, but their economies are growing rapidly. For example, if current economic growth forecasts occur, by 2010, there will be 700 million people in China and India that have income levels approaching those of Spain in the mid-1990s. As income levels rise, it is increasingly likely that consumers in these nations will start to substitute branded food products for basic foodstuffs, creating a large market opportunity for companies such as Nestle. In general, the company’s strategy had been to enter emerging markets early – before competitors – and build a substantial position by selling basic food items that appeal to the local population base, such as infant formula, condensed milk, noodles and tofu. By narrowing its initial market focus to just a handful of strategic brands, Nestle claims it can simplify life, reduce risk, and concentrate its marketing resources and managerial effort on a limited number of key niches. The goal is to build a commanding market position in each of these niches. By pursuing such a strategy, Nestle has taken as much as 85 percent of the market for instant coffee in Mexico, 66 percent of the market for powdered milk in the Philippines, and 70 percent of the markets for soups in Chile. As income levels rise, the company progressively moves out from these niches, introducing more upscale items, such as mineral water, chocolate, cookies, and prepared foodstuffs. Although the company is known worldwide for several key brands, such as Nescafe, it uses local brands in many markets. The company owns 8,500 brands, but only 750 of them are registered in more than one country, and only 80 are registered in more than 10 countries. While the company will use the same â€Å"global brands† in multiple developed markets, in the developing world it focuses on trying to optimize ingredients and processing technology to local conditions and then using a brand name that resonates locally. Customization rather than globalization is the key to the company’s strategy in emerging markets. Executing the Strategy Successful execution of the strategy for developing markets requires a degree of flexibility, an ability to adapt in often unforeseen ways to local conditions, and a long-term perspective that puts building a sustainable business before short-term profitability. In Nigeria, for example, a crumbling road system, aging trucks, and the danger of violence forced the company to re-think its traditional distribution methods. Instead of operating a central warehouse, as is its preference in most nations, the country. For safety reasons, trucks carrying Nestle goods are allowed to travel only during the day and frequently under-armed guard. Marketing also poses challenges in Nigeria. With little opportunity for typical Western-style advertising on television of billboards, the company hired local singers to go to towns and villages offering a mix of entertainment and product demonstrations. China provides another interesting example of local adaptation and long-term focus. After 13 years of talks, Nestle was formally invited into China in 1987, by the Government of Heilongjiang province. Nestle opened a plant to produce powdered milk and infant formula there in 1990, but quickly realized that the local rail and road infrastructure was inadequate and inhibited the collection of milk and delivery of finished products. Rather than make do with the local infrastructure, Nestle embarked on an ambitious plan to establish its own distribution network, known as milk roads, between 27 villages in the region and factory collection points, called chilling centres. Farmers brought their milk – often on bicycles or carts – to the centres where it was weighed and analysed. Unlike the government, Nestle paid the farmers promptly. Suddenly the farmers had an incentive to produce milk and many bought a second cow, increasing the cow population in the district by 3,000 to 9,000 in 18 months. Area managers then organized a delivery system that used dedicated vans to deliver the milk to Nestle’s factory. Although at first glance this might seem to be a very costly solution, Nestle calculated that the long-term benefits would be substantial. Nestle’s strategy is similar to that undertaken by many European and American companies during the first waves of industrialization in those countries. Companies often had to invest in infrastructure that we now take for granted to get production off the ground. Once the infrastructure was in place, in China, Nestle’s production took off. In 1990, 316 tons of powdered milk and infant formula were produced. By 1994, output exceeded 10,000 tons and the company decided to triple capacity. Based on this experience, Nestle decided to build another two powdered milk factories in China and was aiming to generate sales of $700 million by 2000. Nestle is pursuing a similar long-term bet in the Middle East, an area in which most multinational food companies have little presence. Collectively, the Middle East accounts for only about 2 percent of Nestle’s worldwide sales and the individual markets are very small. However, Nestle’s long-term strategy is based on the assumption that regional conflicts will subside and intra-regional trade ill expand as trade barriers between countries in the region come down. Once that happens, Nestle’s factories in the Middle East should be able to sell throughout the region, thereby realizing scale economies. In anticipation of this development, Nestle has established a network of factories in five countries, in the hope that each will, someday, supply the entire region with different products. The company, currently makes ice-cream in Dubai, soups and cereals in Saudi Arabia, yogurt and bouillon in Egypt, chocolate in Turkey, and ketchup and instant noodles in Syria. For the present, Nestle can survive in these markets by using local materials and focusing on local demand. The Syrian factory, for example, relies on products that use tomatoes, a major local agricultural product. Syria also produces wheat, which is the main ingredient in instant noodles. Even if trade barriers don’t come down soon, Nestle has indicated it will remain committed to the region. By using local inputs and focussing on local consumer needs, it has earned a good rate of return in the region, even though the individual markets are small. Despite its successes in places such as China and parts of the Middle East, not all of Nestle’s moves have worked out so well. Like several other Western companies, Nestle has had its problems in Japan, where a failure to adapt its coffee brand to local conditions meant the loss of a significant market opportunity to another Western company, Coca Cola. For years, Nestle’s instant coffee brand was the dominant coffee product in Japan. In the 1960s, cold canned coffee (which can be purchased from soda vending machines) started to gain a following in Japan. Nestle dismissed the product as just a coffee-flavoured drink rather than the real thing and declined to enter the market. Nestle’s local partner at the time, Kirin Beer, was so incensed at Nestle’s refusal to enter the canned coffee market that it broke off its relationship with the company. In contrast, Coca Cola entered the market with Georgia, a product developed specifically for this segment of the Japanese market. By leveraging its existing distribution channel, Coca Cola captured a 40 percent share of the $4 billion a year, market for canned coffee in Japan. Nestle, which failed to enter the market until the 1980s, has only a 4 percent share. While Nestle has built businesses from the ground up, in many emerging markets, such as Nigeria and China, in others it will purchase local companies if suitable candidates can be found. The company pursued such a strategy in Poland, which it entered in 1994, by purchasing Goplana, the country’s second largest chocolate manufacturer. With the collapse of communism and the opening of the Polish market, income levels in Poland have started to rise and so has chocolate consumption. Once a scarce item, the market grew by 8 percent a year, throughout the 1990s. To take advantage of this opportunity, Nestle has pursued a strategy of evolution, rather than revolution. It has kept the top management of the company staffed with locals – as it does in most of its operations around the world – and carefully adjusted Goplana’s product line to better match local opportunities. At the same time, it has pumped money into Goplana’s marketing, which has enabled the unit to gain share from several other chocolate makers in the country. Still, competition in the market is intense. Eight companies, including several foreign-owned enterprises, such as the market leader, Wedel, which is owned by PepsiCo, are vying for market share, and this has depressed prices and profit margins, despite the healthy volume growth. Discussions: 1. Does it make sense for Nestle to focus its growth efforts on emerging markets? Why? 2. What is the company’s strategy with regard to business development in emerging markets? Does this strategy make sense? From an organizational perspective, what is required for this strategy to work effectively? 3. Through your own research on NESTLE, identify appropriate performance indicators. Once you have gathered relevant data on these, undertake a performance analysis of the company over the last five years. What does the analysis tell you about the success or otherwise of the strategy adopted by the company? 4. How would you describe Nestle’s strategic posture at the corporate level; is it pursuing a global strategy, a multidomestic strategy an international strategy or a transnational strategy? 5. Does this overall strategic posture make sense given the markets and countries that Nestle participates in? Why? 6. Is Nestle’s management structure and philosophy aligned with its overall strategic posture?

How Can the Internet Assist Organizations with Creating Customer Value Essay

How Can the Internet Assist Organizations with Creating Customer Value through Personalization and Mass Customization - Essay Example When it comes to narrowing down the scope and role of e-marketing and related technologies to a mere aspect of creating value or enhancing customer value, it seems that words are diminishing and the whole aspect can never be explained in its true sense and that it might take years to elucidate such a broad topic. The contributions of e-marketing strategies and organizations in developing and stabilizing many businesses is obvious with the development in the marketing concepts as well as recent researches which are not proving that co-branding, co-creation and third-party inventions have set up new milestones for all the companies; be it some multinational giant or some small entrepreneurial venture. The concepts that have been introduced with an â€Å"e† as a prefix, like; e-commerce, e-trade, e-business, e-marketing, and e-strategy, explain the literal terms of carrying out business via the electronic channel, apparently. However, these terms explain some very broad concepts of internet cram which have proved to be revolutionary, immensely, after the internet boom of the ’90s. Collaborative Networked Organizations (CNOs), those which are also known as â€Å"third-party vendors† and â€Å"fourth party logistics/vendors† and Virtual Customer Communities (VCCs) i.e. the company which exists online only, confirm a soaring prospective as drivers of value co-creation and open innovation. They have also been playing role in driving value specifically in collaborative innovation.  This joint venture has proven that it can amplify malleability and suppleness of the companies’ VCS (Value creation systems) to support responding to an external situation like co-creation or collaborative opportunities (external driver).