Dams Are Very Important For Any Country Environmental Sciences Essay

Dams are really of import for any state. First they produce hydroelectricity which is the most cost effectual power in the universe. Second, hydroelectricity production used H2O as a resource which is a renewable resource. Dams are besides utile for irrigation intents. Water can be stored in them and so distributed in Fieldss as required. Dams besides help in halting inundations as it store the extra H2O. Constructing a dike requires a batch of stuff and labour input. This boosts up the industry in the state and creates employment chances. The Kalabagh Dam Project was designed in 1984. The United Nations Development Program ( UNDP ) assisted this undertaking. It was supervised by World Bank. This undertaking was started by the Water and Power Development Authority of Pakistan ( WAPDA ) . The undertaking Planning Report was submitted to the federal authorities for blessing. In the average clip detailed design and contract paperss were to be made by the people heading the Kalabagh undertaking. This undertaking was completed in the following two and a half old ages and building was to be started in mid 1987. It was estimated to be US $ 3.46 Billion at June 1987 degree and was to be completed in six old ages, with first bring forthing unit to be commissioned in April 1993. Kalabagh dike was proposed to be situated on River Indus in Kalabagh, Mianwali territory in Punjab state surrounding the Khyber Pakhtunkhwa. During Zulfiqar Ali Bhutto ‘s government ( 1972-1976 ) Tarbela dike was constructed which was a immense undertaking. The Kalabagh dike design had already crossed the pulling board phase at that clip. Due to tremendous stuff and fiscal resources already committed for Tarbela dike, there did non originate the inquiry of start building Kalabagh dike. The political parties of Sindh and NWFP state were against the undertaking and argued that during the storage of H2O in Kalabagh dam the flow of River Indus in the Sindh country and peculiarly at the delta near the metropolis of Haiderabad would be well reduced endangering the ecology of the country and support of a big figure of people depending on piscaries. Similarly the political leaders of the North West Frontier Province ( now Khyber Pakhtunkhwa ) had reserves of another sort. One of their concerns was that 100s of estates of utile land would be covered in the reservoir country striping the state of agricultural usage of that la nd. They farther thought that some populated metropoliss would besides be threatened with inundations from clip to clip besides the hazard that any inadvertent breach of a little part of the dike will rinse off several little towns of the state doing tremendous loss of life and belongings. The federal authorities tried to convey about a consensus amongst all the states and no authorities felt itself strong and safe plenty to travel in front with the undertaking in malice of the reserves expressed by the oppositions of the construct of Kalabagh dike. General Zia-Ul-Haq ruled from 1976 to 1985 but he was ever at cold war with the Pakistan Peoples Party ( PPP ) holding a strong clasp in the Sindh state and opposed to the Kalabagh dike. It did non accommodate the general ‘s power political relations to take caput on confrontation with PPP on this issue and there was no inquiry of any rapprochement between the two. There was a glance of hope during the military regulation of genera l Musharaf ( 1998-2007 ) when he flatly announced his committedness to build the dike. However he did non turn up true to his words and there is small public cognition about what made him bury his committedness and non much was heard about Kalabagh dike during the 2nd half of his regulation.Literature reappraisal:Features of Kalabagh Dam:Kalabagh Dam ‘s salient characteristics include catchments country of 110,500 sq. stat mis. Average one-year flow would be 91.4 MAF. It has gross and unrecorded storage capacities of 7.9 MAF and 6.1 MAF, severally. Its upper limit and minimal keeping degrees are 915 pess 825 pess above mean sea degree. Dam ‘s type zone embankment is filled with clay nucleus. Its maximal height above river bed is 260 pess and entire length is 11,000 pess whereas the entire fill volume is 60 million three-dimensional paces. Dam ‘s flood and wasteweir capacities are 1,070,000 pests and 980,000 pests, severally. Unit size at Kalabagh Dam would be 300 M W. Turbines would be Francis type. Turbine design caput would be 170 pess. Power houses designed are indoor types. The initial installed capacity of the dike would be 2400 MW whereas the ultimate capacity would be 3600 MW. The estimated entire investing in June 1997 for the undertaking was Rs. 250 Billion. ( Alvi, 1997 )Political and provincial issues:One of the leaders that have been seen giving importance and statements demoing his enthusiasm in edifice Kalabagh Dam is General Parvez Musharaf. On December 31 2005 he addressed The News stating that all the major dikes including Kalabagh, Bhasha and Akhori will be built till 2016 to get the better of H2O deficit in the state. ( News, 2005 ) One of the chief grounds why Kalabagh Dam does non be today is that there was no political consensus on the issue as stated by Minister Syed Yousaf Raza Gilani on Monday, August, 10, 2010 in Multan. He besides stated that the deceases and devastation caused by the inundation could hold been averted if Kalabagh Dam would hold been built. ( Daily Times, August 10, 2010 ) . Everyone has a right to talk up on the Kalabagh Dam issue because everyone in this state will be affected by it. Even if person does non hold a proficient know-how on the issue he/she can still talk up and give his/her sentiment about it. It is non a proficient instead, a political issue. ( Ghazanfar ) Punjab Sindh contention: Sindh blames Punjab for â€Å" H2O robbery † . Water is a important affair for Sindh for the past three old ages. They believe that Kalabagh Dam would profit lone Punjab and all the H2O and grosss will be stolen from Sindh through the Dam. Sindhis, their support and agribusiness are being negatively affected by deficit of H2O and they blame it all on Punjab. ( Eckholm, 2003 ) Sindh and North West Frontier Province ( NWFP ) had serious apprehensivenesss sing the possible negative effects of Kalabagh Dam. Apprehensions of NWFP: Chief Minister of NWFP, Akram Khan Durrani said that the authorities of NWFP did non authorise President General Pervez Musharraf to build new dikes in the state. ( News, NWFP non authorizes President to build new dikes: Durrani, 2005 ) The Frontier Province put forward their ailments stating that 182,000 estates of their productive land will be lost under the reservoir, 34,000 people will be displaced and that Nowshera, a ample metropolis of NWFP, will be threatened with H2O logging. ( Kazi, 2003 ) . The political parties of NWFP besides said that Drainages of environing country of Mardan, Pabbi and Swabi fields would be adversely affected by the reservoir therefore making water-logging and salt. They were besides afraid that their traditionally cultural land would be submerged into the Dam. ( Kazi, 2003 ) Answers to apprehensivenesss of NWFP by Alvi: Equally far as the drowning of Nowshera was concerned, in the modified design of the undertaking the reservoir preservation degree has been lowered by 10 pess from 925 pess to 915 pess above mean sea degree ( MSL ) therefore the demand for building of any protective butch near Nowshera was eliminated. At maximal preservation degree of 915 pess, the back-water consequence of Kalabagh lake would stop about 10 stat mis downriver of Nowshera. A state-of-art computing machine based survey, backed by physical mold in Pakistan has assured that a inundation every bit black as the inundation of 1929 would non impact the H2O degree at Nowshera even after 100 old ages of deposit in reservoir. As for Mardan, Pabbi and Swabi countries their lowest land degrees are 970,962 and 1000 pess above MSL severally whereas the maximal preservation degree at Kalabagh Dam is 915 pess above MSL so it will non be a menace. Displaced people would be resettled and provided with surrogate irrigated land and other installations ( Alvi, 1997 ) Apprehensions of Sindh: Sindhi political parties said that there would be no H2O to make full Kalabagh Dam ‘s reservoir, cultivation will be effected adversely in Sailaba country, Rhizophora mangles would be threatened, and imbibing H2O and fish production bellow Kotri would be negatively affected. ( Kazi, 2003 ) Answers to apprehensivenesss of Sindh by Alvi: Dams are built for the intent of hive awaying H2O in the inundation season and doing it available on harvest demand for the remainder of the dry season. They are non built to devour H2O. If any state wants to construct, its portion of H2O would be purely governed by WAA 1991. Flood extremums above 300,000 cusecs would still be coming after Kalabagh, while big inundations would be efficaciously controlled. Out of the entire 1.53 million estates ( MA ) tidally inundated historic Indus Delta, Mangrove forest screen an country of about 0.32 MA In this wood, 95 % of the population now consist of a salt tolerant assortment. In order to resuscitate the Rhizophora mangles, existent demand is for replanting salt tolerant assortments, this possibility would be enhanced by constructing Kalabagh Dam. Fish production has been invariably increasing as shown by the statistical informations and there is no grounds that in Kotri it has been diminishing. ( Alvi, 1997 )Importance of Kalabagh Dam:If Kalabagh Dam is non built, there will be a 25 % shortage in nutrient and agribusiness in Pakistan by the twelvemonth 2000. ( Alvi, 1997 ) . Construction of the Kalabagh dike will assist salvage 20 million barrels of oil a twelvemonth needed to bring forth thermic power or Rs.33.2 Billion. This is said by the Lahore Chamber of Commerce and Industry ( LCCI ) President Zafar Iqbal Chaudhry. ( Tribune, 2010 ) . It will supply inexpensive hydroelectricity to the National Grid with its installed capacity of 2400 MW ( ultimate 3600 MW ) . In an mean twelvemonth, 11413 million kW hours ( MKWh ‘s ) of electricity would be generated. It will cut down the menaces and inclinations of inundations in Indus River. Dam would salvage around Rs. 25 billion per annum. Thus the investing cost of undertaking would be repaid within a really short period of 9-10 old ages. ( Alvi, 1997 )Disadvantages of Kalabagh Dam:There is no H2O in Indus River to make full Kalabagh Dam. Provincial assemblies of three states nem con rejected the Kalabagh undertaking. They must hold done so on some pure groundss. Indus River System Authority, IRSA, rejected the Kalabagh Dam on October 22, 1996 on the footing that the Dam will be silted rapidly ; it has a short life of approximately 22 to 30 old ages ; its public presentation will be instead hapless ; it has a relatively lower electric coevals capableness. All this would ensue in immense losingss to the state ‘s treasury. The Dam is economically impracticable. The dwellers of Sawan, Kabul and Tui will hold to be rehabilitated which will be really expensive. The dike will displace a big figure of people which amounts up to 48500 – 44000 in Punjab and 4500 in the NWFP ( figure taken from ( Ghazanfar ) ) and inundate fertile lands in NWFP and Punjab which is 24500 estates out of which merely 2900 ( figure taken from ( Ghazanfar ) ) acres is irrigated land. Nowshera will endure terrible H2O logging. Infrastructure will be submerged by Kalabagh Dam including including the Attock-Talagang route on river Sawan, the Kohat-Rawalpindi route and the Peshawar-Rawalpindi route on river Indus besides some railroad paths. The Sui gas line between Peshawar-Rawalpindi and Rawalpindi-Kohat will besides drop in the dike. The Mardan and Swabi SCARP undertakings will be affected and there will be a possible backwater effects on the Ghazi-Barotha undertaking. Earthquakes can damage the Dam as it sits on the mistake country. Kalabagh would hold hurtful impact on environment, ecosystem, biodiversity, home ground, wetlands and undersoil aquifers. ( Narejo, 2005 )Positions of Water And Development Authority ( WAPDA ) :Chairman WAPDA Tariq Hameed said that the building of Kalabagh Dam will neither do loss to Sindh nor to NWFP. Seismic survey has already been conducted and temblors will non be a danger to the Dam. 35.2 million acre pess H2O has flowed in the sea since the building of Tarbela dike so at that place will decidedly be H2O available for the Dam. Sindh would acquire 37 per cent ( 2.4 million acre pess ) extra H2O after the Dam is constructed. ( News, 2005 ) . WAPDA has been pull stringsing the figures it shows to public. In 1987 WAPDA put the eastern river flow at 2 MAF but in 1994 it all of a sudden raised it to 4.00 MAF, demoing it as â€Å" flow generated within Pakistan † . WAPDA has given a little figure of 2.0 MAF for the future Indian claim on the western rivers, which in fact, could be every bit high as 4.8 MAF. System losingss have been shown as 10 MAF which could really make up till 18.7 MAF. WAPDA has been increasing the influx figures and diminishing the outflows figures. ( Ghazanfar ) .Cultural and other issues:The Washington based World Sindhi Institute ( WSI ) is a human rights organisation. After hearing the intelligence of blessing of Kalabagh dike by the Nawaz Sharif regime it proposed that it will set together a place paper on Kalabagh dike, foregrounding the negative political, environmental, proficient, and societal impacts of the dike. It will inquire the other Sindhi corporation to collaborate with it. It wil l form protests, seminars, workshops, publish articles, interacts with media and inquire sindhi people to collaborate with it. It targeted the Sindhi husbandmans and made the cultural depletion an issue to elicit them. There were other bureaus as good which cooperated with WSI and farther told Sindhis and people of NWFP about the negative impacts of Kalabagh Dam, concealing the positive points. They created green-eyed monster towards Punjab and the authorities stating that they will utilize the land of NWFP and steel H2O from Sindh to develop grosss for Punjab. They targeted the landlords as good and made them against the undertaking. The husbandmans were brainwashed that their traditional ways of farming would be depleted. ( Dc, 1998 )Discussion:Kalabagh Dam is a really controversial issue. In the survey of this issue I have come to detect that even the experts in different Fieldss who have been related to this issue or have been someway interested to analyze and compose about it b esides seem to hold conflicting positions sing this undertaking. In the earlier portion of this paper I have written about different positions from different experts and it is apparent that Kalabagh Dam undertaking has seen many contentions on political, cultural, international and proficient evidences. Mr. Alvi said that if Kalabagh Dam is non built, there will be a 25 % shortage in nutrient and agribusiness in Pakistan by the twelvemonth 2000. ( Alvi, 1997 ) . This statement is based on statistical survey or female horse premise I can non state because the existent statistics province the antonym. The quantum index figure of major agricultural harvests states that there has been an existent addition in overall production of major agricultural harvests of Pakistan. These statistics have been taken from the Federal Bureau of Statistics.Crops2005-62006-72007-8All harvests101117126Food harvests107115108Rice108105108Wheat10111199Barley747974Jowar698177Bajra142153196Maize188187218Gram8514884Fiber harvests116114104Cotton116114104Other harvests96118138Sugarcane96118138Rape seed and mustard749276Sesamum998693Tobacco10596100Due to non constructing Kalabagh Dam the nutrient and harvest production in Pakistan did non diminish as Mr. Alvi had predicted but if Kalabagh would hold been built, th e production could hold been boosted up even more. It would hold helped Pakistan in increasing its exports as Pakistan ‘s major exports are its harvests. From an economic sciences position, it would hold helped the Pakistani economic system to turn to a great extent. The husbandmans would hold benefited, the people would hold benefited by acquiring cheaper harvests to eat and lesser of their income would hold had to be spent on indispensable points, which means they could hold saved more for superior goods. The consequence: an overall addition in the criterion of life of people in Pakistan. Other than the disbursement factor as Kalabagh Dam is a large undertaking it would hold boosted the whole economic system due to an addition in investing in many different countries of economic system. It would hold had a multiplier consequence. The natural stuffs required in constructing it such as cement would hold boosted the cement industry. Labor demand would hold been high. Peoples would really hold been employed. Unemployment rate in Pakistan would hold been reduced. Skilled and unskilled workers, both were required in this large undertaking. The machinery required in edifice it would hold boosted up the steel industry. And there are many other factors as good which would hold straight resulted in an addition in production in the whole economic system. It would hold had a great multiplier impact and the economic system would hold been boosted up. Peoples would hold earned incomes and the criterion of life in Pakistan would hold increased at a singular gait. This is the effects such large investing undertakings have on the economic system. Kalabagh Dam would hold helped the economic system to hike up in a short period of clip. A large undertaking it would hold been, lending to the lower monetary values and lower electricity measures. Statisticss have shown that it could hold produced 11413 million kW hours ( MKWh ‘s ) of electricity. It would hold provided inexpensive electricity to the people and might hold helped in diminishing the job of burden shading and high electricity measures that we are confronting today. It will cut down the menaces and inclinations of inundations in Indus River. Dam would salvage around Rs. 25 billion per annum. Thus the investing cost of undertaking would be repaid within a really short period of 9-10 old ages. ( Alvi, 1997 ) . Construction of the Kalabagh dike will assist salvage 20 million barrels of oil a twelvemonth needed to bring forth thermic power or Rs.33.2 Billion. This is said by the Lahore Chamber of Commerce and Industry ( LCCI ) President Zafar Iqbal Chaudhry. ( Tribune, 2010 ) . Even our leaders, though they are conflicting amongst themselves on the issue of Kalabagh Dam, are cognizant of the advantages they have lost due to non constructing kalabagh dike. â€Å" One of the chief grounds why Kalabagh Dam does non be today is that there was no political consensus on the issue as stated by Minister Syed Yousaf Raza Gilani on Monday, August, 10, 2010 in Multan. He besides stated that the deceases and devastation caused by the inundation could hold been averted if Kalabagh Dam would hold been built. † ( Daily Times, August 10, 2010 ) . Kalabagh dike had many advantages for the state. The state on the whole would hold benefited a batch from the undertaking. It should hold been built.DecisionSo, if I were to give an sentiment I must state that Kalabagh dike should hold been built. It would hold had so many benefits to the economic system of Pakistan. It would hold boosted the economic system to a great extent. From harvest production to cement industry to employment sector, everything would hold benefited from Kalabagh dike. Pakistan ‘s authorities is excessively controversial in itself and the civilization is so backward that people do non hold exposure to the new engineering and hence its benefits. They stick to their conventional agencies of irrigation and are afraid of any large alterations. These contentions are the basic grounds in my position that Kalabagh does non be today and I must state that Pakistan has lost something which it does non cognize could hold done admirations to its economic system and p eople. The burden shadowing we all complain about could hold been controlled and reduced to a great extent if Kalabagh was built because the demand for electricity has outrun its supply. Due to Kalabagh, the supply of electricity would hold increased and it could hold come to equilibrium with the demand. The deficit of electricity would hold been managed by constructing Kalabagh dike. Sindh and NWFP had some apprehensivenesss sing the undertaking but the experts answered them in a satisfactory mode. The design of Kalabagh Dam was changed in order to foster fulfill them. Kalabagh dike would hold decreased the inundation menaces for the state. It would hold increased the harvests production. This in return would hold increased the exports of Pakistan and benefited its balance of payments account. The currency of Pakistan would hold become a small stronger. Overall, Kalabagh Dam undertaking was so a large investing undertaking which would hold benefited the whole state and its people. Everyone would hold benefited from it. By non constructing it, we have lost a large beginning of income for the people every bit good as the authorities.Mention subdivision:

Andy Warhol Essay

Andy Warhol is one of the significant famous personalities of the twentieth century. He is an artist, a film maker, a celebrity and even a businessman. Warhol advanced the Popular art movement in America. He made compelling and controversial art works that yielded praises and even criticisms. Warhol had once said, â€Å"I’d prefer to remain a mystery. I never like to give my background and, anyway, I make it all up different every time I’m asked. It’s not just that it’s part of my image not to tell everything, it’s just that I forget what I said the day before, and I have to make it all up over again† (Wrenn Andy Warhol: in his own words).   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Andy Warhol was born in 1928 in Pittsburgh, Pennsylvania as the son of Slovakian immigrants. His father was Andrej who was a construction worker who died when he was 13 and his mother was Julia. According to his mother, Warhol suffered three nervous breakdowns in his childhood (Andy Warhol). By 1945, he entered the Carnegie Institute of Technology (now Carnegie Mellon University) where he majored in pictorial design . After college, Warhol went to New York and started his career in illustration and advertising for several magazines including Vogue, Harper’s Bazaar and The New Yorker (Cribbs Andy Warhol: Biography). It was film director Emile de Antonio who encouraged Warhol to start as an independent   artist because he considered commercial art as a real form of   real art. His fondness for art and commerce gained him several recognitions from established organizations (Andy Warhol).   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   During the 1960’s, many of Andy Warhol’s most famous and iconic images were generated. By adapting various images from popular culture, Warhol created many paintings that remained icons of 20th-century art, such as the Campbell’s Soup Cans, Disasters and Marilyns. In addition to painting, Warhol made several 16mm films which have become underground classics such as Chelsea Girls, Empire and Blow Job (Cribbs Andy Warhol: Biography). Most of Warhol’s films were deemed plotless,   complex and somewhat pornographic. Though there were scripts, most of the dialogues in his films were improvised by the actors who were usually transvestites, homosexuals and his acquaintances. According to Warhol, he never particularly wanted to make simply sex movies, but attempted to show how people can meet other people and what they can do and what they can say each other. Warhol’s gradual withdrawal from films production coincided with his near fatal shooting in 1968 by a female ‘factory’ reject connected with an anti-male hate group (Andy Warhol). More so, in this period, Warhol moved to the â€Å"Factory.† It was his place at Union Square in New York City where he and his team of hired workers massly produced screen prints of popular culture. This immediately became the hangout venue for   artist, musicians, and actors where they expressed their individuality. The Factory also served as a working place where he produced most his masterpieces in art and film (Andy Warhol Biography).   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   In the 70’s amd 80’s, Warhol had expanded his empire beyond mere art making. He was in the center of a corporation that produced films, books, plays, and was involved with television (Andy Warhol). He founded inter/VIEW magazine. He also created two cable television shows, â€Å"Andy Warhol’s TV† and â€Å"Andy Warhol’s Fifteen Minutes† for MTV . More so, Warhol had several collaborations with younger artists such as Jean-Michel Basquiat, Francesco Clemente and Keith Haring (Cribbs Andy Warhol: Biography). In his book The Philosophy of Andy Warhol he wrote: â€Å"Business art is the step that comes after Art. I started as a commercial artist, and I want to finish as a business artist. After I did the thing called ‘art’ or whatever it’s called, I went into business art. I wanted to be an Art Businessman or a Business Artist. Being good in business in the most fascinating kind of art† (Andy Warhol).   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Andy Warhol died after a gall bladder surgery on February 22, 1987. His funeral was attended by his friends, colleagues and more than   2, 000 fans at St. Patrick’s Cathedral in New York (Cribbs Andy Warhol: Biography) .   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Warhol made a huge contribution in art history. His eccentric personality brought him to beyond levels of stardom. He constantly shook the art industry with his controversial art works that were considered avant-garde during that era. Warhol’s personality have been subjected to several suspicions. His concepts and interpretations gave an impression that he was a homosexual. According to Wayne Koestenbaum’s psychoanalytical interpretation, everything was sexual for Warhol, who was †as gay as you can get† and he also said that â€Å"Warhol’s major artistic contribution was reinterpreting the worth of cultural waste products† (Andy Warhol). Many would think that Warhol is not a true blooded artist because mainly for the fact that he was driven by monetary ambition and even came to the point where he became obsessed in being rich and famous. But he proved that business can be mixed with art making. He utilized the best of both worlds, which are the corporate world and the art world. In a but shell, he merged art, wealth and fame producing the Pop Artist Andy Warhol (Andy Warhol Biography). Works Cited â€Å" Andy Warhol Biography.† ArtQuotes.net. 28 February 2008   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   . â€Å"Andy Warhol.† 2000. Books and Writers. 28 February 2008   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   . Cribss, Martin. â€Å" Andy Warhol: Biography.† 2002. The Andy Warhol Foundation for the   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Visual Arts.   28 February 2008 . Wrenn, Mike. Andy Warhol: In His Own Words. Omnibus Press, 1992.

Philosophical Martial Arts Essay Example | Topics and Well Written Essays - 500 words

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Does It Matter Who We are Communicating about Essay

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Product design and development - Essay Example Thus, they also provide us the knowledge of how this software developer's work together to create a technology that will satisfy the needs of the client inspite of the slow pace in the development of the products that they aspire to provide. Amongst all designs that I have come across with, IBM production process follows a specific, unique method that enhances the capability of their product to satisfy ones specific role in achieving their product goal. Briefly the following process involves. First, it has a multi perspective view regarding on how they would develop their software. Their main concerns on the primary stage of the software development was to discuss the particular issues at the research site used in this study. In the study the developers would premised on the observation which focus on the two main and common responses to the current difficulties with regards to creating the software the development organizations. These developers tries to achieve the following facts to: (1) establish and follow more formalized production methods for building software products and (2) use teams of software development specialists and the potential positive synergy that arises from their interactions (IBM, 2007). The second phase of the product process is the setting. Here the data and analysis are discussed on how to drawn the strengths and weakness of the product in the field study. U.S. software development site (named Heartland for the purpose of confidentiality) of Compuco creates subsystem software such as database products and languages (IBM, 2007). In this process, the products were sold as commercial packages, which often in combinations that can provide for integrated solutions. The packaged software is called as the commercial, shrink-wrapped, and commercial-off-the-shelf software. Third process is called, the production aspects. In the Heartland's software development organization, they exemplify the production perspective of the development of the software. The process follows a rigorous, well-defined software development method, which IBM based the structured analysis and design approaches from their standard, which they have been using for almost 20 years. The methodology of IBM both well known and heartily supported by their senior development managers, that provides a significant factor to the success of their product design and output. In this process, there is an extensive training at the core software development methodology and base techniques were provided to all developers. Part of this method is the personnel

Global & International Business Contexts Essay Example | Topics and Well Written Essays - 2250 words - 1

Global & International Business Contexts - Essay Example This is mainly because of drinking habits in non-traditional regions, growing culture of cafes and increasing share of instant coffee (Surana 2009). Discussing in detail the coffee market of India, the change in trend towards coffee is mainly due to two reasons, firstly, the entrance of multinational firms which bought the concept of instant coffee that is rising day by day. Secondly, the espresso culture which is encouraging coffee parlours to open up for consumers to choose variety of coffee from there, at the same time providing opportunity to meet people and relax (Sreenivasan 1999). These parlours are targeting the people between the age group of 15-29. This identify that the main target market for these coffee houses is youth which is the major population of India therefore the market is huge and the leader can gain a lot out of it. According to the research, 72% of customer or target market is students or young professional who have enough disposable income to spend on. Another target area for these coffee houses is the young people working in call centers due to which a lot of these cafes are located near call centers and big companies offices (Choudhury 2007). The coffee provided in a unique environment contributes 7% to the total consumption industry and is expected to grow at half percent (Shenoy 2005). Retail cafà ©s are now multi-crore industry and has a huge potential of growth locally and internationally (The Indian Institute Of Planning And Management 2006). Currently, there are few key players in the industry: Barista, Cafà © Coffee Day, Costa Coffee, Coffee World, Coffee Bean & Tea Leaf (CBTL) and Qwicky. Among them the top two are Barista and Cafà © coffee day who have captured the major share in the market. The country is moving towards a stable and conducive political environment as a reduction is seen in internal turmoil due to political influences and moreover, the political parties have shown positive response towards

Can educational inequalities be explained by children and young Essay

Can educational inequalities be explained by children and young people's social economic and cultural background - Essay Example Antoine defines this phenomena as â€Å"a situation in which individual groups in a society do not have equal social status, social class, and social circle.† (THE INEQUALITY PROJECT). Such social stratification is known to exist in the form of income groups and cultural backgrounds. Research and case studies provide further evidence to the sociologist’s claim that social class has an impact on educational opportunity. The disadvantage that a student faces as compared to other students can be explained as an extension of the disadvantages he or she may face as a result of belonging to a certain social group. Thus, a strong positive relationship can be drawn between social class and educational opportunity – the higher the social class is, the higher the quality of education achieved, and vice versa. Based on credible research and scholarly work, educational inequalities can be explained through the social economic and cultural background of the individual, making the attainment of education a process highly influenced by social factors. To understand educational inequality, it is important to first look into the factors that cause such inequalities to exist in the first place. Sociologists identify three main influences in this respect, namely, the income, gender and ethnicity group an individual belongs to. The correlation between poor income households and poor education has been proven through multiple researches. A Research report by Michael Holzman titled â€Å"A Rotting Apple† focuses on educational inequalities in New York City. It reveals that districts with high rates of poverty have a generally low quality of education, with teachers that are less experienced and schools having limited access to resources such as computers and internet as compared to schools in high income localities (SCHOTT FOUNDATION, 2012). This may be explained by the fact that households belonging to low income strata of the society may be not be able to afford sending their children to schools that offer better education with skilled teachers. As a result, the children in these low income area schools, when compared to those from high income areas, achieve less academic success. This supports the point that educational inequality is caused by differences in the income levels of the household the students belong to. Another factor that influences educational inequality is the cultural advantage students for middle class households have as compared to those from working class families. Basil Bernstein explains how children from varying backgrounds develop different codes, or forms of speech, during their early lives, which affect their subsequent school experience.† (GIDDENS, 1996) Bernstein classified the speech of working class families and middle class families as represented by a restricted code and elaborated code respectively. Working class parents are most likely to instruct or explain values and lessons to their chil dren using the minimum of words, and assuming that certain things are understood. On the other hand, middle class parents are most likely to explain and instruct their children by giving them elaborate explanations and reasons about why something is good or bad (BERNSTEIN,1977). In schools, teachers use the elaborated

Teen Suicide Essay Example | Topics and Well Written Essays - 1000 words

Teen Suicide - Essay Example There could be several reasons why a teenager would end his life. It could be stress, depression, or pressure to perform or urge to achieve something. Sometimes problems in families like divorce of parents can also result in deep sense of shame and stress causing the teenager to get psychologically ill. Getting in to a new school or neighborhoods can also create pressure. The reasons for such an act are many and complex. When a person has tried all things in order to solve one's problems the ultimate way of escape seems to be suicide. Many teenagers who have attempted to commit suicide were interviewed; most of them wanted to get of a situation but did not want to die. However sometimes the stress of something, or feeling of loss or hurt is so great that it is difficult to overcome it. The feeling of disappointment is not easy to overcome and usually results in self-inflicted death. Suicide is one action which creates an emotional trauma in the entire family to unprecedented extent. When somebody in the family and especially teenagers commit suicide the whole family, friends and the people who might be related to the person in any way feel guilty. Most of the people believe that they could have done something in order to stop it. This sense of confusion and guilt usually sends other people in a state of depression. People who do not even know him, by just hearing the news get mentally upset. Though it is definitely true that the worst form of aggression is suicide, and it is also true that the victim gets punished the most; he loses his life. However, people who are related to him also get punished all life long. Such families usually get socially isolated. The families' friends are either in a state of shock themselves and do not know what to do or how to calm the teenager's family members, or in some cases they isolate the members and consider them as the cul prits. In such case, it is our duty to start communication with such people and help them in any way we could. Families are affected the most as they carry this burden all their lives (Kids Health, n.p). Anniversaries and birthdays are the most difficult part. Sometimes during the holidays when all family members are together, the sense of loss is often over bearing. This might cause tension in the family. However, the members of the family should see that everybody in the family is grieving. People have different ways of showing sadness, some might sit alone and quiet, others might show anger. However, family members should support each other and see that yet another suicide does not take place (Kids Health, n.p). The friends and the entire school body usually feel guilty. Teenagers usually spend more time with friends and in the school; hence it is normal that the friends will feel that they could have changed something in order to prevent the suicide from happening. However, victimizing ones self and others does not help and the entire school body should help each other pass through the difficult time (Kids Health, n.p). If the family, mother or the father sees that it is becoming difficult from them to cope with, they should always

The Subject Labor Relation Essay Example | Topics and Well Written Essays - 750 words

The Subject Labor Relation - Essay Example Whether knowingly or unknowingly most of the individual is under stress. This stress is not limited to only Industry it prevails in personal life, private life, business, education, and industry. In industry again it was believed that the managerial staff is only subjected to more stress with targets and deadlines. But in modern industry stress is prevailed in all including a worker on whom the production targets are fixed efficiency is closely monitored. Stress leads to health problems such as nervousness, Blood Pressure, heart problems, constipation, muscle problems, tension, depression etc. Stress not only leads health problems it also leads to budget loss to the industry in form of compensation claims. Stress leads a lot of loss to any industry since due to stress the workers' loose health which will reduce their productivity causes compensation etc. (Erika.Hampton on 12/10/2005 5:24:47 PM) Stress can be reduced by a few minutes walk around and a few minutes meditation. Short breaks give mental relief and refresh the mind thereby enables the workmen to work to the optimum capacity. (Angela. Monti on 12/13/2005 9:43:57 PM) Dilly Dally of assignments leads to stress. Avoiding the postponement of work can reduce stress. The assignments, which cannot be done, are to be eliminated from taking up and those that can be done may be undertaken. Most of the managers do not want to hear the word No from their workers or sub-ordinates they always want to here yes whatever job assigned to them. This creates stress first on the workers and then it will be shifted to the boss again when they spoil the job in stress. To reduce the stress listen to the word 'No' try to understand why No then counsel the worker then make it yes if it is really yes.

Major Environmental Issues That Are Associated With Staging Music Essay

Major Environmental Issues That Are Associated With Staging Music Events - Essay Example Music can put forth powerful substantial effects; can create deep and thoughtful emotions within us, and produce substantially subtle variations of articulateness by skilled com- challenge and performers (Besser, 2000). Playing pleasant-sounding music in the innate environment can be therapeutic because it supports people to reconnect and accord them with nature.   This leisure interest can assist us increase greater responsiveness and high opinion for the environment, together with the rocks, trees, rivers, animals, skies birds, et cetera. Which are all complete the four basics of air fire, earth and water.   Basically play a harmonious instrument or resonate, hum or screech out in the surroundings, focus on the environment, calm down into the experience and scrutinize ourselves and the innate world’s activities. Dorothy conducted research of the special effects of music on vegetation and exposed that their strength and growth flourish when constructive, pleasant-sounding music was performed to them (Todd, and Cody, 2000).   In dissimilarity, the findings established that plants worsened and ultimately died when serious rock music was performed to them.   She further defines the term constructive music as unfamiliar to a number of people. When she uses the term constructive to portray music, they are describing music that has advantageous qualities and is expressively and spiritually inspiring, maybe even curative. In

Aristotle concept of virtue Essay Example for Free

Aristotle concept of virtue Essay The concept of virtue by Aristotle can be attributed to the state of character which he believed lies between two broad extremes which are the excess and deficiency. He believed that virtues falls into two major categories which are the moral virtue and the intellectual virtue. He considered moral values to be associated with feelings, choosing and acting well while intellectual is being acquired. He believed that not all the state of character is virtues and that virtue can be considered the doctrine of mean. This doctrine helps us to determine the actual state of character that is virtuous. He considered character such as lustfulness as not virtue because lustfulness represent an increase feeling of sexual desires or seek for too much sexual pleasure and it lies towards the extreme of excess and not being in the mean which Aristotle considered to be a point that represent virtue. Comparing and contrasting the Aristotle definition of virtue and Socrates definition of impiety and piety. There is no much similarity between the definitions except in that they try to explain the concept of justification in whatever we do. Both definitions relates to what can be considered to be morally good. There are several differences between the two forms of definition. 1. Socrates believe that there are certain fundamental characteristic that makes pious things pious which is different from the Aristotle concepts of virtue which strongly believe in character that lies between the two extremes. 2. Aristotle consider the relationship of friendship to virtues while Socrates believes piety is what god loves and impiety what god hates The better definition might be determined by its application to moral values. Since the Aristotle’s definition explains certain aspects of ethics, I will consider it, the better of the two definitions. Aristotle’s definition relates directly to human life and character and it application can guide the way we act and helps us live better life. Aristotle also consider friendship as being indispensible to virtuous life believing without friendship towards our fellows it is impossible to live a complete and virtuous life. He believes we must be good friends to ourselves before we can show which a concept of â€Å"self love† is. We can only understand friendship when will understand the virtue of oneself. The issue with the relationship of friendship with ourselves and others can be narrowed down to the fact Aristotle believed that virtue brings happiness. Aristotle in summary established a relationship between character, reasons and emotion. He explains the relationship virtues and vices, relationship of virtue to pleasure and to happiness and the notion of moral education. Socrates believes that piety is intimately bound to gods and it is what the gods loves. References Aristotle, (350 B. C. E). â€Å"Book I. In Nicomachean Ethics (W. D. Ross, Trans. ). Retrieved 2 June 2009, from http://classics. mit. edu/Aristotle/nicomachaen. 1. i. html Aristotle, (350 B. C. E). â€Å"Book II. In Nicomachean Ethics (W. D. Ross, Trans. ). Retrieved 2 June 2009 from http://classics. mit. edu/Aristotle/nicomachaen. 2. ii. html Aristotle, (350 B. C. E). â€Å"Book VII. In Nicomachean Ethics (W. D. Ross, Trans. ). Retrieved 2 June 2009 from http://classics. mit. edu/Aristotle/nicomachaen. 7. vii. html

Micro Marketing Environmental Forces

Micro Marketing Environmental Forces The LG 60PK250 Plasma HDTV was launched less than a year ago and is currently within its growth stage. To continue its growth process, a differentiated marketing strategy has been implemented in which the company should make use of annual holidays such as Christmas and Wimbledon for advertising campaigns. Moreover, a marketing strategy change has been recommended for the next 12 months that involves achieving a wider distribution network. This will be done by not only focusing on retailing outlets but also focusing on expansion into supermarkets such as Tesco with the use of competitive pricing strategies. Introduction LG electronics is a consumer electronics company that was founded in 1958 as GoldStar (LG, 2010). They product Koreas first ever consumer radios, TVs refrigerators, washing machines and air conditioners and were renamed as LG Electronics in 1995 (LG, 2010). Since then LG has become one of the leading electronic brands through continuous innovative product development, evolving technologies and their easy going ethos of making our customers lives better and easier-happier, even through increased functionality and fun (LG, 2010). LG was the company that produced the worlds first 60-inch plasma TV in 1998 (LG, 2010). The LG 60PK250 60 Full HD Plasma TV was launched in March 2010. Although it is a relatively new product with a well-established brand name and company, it is a plasma screen television and an appropriate marketing strategy will need to be applied in order to ensure the success of the product and prolong its life cycle. The report will analyse the internal and external marketing environment of the television industry within the UK by focusing on what makes up the internal and external environment, LGs main competitors and consumer buyer behaviour. It will use relevant theories and concepts to assess different aspects of the market and from this an appropriate marketing mix for the next 12 months will we developed and recommended to try and ensure success of the Television within the UK television industry. Macro marketing environmental forces Marketing Environment Organizations can succeed if they match their products and services to the marketing environment. A companys marketing environment consists of the actors and forces outside marketing that affect marketing managements ability to develop and maintain successful transactions with its target consumers (Kotler et al. 2001, p. 116). The Marketing environment is made up of the Micro Environment and Macro Environment. Micro marketing environmental forces Political Buyers Economic and competitive Competitors The business Legal Company Suppliers Customer Marketing interme- Techno- logical Publics diaries Regulatory Societal/Green (Adapted from Dibb et al., 2006, p. 90) Micro environment The micro environment comprises all those individuals and organizations that affect the operation of a business on a day-to-day basis (CIM, 2002). Below are all the areas that make up the marketing environment applied to LG. Customers In order to generate profit, it is necessary to create a customer (CIM, 2002). It is important to predict what customers will require rather than wait and follow them. To create products and services that not only meet customers needs but also benefit them is of high importance. LG Electronics is one of the worlds largest electronics manufacturers, producing a large variety of consumer electronics and IT products. They strive to improve their customers lives with intelligent products, intuitive functionality and excellent performance. LGs customers take pride in owning an object of excellence and take comfort in knowing theyve made a smart, informed purchase, every time (LG, 2010). LG keeps close relationships with its customers in more than 180 countries through the four basic elements: values, promise, benefits, and personality. Based on a principle of creating value for customers, LG Electronics is safely providing products that customers want, offering differentiated services, and protecting customer information (LG, 2010). Source: LG, 2010 (See appendix 4 for details) Competitors A successful company is one that provides greater customer value and satisfaction than its competitors. LG has some top direct competitors like Sony, Samsung, Philips, Panasonic or Sharp. However, the Group, with its new topic Worlds only maintain nutrition television and declaration as digitally yours to express to the consumers that it majorly addresses the consumer obligation and make things simpler to them, has become a very mighty business in the television commerce in the present years. Consumer approval has been the centred topic from the development stage to the maturity stage and augmented product: 5 year warranty time span and productive after sales service along with call centres are provided by the Group might also be the reason why competitors could not trounce LG in periods of sales for many years. LG also has some indirect competitors that can damage, to a degree, its television market such as internet, PS series, or high tech products like the I-phone, I-pad, etc. Intermediaries are organizations that help a company promote, sell and distribution its products to target customers. They can be wholesalers, retailers, distribution firms, marketing agencies, or financial intermediaries. Effective intermediaries, is crucial for a firms marketing success. Televisions, from LGs agency located at Noida, are dispatched to the local agency dealer, and then to the consumers. However, the Group values a selective circulation convention where products drop into the hands of only couple of intermediaries, not one or all. This assists the business in having a good market treatment with more command and less cost than those of intensive distribution. Suppliers are the key component in transformation of materials to final products and services. It is important to review how suppliers, manufacturers and intermediaries co-operate with each other. LG establishes the win win management with its business partners in which LG has always been trying to grow alongside its suppliers by strengthening their competitiveness. Still, it re-established its strategic direction for purchasing and refurbished its support division for suppliers to effectively deal with the recent economic crisis as any responsible business partner would do in a similar situation (LG, 2010). Importantly, LG is committed to the Eco Supply Chain to develop eco-products under the Green program. It is operated in coordination with partner firms who supply parts, raw materials, and other materials to establish themselves as environmentally friendly companies. The television LG 60PK250 60 Full HD Plasma is an eco-design that shows harmonized cooperation between LG and its suppliers, in which resource consumption is reduced, components are recyclable, and safe materials are facilitated (See appendix 3 for details). Shareholders are the ones who have supported, are currently supporting, or may support the organization in the future (Palmer, 2009, p.45). They provide funds to the firm to finance its financial and non financial performance. LG has experienced a consecutive increase in investment by domestic investors between 2005 2008, while investment by foreigners has decreased and investment by the Group remains sustainable. LGs Shareholder Composition Source: LG, 2010 (See appendix 1 for details) Employees are involved in a companys marketing plans, in which groups of people must be taken into consideration: top managers, finance staffs, RD staffs, purchasing staffs, or manufacturing and accounting staffs. On the way to Great Company, Great People, LG believes that only great people can create a great company. LGs workplace is the space of solidarity, creativity, and freedom. LG strives for greatness in what it has recognized as People Leadership which concerns with market dominance achieved by selecting and nurturing talented team players able to internalize and execute innovation across the board (LG, 2010). (See appendix 2 for details) Macro EnvironmentThe macro environment, also known as the external environment, comprises general trends and forces which may not immediately affect the relationships that a company has with its customers, suppliers, and intermediaries, but sooner or later, as this environment changes, these trends and forces will alter the nature of such micro level relationships (Palmer, 2009, p.51). The macro environment is beyond the control of the marketers, but it is evaluated to help a company make decisions and plans. Macro environment could be divided into a set of subject areas frequently used in the UK SLEPT: Socio cultural environment Legal environment Economic environment Political environment Technological environment SLEPT Analysis(CIM, 2002) Socio cultural environment: is fundamental to a businesss operation in a specific community. It is crucial for a company to keep up with the changing needs of customers. Demographic environment Demography is the study of populations in terms of their size and characteristics. (Palmer, 2002, p. 59) We can sub-divide the demographic environment into following categories: Population size and growth trends Age sex structure Changing family Number of educated people Increasing diversity The TV LG 60PK250 60 Full HD Plasma is a high tech innovation with eco design, which can be listed as one of LGs prides. It might be an ideal product for young age groups who are focused on style and dominant features, or for older age groups who are interested in energy saving functionality. The TV can also attract both males and females who are looking for bigger screen size, better picture quality, and digital ready TV. LG might expect the highest sale of this TV to be to households who have children aged 5-9, or households with family size 5+ (Mintel, 2009). However, the Group should never look for a higher sale of this model compared with that of LCD TV because LCD TV is always likely to be the first choice for all ages, sex, or occupations. Cultural changes Cultural environment is made up of institutions and factors that affect each societys values, attitudes, perception, behaviours, and so on. Marketers must be aware of cultural influences and changes across societies in order to renew the firm and adapt to the changing needs of customers. Some culture groups should be considered within a society: ethnic and racial cultures, religious cultures and classes (CIM, 2002). Cultural values are always important and highly appreciated in a society. Shifts in cultural values during years will lead to a change in customers philosophy of life, and then result in consumption habits. Nowadays, changes in audio-visual culture have resulted in differences in buyer behaviour. The TV LG 60PK250 Full HD Plasma is an evidence for a shift from basic need to self esteem need of consumers. LG TVs with reputation, high technology and high quality are always every customers desire. However, they are most preferred by high socio economic groups. It is the development of society that situates LG in the competition against other celebrated brands in which its products need to have competitive advantages to survive in the changing and challenging market. Social trends Social changes involve changes in the nature, attitudes and habits of society. Social changes are continually happening, and trends can be identified (CIM, 2002). Rising living standards: higher incomes, proper and developed services in recent time can result in higher expenditure, wider ownership of luxury products like LG 60PK250 60 Full HD Societys attitude to business: LG always strives to be consistent and systematic in full scale implementation of social activities on raising environmental awareness, alleviating global famine and combating infectious diseases. Fundraising and volunteer work are the key points of the Groups goals and operation system. The workforce: high skilled labours are needed for not only LG but also other manufacturers in the macro economy. Besides, there have been changes from manual jobs to an increasing intellectual employment. LG has a vision of expected core capabilities of its employees: Product leadership refers to the ability to develop creative, top-quality products, using specialized new technologies. Market leadership refers to the ability to achieve top ranking, worldwide, thanks to a formidable market presence in countries across the globe. People leadership refers to the market dominance achieved by selecting and nurturing talented team players able to internalize and execute innovation across the board. (LG, 2010) Political and legal environment: is treated as an unpredictable element in a companys marketing environment. It comprises government, politicians, and pressure groups. Changes in government policies or changes of government can exert great impacts on businesses performance. Legislation is a part of political process. It covers all aspects of an organizations operation. Laws and regulations are adopted by the government, in which some basic issues of economic policies are recognized: criminal law, Health and safety law, company law, tort, legal framework, employment law, contract, consumer protection, data protection. (CIM, 2002) LG is headquartered in Seoul, Korea functioning 60 subsidiaries in 34 nations and making its products to consumers in more than 180 countries. Therefore, it will be affected to some extend if there is any change in these countries politics, especially in Asian countries and Middle East. However, LG is always committed to basic laws and regulations on corporate business such as customers health guarantee, customers information protection, environmental protection, employee right protection, and so on. Economic environment: A state of economy in which a company operates, where trade should always be at the very heart of performance. Economic environment includes factors that can influence consumer buying power and spending patterns. A company should keep an eye of both regional or national economic changes as well as movement in the global economy. The main aspects of economic environment are: Income distribution and purchasing power Consumer spending patterns Market competitiveness Business cycle: recession, inflation, unemployment, fluctuation of exchange rate, etc Before a luxury product like LG 60PK250 Full HD Plasma appeared in the market, economic factors would have been taken into cautious consideration. According to Mintel (2009), there has been a trend of higher personal disposable income and consumer expenditure since 2004. This could be a good sign for LG if customers can afford that type of TV. However, the global economy has not escaped from the recession. Therefore, the product sale could be damaged by customers attitude if they delay their purchase. Moreover, the TV market is becoming competitive when a wide range of available products are introduced by numerous manufacturers. The TV market has to face a rising number of different technological products like online video. This could make customers confused when making their purchase. The lower average price may also have benefited customers but it is not a good sign for the producer because deeper price cuts can cause market values to drop off much more steeply, especially with lar ge screen TVs like the LG 60PK250 Full HD Plasma. Technological environment: As human society develops, technological change happens. Technological development can create favourable conditions for productivity and business efficiency. New technologies provide new markets and opportunities but sometimes they can affect a firms determination towards whether or not to invest in radical new or high technologies to achieve their targets. Shifts in technologies are sometimes problematic to several organizations. However, companies operate in an environment where technology changes must be adapted quickly to the business for improvement and innovation. They should pay attention to pace of technological change, RD budgets, concentration on minor improvements, and increased regulations (Kotler et al. 2001). LG Electronics is a company that thrives on innovation. It is reinforcing centre competencies to father its status as the Digital Leader. LG is now developing its Smart Technology which creates convenience and adds joy to customers lives. Smart Technology is a development philosophy that embraces sensitive communication with customers in order to provide products that everybody wants to use, and easily can. (LG UK, 2010) Competitor analysisThe television market consists of highly competitive players, who are continuously innovating (Mintel, 2009). Competitor analysis is essential to be able to plan effective marketing strategies. According to Kotler and Armstrong (2004) there are 3 steps to analysing competitors: Selecting which competitors to attack or avoid Assessing competitors objectives, strategies, strengths and weaknesses, and reaction patterns Identifying the companys competitors Porters five forces is a strategic tool used to assess an industrys competitive environment based on the strengths of five generalised forces (Henry, 2008). These five forces are: threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitute products, and amount of rivalry among firms in the industry (Henry, 2008). In this case, Porters five forces can be used as an effective tool to analyse the competitor threats LG would face in the television market. New Entrants Economies of scale Government policy Capital requirements Proprietary products/technologies Threat of new entrants Buyers Price/total purchases Buyer concentration verses firm concentration Ability to backward integrate Price sensitivity Competitors Market volumes/shares Market sectors/product/ service type Market responses Bargaining power of suppliers Suppliers Differentiation of inputs Supplier concentration Threat of forward integration Switching costs Bargaining power of buyers Substitutes Switching costs and propensity to substitute Relative price performance of substitutes Threat of substitutes (Adapted from Baines, Fill and Page, 2008, p. 74) The television manufacturing industry faces intense segment rivalry due to the fact that few players dominate the market. The main competitors in the television industry are LG, Panasonic, Samsung, Sony and Toshiba, with LG being one of the best (Mintel, 2009). Company Brands LG LG Panasonic Panasonic, Viera Samsung Samsung Sony Sony, Bravia Toshiba Toshiba, Regza (Mintel, 2009) In the case of being threatened by new entrants, as mentioned before, the TV market is a well-established industry that is highly competitive and requires constant innovation and technological investment. This makes it an industry with high entry barriers (Kotler and Keller, 2006) therefore it is not an easy market to enter, especially when competing with a company as established as LG. Suppliers bargaining power increases when there are a few substitutes and when there are fewer suppliers in the industry (Kotler and Keller, 2006). High costs and the importance of the product has an impact on their bargaining power as well. Televisions are considered a necessity in most homes and are an important product therefore suppliers will have some form of bargaining power however the television industry is large and will have a large number of suppliers therefore switching suppliers would be easy to do, which means that LG will have more power over its suppliers because they are a well-established and large consumer electronics company and suppliers would not want to lose business to such a mass producing company. In the case of buyers one of the main reasons their bargaining power increases is when they have many options (Kotler and Keller, 2006). When purchasing a television, a customer considers every aspect of the product because it a long term and expensive purchase (Mintel, 2009). Consumers have a wide range of products and features to choose from when trying to buy a HD Plasma TV. Plasma screens are becoming increasingly unpopular and are the least published type of screen nowadays (Mintel, 2009), therefore in the case of this particular product consumers will have high bargaining power because of high choice and plenty of manufacturers with different prices, for example currys and PC World. However, since the recession the amount of people willing to pay high prices for the latest technology has reduced and price has become the most important factor (Mintel, 2009). The threat of substitute products within the television industry can be argued. It would be considered low because a television is considered an essential and few efficient substitutes are available. However, PC screens have become an increasingly popular substitute for video (Mintel, 2009). People within the UK are using more and more internet technology and online streaming websites to watch TV. Companies like Sony and Toshiba are releasing televisions that are internet compatible (Mintel, 2009) and the LG 60 HD Plasma TV will not be able to keep up. Larger TV screens have also become less popular since the recession (Mintel, 2009) which will make it harder for LG to ensure the televisions success. Due to the fact that the television industry is dominant by a small number of well established large firms that produce a range of products but have slightly different quality standards, features and style. Therefore the market can be described as a Differentiated Oligopoly (Kotler). In this case companies are better focusing on one attribute and attracting the people concerned with it (Kotler) LG has been an innovator in the television industry for a long time. Amongst many other innovations, they were the first to product a 60 plasma TV (LG, 2010). Therefore although there is high pressure within the industry LG is constantly keeping up with it by focusing on their customer needs. In 2008 they introduced their new global brand identity as Stylish design and smart technology, in products that fit our consumers lives (LG, 2010). The PLC theory is based on the idea that every product goes through a life cycle from its introduction onto a market, to its decline and withdrawal from the market (Hoffman et al., 2009). The traditional PLC curve consists of 4 stages: Introduction, Growth, Maturity and Decline (book?). Product Life Cycle (PLC) Traditional Product life cycle Introduction Growth Maturity Decline  £ Sales The product life cycle can be a useful tool in analysing how a product is doing and for a firm to manage its portfolio of products (Palmer, 2008). It is also useful in helping make strategic decisions about the marketing strategy of a product and the best way to market it while it goes through the stages because the marketing mix varies at each stage. It is more descriptive rather than predictive (website). The life-cycle of different products vary, and it can be difficult to identify the stage at which the product lies in a PLC. The shape of a PLC varies as well and depends on the marketing strategies being applied to the product, as well as whether it is a product form, product class or brand that is being considered (Palmer, 2004). A television is a product class and usually has a lifecycle of about 70 years however it is easier to identify the life-cyle of a product form for example plasma TVs. HDTV is relatively new technology that is likely to be in its growth stage and has a lot of potential for the future however plasma is an older technology that is now most likely to be in its decline stage (website). LEDs and LCDs are much more popular and 3D TVs and OLED technology are being introduced as well. HDTVs lifecycle is predicted to grow and evolve over the next two decades due to the prediction and development of HDTV LCDs, OLEDs, 3D TVs, Laser TVs and Holographic TV (Squidoo, 2010). The LG 60PK250 60 HDTV is likely to fit into the growth stage of the traditional PLC as it was launched in March 2010 and combines HDTV technology with Plasma screen technology. The right kind of marketing strategy can be applied to help extend its life-cycle. (Refer to appendix 5) BCG MatrixThe Boston Consulting Group (BCG) Matrix is a tool that was developed in order to analyse the portfolio of an organisation to assess the products position according to its growth rate and its relative market share (Henry, 2008). It can be used to help make strategic decisions about their products and how to maximise returns on them (Henry, 2008). The growth rate is determined by looking at the growth rate of the economy and its market share is refers to its competitive position within the industry (Henry, 2008) The position of the LG 60PK250 HDTV can only be estimated based on the knowledge available. It is a relatively new product and is priced quite high. A lot of people would rather pay that money towards purchasing an LCD screen, however all the major retailers such as Argos, Currys, PC World etc. sell the television. LG also has a well-established brand and a loyal network of customers. For these reasons the television is likely to be a cash cow. Its market share would be relatively high due to being an LG TV as well as the fact that it is a HDTV. However its market growth is likely to be low due to the overall economic recession and PC screen technology replacing televisions. However the BCG matrix assesses performance based on only these two factors. It overemphasizes the importance of market share and market dominance (Henry, 2008, p. 241). It also relies on managers judgements (Henry, 2008) and does not take into consideration other internal or external factors that could determine the success of the product. However it is a useful tool to use in conjunction with other strategic theories such as the PLC curve before. SWOT AnalysisA SWOT analysis is a framework used to assess the strengths, weaknesses, opportunities and threats of an organisation and its marketing environment (Palmer, 2004). The strengths and weaknesses consider the internal environment and the opportunities and threats are linked to the external environment (Henry, 2008). SWOT Analysis of the LG 60PK250 60 HD TV Strengths Well established and popular TV Brand Big screen size Built in freeview Currently in intro/growth Weaknesses Plasma screen technology declining Expensive due to screen size No innovative technology Opportunities Popularity of HD TVs Potential for growth Increasing sales due to end of recession Threats Similar products available at different prices High competition PC/online video streaming technology taking over Innovative technology taking over for example 3D and OLED TVs A SWOT analysis can be useful for the general and competitive external and internal environment however it does not take into account unpredictable changes or events in the external environment (Henry, 2008). It helps identify weaknesses and opportunities for which strategies can then be developed to make improvements. However, some of the limitations of a SWOT analysis are, it is hard to identify what is a threat and what is an opportunity, sometimes the same thing can be a strength or a weakness and the analysis can be too focused within the industry boundary (Henry, 2008, p. 120). In this case the SWOT analysis is stronger as it has been used in conjunction with a PEST analysis which was conducted to analyse the external environment in detail. Buyer Behaviour If organizations want to survive in a challenging market, customers should be always at the very heart of their operation. Marketers are expected to be aware of what consumers are thinking, what they need and what they want to buy. Basic insights into buyer behaviour can be seen as a versatile key to unlock all those thorny questions. The model of buying behaviour Evaluation of alternatives Information research Purchase decision Post-purchase behaviour Need recognition Source: Kotler and Armstrong, 2004, p. 198 The model is designed to synthesize and coordinate relevant concepts that reflect the problem solving progress inside the emotional consumer. The three main components of the model are: input, process (buyers black box) and output (Kotler et al. 2001, p.191). The input The input component rests on external influences which can be observed as sources of information affecting consumers product related values, attitudes, and behaviour. Firms marketing efforts and other stimuli like socio cultural environment, economic environment, technological environment and political environment are chief among those. Marketing Efforts The firms marketing activities are direct components that play a pivotal role in persuading consumers to buy and use products of a manufacturer. Marketing strategies consists of products, promotion, price, and channels of distribution. We will have an in-depth insight into the marketing efforts of the product LG 60PK250 60 Full HD Plasma TV in the session marketing mix later, but some key points can be identified as: Product: The TV can be classified as a consumer product generally acquired by the last consumers for individual consumption. It is an amazing innovation of LG which allows customers to enjoy creativity, high technology, convenience and other great values. The TV could be a big opponent against a number of other high tech TV series in the market in 2010 because of its outstanding features providing superb crystal clear picture quality perfect for bringing the cinema experience home, or converting the living room to a sports stadium. Promotion: LG foremost advocating of the product is through publicity crusades on TV, publish newspapers, hoardings and the internet. Price: According to Mintel 2009, 86% of customers consider the prices of products as their first priority. The price of LG 60PK250 60 Full HD Plasma is quite high (more than 1000GBP), and this could be a disadvantage f

Inflation And Oil Prices In Malaysia

Inflation And Oil Prices In Malaysia It is observed that more than a decade ago, crude oil prices were between $20 to $40/barrel with its ups and downs throughout the late 90s. The price went up slightly before dropping again after the 1997 Asian financial crisis. In the beginning of the 21st century however, the prices started to climb to almost double that to the average value of $40. Volatility is high as by 2002 the value dropped back to about $20 right after the September 11 Attacks before surging up again almost immediately. It can be said that from 2003 onwards, the price of crude oil throughout the world began to steadily ascend higher and higher over the few years till late 2006. This is mainly due to concerns on exhausting oil-wells throughout the world, the post US-Iraq war situation, OPECs stand on providing the world with limited supply with its reason to preserve resources, increasing growth and dependency on consumption of crude oil in the world and more. All of these add into the weight and urgency that spiked conspiracy and panic into the industry, added that market players took advantage of the situation to further propel prices into the sky. By 2007, the bubble for the US Sub-prime loan crisis burst and sent a shock wave that affected cash flow in world economies with a shortage of funds. A temporary sharp drop occurred in the prices of crude oil. Within a period of just a year, speculators, players, investors and suppliers all contributed a part to the worst oil price hike in human history. The price of just an average of $60 per barrel more than doubled to an unbelievable peak of $140 or more per barrel. This has sent the world oil prices scrambling to readjust its value in the market and also affecting every other industry linked to it. As quickly as it came, the prices of crude oil crashed back to about $40 per barrel in less than half a year. The crash was timed, played and expected. However the damage has been done to the world economies affecting overall price increases and devaluation of currencies. The more dependent on crude oil a country is, the bigger the effect it has taken. In short, it is the citizens who suffer from these two back to back sub-prime loan and crude oil price hike crisis. From then since, the price of crude oil has lingered around $40 to $50 average for awhile as economies embrace recovery before the price of crude oil resumed its steep climb again. The climb hovered around $80 per barrel by early 2010. Up until recently, the price of crude oil continues to hang around $75. It is safe to assume that the 21st century modern crude oil prices would continue to be at least this value of $70 and above with the very simple reason of increasing demand with decreasing supply. Comparing the prices back a decade ago and ignoring the price hike scenario, todays crude oil prices in per barrel is twice as much what was valued back in the year 2000. This just goes to show how much has changed in just a short span of ten years in this industry and provides a good indicator of what the future of the petroleum industry holds for us. One thing is for certain, it is that the price for crude oil will continue to climb at an increasing rate in the future unless a substitute for our heavy reliance on petroleum could be discovered in time. Otherwise, there is only that much we can prepare ourselves and embrace the ever increasing cost of living linked so heavily back to our grave dependency on the core energy source of the modern world. Research objective This research aspires to validate the public perceptions that the oil price hike does essentially affect inflation. It will analyse the consumer price index (CPI) in Malaysia that would be affected by the movement in oil price by world crude oil price. Thus, the objectives of this research are as follows: (a) To determine the effect of global oil price shock on Malaysia inflation rate. (b) To validate the theories and perceptions that oil price movements will affect consumer products and services, regardless of whether fuel is directly or indirectly used as main input in the business operations and value chain. 1.3 Significance of the research The outcome from this research will assist Malaysia government to formulate measures in time of economic turmoil due to oil price shocks which include fiscal and monetary policies. This will spur economic development and stabilizing inflation and unemployment rate. On the other hand, this research helps management of companies in Malaysia to be sufficiently prepared for any recurrence of oil price crisis that will impact heavily on the country economic. The companies would need to redirect their business model in preparation for the economic crisis. Chapter 2 Literature review 2.1 Introduction Inflation influences the economic growth of a country including those developing, developed or even underdeveloped country. High inflation tends to give negative perceptions on a country as it indicates increase in consumer products price and unemployment rate. We believe that oil price movement is the major cause of Malaysias inflation. Also, we are keen to discover whether real interest rate, real exchange rate, and money supply would cause more on inflation compared to oil price. 2.2 Oil price and inflation Different researches on the oil price fluctuations had been conducted to discover its effect on certain country economy performance. These findings contributed important decision making of macroeconomic variables which seek to cope with the hiking of petrol price. For instance, Hamilton (1983) found that there is significant correlation between oil price movement and economic expansion. This is supported by Gisser and Goodwin (1986) and also Brown and Yucel (2002), who identified that increase in oil price, will tend to retard economic growth. In addition, Tang et al. (2009) in recent research, found that oil price hike negatively decrease output and investment, while it increases inflation and interest rate in China. 1% increases of oil price is said to decrease the output by 0.38%; 100% increases of oil price will increase 7.34% of Producer Price Index (PPI) in the same month and 11.33% in the following month (Tang et al. 2009). These findings supported our research question and ob jective on whether oil price hike is one of the major causes of inflation in Malaysia. In Malaysia, Saari et al. (2008) focused on the effect of local petroleum price on the cost production in agricultural and agro-based sectors. They found that if price of petroleum increases 90%, the cost of production for fishing, forestry and logging, and oil palm primary products industries would increase by 30%, 12% and 7%. In our research, we refine Saaris research by discussing several independent variables and its effects on overall cost of production. 2.3 Other independent variables and inflation Other independent variables besides oil price may give high impact on Malaysias inflation. Turnovsky and Wohar (1984) found that the causality between money supply and aggregate prices in US is rather neutral from year 1929-1979. In Malaysia itself, empirical studies on inflation and money supply are relatively few. Masih and Masih (1998) discovered a unidirectional causality runs from money supply to inflation rate regardless of the lag structure. Recently, Tang (2004) re-investigated the causal relationship and found that money supply leads aggregate price in Malaysia but there is no evidence showing direct causal effect runs from money supply to inflation over 1970-1998. The Fisher (1930) stated that nominal interest rate should reflect movements in the expected rate of inflation. In his findings, there is no apparent relationship between price change and interest rate in the short run. Correlation coefficient of -0.459 was obtained for British data and -0.289 for United State. Th is is supported by Lardic and Mirgon (2003) which positively validate Fisher effect on G7 countries for the period 1970-2001. Chapter 3 Theoretical Framework 3.1 Introduction We are interested to investigate whether increase in oil price would actually cause inflation and if so, how much of this inflation is actually related back to rising of oil price Theoretically, an oil price increase is assumed to be related to causing inflation, most commonly among day-to-day items and activities such as transportation cost, food price, and other short term dealings. This research study is part of finding out the extent of inflation and hopefully to get a good estimation of how much relationship is there between a 10% rise in oil price contributing to inflation. Long term dealings should remain unaffected by short term price changes as it will require longer period of time for the inflation of price to kick in before its price increases. One such example would be college and school fees. In fact, a good representation of this theory that we could use would be the very recent 2007-2009 oil price hike which spark worldwide oil demand and price going tremendously high yet pummeling to unbelievably low price per barrel. This has somehow contributed to how we came up with this idea for our research project as we are keen to learn about rising oil price and its effect on inflation as a whole. 3.2 Variables Two very important figures in this research project would be oil price and inflation. Oil price as the independent variable is a very volatile value to determine. We would be using global value in determining how much US Dollars/barrel for oil price, occasionally there might be some numbers in Ringgit Malaysia (RM) for local references especially the ballooning price hike for 2008 in Malaysia, but mostly would be converted into US Dollars/barrel to effectively study the effect of oil price versus inflation in a global scale. Y (inflation) = f (oil price, money supply, real interest rate and real exchange rate) Due to the nature of the world economy and everything has a relationship with others, there is more than one independent variable besides oil price, including the total money supply in the market, the real exchange rate and the real interest rate. We will also study how each of these variables interact with inflation as well. Inflation would be the dependent variable in this research project. Inflation is calculated from the consumer price index (CPI) which comprises several categories (as shown in Table 1). Table 3.1: Weights of the CPI by major categories in Malaysia Categories Weights (%) Food and non-alcoholic beverages 31.4 Alcoholic beverages and tobacco 1.9 Clothing and footwear 3.1 Housing, water and electricity 21.4 Furnishings, household equipment and routine household maintenance 4.3 Health 1.4 Transportation 15.9 Communication 5.1 Recreation services and culture 4.6 Education 1.9 Restaurants and hotels 3.0 Miscellaneous goods and services 6.0 Total 100.0 (Sources: Department of Statistics Malaysia, 2010). 3.3 Model The initial model that was proposed is the Input-Output Price Model. It is proven in past researches that this model defines the relationship between oil price and inflation well enough. However, due to restricted resources and time as well as permission to accessible private data, there is only three students could come up with. It is being suggested that we use a Regression Model towards our data for calculation purposes to support our findings in this research project. And we will only use past proven records of results from the Input-Output Model to verify theories that could come up in this research project. 3.4 Expected direction It is expected that oil price as well as the other independent variables such as money supply, exchange rate and interest rate will have some effect on inflation. An increase in oil price, money supply as well as interest rate is expected to positively affect inflation. While an increase in exchange rate however is expected to negatively affect the inflation rate. Y (inflation) = f (oil price, money supply, real interest rate and real exchange rate) (+) (+) (+) (+) (-) Chapter 4 Data and Methodology 4.1 The data The data obtained is time-series data from year 2007-2009. Monthly data includes crude oil commodity prices that classified under world oil price. These data is extracted from the Organization of the Petroleum Exporting Countries (OPEC) and Bloomberg. In addition, monthly consumer price index (CPI) is obtained from the Department of Statistics Malaysia while the data of real exchange rate, real interest rate are taken from Bank Negara Malaysia (BNM) Monthly Statistical Bulletin. 4.2 Research methodology Valadkhani and Mitchell (2002) applied the input-output price model to assess the petroleum price shocks on inflation and household expenditures in Australia. Similarly, Saari et al. (2008) examined the impact of petroleum price on costs productions by disaggregating the components in the costs production into three categories: fishing, forestry and logging, and oil palm primary products industries. In the other hand, Hamilton (1983) used seven-variable vector auto regressions (VAR) system to identify the impact of oil price shock on U.S economy in year 1948-1974. Similarly, Marcelo S. (2005) used identified vector autoregressions (IVAR) to analyse the interaction between interaction between exchange rate and cost production. Masih and Masih (1998) employed the Granger causality test, modified Sims causality test and vector error-correction modelling (VECM) approach to examine the causality direction between money supply and aggregate prices in the Southeast Asia economies For Malays ia, they found that all causality tests are consistently implied that money supply (M1 and M2) Granger causes increase aggregate prices. Lastly, Mitchell-Innes H. A. (2006) used the same method (VAR) and vector error correction model (VECM) to prove that inflation and long-term interest rate moved in the same direction. 4.2.1 Hypothesis testing In our research, quantitative research (regression model) is applied as a method of analysis and interpretation of observation data in order to discover the strength of relationships between independent variables (money supply, real interest rate, real exchange rate, and oil price) and dependent variable (inflation). This statistical method starts with the collection of data which will be implied in regression model to verify null-hypothesis testing. Causal relationships are analysed by manipulating the factors to influence the phenomena of interest. Following is the research hypothesis: Ho: Oil price is not one of the major causes of inflation from year 2007-2009 H1: Oil price is one of the major causes of inflation from year 2007-2009 4.2.2 Regression analysis In order to verify the hypothesis testing above, regression analysis is applied in estimating the unknown parameters ÃŽ ²0, ÃŽ ²1, ÃŽ ²2, ÃŽ ²3, and ÃŽ ²4 in the relationship, using the data on oil price, money supply, real interest rate, real exchange rate, and inflation rate. Y1 = ÃŽ ²0 + ÃŽ ²1X1 + ÃŽ ²2X2 + ÃŽ ²3X3 + ÃŽ ²4X4 + ÃŽ µ where Y1 is the inflation rate; X1 is the oil price; X2 is the money supply (M1); X3 is the real interest rate; X4 is the real exchange rate; and ÃŽ µ is the variable representing all other factors that may have direct influence on inflation rate. In addition, coefficient of determination is implied to identify the significance of independent variables (money supply, real interest rate, real exchange rate, and oil price) on dependent variable (inflation). RÂ ²= {(1/N)*ÃŽ £[(xi-x)*(yi-y)]/(ÏÆ'x*ÏÆ'y)}Â ² Results from the regression analysis and coefficient of determination test shall decide whether or not Null Hypothesis (Ho) will be accepted and reject Alternative Hypothesis (H1). Statistics, tables and graphs will be used to present the results of these methods. Chapter 5 Research findings Initial Analysis Initial findings are done based on the graph analysis to identify the relationship between dependent variable (CPI) and independent variables (oil price, money supply, real interest rate and real exchange rate). From the graph, we analysed and identified reasons of those variables fluctuations from year 2007-2009. Figure 5.1: Relationship between CPI and Oil Price From Figure 5.1, it can be observed that inflation has a steady rate of increase over the past three years while oil prices met with a steep increase and peaked at June 2008 before crashing low at December 2008. After that, the value of oil prices increases steadily again. Much of the fluctuation in the value of oil prices was caused mainly by human speculation and manipulation of the oil market where issues such as limited oil supply, on-going war, terrorism and the sub-prime financial crisis caused the price hike. Despite the high and low prices of oil per barrel around the world, inflation rate was not highly impacted. Figure 5.2: Relationship between CPI and Money Supply From Figure 5.2, it can be observed as usual inflation rate steadily increasing over the years without much interference. However, money supply has been increasing as the gap between inflation and money supply is closing in together over the years. This could be mainly caused by the recent financial crisis which caused governments around the world to panic and quickly come up with programs to reduce the impact of the financial crisis which saw many going bankrupt. Programs are usually drawing up of hefty sums of cash to be spent by the government or distributed through ways as a mean to have people spend money to keep the economy of the country moving. Billions of dollars worth in bills and bonds are created and countries such as Australia and Singapore even had its government give out Christmas Bonus in cash to encourage their citizens to spend. There is also the usual routine of printing new money each year into the economy. All of these and more could have added up to the increasing rate of money supply into the economy. Figure 5.3: Relationship between CPI and Interest Rate From Figure 5.3, real inflation rate sees a steady increase as already mentioned however interest rates have a rather surprising pattern. This shock pattern can be observed at September 2007 when interest rates suddenly spiked to almost double its usual rate from 3.60% to 6.61% in the difference of a month. There was not much effect on inflation rate but this could be due to time lag for it to have effect. Ironically, it was this same period that the sub-prime financial crisis really started to accumulate in a wider problematic scale. Much could be questioned on why did the interest rates spiked all of a sudden. Yet in the aftermath of the crisis, we are seeing a steady decline on interest rates around the world. This is mainly because interest rates are being lowered now to help accelerate recovering economies by providing cheaper access to funding. Typical, this low interest rate attraction was what started the bubble for this crisis in the first place back in the year 2001 right after the September 11 Attacks. Figure 5.4: Relationship between CPI and Exchange Rate Inflation rate is once again here, only seeing a slight peak when oil prices jumped over everyones expectations. There is not much to be said for inflation rate with exchange rate as they both seem to be almost a nice straight line on the graph. A closer look into Figure 5.4 however tells us that inflation rate has been increasing steadily over the years while on the other hand exchange rates have seen an increase and decrease over the years instead. Exchange rate has not seen much big movements. Reasons could be that exchange rates around the world are extra sensitive and its value will react accordingly with all other exchange rates to find its correct value thanks to rapid arbitragers. Another reason could be due to economies around the world encouraging lower exchange rates to increase trading among countries. This would help the weakened economies recover better. 5.2 Empirical result and analysis Table 5.1: Mean and standard deviation Mean Std. Deviation N CPI 109.733 3.4206 36 Oil Price 69.75 25.368 36 Money Supply 888203.088 71807.6196 36 Real Interest Rate 3.4600 .66410 36 Real Exchange Rate 3.428771 .1332732 36 From Table 5.1, the number of observation (N) represents sample size collected from year 2007-2009 (12 months x 3 years). Smaller sample size tends to increase variability of the distribution. N equals 36 which is larger than 30, hence the difference is negligible. We assumed that the distribution is normal and represent the population. Table 5.2: Skewness and kurtosis N Sum Mean Skewness Kurtosis Statistic Statistic Statistic Std. Error Statistic Std. Error Statistic Std. Error CPI 36 3950.4 109.733 .5701 -.116 .393 -1.570 .768 Valid N (listwise) 36 From table 5.2, the skewness and kurtosis are -0.116 and -1.570. Negative skewness indicates that the distribution skews to the left. Meanwhile, negative kurtosis indicates that the distribution has shorter tail. Hence, we concluded that the data is not normal distributed and asymmetrical. Table 5.3: Variables coefficients Model Unstandardized Coefficients Standardized Coefficients t Sig. 95.0% Confidence Interval for B B Std. Error Beta Lower Bound Upper Bound 1 (Constant) 13.325 9.178 1.452 .000 -5.392 32.043 Oil Price .089 .013 .664 6.812 .000 .063 .116 Money Supply 3.911E-5 .000 .821 11.267 .000 .000 .000 Real Interest Rate .445 .369 .086 1.205 .000 .308 1.197 Real Exchange Rate -.716 .509 .612 6.263 .000 -.898 .834 a. Dependent Variable: CPI From Table 5.2, we can observe that: Oil price: Oil price has positive coefficient, indicating that this variable has positive relation with CPI. When oil price increases by USD1, the CPI will increase by 0.089% in one month on average, while other variables being constant. The p-value for oil price is 0.00, which is smaller than the 5% level of significance used in the test. Money supply: Money supply has positive sign of coefficient, indicates that this variable has positive relation with CPI. If the rate of money supply increases by MYR1, the CPI will increase by 3.911E-5% in one month on average, while other variables being constant. The p-value for money supply is 0.00, which is smaller than the 5% level of significance used in the test. Real interest rate: Real interest rate has positive coefficient, showing positive relation with CPI. When interest rate increases by 1%, the CPI will tend to increase by 0.445% in one month on average, while other variables being constant. The p-value for exchange rate is 0.00, which is smaller than the 5% level of significance used in the test. Real exchange rate: Real exchange rate has negative coefficient, indicating that this variable has negative relation with CPI. When exchange rate increases by 1%, CPI will decrease by 0.716% in one month on average; while other variables being constant. The p-value for exchange rate is 0.00, which is smaller than the 5% level of significance used in the test. All independent variables have significant value (sig.) smaller than 0.05. This indicates that all variables represent large level of statistical significance in the model. Therefore, equation for the model would be: CPI = 13.325 + 0.089 Oil Price + 3.911E-5 Money Supply + 0.445 Real Interest Rate 0.716 Real Exchange Rate Table 5.4: Adjusted R square Model R R Square Adjusted R Square Std. Error of the Estimate 1 .951a .904 .891 1.1281 a. Predictors: (Constant) Oil Price, Money Supply, Interest Rate, Exchange Rate From Table 5.3, adjusted R square is 0.891, indicating that all variables (oil price, money supply, interest rate, exchange rate) explain 89.1% of the variation in CPI. There is a strong positive correlation between the independent variables and dependent variable. Hence, it is considered that the variables fit closely into the model and are more likely to predict CPIs movement. Coefficient of Variation (CoV) is calculated to evaluate models goodness of fit. From Table5.3, the standard error of the estimate is 1.1281. From Table 5.1, the mean CPI is 109.733. The calculation of CoV is as follow: Coefficient of Variation = (SE)/ (Mean Price) x 100% = 1.1281/ 109.733 x 100% = 1.028% The coefficient of variation of 1.028% indicates that the average forecast error is 1.028% of average CPI. The model is considered as good model as its CoV is lesser than 5%. Table 5.5: ANOVAb Model Sum of Squares df Mean Square F Sig. 1 Regression 370.069 4 92.517 72.699 .000a Residual 39.451 31 1.273 Total 409.520 35 a. Predictors: (Constant), Exchange Rate, Interest Rate, Money Supply, Oil Price b. Dependent Variable: CPI Hypothesis: Ho: Oil price is not the major cause of Malaysia inflation from year 2007-2009 H1 : Oil price is one of the major causes of Malaysia inflation form year 2007-2009 From Table 5.4, the significance value is 0.00 which is smaller than the level of the significance (0.05). Therefore, the null hypothesis (Ho) will be rejected. Oil price is considered as the major cause of Malaysia inflation from year 2007-2009. Table 5.6: Correlation between CPI, oil price, money supply, interest rate, and exchange rate. CPI Oil Price Money Supply Interest Rate Exchange Rate Pearson Correlation CPI 1.000 .145 .857 .400 -.226 Oil Price .145 1.000 -.052 .188 -.803 Money Supply .857 -.052 1.000 -.601 .200 Interest Rate .400 .188 -.601 1.000 -.193 Exchange Rate -.226 -.803 .200 -.193 1.000 Sig. (1-tailed) CPI . .199 .000 .008 .092 Oil Price .199 . .381 .136 .000 Money Supply .000 .381 . .000 .122 Interest Rate .008 .136 .000 . .130 Exchange Rate .092 .000 .122 .130 . N CPI 36 36 36 36 36 Oil Price 36 36 36 36 36 Money Supply 36 36 36 36 36 Interest Rate 36 36 36 36 36 Exchange Rate 36 36 36 36 36 From table 5.5, it can be observed that: Correlation between CPI and oil price is 0.145, indicating positive relationship between both variables. Correlation between CPI and money supply is 0.857, indicating positive relationship between both variables. Correlation between CPI and interest rate is 0.400, indicating positive relationship between both variables. Correlation between CPI and exchange rate is -0.226, indicating negative relationship between both variables. The largest Pearson Correlation coefficient is to be found between CPI and money supply, which is 0.857. The Squared Correlation figure of 0.735 (0.857Â ²) is smaller compared to the adjusted RÂ ² of equation model, which is 0.891. Thus, the correlation between CPI and money supply does not show any signs of collinearity problem with the model. Since the biggest available coefficient between pairs of independent variables is not a problem, hence the equation model does not have multi-collinearity problem. 5.3 Discussion From the result, it is proven that oil price does influence the inflation fluctuations. Oil price has positive relationship with CPI at 5% level. USD1 increase in oil price tends to increase 0.089% of CPI. Oil price influences most of the cost of goods and services in the market including cost of production and transportation. As a developing industrial country, Malaysia relies heavily on the import of crude oil as source of energy. Significant increase of oil price tends to cause hyperinflation and therefore effect the development of the country. The results show that other variables such as interest rate, money supply and exchange rate do influence the inflation rate as well. From the analysis, money supply has strong positive relationship with Malaysia CPI between years 2007-2009. Hawtrey (1923) stated that the public holds undue proportion of cash balances with respect to their income when money supply increases. Hence, they tend to increase the level of spending. This is proven by the Quantity Theory of Money. When amount of money in economy increases faster than the growth in the level of future output, this will increase the market price level and therefor