Wednesday, November 20, 2019
Operations Management Essay Example | Topics and Well Written Essays - 5500 words
Operations Management - Essay Example Operation management is the function of managing core activities such as creation, production, distribution and delivery of the organisation’s goods and services (Chase, and Aquilano, 1977). This management of organisation is associated with the conversion of labour and material into goods and services efficiently to maximise the profits of the organisation (Gaither, 1984).Managing of operations appropriately is important for organisations in order to ensure high productivity, and customer satisfaction (Krajewski, Ritzman, &Malhorta, 2007). 1.2 What will be discussed in this case study?(Synopsis) This case study will provide an extensive knowledge regarding the operational problems being faced by the hospital; Riyadh Medical Hospital. This case study will be focused on highlighting the critical operational problems such as Supply chain management, Inventory management, Waste and lean management; and Quality management Along with these critical problems, the case study will pro vide an overview of the structure and growth that are relevant to these essential areas of operational management.The elements mentioned above will be separately investigated to evaluate the importance of each of the operational management issues. ... spital.The operation management deals with managing core activities from the conversion of labour and material to goods and services (Apte, Maglaras, and Pinedo, 2008). This would allow us to better understand the issues related to operation management at Riyadh Military Hospital. This case study addresses the major operational management issues such as supply chain management, inventory management, waste and lean management and quality management at Riyadh military hospital. Each of the issues mentioned are a hurdle for the hospital to work effectively and efficiently. This case study helpsto analyse and provide recommendation to improve the understanding of these problems. The concept of operation management would be used to understand the information and the problems associated with the management at Riyadh Military Hospital. The supply chain management issue wouldhelp in learning more about the importance of supply chain in a hospital and how can the supply chain management affec t the overall performance of the Riyadh Military Hospital. Similarly, the inventory management issues will highlight the importance of keeping balance between the required inventory and the amount of inventory at hand. The excess inventory in a hospital can lead to unfavourable situations as it reduces the capacity of the organisation and the value perceived by the customers reduces. On the other hand, the waste and lean management issue would highlight the importance of processes that are aimed to reduce the waste and improve the efficiency of the hospital. Lean management is aimed to transform the processes radically and to reduce the cost of the processes(Schemenner, 1984). The last but not the least operational management issue; quality management, would highlight the importance of
Sunday, November 17, 2019
Theories of rent and urban economics Essay Example | Topics and Well Written Essays - 2500 words
Theories of rent and urban economics - Essay Example The essay further outlines Smith’s rent gap theory and the agricultural land theory. The analysis is followed by an outline of the agent based land market model, and the microeconomic theory. The paper winds up with the central place theory and a conclusive remark on the varied rental patterns in an urban setting. The Collier Map show that there are different rent patterns for urban areas in UK and London in particular. The Western part of London records a mixture of rent patterns with a lower level of 10 pounds, and a higher level of 34pounds. The South East London has a rental pattern that way near similar with the difference between the highest and the lowest; levels being minimal (16-24 pounds). The same scenario applies to the North West and Yorkshire which has one of the lowest/cheapest rental rates. The outskirts of London and the hinterland towns have a low level of rent rates compared with the metropolitan. However, there are some urban areas outside the London Metrop olitan which have higher rental patterns. A good example is Dublin with a high of 35 pounds. Urban economics is the study of economies that are organized as urban areas (Harvey and Jowsey, 2003). It also studies the cities which are the modern centre of culture, innovation and education. It is in the urban centers where major commercial activities takes place hence the aspect of many offices being located in the urban areas (MacDonald & McMillen, 2007). Urban economics is closely related to the field of real estate and rental properties. Rent is the amount paid by a tenant to a landlord on a rented or leased space. Many theories exist in the field of urban economics and real estate. They are outlined below; The Neighborhood Theory The first theory is based on the housing prices, neighborhood characteristics, and racial segregation. This theory stipulates that the price of an office premise is determined by the characteristics of the neighborhood as well as the characteristics of the house. These neighborhood factors directly influences the patterns of office rent in given urban areas. Neighborhood variable affect the pattern of office rent either positively or in a negative way. These two factors combine to determine the pattern of rent in a given section of an urban area. They include; crime rate in an area, property tax rate, economic strength of the neighborhood, air pollution, accessibility from nearest train/ bus stations, extent of traffic on the street as well as quality of education/ number of institutions of learning (McDonald & McMillen, 2007). This explains the different office rent patterns in an area like Cambridge which is an educational centre and Nottingham. There has been an increase in the quality of office buildings in some sections of urban areas. This results in changes in office rent patterns. Areas with good quality buildings have different office rent patterns with areas with low quality office buildings. The same case applies to areas with different races. There is a tendency for rental patterns to be high in areas populated by the whites, as opposed to areas with a mixture of races (King and Mieszkoski, 1973). This theory explains the difference rental patterns in the London Metropolitan. Areas such as Wimbledon (?30) and Heathrow (?28) with good quality houses have higher rental patterns as compared with those with low quality such as Norwich (?15). Natural Evolution Theory Natural evolution theory is a model which was advanced by Mieszkowski and Mills (1993). They argue that the filtering model provides a primary reason for the movement and relocation of offices in the suburbs. The result is the emergence of suburbs which acts as commercial centers, characterize by high and
Friday, November 15, 2019
Globalisation And Its Effect On Sovereignty
Globalisation And Its Effect On Sovereignty In essence, understanding the consequences that subsequently emerge from globalization and sovereignty depends on how we define both the globalization and sovereignty. Once defined it is much clearer to draw out the central themes concerning the relationship between globalisation and sovereignty. In this essay, the subject matter I have chosen to address pays focal attention to the three most palpable issues; political, economic and security-related safekeeping. In each case, I aim to demonstrate that globalization has both threatened sovereignty and strengthened it. Ultimately, I intend to show that whilst globalization has transformed our understanding of sovereignty it has progressed in such a way that globalization has, to a large degree, been structured around the Westphalian concept. If we are to understand how the consequences of globalization affect our understanding of sovereignty, we must first define what we mean when we speak of sovereignty and globalisation. For the sake of simplicity, I will offer a definition of both globalisation and sovereignty and proceeding from that basis draw out the consequences such a definition of globalization has on such a definition of sovereignty. Globalization is best defined as a relatively recent process of worldwide integration, cooperation and conscious building whereby an increase in the flows and trade of ideas, people, goods and services between national state borders is prevalent. Sovereignty is best defined as the recognised privilege of nation-states to legitimately hold and exercise complete authority over a territorialized jurisdiction, determine ones own destiny within ones territorialized jurisdiction and the freedom from external interference to dictate such domestic governing. Throughout human history, the globe has gone through a series of material epochs that have also brought with it a series of epochs concerning human political organization. The two most striking epochs shaping human political or ganisation in recent times have been firstly; the emergence of the modern state, and secondly; the emergence of an era many contemporary political analysts regard as the post-modern epoch. It is these two prominent concepts of human political organisation that have fashioned the debate of globalization and sovereignty. The era in which the modern state emerged can be expectedly traced back to the Westphalian Peace Treaty of 1648 where the idea of state sovereignty arose and set the foundations to the normative structure for international relations in the last several hundred years (McGrew, 2009: 23). As the sovereign state arose because of a particular conjunction of social and political interests in Europe (Mansbach, 2000: 59) so too have interests dictated that sovereign states be drawn into union in the post-modern era. The most defining interests of the post-modern era that have drawn sovereign states into union have centred on political, economic and security-related safekeepin g. International political relations in the 20th century have drastically transformed the way in which nation-states co-operate. Since the 1940s, substantial political integration has become so predominant that some political theorists believe that the idea of Westphalian sovereignty no longer pertains. Political interconnectedness via international and regional organisations such as the United Nations and European Union has meant that nation-states are increasingly coalescing and thus sacrificing their recognition as sovereign. Advocates of such a view argue that supranational entities such as the European Union demand unified conformity and thus gradually erode the individual legal characteristics set by the legitimate authority put in place to govern over a territorialized jurisdiction. As such, they argue member states of the European Union have forfeited their freedom to determine their own destiny by willingly granting external entities the privilege to interfere and dictate d omestic governing. A classic contemporary example we can take into consideration of where critics argue that the monopoly of domestic-retained governing is undermined and reduced can be found in the European Unions European Court of Justice. Via the European Arrest Warrant, the European Court of Justice issued an extradition order for British citizen and controversial historian Frederick Toben in 2008 for alleged denial of the Holocaust. Whilst the German government who had initiated the arrest warrant eventually abandoned the extradition order, critics of globalization would argue that the incident demonstrates that the extent of British integration into the European Union calls into question the definitive distinctions between state sovereignty and supranational interference. Conversely, however, advocates of British membership to the European Union would argue that the fact that the extradition order was dropped demonstrates that member states clearly still retain the legitimate monopoly to exercise complete enforcement of domestic laws. Nevertheless, whilst critics of globalization may perceive the consequences of globalization to be eroding the concept of state sovereignty, and political theorists such as Stephen D. Krasner accepts that state interdependence has somewhat reduced the Westphalian concept of state sovereignty when the domestic jurisdiction of sovereignty is taken into account, Krasner also argues that globalization is not necessarily eroding the concept of state sovereignty but evolving, enhancing and expanding the concept (Krasner, 1999). Supporters of this argument would point to international organisations such as the United Nations that stresses each member state recognise and uphold the principle of respect for the territorial and political jurisdiction of fellow states (Mansbach, 2000: 71). In this way, whilst some may see international organisations of this nature to have a negative influence on the idea of sovereignty, it is argued t hat such organisations in fact strengthen the value of sovereignty by including the idea as a central pillar to United Nations structure. Political integration is practically inseparable from economic integration. The latter has also been a historic product of globalization, specifically since the end of the Cold War. The internationalization of commerce, spreading global capitalism into all continents, has become so substantial that the issue of borders has become irrelevant and vanished as an effective control mechanism (Reynolds, 2000: 650-656). For national state sovereignty therefore, economic amalgamation has become an inevitable consequence to which many feel has both merits and demerits. International organisations such as the World Bank and the International Monetary Fund have played an extensive role in shaping intercontinental trade and thus created animosity and resentment in specifically non-Western states where it is properly accepted as an extension of Western ideolog y. In recent years, there has been some vocal opposition to the International Monetary Funds involvement in South Africa where the post-apartheid state continues to be indebted by International Monetary Fund loans dating back to the apartheid era. For many South Africans such colossal debt, they feel, has prevented them from making good their freedom in the post-apartheid era and ultimately restricted their ability to direct funds toward social programmes such as education, health and even policing within their territorial jurisdiction. In essence, many of those who resent economic integration feel The increasing internationalisation of national economies and the increasing transnational character of capital, suggests that policies designed to compete for inward investment favour transnational rather than national interests (Ralph, 2001: 158). However, advocates of global capitalism and the democratic peace theory argue that the internationalization of trade has not only created gre ater wealth (Osterhammel and Petersson, 2005: 121) but also lessened the prospect of military conflict among state actors that adopt liberal democratic political values and thus capitalist economics. Therefore, they argue, ensuring state stability on a global basis and accordingly reinforcing the effectiveness of state sovereignty, internally and externally. This is evident if one takes into account that since the 1940s, countries that have adopted liberal democracy and capitalist economics have not waged war against one another or had a civil war. Interlinked with state stability and sovereignty in a global era is the issue of security-related safekeeping. The issue of security-related safekeeping is also, like political relations, intertwined with the economic aspect. Technological advance in areas such as transport and communications has had an impact on sovereignty on a global scale so much so that it has shaped, if not dictated, greater co-operation among state actors in times of peace and in times of conflict. Conflict, specifically, has drastically changed over the last several centuries due to the global integration of both technology and communications. In contemporary international relations, state actors have been effectively forced to collaborate on related national security interests (Mansbach, 2000: 80-92). International relations in the 21st century has been commonly referred to an era whereby global cooperation between state actors will be crucial in managing the phenomenon of global terror (Eriksen, 2007: 134-138). This phenomenon of global terror has greatly benefited from the technological advance of transport and communications and thus revolutionized contemporary warfare. The War in Afghanistan, for example, was prompted not by any central authority in the nation-state but by non-state actors Al Qaeda. As a result of the September 11th Attacks the War on Terror has challenged the state sovereignty of numerous nation-states, predominantly Iraq and most recently Iran. Greater emphasis has also been placed on international stability and human rights. Thus, the globalization of terrorism has transformed the way in which we conceptualise the right to the privilege of sovereignty of other nation-state and the way in which we ourselves perceive our own sovereignty in the post-modern age (Arnold, 2008: 190-209). However, there are those that whilst recognizing that the art of war has changed over time, of which globalization has had an immeasurable impact upon, who argue that If we think of global politics today as unfolding in an arena without superordinate authority, in which overlapping groups compete with each otherand in which the potential for violence is present, then the politics of medieval Europe may not seem so alien (Mansbach, 2000: 43). Some would even go as far to say that the art of war, or rather terrorism, has only superficially changed (Baylis and Rengger, 1992: 229-230). In this sense, the Hobbesian view that the period in which the Westphalian concept of state sovereignty arose in Europe was a time where lack of security and the absence of clear centres of authorityerased the distinction between the domestic and foreign realms (Mansbach, 2000: 44) can be considered exceptionally relevant to how the Westphalian concept still remains a central pillar to the normative structure of inter-state security relations since its emergence. In conclusion, understanding the consequences that subsequently emerge from globalization and sovereignty depends on how we define both concepts. Proceeding from that basis there are three central issues that are instantly recognizable to such a discussion, namely; political, economic and security-related safekeeping. In each case, globalization has both threatened sovereignty and strengthened it. Ultimately, I consider that Since state evolution was gradual, states managed to monopolize the means of coercionToday, some states have surrendered that monopoly . This does not suggest that states will become irrelevant or disappear. Rather they must share pride of place with other actors and must co-operate with one anotherto cope with todays challenges (Mansbach, 2000: 59).
Tuesday, November 12, 2019
A Call from the Lower Middle Class
Most people belonging to the lower middle class are usually those who have a little degree of education and acquire basic office and clerical jobs. A rising issue on the division of classes is the abolishment of the lower middle class and the threat of more lower classes to evolve. Thus, in order to save the lower middle class, their needs as well as priorities must be considered and given enough attention. One of the basic needs of people belonging to the said class is health care. Due to the high cost of obtaining a health insurance, only limited people are able to access to an assured quality health care. Another need that should be considered is the opportunities for high wage jobs. The salary that the lower middle class gain from their works is not sufficient especially for those who already have a family. Such salary will be allocated to the everyday budget of his family. With the continuously increasing prices of the necessary commodities, the allocation of a low wage salary would be difficult. Some of the supposedly basic necessities for the family might be disregarded and sending their children to college might also arise as a problem. With regards to education on the tertiary level, an affordable college education must be provided. Reduced cost of education for those belonging to the lower middle class families would mean great importance and assistance.  Provision of scholarship programs is also a solution for the problem in education. The issue on education must be given priority since this process prepares the next generation for a better job. In the long run, if the education would be adequate, then the threat for the demolition of the lower middle class will no longer exist. Other needs of the lower middle class that must be considered concerns provision of low housing programs, reduced tax payment and an improve retirement security. The said social class must not be taken in for granted because they take part in the development of the economic growth of the country. The progress of the lower middle class is a means to reflect the condition of the state’s economy. Reference Strengthening the Middle Class. Retrieved April 17, 2008, from http://www.hillaryclinton.com/issues/middleclass/
Sunday, November 10, 2019
Christ in His Suffering and Death
The death of Christ on the cross gives the meaning to all the undertakings of God. In His sacrificial death Christ revealed the holiness, righteousness and love of God, and His infinite wisdom. Disputing the actual death of Christ and His resurrection is destructive for Christian faith. Many biblical passages predict the death of Christ and state or assume His actual death. Definition of Terms Atonement      Guilt               Penalty          Reconciliation    Righteousness      Substitution Expiation         Justice            Propitiation    Redemption       Sanctification Forgiveness     Justification    Ransom          Remission         Satisfaction Theories of the Atonement There are principal theories of atonement, which arise from the disputes around the meaning of the death of Christ. 1.     Substitutional Atonement. 2.     Payment-to-Satan Theory. 3.     Recapitulation Theory. 4.     Commercial or Satisfaction Theory. 5.      Moral Influence Theory. 6.      Theory of Thomas Aquinas. 7.     Theory of Duns Scotus. 8.      Example Theory. 9.     Mystical Experience Theory. 10. Governmental Theory of Grotius. 11. Theory of Vicarious Confession. Although the upper theories have some aspects that can be recognized as having merit, the true concept of the death of Christ may be understood from the biblical passages that reveal the doctrines of redemption, reconciliation and propitiation, and the death of Christ thus is the substitutional or penal concept of the atonement. The doctrine of Redemption is an important aspect of the work of God in salvation accomplished by the death of Christ. The doctrine of redemption in Christ can be erected from the study of three words: agoraz?, lutro?, and peripoie?. Agoraz? (exagoraz?) is the basic word for redemption in the scripture and expresses the idea of purchasing Christians by Christ, and His death was the praise paid. Peripoie? means to save or to preserve one’s self, and lutro? has the meaning to rescue by paying a ransom. The study of redemption through Christ in the New Testament discloses clearly that the death of Christ was the praise He paid to God and thus purchased the sinner from the bondage of sin. The doctrine of Propitiation represents the idea that the death of Christ fully satisfied the demands of a righteous God in respect to judgment upon the sinner. The word is mentioned in both Testaments. Propitiation had a substitutional character and three important results. The doctrine of Reconciliation as one of the most important in theology is being discussed wildly and has four basic interpretations. Several biblical passages reveal that reconciliation effects the change in man which reconciles him to God: II Corinthians 5:17-21, Romans 5:6-11, Ephesians 2:16, Colossians 1:20-22. Reconciliation is provided to all men, but applied only to the elect when they believe. Those who reject the love and grace in Christ are still judged according to their work. Reconciliation is applied to the whole Universe. The work of reconciliation extends to the work of God on the behalf of the believer. Christ in His Resurrection The doctrine is essential for the whole Christian faith and theology. The resurrection of Christ is the first step in the series of the exaltation of Christ and His ministry as our Intercessor. Evidences for the resurrection of Christ are abundant. The Scriptures fully describe the appearances of Christ after resurrection to many people under different circumstances; therefore resurrection is a well-documented historical event. Between the evidences for the resurrection of Christ are the following. 1.     The empty tomb. 2.     The character of the human witnesses to the resurrection. 3.     The dramatic change in the disciples after the resurrection. 4.     The disciple’s experience of the divine power in the postresurrection period. 5.     The events of the day of Pentecost. 6.     The evidence in the custom of observing the first day of the week. The Origin of Christian Church The foundation of the Christian church in the first century, its convincing power and dynamic stemmed from the belief in the resurrection of Christ. The Scriptures evidences the resurrection of the body of Christ, not only His resurrection in spiritual sense. His resurrection body was the same, though changed a little, that the one in the tomb and Scriptures evidence this fact. Who Raised Christ from Dead? The resurrection of Christ is the work of triune God. The significance of the resurrection of Christ is underestimated in all branches of systematic theology. The major facets of the significance of the resurrection of Christ are: 1.     Proof of His person and His offices (Prophet, Priest, and King). 2.     Key to all of His present work. 3.     Consummation of the divine plan in the prophetic future. 1. The article â€Å"The nature of the atonement: how should one view the cross?†by Steve Sullivan emphasises the importance of understanding the doctrine of atonement and pays particular attention to the Payment-to-Satan and Recapitulation theories of atonement. According to classical views presented by Walvoord in â€Å"Jesus†, Payment-to-Satan theory is one of the earliest in the church and it is not held in modern times. This theory implies that Christ was paid to Satan as the ransom for sinner. Recapitulation Theory is based on the idea that Christ recapitulates all the phases of human life including being made sin in His death on the cross. Sullivan combines these theories, presents the short historical intercourse into each, and then upholds the point of view that merging some of these views one can capture the Word of Faith Movement (WFM) leaders’ view of Christ’s death. The WFM teachers assert that ‘Jesus took upon himself a satanic nature, died physically on the cross, suffered spiritual death in hell for us, and then was reborn (or born again) in hell and rose from the grave’. Therefore, when the believer is born again he becomes like Christ. Even from the short overview of the WFM ideas about one of the existing doctrines we can see how deep the interpretations of Bible can differ. I would recommend this article as it presents the view on the death and atonement of Christ and lets the reader to compare traditional catholic teaching with one of modern Christian branch’s views. This article is a good source for critical thinking evaluating. 2. The article â€Å"The Reality of Resurrection†by Darrell Young is focused on historical proofs of Christ resurrection. The resurrection of Christ is recognized equitable to be the most powerful event in all history. Further, the author cites numerous passages from the New and Old Testament concerning the prophecy of resurrection, its vital importance for the Christian faith, and its significance in the context of the Second Coming. I would recommend this article as a rich source of historical approach to resurrection and to some questions related to the doctrine of resurrection, such as resurrection of believers during the Second Coming, the resurrected bodies of believers, the time of resurrection and others. The Bibliography Sullivan, Steve. The Nature of the Atonement: How should One View the Cross? – Part–I [on-line]. Ankerberg Theological Research Institute; available from http://www.ankerberg.com/Articles/_PDFArchives/theological-dictionary/TD1W0600.pdf; Internet; accessed 9 November 2005     Â
Friday, November 8, 2019
Ohms Law - Voltage and Current relationship
Ohm's Law - Voltage and Current relationship Ohms Law is a key rule for analyzing electrical circuits, describing the relationship between three key physical quantities: voltage, current, and resistance. It represents that the current is proportional to the voltage across two points, with the constant of proportionality being the resistance. Using Ohms Law The relationship defined by Ohms law is generally expressed in three equivalent forms: I VÂ /Â RR V / IV IR with these variables defined across a conductor between two points in the following way: I represents the electrical current, in units of amperes. V represents the voltage measured across the conductor in volts, and R represents the resistance of the conductor in ohms. One way to think of this conceptually is that as a current, I, flows across a resistor (or even across a non-perfect conductor, which has some resistance), R, then the current is losing energy. The energy before it crosses the conductor is therefore going to be higher than the energy after it crosses the conductor, and this difference in electrical is represented in the voltage difference, V, across the conductor. The voltage difference and current between two points can be measured, which means that resistance itself is a derived quantity that cannot be directly measured experimentally. However, when we insert some element into a circuit that has a known resistance value, then you are able to use that resistance along with a measured voltage or current to identify the other unknown quantity. History of Ohms Law German physicist and mathematician Georg Simon Ohm (March 16, 1789 - July 6, 1854 C.E.) conducted research in electricity in 1826 and 1827, publishing the results that came to be known as Ohms Law in 1827. He was able to measure the current with a galvanometer, and tried a couple of different set-ups to establish his voltage difference. The first was a voltaic pile, similar to the original batteries created in 1800 by Alessandro Volta. In looking for a more stable voltage source, he later switched to thermocouples, which create a voltage difference based to a temperature difference. What he actually directly measured was that the current was proportional to the temperature difference between the two electrical junctures, but since the voltage difference was directly related to the temperature, this means that the current was proportional to the voltage difference. In simple terms, if you doubled the temperature difference, you doubled the voltage and also doubled the current. (Assuming, of course, that your thermocouple doesnt melt or something. There are practical limits where this would break down.) Ohm wasnt actually the first to have investigated this sort of relationship, despite publishing first. Previous work by British scientist Henry Cavendish (October 10, 1731 - February 24, 1810 C.E.) in the 1780s had resulted in him making comments in his journals that seemed to indicate the same relationship. Without this being published or otherwise communicated to other scientists of his day, Cavendishs results werent known, leaving the opening for Ohm to make the discovery. Thats why this article isnt entitled Cavendishs Law. These results were later published in 1879 by James Clerk Maxwell, but by that point the credit was already established for Ohm. Other Forms of Ohms Law Another way of representing Ohms Law was developed by Gustav Kirchhoff (of Kirchoffs Laws fame), and takes the form of: J ÃÆ'E where these variables stand for: J represents the current density (or electrical current per unit area of cross section) of the material. This is a vector quantity representing a value in a vector field, meaning it contains both a magnitude and a direction.sigma represents the conductivity of the material, which is dependent upon the physical properties of the individual material. The conductivity is the reciprocal of the resistivity of the material. E represents the electric field at that location. It is also a vector field. The original formulation of Ohms Law is basically an idealized model, which doesnt take into account the individual physical variations within the wires or the electric field moving through it. For most basic circuit applications, this simplification is perfectly fine, but when going into more detail, or working with more precise circuitry elements, it may be important to consider how the current relationship is different within different parts of the material, and thats where this more general version of the equation comes into play.
Wednesday, November 6, 2019
Bsb Versus Sky Tv Essay Example
Bsb Versus Sky Tv Essay Example Bsb Versus Sky Tv Paper Bsb Versus Sky Tv Paper Executive Summary British television viewing levels had stagnated in the 1980s due to already high levels of television viewership (3. 5 hours per day) and the rapid penetration of the VCR. This caused broadcast companies like BBC and ITV to look for new ways to spurn growth. The British government tried to allocate three of the five high powered digital satellite broadcast (DBS) channels first to the BBC and then to a joint venture between BBC and ITV. Both attempts failed due to high startup costs in building and launching dedicated satellites. The bidding for these channels was then moved to the private sector in April 1986. Additionally, the use of the untried D-MAC transmission standard that was viewed as a move towards HDTV was made mandatory. British Satellite Broadcasting (BSB) was to be the first mover and quickly acquired a 15 year franchise for the DBS channels. BSB planned to start broadcasting by the fall of 1989, investing $500 million and projecting to break-even 4 years later. Sky Television a subsidiary of Rupert Murdoch’s News Corporation unexpectedly announced its entry into the satellite broadcasting market. Murdoch known for his aggressiveness aimed to start broadcasting from Sky’ leased medium powered satellite by February 1989 becoming the real first mover in the market. This led to an intense battle between BSB and Sky as they fought to gain the upper hand. By October 1990, both BSB and Sky were making combined losses of $10 million per week. BSB’s inability to view the competitive landscape combined with Sky’s aggressive tactics to leverage first mover advantage lead to both companies losing focus on the underlying economics in the launch of what is regarded the second biggest business undertaking in Britain (second only to the Chunnel). BSB’s superior technology has the upper hand long term but, Sky’s overall superior economic model allows it to sustain losses for a longer period possibly outliving BSB’s investor’s faith in the DSB market in Britain. Industry Analysis The British broadcasting business was unable to grow due to a number of reasons, chief among them being the inability to move away from an obsolete revenue model that depended on license or advertising revenue. Pay television that utilized either cable or satellite media was expected to be the next vehicle for growth and with the restrictions imposed on access to cable (available only to remote areas), satellite television soon became the next practical choice. Economics of the DSB business Entering into the satellite broadcasting business was however an expensive proposition exacerbated by a long break-even period. Appendix A details BSB’s business plan assuming no competition (i. e. market share of 100%) in an attempt to determine the most aggressive break-even period. Building and deploying satellites combined with investing in the technology that would allow television sets decipher signals from satellites was estimated to be in the range of $300-$400 million. These numbers point to a ten year break-even given typical British consumer electronics adoption rates (initial BSB market penetration forecasts). An alternate approach at analyzing the economics of the satellite broadcasting business is to fix the break-even period to a reasonable number of years, say 4, (BSB’s initial business plan) and study the consequence on subscriber rates. Appendix B details this analysis in which we find that the typical consumer electronics adoption rate would have to be scaled up by a factor greater than 4. 75 to achieve this reasonable break-even target. BSB’s business plan prior to Sky’s market entry is compared against its’ revised business plan (incorporating effect of market share and increasing advertising and promoting budgets with a view to accelerate sales) in Appendix C and D. Only a well funded corporation that could sustain losses for a long period would be able to make it in this market. Entering the DSB Market In December 1986, BSB, a consortium of five financially sound companies, won a 15 year franchise to the DSB channels in Britain. They immediately set out to raise capital to fund the deployment of two satellites. With the enormous start-up costs and an economic model that expected a market entrant to stay the course of making losses for a minimum of 10 years it was easy to see why BSB refused to view Sky’s movement in the satellite broadcasting business as a serious threat. Sky Television was formed in June of 1988 out of Sky Channel by Rupert Murdoch, of News Corporation. Sky Channel had been using low powered satellite technology for broadcasting since 1983. Although a money loser, this project allowed Murdoch to see the potential for a wider acceptance of satellite technology for broadcasting in Europe. In 1986, News Corp under Murdoch launched Fox in the US and started using satellite technology. News Corp planned for a $150 million in start-up losses for Fox. This prior experience with Fox and Sky Channel definitely gave Sky the upper-hand in understanding the economic of satellite broadcasting and the business requirements. BSB should have expected to witness some activity from News Corp given Murdoch‘s recent success with Fox but when Sky Television was announced in 1988, BSB was actually taken off-guard. Alternative Scenarios for Market Entry BSB on announcing its entry into the DSB market, setout to obtain $222. 5 million in financing to fund the buying and launching of the satellites. It also started the recruiting process that took almost 6 months to find a Chairman and 10 months to find a CEO. The CEO who was lured away from a high profile advertising company was awarded a total compensation package close to $0. million without any link back to performance. A year and half later BSB had only grown to several dozen employees who occupied an office in the prestigious Kensington Park area. BSB did however, understand that making the chip technology work was crucial and obtained an exclusive contract with ITT. Assuming that BSB was aware of Sky’s intentions it should accelerated the ramp up of its operations. Recruiting should have started in full earnest and compensation packages should have been built based performance (e. . successful deployment of first satellite, etc. ) BSB should have contemplated hiring key personnel from News Corporation and other broadcasting companies in the US and Europe who had more direct experience with satellite broadcasting business so as to get a leg-up in the learning process. Given that it had a â€Å"money back†guarantee from Hughes who was delivering the satellites; it should have pursued similar contracts with ITT. Maintaining a low overhead expense would also allow it to stay in the fray longer. Relocating from the swanky Kensington Park area to a cheaper alternate would help in this regard. BSB, although well supported by its founding companies could have also looked at making its economic model more attractive by reducing future capital expenditures. Leasing the high powered satellites from Hughes would have allowed it reduce its cash outlay and stay more competitive with Sky. Lastly, BSB should have lobbied the British Government to block Sky’s anticipation market entry given the underlying economics of the DSB business. Customer Adoption Concerns The rate at which customers would sign up for satellite broadcasting service is based on the price of the dish, quality of programming, value of the investment (is the technology going to change soon? ) and other macroeconomic factors like interest rates etc. The faster customers adopt the satellite technology the shorter the timeframe wherein BSB /Sky would have to incur losses. Moreover, switching costs tend to be high (the cost of the dish) and interest rates in Britain were rising in the late 1980s. BSB’s plan to sell 12†dishes at $250 (which when adjusted to today’s US dollar equals 2,500USD), represents a significant investment from the customer on a technology that is new, un-tested and whose content is unknown. Further BSB’s advertising program that aimed to increase awareness on the technology advantages of D-MAC over PAL further confused customers and backfiring BSB. Most importantly however, was the fact the BSB was the second mover in the market giving Sky the first chance at seizing market share. Differentiation of satellite broadcasting through technology BSB and Sky although targeting the same market, approached the business very differently. On one hand BSB was forced to use the risky D-MAC standard for high powered satellite signals while Sky through its use of medium powered signals was able to stay with the tried and tested low technology PAL system. Given BSB’s use of the D-MAC protocol it had no alternative but, develop chip technology that could decode the satellite signals. This resulted in BSB inheriting additional risk due to the nature of the technology development that was necessary to support BSB’s launch plan. Sky’s use of PAL although not a technology issue from a transmission standpoint posed its own technical concern in that film studios were reluctant to sell film rights given that the PAL signals could not be easily scrambled. While Sky was able to work through the scrambling issue with PAL, BSB found that its project with ITT was behind schedule. This translated into the need for an additional round of financing and the loss of a key supporter, Virgin. Longer term (ten plus years), BSB’s technology advantage should sustain itself. But this is contingent upon them being able to ride out making loses for ten years at a minimum. Short term, Sky’s choice to use PAL makes better financial sense. It will be able to establish a market presence in Britain and experiment with programming and other content as it gears up for launching HDTV (the ultimate technology goal in broadcasting ten years ago)to the broader European market. Staying the course in the DSB market With the entry of Sky into the satellite broadcasting market, BSB was forced to pull ahead some of its marketing initiatives. This was an attempt to educate the consumer on BSB’s product offering and differentiate itself from Sky’s PAL standard. BSB also hoped that the additional marketing prior to the actual launch process would increase the number of future adopters of BSB and induce some Sky consumers to switch. BSB initiated second round financing to allow it to double its advertising and promotion programs as well. Sky experienced very low sales in the six months after launch. This was attributed to equipment unavailability, customer confusion and the acroeconomic climate that existed in Britain. Sky sensing that it had an opportunity to leverage its first mover advantage, setup Project X where dishes were sold through a door-to-door sales effort. They also reduced the price barrier that prevented most consumers from adopting the technology. By selling the dishes through a lease program they were able to win more subscribers (possibly at a loss) and protect market share. This strategy of aggressively seeking customers should pay off for Sky as it boosts programming content and quality. Subscription fees for both Sky and BSB are comparable. It is the initial cost of the dish that creates reluctance on the consumer to sign up. By taking away this issue, Sky will be able to grow market share until BSB mimics this strategy. Recommendations Given BSB’s technology advantage and well funded investors it is possible that BSB could sustain the upcoming losses for some time. However, with the cash flow calculations it is clear there will be mounting pressure to change their business model by reducing capital expenditures by leasing satellites instead of purchasing. BSB should also explore reducing the price of the dish unit or establishing contracts that entice consumers with free dishes but, penalize them for breaking the contract if they cancel or switch. On the other hand Sky with its first mover advantage should build on its market share by investing in programming and using its installed base to solicit additional advertising revenue. Sky should also be concerned about how long it can continue to make losses in its bid to outlast BSB. In an effort to change the game, Sky could use the power of its parent company
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