Fulltec – Business Profile

PROFILE FULLTEC AG A Executive Summary Fulltec AG, Zug, Switzerland, was established in 1973 at Neuhausen am Rheinfall in Switzerland as a private limited company. The company has been taken over by Mr. Frank W. Bencsits in 2000 as the General Manager. He has been forming a fully new innovative R&D company for research and development of active natural substances for pest controlling (repellents as insecticides) since that time. Consequently the company’s activities mainly comprise R&D, but bio-insecticides and repellents are also produced and sold. Fulltec doesn’t sell its products under its own trademarks so far. The products are sold through thoroughly chosen international sales partners who resell under their own brand policies. As the results of intensive research, fully natural based active ingredients with highest activity and lowest toxicity were found in 2001. Fulltec is the patent holding company for these substances. Until 2005 most of the filed patents were granted in the EC and several overseas countries like USA, China, Hong Kong and Australia. In 2002 moved the company to its new modern site in Zug, Switzerland to expand and improve R&D and manufacturing. As these new natural based Active Substances don't have the broadly well-known negative characteristics shown by the common competitive synthetic products available on the market – above all regarding toxic effects – they will possibly completely change the way of pest control business in the near future. The inventions comprise different natural substances of two groups: Ingredients of the first group only repel and those of the second group kill and repel insects and acarides of all kinds. The main objective of Fulltec AG is to be a totally ecologically oriented company, developing and selling insecticide and repellent products containing exclusively natural based and lowtoxic active substances and ingredients. The Fulltec products are based on active ingredients obtained from natural sources by patented pure physical ways of extraction which the one group can effectively be used as Insect Repellent and the other group Insecticide. The production procedure of the active repelling ingredient consists of hydrating firstly under high pressure, followed by a vacuum and water steam treatment from natural oils and fruit acids; The insecticide actives are obtained by saturating of natural oils under comparable conditions. The range of possible applications is very wide, including but not limited to application on human, in the household, use for pets and other animals, as well as for plants. As a result, the available range of products is large and currently includes all possible methods of applications on pets, animals and human, e. g. Spray, Cream, Oil and Lotion as Insect Repellent, Lice Shampoo, Gel, Lotion and Cream, different variations for use against Dust Mites (prophylaxis and cure of Allergies! ) as well as Insecticides in all conceivable forms of application. In this regard Fulltec offers concentrates also, which have to be post processed by the customers as well as â€Å"ready for use formulations† of all products. The worldwide markets for Insect Repellents and Insecticides are enormous, in the size of Billions of Dollars. The Fulltec products have been and still are extensively tested, both inhouse and in-field as well as by independent laboratories, for both efficacy and tolerance. Existing patents and registrations are representing a barrier of entry to potential competitors. With the current trend very clearly pointing towards substitution of toxic products, the market potential for Fulltec must be considered excellent. Sales are and will be effected trough thoroughly selected business and sales partners with their own significant market presence in the respective fields and markets, which sell the products under their own brands and labels. Fulltec intends to continue with this strategy, as it allows a broader and faster international market penetration. Production currently is executed by selected and certified contractors. The production processes are explicitly specified and include st rict quality control. Current infrastructure allows significant production increases without additional costs/investment. Raw materials are available on the market at more than one manufacturer, with no significant dependence on a single source or market. Research & Development will concentrate on the further refining of existing products, on testing further possible applications for the existing products and research for new active ingredients and products. Fulltec AG is already a nicely profitable organization, but has not nearly reached its potential market appearance yet. All figures show that Fulltec only just started to penetrate some major markets, and will be able to show growth rates between 30 % and 60 % revenues each year for the whole planning period. Earnings are likely to grow even faster by a higher use of existing capacity. The further development of already served markets (with additional products and into additional retail channels) as well as the development of new geographical markets will be the main target of Fulltec AG business activities in the years to come. B – The Company Small Growth Company Profitable and financially sound Strong Growth Potential Discovered new natural Active Substances A Family of Products ready for the Markets Many Patents granted and pending Ready for substantial Market Penetration B. 1 History During the period of 2000 to 2002 extensive research was done by the R teams of Fulltec AG which led to the development of different new active ingredients with insecticide and repellent properties. Early in 2000 Fulltec AG changed its business focus from a purely trading agency to a patent holding company for products, applications and systems which cover insecticide and repellent properties – this means active ingredients and formulations including specific fields of applications. Repellents are used to repel insects, whereas insecticides have a lethal effect on such insects. Market introduction started in late 1999 with the launch of a former formulation of Repellent and a Household-Insecticide tested on the market by partially using new actives. Immediate success on the market has been achieved already with these temporary products due to the fact that a) the major shareholder and current Managing Director has great experience in the marketing of such products and therefore has extensive and valuable contacts in the industry, and b) the astonishing effectiveness of this natural product line. 2 B. 2 Current Situation The Present Board of Directors of the Fulltec Company consists of the following members: Urs O. Kraft (Chairman of the Board) Frank W. Bencsits Trustee and Tax Expert Managing Director Presently Fulltec AG has no permanent employees. So there are no liabilities in dispatches or payrolls. The business location of Fulltec is Zug, Switzerland (45-km outside Zurich). Research & Development is done in the specialized chemical and entomological laboratories in Austria. Production is carried out by beholden contractors under full control of Fulltec. B. 3 Strengths and Weaknesses The following mentioned strengths and weaknesses give an overview on the current situation of Fulltec. They will be elaborated on in more detail though in the following chapters. Strengths: Fulltec owns the one and only registration of Anti-Lice products as a Medical Device according Directive 93/42/EEC in the world. High Products Efficacy of the Repellents even under Hard Circumstances (Sweating, Swimming) All Products on Natural Basis Nigligible Toxicity to Humans, Animals and Plants Repellent has Passed the OECD Skin Absorption Test Repellent Capable of Avoiding Severe Diseases like Malaria, the West Nile Virus and the Tick-born diseases Encephalitis, Tularemie (Francisella tularensis), RockyMountains-Fever (Rickettsia richettsii), Theileriose (Tehileria spec. ) and LymeBorreliosis. Products provide high Added Value in Terms of Profit and Prestige to the Distributor High Market Share in Germany, Denmark, Sweden and Hungary French Partner with Best Connections to all French Influenced Countries Rocketed in 2005 in these Well Known Difficult Accessible Markets Attractive Industry Availability of Raw Materials from Various Sources Production at Low Costs, Little Manpower and in Production Units of Small Sizes High Flexibility in Organization, Production and Sales – no Long Term Treaties Competent Management and R Teams High Liquidity High Profitability Strong Financial Base – – Challenges: Still small Market Presence in USA, NAFTA, Asia and Southern Europe 3 – Market Penetration in far countries, like China, Japan, Australia and Hong Kong just started B. 4 Goals / Future Developments Fulltec, with its development of new technologies has an important impact in the industry. The company already gained recognition and a considerable world m arket share of 10 % for Household Insecticides and Repellents. A concentration on the most attractive markets with the best relative competitive situations will allow Fulltec to achieve strong further internal growth. Prime products will be the Repellent line and the Medical Device series of Anti-Lice products for human use, a line of Household-Insecticides and Pet Care products, and a newly developed product for use against Dust Mites. Annual growth rates in the range of 30 % to 60 % for revenues will be attainable under the current economical circumstances. Fulltec AG with its innovative technologies therefore appears as an attractive future partner for potential co-operations, joint ventures, etc. Strategically using such co-operations already allowed Fulltec to achieve market leadership in individual market segments, as the market leadership in sales of repellents in European Community Pharmacies. C Products / Technology Insect Repellents / Insecticides Broad Range of Use (Humans, Household, Indoor Plants, Gardens, Several Branches of Industry, Pets, Animals, Plants) Active Ingredients of Natural and Non-Toxic Base Significant Added Value for the Customer – C. 1 Product Description C. 1. 1 Active Ingredients / Substances Repellents The active repelling ingredients are produced under physical conditions only, e. g. by hydrating under high pressure, followed by several vacuum and water steam purifying processes of different natural oils and / or their natural grown main ingredients. They also could be obtained from semi-synthetically substitutes and fruit acids in the way of patented manufacturing procedures. The active substances used in all repellent products possess the same chemical characteristics independently of their target application on the human or animal skin. Only different concentrations and varying contents of actives and their special synergists are dependent on special requirements of various targets, regardless whether used in the form of sprays, creams, oils or lotions. C. 1. 2 Repelling Effect Pests are in a position to recognize suitable quarry as a result of the presence of so called â€Å"bio receptors†. These are for example (body-) temperature, humidity, CO2-content and certain chemical substances produced in small quantities by mammal skin metabolism processes, such as ammonia, butyric acid and urea. Conventional repellents cover up such bio receptors with a more or less effective aura. Therefore they are extremely limited in 4 their efficacy, as this aura of gas becomes rapidly perforated by friction from clothing, sweat and other external influences, which then leaves an open target for attack by pests. Patented Active of Fulltec products on the other hand finely covers the whole treated skin surface and influences and eliminates the bio-receptors by various mechanisms. These continuous reactions between Receptors and Active make the quarry invisible for the attacker (camouflage effect). This process continues until the Active is entirely exhausted (around 8-hours). As the active ingredient is water resistant, it keeps the full efficacy even during periods of sweating and short periods of swimming. In contrast to most competing products, especially to natural based products, efficacy remains at a very high level for well over eight hours. In contrast to DEET, the most widely used substance in traditional repellents, the skin tolerance of Fulltec's substance is excellent. Fulltec repellent has passed as only substance of its class the very rigorous measures of the well known OECD skin absorption test! The Fulltec products are negligible toxic for human beings and animals. C. 1. 2. 1 Active Ingredients / Substances Insecticides The active insecticide ingredients are obtained by saturation under high pressure, vacuum procedures and partially water steam amidizing from natural oils and plant extracts by a patented manufacturing procedure. Concentrations in different formulations are varying according to the use. C. 1. 2. 2 Insecticide Effect Fulltec Insecticide Actives coat the target insects and acarinas with a fine, oily film. The active substances penetrate through the respiratory openings and block them so that the insect dies within a very short time. In addition, a pronounced water displacement results in the quick and complete desiccation of the pest. Fulltec Insecticides are the one and only products in the sector of insecticide Actives with exclusively physical efficacy. Fulltec Insecticide Actives do not enable resistance build-up because of this natural and physical and completely new system of efficacy. Especially efficacy is not achieved by a nerve poisonous effect how it is the case for most traditional insecticides such as carbamates, phosphoorganics and pyrethrines, which always have more or less severe effects on humans and animals. The effects of Fulltec insecticides only occur in cold-blooded species, such as insects, spiders and mites (ticks). The substances have no negative toxicological effects on the warm-blooded humans and pets. Moreover the solely physical mechanism makes the buildup of resistances of any kind impossible. C. 1. 3. Toxicological Summary Acute oral toxicity : LD50 – > 10g/kg rat Acute dermal toxicity : LD50 – > 10g/kg rabbit Inhalational toxicity : no results, inhalation non poisonous Primary skin irritation : none irritating in patch test on rabbits and humans Mucous membranes tolerance: only slightly irritating in pure concentration Biological degradability : >90% BSB28/CSB according to the modified OECD screening test Fish toxicity : LC50 – > 100mg product/liter Bacterial toxicity : EC50 – > 100mg product/liter C. 2 Products 5 The product lines, due to the substance's unspecific effect on all kinds of insects, cover a very broad range of applications for the benefit of humans, animals, and plants. All products are based on Fulltec? s Active Substances, though in varying concentrations and with different additives to achieve specific requirements of different applications. Moreover further future applications are possible, as tests continue to reveal good results in previously uncovered areas. In addition, the formulas allow various ombinations, so that the products range can include gels, creams, oils, lotions, sprays, additives to cleaning and impregnation products, shampoos, spot-on-products, collars, bracelets and aerosols. The following tables list examples of available products. C. 2. 1 Products for human and environmental use Range of Use – Men – Women – Children Product Mosquito Protector Tick Protector Wasp Protector Horsefly Protector Repellent Bracelets Anti-L ice Shampoo Anti-Lice Lotion Anti-Lice Gel Anti-Lice Spray Lice-Repellent Spray Lice Repellent Gel Insect Killer Insect – Mosquitoes – Ticks – Wasps, Hornets – Horseflies Type Repellent – Men – Women – Children – Mosqitoes, Ticks – Headlice – Crablice Medical device – Clothlice acc. Directive – Nits 93/42/EEC – House Mite Stop – Washing Machine Anti-Lice Detergent – Business premises Roach Killer – Kitchen – Basement – Gels Insect Stop Spider Stop – Flies, Mosquitoes Insecticide – Wasps, Ants – Mites – Cloth Moths – Food Moths – Fleas, Lice – Dust Mites – Lice and Nits – Cockroaches – Cockroaches – Ants – House Crickets – Spiders – Woodlice – Ants – Cockroaches – Silverfish Insecticide Repellent & Insecticide C. 2. 2 Products for Pets and Animals 6 Range of Use Pets – Domestic animals Product Insect – Fleas – Biting flies – Lice and Nits – Mosquitoes – Ticks – Mites – Fleas, Ticks â €“ Mites, Lice – Horse Flies – Lice – Flies – Flees – Ticks – Other pests and nuisances Type Repellent & Insecticide Horsefly, Sandfly, Mosquito and Tick Protector Collars X-Line and Protect Line Spot on products – Dogs, Cats Liquid Sprays – Small farm animals Spot On – Horses Liquid Sprays – Cattle – Sheep – Other Domestic Animals Repellent & Insecticides C. 2. 3 Products for Plants & Garden Range of Use General Use Product Ant Stop Termite Stop Bug Stop Flowerspray Insect Ants – Termites – Beetles – Nematopodes – Mites – Aphids – White Flies – Red Spider Mites – Caterpillars – Ants – Fruit Flies – Caterpillars – Other Insects Type Insecticide Flowers Insecticide Trees Tree Protection Repellent & Insecticide C. 3 Independent Tests and Studies General: Various independent Institutes (1) conducted numerous extensiv e studies and tests on the individual Fulltec Products. Subjects of those were first of all the efficacy under test conditions and in practical use, secondly the tolerance (Toxicology) for humans as well as animals, and thirdly the ecological behavior (biological decomposition). As the insecticide effect is solely physical and not based on a nerve poison, there can't be any buildup of resistance. Regarding the Insecticide Products, the broad range of efficacy on various kinds of insects was demonstrated in the lab as well as in practical use. Furthermore the biological decomposition was demonstrated to be excellent. On the product Roach Killer efficacy against cockroaches was demonstrated. Regarding the Repellent Products – besides efficacy and toxicology – skin tolerance were main subjects of the extensive tests conducted. All tests showed excellent results. In addition, separate studies compared the efficacy in practical use (field tests). All tests revealed superior efficacy of Fulltec's Repellents compared to competitive products 7 including the market leaders Autan (Active: Bayrepel) and OFF (Active: DEET; both products by SC Johnson). On comparable conditions, the repelling effect of Fulltec's Repellents was shown to last longer. Worth to mention explicitly is the fact that Fulltec's Repellents are the only products available on the market yet to pass the rigorous requirements of the well known OECD Skin Absorption Test. 1) LHS Institut fur Hygieneforschung und Schadlingsbekampfung in Labor und Praxis, Miesenbachgasse 7, 2700 Wiener Neustadt, Austria PRAEVMEDIC, Carmenstrasse 8a, 8032 Zurich, Switzerland Swiss Tropical Institute, Socinstrasse 57, 4002 Basel, Switzerland BioGents GmbH, Universitatsstra? e 31, 93053 Regensburg, Germany IS Insect Services GmbH, Dr. Hans Dautel, Haderslebener Str. 9, 12163 Berlin, Germany T. E. C. Insec ticides testing, 7 bis rue pont de l'aveugle, 64600 Anglet, France Hopital Avicennes, Professeur Azreki Izri, Laboratoire de Parasitologie, 125 rue de Stalingrad, 93009 Bobigny, France Complete detailed List of Test Reports see Annex I C. 4 Customer Benefits In the following graph, the characteristics of the Fulltec's substances are compared to those of DEET, Bayrepel and essential oils in Repellents. C. 4. 1 Comparison: Customer Benefit Repellents Active Ingredients Insect Repellents Fulltec DEET Bayrepel ++ + ++ + + + + ++ -+ ++ -0 0 0 + ++ ++ ++ + Essential Oils —+* + 0 ++*1 – 1 2 3 4 5 6 7 8 * = in low concentration, higher concentrations are irritant *1= banned after 01. 09. 2006 acc Directive 98/8/EEC Explanations: Comparing Fulltec's repellent against DEET, BAYREPEL containing products and essential oil: ++ = very good + = good 0 = reasonable -= could be better = unacceptable Comments: 8 1 – Long Term Effect: Contrary to the essential oils, Repellents from Fulltec show a high repelling effect for over 8 hours. DEET and Bayrepel also have proven to be effective under laboratory conditions whereas the effectiveness depended highly on the amount of active ingredient (high doses of > 30 %+ are effective like Fulltec’s Actives. Lower concentrations have poorer efficacy). 2 – Broadband Efficacy: Fulltec’s Repellents show the best broadband repelling efficacy against a wide range of nuisances, including multiple species of mosquitoes, ticks, wasps, horseflies, biting flies, black flies and mites. Products containing DEET at higher concentrations (> 30 %) are also effective widely. Bayrepel is only available in concentrations 10 and 20 % and exhibits just short protection times so that reapplications every 2 to 3 hours are necessary to get a safe level of protection. Essential oils are unsuitable because of practically non-existing protection time and broadband efficacy. 3 – Water/Sweating Resistance: Compared to the other substances, Fulltec’s products are more water resistant. As they are deactivated neither by sweating nor under water contact (e. g. short swimming) they keep their effectiveness also during sports. 4 – Skin Care: The substances used by Fulltec show significantly more skin care qualities than the competition. They only contain highly skin tolerant and even skin caring base- and active ingredients. Therefore the products are not only highly effective repellents, but also high quality cosmetic products. The plant oils and their skin caring derivates give the skin energy and vitality, whereas natural Vitamin E fights potential inflammations. Evenly applied, the product maintains the skin's natural moisture, and makes it soft and elastic. 4 – Skin Tolerance: Traditional, effective Repellents all contain high levels of skin irritating and partially highly toxic substances. Contrary, Fulltec products have never caused eczema or allergic reactions so far. Essential oils in higher concentrations cause skin and mucous membrane irritations. Furthermore they can solve plastics and synthetic textiles, which is a problem of DEET products, too. Bayrepel seems to have second best Skin Tolerance but examinations of its toxicological properties are not finalized yet. 5 – Ecological Tolerance: Fulltec products are natural non-poisonous products with a high ecological tolerance. Essential oils, above all technical qualities of Rosemary and Citronella exhibit toxic effects on soil bacterias and show only poor ecological tolerance. DEET on the other hand is an ecotoxic substance. Bayrepel seams to have only slightly ecotoxic potential. 6 – Price: The Fulltec product’s prices are usually conforming competitors and markets policies. Fulltec’s low standing expenses allows following all prerequisites of different markets and competitors pricing. 7- Availability: Bayrepel (Autan) definitely has the best availability in all retail channels today. Being the No. 1 in Central European pharmacies Fulltec? s Repellents reached a high level of availability. Furthermore they are able to substitute all Natural Actives based competitive products which will be banned after 01. 09. 2006 (deadline of Directive 98/8/EEC). These other Natural products mainly are sold through drug stores, but constantly decreasing customer acceptance and demand will lead to only a narrower availability in the future in countries outside of the EC as well in NAFTA under further restrictions by the EPA and the Canadian PESTICIDE REGISTRATION and EVALUATION COMMITTEE. 8 – User friendliness: All products are user friendly in the sense of easy application. However DEET is aggressive against several materials like plastics, is toxic and causes skin and mucous membrane irritations. This is also valid for several essential oils. Bayrepel seems to be more safe and gentle but is restricted for application on children below an age of 2 years. Only Fulltec Repellents fulfilled requirements of the OECD skin absorption test and can be used safe under observance of the recommended directions for use. In summary, the Fulltec products clearly offer the highest customer. The Fulltec products are highly effective against insects comparable to high concentrated DEET. In contrast to DEET, Fulltec products are based on natural ingredients and show excellent skin tolerance 9 and skin care qualities. In comparison essential oils repellents are of natural base, too but they show a low efficacy in terms of repelling insects over a longer period of time. Moreover a lot of them cause skin and mucous membrane irritations and possess photosensitizing potential. C. 4. 1 Protection against Competition The products are adequately protected by granted or pending patents). Fulltec AG owns the patents protecting the repelling as well as the lethal features of the active substances. In addition, the isolated declaration of ingredients according UPAC or INCI usually does not allow gaining knowledge on the exact composition and special nature of the Actives. Fulltec’s exclusive knowledge of the patented manufacturing process of Actives guarantees imitation protection of Fulltec Repellants and Insecticides by competitors. D Markets Very attractive market (extremely high market volume, high growth) Fulltec shows all pre-requisites to be successful Market is already accepting the Fulltec Products Consumer Trend clearly going towards Natural Products Barriers of entry already overcome D. 1 Market Overview D. 1. 1 Description / Characteristics If only for its enormous size, the market for Insect Repellents and Insecticides should be considered extremely attractive. Despite the big established competitors dominating the market, there are various attractive niche markets available to innovative companies. Fulltec, with its range of nature products falls into such a niche. The currently most widely used ingredients in competitive products are DEET (in repellents) and Pyrethroids (in insecticides). All those substances are being increasingly questioned and therefore avoided by many consumers and more and more even by governments and appropriate authorities. It can be expected that those products with questionable active ingredients will have to be substituted more and more by natural products. This opens up an extremely high potential for Fulltec to firmly establish itself in this market. As the products meet a high consumer acceptance already today, a bigger market penetration can be safely foreseen. D. 1. 2 Market Segments The segmentation of the market shows the following criteria: †¢ †¢ Range of use: Humans and Environment / Pets / Animals / Plants Type of use: Repellent (to repel insects) / Insecticide (to kill insects) Region: Switzerland / European Community / USA / Canada /Australia †¢ To identify the estimated total market volume, the various market segments were analyzed at first (Supplements: Estimated Market Volume). Starting points were market studies of IHA GfM for Switzerland and GFK for Germany. In addition, the relevant market segments for Fulltec in terms of distribution channels, competition, prices and margins were analyzed. On the basis of market data of the specialized trade (pharmacies, etc. ), the total market volume for Switzerland and Germany was estimated. In order to calculate total 10 world market volume, Switzerland's and Germany? s per capita consumption was taken as a base. However adaptations to in some instances different distribution channels, price levels, usages, etc. were made. D. 1. 3 Client Structure To distribute its products, Fulltec currently uses the following channels: †¢ †¢ Specialized Trade (Pharmacies, Drug Stores), and more sparely in Retail Chains and Stores However it is a set goal to penetrate all segments of distribution. In Switzerland for example, the specialized trade segment could be covered by big players in pharmaceuticals and special chemicals (for Repellents), and the retail chains and stores by international players (for Insecticides). Moreover, Fulltec currently is in negotiation with various Multinational Companies. D. 1. 4 Factors for Success In the Insect Repellent and Insecticides markets, the most important factors for success are definitely the efficacy of the products and the presence at the â€Å"point of sale†, i. . the easy availability for the consumer. Moreover the tolerance of the products for human and environment is of increasing importance. In addition, an increasing sensibility against synthetic, toxic substances is recognized, as more health consciousness of people leads to preference of natural products. The Fulltec products are both, highly efficient and ecologically well tolerated. In order to imp rove easy availability for the consumers, Fulltec decided to collaborate exclusively with established distribution partners. It is possible to achieve a high market presence in short time with this strategy. Fulltec products perfectly meet the factors of success, which allows the continuation of the quick market penetration by Fulltec products. D. 2 Market Position Current Situation Currently, the strongest market position held by the Fulltec products is repellents, a highly attractive market segment. The second position in terms of market penetration as well as attractiveness of the market segment is held by the natural insecticides, especially the market segment Pet Protection. All remaining product groups (Repellents and Insecticides in all their broadness) are positioned in relatively highly attractive market segments, but have not reached significant market penetration so far. Future Situation Longer term, Fulltec expects to achieve fairly dominant market positions in the following segments: Insect Repellents, Anti-Lice product line, Household Insecticides, Pet Protection and Mite Stop, which at the same time are the most attractive product groups and market segments. Less dominant, but nevertheless sizeable market positions are expected to be attainable in the egments Agricultural Insecticides and Garden Products. Repellent 11 At least for the next one or two years, Repellent products are expected to continue contributing the largest share to total revenues among all product groups, as the total world market for such products is huge and extremely attractive. Furthermore, Fulltec? s natural and non-toxic products today are already well accepted in Europ e and USA. It is assumed that over time, natural products will increasingly challenge the established toxic products, gaining in market share also due to legislation changing towards more restrictive forms. Anti-Lice Products Market penetration of these products is on the best way to get No. 2 in Europe and No. 1 in Medicine Devices in EC. It is expected to significantly increase its share, as being of natural base and pure physical efficacy often is the decisive factor for being chosen by consumers. Efficacy of the product is excellent, and it is being very well tolerated. Pharmaceutical trading (Drug stores and Pharmacies) will be the preferred sales channel, thereby guaranteeing high margins and profits. Pet Products By nature, the market for pet products is very attractive and competition is very high. As Fulltec will concentrate its efforts on those markets, which offer the best relative competitive position, pet products will not be at the forefront of marketing efforts at the moment. A potential cooperation with one or more established companies in this field however could change this assessment rapidly. Natural Insecticides Due to ever increasing requirements in terms of ecological tolerance and to the extensive restrictions of Directive 98/8/EEC according Biocides, natural insecticides should gain significant market share over the coming years. This product group therefore is expected to contribute markedly to total revenue growth. Mite Stop Taking into account the steady increase of Dust Mite Allergies, this segment is clearly a market of the future. Dust mite allergies come from a saturation of the air with dust and excrement particles. A Fulltec product to exterminate dust mites is already fully developed and successfully introduced into Central European markets. It is applied by spraying into air and on mite-infested surfaces. The dust particles become saturated with Mite Stop and drop to the floor, which already brings about a cleaning of the air. The fallen down particles start to act as insecticide against the dust mites population. The circle of the extermination of dust mites therefore is closed. A relatively quick market introduction is possible, as a registration as Anti-Allergicum can be avoided if the product is advertised and sold as primarily an Air Cleaner. All other currently available products on the market are still based on toxic Pyrethroids, which puts the Fulltec product into an advantageous position. Alternative methods used are various medications, which however combat the symptoms rather than the cause of the problem. Furthermore, as such drugs are high margin products, the Fulltec alternative can also be expected to sell at premium prices with high margins. D. 3 Market Assessment The following points peak in further increasing market penetration by the products of Fulltec: 1. Acceptance of the Fulltec Products 12 On the markets already served, the Fulltec products generally achieve a high market acceptance. 2. Barriers of Entry The barriers of entry to new contenders are quite high. Fulltec has already overcome them as the products lready have been tested in terms of efficacy and tolerance, and as patents and registrations processes have already been initiated. 3. Trends A major trend within today's society points towards substitution of toxic substances by natural ones. Accordingly, the market potential for Fulltec's natural and non toxic products can safely be considered very excellent. E Competition Competition in Repellents mostly DEET and Bayrepel based Competition in Insecticides mostly Pyr ethroid, Carbamates and Organophosphonics based Significant competitive advantage for Fulltec Fulltec is ready for competitive strategies E. 1 Competitive Products E. 1. 1 Repellents In competing repellents worldwide, almost universally the substance DEET (N,N-Diethyl-mtoluamide) is used. This specifically effective Insect Repellent is toxic and has a strong irritating effect on eyes and mucous membranes. Some children have shown a harming of nerves and, due to inhaling DEET, cases of death have been reported (Tenenbein, M. JAMA, J. Am. Medical Assoc, 1987, 258). In competing repellents in Europe, almost the substances Icaridin (Bayrepel) and IR3535 are used. Alternative repellents such as essential oils show a rather low efficacy and can cause allergic reactions. E. 1. 2 Insecticides A multitude of active ingredients is used by competing insecticides products. Most of them are nerve poisons. A lot of the formerly highly praised substances (DDT, Dieldrin, Lindan) are banned today in many industrialized countries because of their toxicity. Alternatively, Pyrethroids are used very widely today (about 50-75% market share). Pyrethroids are synthetic insecticides. Although the toxicity of this insect specific biocide is markedly lower for mammals, it is still a factor of up to 100-times higher compared to the Fulltec Insecticides. In addition, Pyrethroids show a considerably higher fish toxicity. Other natural insecticides currently show a clearly lower efficacy compared to both, the synthetic insecticides and the Fulltec products. E. 1. 3 Most Important Competitors The following table gives an overview on Fulltec's most important competitors and their products. In the Supplements section, there is a table listing the most important companies within the various market segments in Switzerland with their market shares. 13 Competitors and Competing Products Company Bayer SC Johnson 3M Corp. Reckitt & Coleman Shell Vogt AVON Description Multinational Chemical Co. Multinational Chemical Co. Multinational Chemical Co. Multinational Chemical Co. Multinational Chemical Co. Small Specialty Co. Intl. Cosmetics Co. Geographic al Presence International International International International International Switzerland USA and Intl. Market Position Market Leader worldwide Marked Leader USA No. 2 USA No. 3 worldwide No. 1 in Market Segments Leader Repellents CH No. 1 Mail-order USA Company Bayer SC Johnson Insecticide Baygon Raid Substance pyrethroids pyrethroids Repellent OFF, Autan Ultrathon KIK Anti-Brumm Skin So Soft Substance DEET/DMP Bayrepel DEET/DEP DEET/DMP DEET Natural Base 3M Corp. Reckitt & Coleman Heropic, Neocid pyrethroids Shell Shelltox pyrethroids Vogt AVON E. 1. 4 Competitive Advantages / Disadvantages Advantages: The products of Fulltec have enormous advantages of being based on substances well tolerated by human and environment. They do contain neither the toxic DEET nor any other harmful substances. Moreover the products show high efficacy – comparable or higher to the synthetic products and significantly higher than essential oils. Initial success, especially due to above factors, is clearly visible on already covered markets. Disadvantages: The products themselves do not have any apparent disadvantages. As the market position of the competitors is fairly dominant so far, a successful market entry of small companies like Fulltec is not easy. However, the massive advantages of Fulltec products cited above as well as an experienced management will help Fulltec to overcome such hurdles. E. 1. 5 Competitive Strategies The constantly increasing demand for natural products may tempt competitors into imitating Fulltec's substances. However the patents as well as the product know-how speak against such strategies. A substitution of the Fulltec formula by another, equally effective natural substance, is not discernible so far. After all, some competitor might be tempted into trying a takeover of Fulltec AG. The current shareholder structure though represents an insurmountable barrier at least for unfriendly and unwelcome takeover attempts. In any case the interests of the shareholders will be of major importance. F F. 1 Marketing Market Coverage 14 F. 1. 1 Distribution / Sales Distribution is effected through sales partners with a high market presence in the respective market segments. This strategy will be continued, as it allows a relatively rapid penetration of the markets. In addition, it allows using more than one distributor in a single market with the different Actives and slightly modified formulas in different structured market segments. This strategy also allows opening up the various distribution channels in a given market (Specialized Trade, Retail Trade, Mail-order Business Partners, etc. . However it is possible that some distributors are in direct competition with others selling a different form and Active Ingredient of the same basic product. For products or product groups which are not part of first priority marketing plans, strategic alliances with companies firmly entrenched in those market segments are planned. F. 1. 2 Communication Communication will be expanded to new partners to develop new markets and activities of business. Further it will be necessary to perfect and extend information. The end users will be more clearly informed about both, the negative effects of the competitive products, and of course about the advantages of the Fulltec products. This strategy will lead to accelerated substitution of the traditional synthetic products by natural Fulltec products. For this purpose, various media, like Internet TV and radio advertisement appear predestined. F. 2 Product and Marketing Design Currently Fulltec does not sell any products under its own name. The distributor or sales agent can individually choose a brand name of his own. F. 2. 1 Product Line The product line of Fulltec is described in detail earlier in this report. All products are available either as bulk ready to use, as concentrate (container, barrel) or already packaged as lotion, spray, etc. Future Years In the following years Fulltec expects continuous gain of overall market share. This should lead to a sustainable growth in revenues of at least 40 -60% per year. It will be looked for further sales partners in Europe as well as in the USA, Asia, Africa and South America, mainly for the Repellent, the Insecticide and the Anti-Lice Product line. G Production / Procurement/ Ecology / Location / R & D Patented Production Processes – Ample unused Production Capacity – No specific Dependence on Suppliers of Raw Materials – Environment-friendly Production – Good Location – R & D Emphasis – Refine existing Products – Develop further Applications G. 1 Production All sold products are produced under control of Fulltec by indep endent contractors. The production processes mainly consist of the manufacturing of Active Substances by physical 15 conversion of natural substances into efficient derivates and mixing various substances according to proprietary and secret processes and formulas. Consequently only a relatively small number of equipment and technical installations are needed. To get to the finished products, automatic filling and packing machines are used. The production process itself is high technology, although just common lab equipment (including gas chromatography and thin layer chromatography) is necessary. As the production process is highly automated, labor costs are kept low, too. Fulltec has the option to build up its own production facility or seek external contractors for tasks like mixing, filling and packaging. However at the moment such a construction step is not planned. G. 2 Procurement All ingredients and raw materials needed for the production are easily available. Suppliers are mainly big companies, competing against each other price-wise as some of the raw materials used are also traded on the commodity markets. The prices for the raw materials used do not fluctuate widely. Therefore no problems regarding the supply side are foreseeable, which should guarantee an ongoing smooth production process. G. 3 Ecology G. 3. 1 Legal Compliance All relevant laws and orders of Switzerland and the EC are strictly followed by Fulltec. However it is important to note that Fulltec does not fall under the order on ecological tolerance (Umweltvertraglichkeitsprufung) or the Storfallverordnung). For all products, safety data sheets are available, as requested by the regarding directives, e. g. Stoffverordnung (order on materials used). G. 3. 2 Raw Materials The main components of the products consist of natural raw materials. Apart from water, mainly non-toxic and well biodegradable substances are used. Some other ingredients of very low toxicity (all within Swiss poison class 4 or 5 or not classified) are just used as additives in very low quantities. All raw materials are well biodegradable. G. 4 Location Fulltec AG is located in Zug, Switzerland. Infrastructure: Currently production is done by contractors which are capable of increasing volumes significantly without causing any problems. The (rented) offices are fairly new, and adequate for Fulltec's sales activities. As most of the clients are located in different foreign countries and transport costs are low at current sales volumes, this point is of no major importance at the moment. At a later stage though, when sales continue increasing at estimated rates, other (outsourced) production facilities within major client regions or countries will be installed. The generally very high level of education of employees in Switzerland and countries of contractors (Austria, Germany) represents a competitive advantage. Locations are very attractive for employees. 16 Distance to clients: Education: Labor Costs: Corresponding to the high level of education, salary levels are quite high as well, at least compared to other countries. However, as the operation of Fulltec is not very labor intensive, this does not represent a major disadvantage. G. 5 Research & Development Research & Development is being conducted in laboratories in Austria. As this division caused no problems in the past, there is no plan to combine these efforts in one single place. In R, emphasis is being put on refining existing products. In addition, further potential applications for the same basic formula inherent in all Fulltec products are also developed as new Actives on natural basis. H Organization / Management Direct major efforts to the goal of achieving competitive advantages Lean Organization Management with proven capabilities Profit Sharing by Management H. 1 Organization H. 1. 1 Core Functions In the following, we comment on the core functions within Fulltec today, in the order of current importance or weighing (number of people involved, financial resources). Marketing / Sales: This part definitely requires the most attention in the current phase of development. New distribution and sales partners have to be located, new markets have to be developed, new products introduced, etc. Strong partners offer the best prospects in terms of the variety of products represented and of potential market penetration. Production: The production processes are very well matured. Therefore it can be outsourced to thoroughly selected partners. However Fulltec controls the whole process at any stage. Of course there will be efforts to optimize production, to use free capacities, etc. Even though good patent protection is given, the producers have to prove reliability in keeping the exact formulations secret. R: The major phase of R, the development of the formulations and the final products, is basically done. Therefore main R emphasis will be put into the refinement of existing products and the identification and development of additional applications. However this does not mean that no new products or product lines will be developed in the future. Procurement: As already mentioned in other sections of this business plan, the procurement of the raw materials does not pose any problems, neither in terms of availability nor in terms of price. Increased sales volume in future will even lead to better purchase conditions. Service: Sales advice and support is of major importance for every production company. However, regarding the specific construction of the company, service does not play a major role in the case of Fulltec, as the products do not require any kind of maintenance, repairs, or other frequent advice. Speed and accuracy of delivery on the other hand is of paramount importance. 17

Formula 1 Constructors

Introduction The Formula One World Championship was started in 1951 by private sportspersons. Today, Formula One is the world’s biggest motor sports event and is arguably the second most popular sport in the world. It consists of ten teams, with two cars each, contesting a 17-race series. It involves two titles, the Driver’s Championship and the Constructors Championship. Formula One today is a highly dependent on technology (Denison and Henderson, 2004). This article will discuss the resources, capabilities and attributes required by Formula One constructors.This article will also analyse the reasons for the dominance of different constructors during different periods, by using one of the methods of identifying competitive advantage. It will analyse the reasons behind their inability to sustain their dominance and also suggest ways by which these constructors could have sustained their competitive advantage. â€Å"A firm is said to have competitive advantage when it i s implementing a value creating strategy not simultaneously being implemented by any current or potential competitors. (Barney, 1991:99) Resources, capabilities and attributes required by Formula One Resources can be classified as financial, physical, human, technological and organisational (Grant, 1991). The financial resources required by Formula One constructors are vast (close to $1 bn), the human resources required are a staff of around 450-800. They need highly qualified staff like race engineers, designers, aerodynamicists, composite experts and system specialists. They require physical resources including their own testing and development equipment like wind tunnels, test tracks and other equipment.They also need to constantly change their strategies to counter strategies of the other teams. All the teams and members need to work as a cohesive unit. Based on Porter (2004) we can identify factors important for competitive advantage in the Formula One industry. Technology deve lopment is crucial to competitive advantage in the racing industry. Technology development involves steps to improve the racing car in aspects like power, stability and drag. It involves steps like research, product design and servicing procedures.Human resource management is also key to competitive advantage in the racing industry. Human resource management involves activities like recruitment, training, and development of employees. In Formula One human resource management involves choosing the right drivers, engineers and designers who are expertds in their fields and also good team players. It also involves training new drivers, engineers and designers and keeping them satisfied and motivated so that they don’t leave and join other competitors. Firm infrastructure involves activities like general management, planning, finance and accounting.This can also be an important source of competitive advantage as management and planning are crucial to success in the racing industr y. Value linkages are also an important source of competitive advantage in the racing industry. Linkages can be both internal and external. Internal linkages include co-ordination between various departments within the firm like the design team, racing team and the technical team. External linkages include co-operation and co-ordination with component suppliers and sponsors(Porter, 2004). Attributes are qualities or skills possessed by constructors.Attributes include trust, relationships, history and management structure within a firm (Barney, 1995). These skills relate to ways in which they do things. These skills and qualities are not easily transferable, as they cannot be easily copied. These skills and qualities are generally developed over a long period of time. Formula one constructors require attributes like knowledge, experience and flair for innovation. A firm’s capabilities are based on the resources it has. Capability means the ability of a firm to perform certain tasks based on the resources it has.Capability is created by the integration of many key resources and attributes. Resources and attributes alone do not lead to competitive advantage, but capabilities are a source of competitive advantage. The key resources of an organisation need to be identified, and capabilities, due to a combination of particular resources that need to be identified. Capabilities involve efficient interaction between people and other resources. Formula One Constructors require engine manufacturing, car design and technological capabilities. Key capabilities are those that are not shared by the firm’s competitors.Strategy of an organisation has to be based on its resources and key capabilities to gain a competitive advantage (Grant, 1991). For example, Ferrari had the unique capability of manufacturing engines, which its other competitors did not have. Hamel and Prahalad, (1990) describe key capabilities, which lead to competitive advantage as ‘core competencies’. Ferrari’s success in the mid 1970s Ferrari was the dominant Formula One Constructor’s Championship in the mid 1970’s. Using one of the many approaches to determine competitive advantage, the reasons for Ferrari’s dominance can be identified.Some approaches to determine competitive advantage are explained below: Porter’s (1980) five forces model helps to position a firm in the best way to tackle competitors. This model helps in understanding the competition and formulating strategy accordingly. Carl Shapiro’s (1989) approach is based on making competitive firms act in unproductive ways. This theory can only be used where competitors are closely placed. Barney’s (1995) resource based approach believes that competitive advantage is due to unique resources. The capability of the firm is based on its unique resources.He suggests that it is important to understand the firm’s internal strengths and weaknesses to understand how exactly competitive advantage can be gained. Barney’s (1995) approach is based on SWOT (Strengths, weaknesses, Opportunities and Threats) analysis. Barney’s (1995) approach implies that only those firms that use their internal strengths to make use of the available opportunities gain competitive advantage. Strengths and weaknesses can be understood by 1. Continuously checking whether resources and capabilities of a firm help it in the changing environment. 2.Checking whether these capabilities and resources are unique to the firm. 3. Understanding if the resources and capabilities of the firm are difficult to imitate. 4. Checking if the firm’s processes make use of the resources and capabilities effectively. Teece (1997) suggests that dynamic capabilities are a source of competitive advantage. â€Å"Dynamic refers to capacity to renew resources so as to achieve congruence with the changing business environment. † (Teece et. al, 1997:515). A ccording to Teece (1997) dynamic capabilities of a firm depend on its processes, position and path.Processes mean the way things are done in the firm, position means the technology, assets and customer base the firm has, path means the ways available to the firm to do things. These dynamic capabilities of the firm lead to competitive advantage. Porter (2004) introduced the concept of value chain to determine competitive advantage. It was based on identifying the primary and secondary activities of the firm. Primary activities include activities like inbound logistics, operations, outbound logistics, marketing and sales and service.Secondary activities include firm infrastructure, human resource management, technology development and procurement. It then identifies and separates activities that are unique strengths of the firm in relation to the competition. Spanos and Lioukas (2001) argue that Porter’s value chain is based on external factors of competition and ignores the cr ucial internal resources and capabilities of the firm. Rumelt (1984) also argues that strategy of a firm should be based on its unique resources and capabilities.McWilliams and Smart (1993) argue that Porter’s value chain theory lead managers the wrong way by suggesting to develop unique activities based on the resources, even though the activities may not be beneficial to the firm. From the various views it can be seen that Barney’s (1995) approach, based on identifying and focusing on unique resources and capabilities, based on SWOT analysis, is more relevant in analysing competitive advantage in Formula One. Using SWOT analysis we can identify that one of the strengths of Ferrari was the use of component knowledge as a source of competitive advantage.Component knowledge means skills, resources and knowledge related to particular parts of a system. For example, in Formula One it means technical and design skills related to engine, chassis and gearbox. (Pinch et al, 2 003). The Ferrari 12-cylinder engine and 312-T car was a result of component knowledge. In 1975, Ferrari designed a new car 312T, which had a wide low body, powerful 12-cylinder engine and a revolutionary transverse gearbox. All these improved the balance and handling of the car. 312T had a chassis, engine and gearbox combination, which could not be matched by the engine, gearbox combination of the competing cars(Johnson, G et. l, 2008). The component knowledge behind this engine and car could be easily understood, but could not be easily transferred because it was based on firm specific component knowledge and because it didn’t fit in with the systems of other manufacturers; hence it was not used widely. The other strength that was the reason for Ferrari’s success was the use of architectural knowledge as a competitive advantage. Architectural knowledge considers the whole system and the interaction between component knowledge of its various parts (Matusik and Hill, 1 998).It is difficult to transfer architectural knowledge between organisations because it is distinct for each organisation and develops over time. The highly efficient practices introduced by Montezemolo were the architectural knowledge of Ferrari. Montezemola ensured that each team concentrated on a specific task, for example, chassis, gearbox, engine and suspension. This helped avoid conflicts and helped in getting a great car made. The system of having each team concentrating on a specific task to avoid conflicts was also a part of architectural knowledge of Ferrari.Architectural knowledge also helps in determining the ability of organisations to acquire new knowledge. (Zahra and George, 2002). Human resource management was another strength, which was a factor of competitive advantage in Ferrari’s success, as Montezemola recruited the right driver in Nicki Lauda, who could communicate effectively with the technical team. Another of Ferrari’s strengths were the uniq ue resources that it had, like its Maranello factory where it made its own engines and the test track in Fiorano, which is one of the most advanced and sophisticated test tracks in the world, which enabled it to test and develop cars.All these strengths were the reason for Ferrari’s dominance in the 1970’s. McLaren’s domination in the late-1980’s In September 1980 Dennis was appointed as the team principal. Dennis bought in Barnard as a car designer. Barnard had ideas of making the racing car chassis of carbon fibre, instead of metal. Barnard left in 1986 but a lot of progress in car design had been made by then. By SWOT analysis we can identify the strengths of McLaren, which endowed it with competitive advantage. One of McLaren’s strengths during this period was the efficient and disciplined way in which the organisation was run.They prepared carefully for all the races. Many elements that contributed to McLaren’s success are still unknown . This is an example of architectural knowledge being used for competitive advantage. (Pinch et. al, 2003). Good human resource management can be seen to be another strength, which was the reason for McLaren’s success as McLaren had the right people for the job in Dennis and Barnard. Dennis had good managerial skills while Barnard had highly innovative design skills. Dennis, in turn, recruited the best drivers in Senna and Prost, who were crucial to McLaren’s success.Senna was fast and determined whereas Prost was fast and good at tactics. Another of McLaren’s strengths was the use of external linkages of value chain as a competitive advantage, by its collaboration with Honda for engines. All these strengths helped McLaren dominate F1 from 1988 to 1991. Williams’ success in the mid 1990’s Williams developed on the ideas of ground effect, carbon composite monocoque, semi-automatic gearbox and active suspension. Williams considered the driver to be o nly part of the system.Using SWOT analysis we can determine that one of the strengths of the Williams team can be attributed to use of cluster level architectural knowledge as a source of competitive advantage. Cluster level architectural knowledge refers to knowledge shared by groups of organisations in a particular geographical area. Cluster level architectural knowledge also involves common ways of thinking and habits among organisations in the cluster. Hence it becomes difficult for organisations outside the cluster to copy the technologies developed in the cluster.An example of cluster level architectural knowledge can be seen in UK’s ‘Motorsport Valley’. Many technologies used in Formula One cars have been developed here, for example, the use of carbon composite materials, traction controls and active suspension systems (Henry and Pinch, 1999). Brown and Duguid (2001) argue that component knowledge is the ‘cargo’ that is moved around on the â⠂¬Ëœrails’ of cluster level architectural knowledge. The ‘Ground effects’ technology was developed in Motorsport Valley and was first used by Lotus.The Williams team that was in the same area was the one that applied the ‘ground effects’ technology efficiently. Thus, all the technologies developed in the ‘Motorsport Valley’ were transferred to and adopted by Williams, this contributed greatly to its success. (Pinch et. al, 2003). Thus it can be seen that Williams developed strong and unique capabilities in the designing of the car body, chassis and gearbox. Human resource management was another strength, which also acted as a source of competitive advantage. Frank Williams was the founder of Williams and he appointed Patrick Head as the Technical Director.The attributes of entrepreneurial energy and technical excellence helped them to succeed. Patrick Head appointed good drivers like Senna and Prost. Another strength of Williams was thei r external linkages. Their linkage with Renault helped them use the powerful and reliable Renault engine, which complemented their FW15 chassis. All these strengths that acted as sources of competitive advantage led to William’s domination from 1992 to 1994. Ferrari’s return to winning ways after 1999 Montezemela was brought back to Ferrari, as CEO in 1992. He set up a new design department with 50 people.Ferrari’s focus shifted from engine to integration of main parts. The strengths of Ferrari, identified using SWOT analysis, was that value linkages (Porter, 2004), both externally and internally became a source of competitive advantage for Ferrari. Internal linkages were the co-operation between the departments manufacturing engine, chassis and the aerodynamics department. These were crucial in integrating all components of the car efficiently. External linkages were the collaboration with Bridgestone for making customised tyres for Ferrari and with Shell for f inancial and technical support.Another strength identified was good human resource management, which also acted as a competitive advantage by Ferrari’s appointment of Montezemela as chief executive and Schumacher as the driver. Ferrari recruited Schumacher in 1996, who was a great driver and motivator. He communicated well with the engine technicians. The core competency (Hamel and Prahalad, 1990) of Ferrari was the capability of manufacturing powerful engines. Since Ferrari manufactured its own engines they were able to integrate engine, chassis and aerodynamics early in the process. This was the most significant and unique strength of Ferrari.All these factors helped Ferrari win the constructors championship in 1999, after a gap of 12 years. Reasons for Ferrari, McLaren and the Williams teams not being able to sustain their success Using SWOT analysis we can see that one of the major weaknesses of Ferrari, due to which they could not sustain their success, was their lack of dynamic capabilities. Dynamic capabilities mean the ability of firms to adapt their competencies to the changing times and changing external environment. Ferrari needed the dynamic capability to create newer cars, which were more powerful, had better balance and had great aerodynamic properties.Penrose (1959) and Teece (1982) were the first to suggest that, to sustain competitive advantage, firms will need to utilise their firm specific capabilities and also develop new capabilities. Deeply ingrained ideas of architectural knowledge prevent the organisation from acquiring new knowledge. (Henderson and Clark, 1990). Another weakness of Ferrari was their strongly ingrained architectural knowledge that prevented them from initially accepting the ground effects technology, as it was concentrating only on engine design. (Pinch et. al, 2003). Lack of dynamic capabilities to adopt the ground ffects technology and bad human resource management that led to loss of Nicki Lauda from Ferrari, were major reasons due to which Ferrari was unable to maintain its success after 1979. One of the weaknesses of McLaren, identified by SWOT analysis, due to which they were unable to maintain their competitive advantage, was the pulling out of Honda from Formula One. McLaren were not prepared for this and did not have any other good engines to replace Honda. Thus the lack of ability to maintain external linkages as a source of competitive advantage was the one of the reasons for the failure of McLaren.The other significant weakness identified was their not continuing to use human resource management as a source of competitive advantage. The loss of Senna to Williams in 1993 was a big blow to McLaren and they had not developed any new drivers to replace him. The main weakness that was the reason for the decline of Williams was the use of technologies developed by them by other competitors, like Benetton. Their competitors easily replicated their component knowledge. Since their capab ilities could be easily copied they could not maintain competitive advantage in the long term.The death of Senna in an accident left Williams without a good driver. Another weakness was the lack of dynamic capabilities that led to their not having a good replacement for Senna. Renault’s decision to supply engines to Benetton also meant loss of competitive advantage. The inability of Williams to maintain external linkages as a source of competitive advantage was another weakness identified. The main weakness that was the reason for the decline of Ferrari after 2004 was they were not able to adapt their capabilities and external linkages to the changed rules.The strategies that could have been developed by each of these teams to further sustain their period of dominance. Spanos and Lioukas (2001) and Wenerfelt (1984) suggest that Porter’s value chain and the Resource based view are complementary and considering both together can help in sustaining competitive advantage. But from empirical studies conducted by Spanos and Lioukas (2001) it was found that focusing on unique resources and capabilities was more beneficial in sustaining competitive advantage than focusing unique activities in relation to competition.Thus it can be concluded that it is important to consider both your firm specific unique resources and capabilities and to develop activities that are unique in relation to competition in developing strategy, to sustain competitive advantage. Capabilities that are not easily transferable, that cannot be easily copied, that are not transparent and those that last a long time act as significant sources of long-term competitive advantage (Grant, 1991). Walker, (2007), suggests that to sustain competitive advantage a firm must use tactics of offence and defence.Offence involves working towards dominating the competition and defence involves taking steps to maintain the dominant position. Ferrari could have continued their dominance from the 1970à ¢â‚¬â„¢s if they had used opportunities identified using SWOT analysis to develop dynamic capabilities to adopt new technologies like ‘ground effects’ and to recruit other good drivers to replace Nicki Lauda. Miller (2003) suggests that the differences between firms are a source of sustained competitive advantage.Hence it can be said since from all the racing constructors only Ferrari made their own engines and other parts, they could integrate the parts much better. This was another opportunity for Ferrari to use this capability as a long-term competitive advantage and helped extend their period of dominance. McLaren could have used opportunities identified to maintain external linkages as a source of competitive advantage by persuading Honda against quitting Formula One or by developing other external linkages for supplying engines, as a replacement for Honda. They needed to develop dynamic capabilities to have good alternative drivers for Senna.Teece et. al (1997) su ggests that competitive advantage can be sustained by improving efficiency. Hence, considering this theory McLaren could sustain their competitive advantage by improving their efficiencies continuously. Williams could have used the opportunities identified to develop strong architectural knowledge, which would not have been easily replicated by their competitors. The fact that all new technologies like ground effect, active suspension and semi-automatic gearbox were first developed by Williams was the differentiating factor from other racing constructors.Hence by Miller (2003)’s theory Williams needed to use that capability to sustain their competitive advantage. They needed to develop their innovative capabilities in a way that they could not be easily copied. They also needed to develop dynamic capabilities, in terms of other drivers, so that they had a replacement for Senna. To sustain competitive advantage after 2004, Ferrari needed to have dynamic capabilities, which wou ld help adapt their capabilities to the new rules. ConclusionFrom the study of the periods of dominance of various Formula One constructors, it can be concluded that each of the constructors had individual strengths, which they could have used as their core competencies and developed dynamic capabilities to be ahead of the competition. They need to focus on their unique resources, capabilities and develop unique activities, in relation to the competition, to gain competitive advantage. Success in Formula One is dependent on a variety of factors like the cars, the drivers, the management etc. Hence the constructors need to continuously improve their cars and retain their good drivers, to succeed.

Cultural and Ethnic Diversity Essay

The different beliefs, characteristics and looks of different ethnicities give more diversities in a place. The differences in cultures create color in every region. It allows people to understand each other and respect each other’s differences and beliefs. On the other hand, these differences are emphasized too much that instead of being the key to a harmonious living, leads to gaps, differences and even fights (Singelis 4). In a certain region, diversity is inevitable especially in a place like the United States. The United States is the melting pot of many cultures. Over the years, the country has become the destination of people from all over the world to achieve their dream. It seems that each state has its own taste of a different culture. Aside from that, immigrants have slowly settled in the country making it much more diversified. You wouldn’t be surprised that there is a little China Town in every state. There is also a growing number of Muslims in the country. This is a good sign for us as it shows that the war does not hinder our Muslims brothers to reside in our country. They are also given the freedom to stay here whenever they want. Other nationalities such as Filipinos, Indians, Japanese and Koreans have chosen to stay in the Land of the Dreamers. The Americans are known for their quest in reaching our dreams. And that is probably one of their best attributes. It is also probably one of the reasons why a lot of people choose to settle here. They too think that they will reach their dreams by going to America. Despite the diversity that has evolved in our culture, there is still this distinct American taste that is present is the American culture. This distinction in each culture paves way for people to know each other. (Singelis 152) Each culture, ethnicity is proud of its heritage. American families, for example, are very particular in implementing the American culture. American parents taught their children to love their country and have pride that we are Americans. This is, after all, the Land of the Free and the Home of the Brave. Our families teach us to be good Americans by passing on the value of citizenship, American holiday celebrations and traditions, leadership, entrepreneurship, competition and positive attitude. On the other hand, each culture is like that. The media plays a huge role in exposing the differences in each culture. Movies, documentaries all feature distinct qualities of each culture. These differences are somehow exposed in wrong way. Most of the time, cultures are perceived based from what people hear about them. I really think that the differences in cultures and ethnicities are given too much emphasis without being aware of it. In effect, this led to conflicts and gaps between cultures. It is a sad fact that instead of being united especially in these times of crisis, we are still separated by our personal beliefs. The media would be a really good help in promoting unity. It would help if similarities are focused and if people will be taught to respect one another’s beliefs too. A good example of this would be the movie Gran Torino. The movie is about an American old guy who lives near a bunch of Hmong people. Hmongs are people from China, Laos, Vietnam and Thailand who came to the United States to find their fortune. They decided to live altogether in one neighbor so that they too can perform their traditions and gather often. The American guy and some of the Hong’s turned out to be true friends and depended on each other. It was good to see the culture of the Hmongs in the movie. It was an eye-opener to many of those who have watched it. The only similarity between the American and the Hmongs was that they both wanted to live peacefully. It happened when they got to know each other and respected their own beliefs (The Gran Torino 1). Movies like Gran Torino should be featured more often. I think it is a good thing to showcase the different distinction of each culture especially the minorities. These minorities deserve their recognition from the world. Maybe with given much time, people should get to know the history, beliefs and traditions of the many cultures and ethnicities especially if they are just in the neighborhood. It is good to know that we are uniting for the sake of living peacefully and harmoniously. Work Cited Singelis, Theodore. Teaching about Culture, Ethnicity and Diversity: Exercise and Planned Activities. California: SAGE Publishing, 1998. â€Å"The Gran Torino. † 2008. Retrieved 20 February 2009 .

The Importance of Companys Management Assignment

The Importance of Companys Management - Assignment Example The company took a different direction after Zhang Ruimin took over as the CEO. The company is now regarded as one of the fast developing and aspiring Chinese brands in the International Market. Before Zhang came to the rescue of the company, the Haier Group had a group of undisciplined and low-skilled employees and suffered from low productivity and reduced product quality. Zhang faced difficult times while trying to rescue the company from management mayhem and financial turmoil (Lau & Han 1-2). In order to liberate the company, Zhang instituted an organizational philosophy and rules and overhauled the business strategy to establish an incentive-oriented management control system. As the company continued to grow, Zhang was proud of its growth. However, one of the hurdles facing the company was how to fine-tune its processes and structure to face transformations in the current competitive global market. In order for the company to sustain growth in the future, it needs to consider how it will motivate its workers in the future to attain high performance goals, and how it will revolutionize the management control system to adjust to the organization’s internationalization stratagems. ... However, as the organization’s operations grew, it shifted from a process to people oriented approach. This led to the implementation of OEC management system, which aroused the employee’s sense of responsibility (Lau & Han 4). This management system grouped people into small groups with different standards and targets. This required every group to ensure that it attained the targets. This made the groups repeat the processes in order to find means of improving their process the same day (Lau & Han 5). The fact that the employees were required to come up with ways on how to improve their process within the same day would have acted as a less motivating factor. Notably, most of the processes in an organization require a considerable number of hours if the process fails or does not meet the target result then the employees will have to redo the process and will spend more time and will have overworked within that day. It is imperative to note that overworking of employees is one of the factors that contribute to low levels of motivation among employees. This may make the workers feel overburdened with huge work that can make them stressed and less motivated. Therefore, it is significant to recommend an OEC management system with a longer timeline such as two days or a week, or a management system that gives few processes to be accomplished within a given time. For instance, an OEC management system that gives three tasks that can be accomplished within five days. The reward system adopted by Haier is based on the performance of each product division recorded by the product manager (Lau & Han 7). Though this seems to be an

Violence in the Media Contributes to Behavior in Children Research Paper

Violence in the Media Contributes to Behavior in Children - Research Paper Example From the essay it is clear that  the issue of media violence is highly controversial and there has been no common consensus so far. According to some researchers, constant exposure of children to violent content on television, such as shooting, bombings etc., desensitizes them and hampers their emotional development. It is also stated that such exposure may possibly influence them to use it as a normal response when faced with stressful situations. It is also suggested that continuous exposure to violence and violent images, is likely to evoke feelings of fear, anxiety and trauma among children thus resulting in sleeplessness. Some children may find it difficult to differentiate between real and reel life events, thus causing developmental setbacks.As the report discusses the dangerous impact of exposure to violent content on television, is described differently by different researchers. The negative impacts of exposure to media violence is akin to that of smoking or consumption of tobacco, both of which result in life threatening consequences such as lung cancer.  Exposure to violent images and content on television, leads to development of bitterness and hostility among the children, which elicits harsh and intensely emotional responses and reactions when faced with difficult and taxing situations.  Neurologists have argued that extensive exposure to violent television programs and other aggressive content by children.

Managerial Finance in a Health Spa Resort Assignment

Managerial Finance in a Health Spa Resort - Assignment Example In the face of looming competition, the company has decided to revamp its operations and in this respect formulate a suitable strategy, taking into account the escalating demand for the services provided by the Health and Beauty sector in the leisure industry, with the aim of sustaining growth and strengthening its market share. â€Å"The method a company uses to expand its business is largely contingent upon its financial situation, the competition and even government regulation. Some common growth strategies in business include market penetration, market expansion, product expansion, diversification and acquisition†. (Suttle, R., 2012) The following important issues have been identified, in connection with the strategies to be evolved, during the discussions at board level. Better marketing and cost reduction exercises could not improve profitability dramatically as the company in these cases cannot push beyond certain limits. The idea of bringing down the debt level, so that the company can plow back the profits generated for investment, is not consistent with the objectives of growth and increasing market share, which calls for new investment. The company needs to think about new strategies to improve profitability and market share. It is in this backdrop, the following strategies have been put forward for consideration after discussion between the board and the management team. This paper seeks to analyze the above strategies and advise the company with regard to the advantages and critical issues related to the strategies put forward and the strategy best suited for the company for achieving its objectives of growth and increase in market share in the long run. It is proposed to acquire the assets of the company New You. Smith, H.T.J. & Moraitis, T. (2009, p.86) state â€Å"The traditional logic of an acquisition is based on inter-assets synergies that are expected to arise when the merged organizations can support activities more proï ¬ tably in combination than they could separately.† New You is a major player in  the industry with a market share of 28% as given in Exhibit 1.  

Final project Essay Example | Topics and Well Written Essays - 1000 words - 4

Final project - Essay Example Unless controlled, these conditions constantly prompt more noteworthy ethnic and racial competition and to more noteworthy political, social, and economic oppression. According to Barusch (264) racism is a modern phenomenon that has been in place for a longer time and it aims at alienation and exploitation of both economic and social state of the victims. I come from a metropolitan area and for that reason the area is home to all races of the world. In the past years, there has been conflict between different races living within the area. The situation around the area can trace its roots back to the time when the area was growing with establishment of industries and other social amenities. There was a huge movement of people from other regions of the country seeking employement and better social amenities. In return, there was an increase in population which was made up of different races. With time, differences started rising among individuals from different races. There are those who felt to be more superior to others. The main races that have greatly been affected are the African-American and the Latinos. The racism is highly manifested in the places of work, educational facilities, and among social amenities like restaurants and places of worship. The African-Americans particularly have been victimized more than other races as th ey are the minority within the area. The plan against racism will take place in three main area; Educational institutes, social places, and in the public places. The idea is to create social awareness and ask people to stand against racism. The following people will be involved in the program; The program will run for a month and will be taking place daily running from Monday to Saturday. The use of the Ying Yang will be very instrumental as our tool or instrument of communication. The Yin Yang is known globally to represent two

Writing Essay Example | Topics and Well Written Essays - 250 words - 5

Writing - Essay Example Consequently, from his throne, God watches the inhabitants of the earth. Moreover, in Psalm 139: 7 -10, King David wonders where he can hide or flee from the Spirit of God since He is everywhere; in the sea, heaven, and in Sheol. Further, in Galatians 2: 20, God is supernaturally present in every place and at the same time. Moreover, the Book of 2 Chronicles 7: 2, also asserts the presence of God in the life of every person who believes in Christ (New Jerusalem Bible, 2 Chronicles 7: 2). These biblical evidences prove that God is everywhere and that nobody can hide from Him. The implication of the nature of God being omnipresent shows the greatness of His power. Since he is omnipresent, he is powerful and that is the reason He can exist everywhere and at the same time (Packer 25). Consequently, this feature of God shows that we cannot hide from Him because He sees us every time and in every place as He exists everywhere. For instance, the biblical Noah tried to hide from God but was never successful. Further, because of this attribute, human beings should never fear anything since God is everywhere and keeps watch over His

Examine the importance of avoiding plagiarism Essay

Examine the importance of avoiding plagiarism - Essay Example There are many universities that have proper academic guidelines regarding rules of properly citing the sources taken from various journals, books, or websites. Higher educational studies are a very critical stage for the students and this phase is the starting point for building the career for individuals. They need to pass this phase with good grades for attaining future achievements. Due to being in such a critical stage of studies, there are many cases of plagiarism detected amongst students of higher educational studies. This paper discusses the importance of avoiding plagiarism by all individuals in the academic learning environment. The world we are residing in is the information age where the amount of information available for the general community is there in abundance and also is free of charge. It is extremely easy to plagiarise the work of others due to easy availability and accessibility of the work. There are many research papers available online for users and students who want to copy the work do it from these online sources and other research databases as well. Nonetheless, it is extremely important to avoid plagiarising the work of what other authors have done. By plagiarising, the individual is violating the legal laws of the research work or paper and also the individual is considered to be involved in unethical practices. It is highly unethical act to regard someone else’s work as one’s own. By not acknowledging the person via the right reference techniques, the individual is taking the credit of the work. Some students take the aspect of acknowledging sources is to copy paste the work of the author and then write the name of the author in brackets. This again is not the right of acknowledging anyone’s work and would be regarded as plagiarised work. There have been many research studies conducted that

Filipino Americans In America Essay Example for Free

Filipino Americans In America Essay Filipino Americans have retained their racial and cultural pride and outlook even as they are fast becoming assimilated and adopting American values and cultural norms in the United States as an adopted country. This is a preliminary paper which featured six respondents to a fundamentally open ended but structured questionnaire, intending to elicit their inner sentiments on their nationality as immigrants to the United States. Qualifying criteria: Filipino ancestry, and residency in in the United States for the last 5- 15 years. Must have spent at least 10 to 15 years in the Philippines prior to immigration to the United States. Structure of Questionnaire: This is a fundamentally controlled emic questionnaire, initially, intended to have open-ended response that will give the inner sentiments of the respondents. Six respondents were given a free-wheeling right to answer the following questions (1) how they feel being Filipino Americans (2) the comfort level they have in being called Filipino Americans (3) their attitude to the previous citizenship (4) their general feeling about being Filipino or simply, Americans. (5) the values that differentiate them as a group (6) the beliefs that are common among them (7) their loyalty to their mother country (8) their religious faith/s (9) their attitude towards the US elections and the candidates (10) their celebrations and joys (11) The problems they perceive about their home country (12) The problems they meet in the United States. Emic-Etic Research 3 Interview results: 1. Four of six said they were proud Filipinos â€Å" just living or working in America. † Two said they are Filipino Americans, but that the United States is their country. 2. Four of six said they are not comfortable being referred to as Americans. Two were comfortable, but explain that they have Filipino roots. 3. All six said they were proud of their racial roots. Four of six said they identified with the United States as a friendly second country. 4. All said they would have preferred to stay in the Philippines because of the character of the people there (friendly and hospitable, and â€Å"wonderful†) but they would like to look for higher paying jobs in the US . 5. Five of six said their Catholic religion bind them together, four said they are proud of the heroes of their race, all five of six said they are proud of the racial industriousness and resourcefulness of their fellow Filipinos, and that their friendly nature distinguish them as a group. 6. All six said belief in God is a national faith. Among the values that they share as a group are: being good to foreigners, kindness to neighbors, cleanliness in their bodies, living harmoniously with neighbors. Some of the vices of their race include: gambling, gossip, and crabbing or stealing dreams. 8. Four of the six said they are non-practicing Catholics One was Protestant. One did not answer. 9. Three would vote for Obama , one for McCain. Two are not inclined to join the electoral discussions as irrelevant to them. Four said a McCain victory would be bad for Emic-Etic Research 4 Filipino immigrants. The same number said Obama would be good to immigrants. (Two answered twice) 10. All six said they enjoy Christmas as the most awaited holiday of the year. They enjoy singing publicly or in groups. They also all eagerly await the religious month of the Lenten season. They also enjoy family reunions, attending funeral wakes, group drinking, and teasing beautiful women, passing hours for their siesta, engaging in small talk, talking about their politicians, listening to movie gossip, either Filipino local or Hollywood. 11. The following came out as their negative list of events and/or descriptions in their country of origin: low value of the peso (5 of interviewees ) , high unemployment (4 of respondents) , air and water pollution ( 3 of respondents ) , and corruption in government (2 of 6 respondents). . 12. All six said they have experienced and can easily discern racial bigotry and discrimination in America. ANALYSIS The results of the tally suggest a pattern of national consciousness, an awareness of nationhood and national pride. The limited number of respondents at = six (6) is without any other controlling variables like total population and distribution profile and therefore cannot be a basis for any claim of being representative of the population of Filipino US immigrants. Emic-Etic Research 5 The present practical inquiry however can serve as a basis for future etic questionnaire that will define the answers to the above from a truly representative sampling, and allow an etic database that will provide objective percentages to the initial summary of findings above. As important as what the respondents above are saying are those that they have left unsaid. For example in Item 2, four of six respondents were unwilling to be called Filipino Americans –a fact that clearly displayed national loyalty and preference for their citizenship branding as Filipinos. The two who acknowledged their American citizenship were nevertheless fully cognizant and proud of their Filipino roots. In item 12, the stark figure of all six respondents saying they have experienced and could discern racial bigotry and discrimination in the United States speaks volumes about the social environment they operate, and describes their inner sensitivity to indications of racial discrimination. This is wide field of further inquiry that can further establish objective etic ( or objective, verifiable) information of concrete cases of discrimination that respondents have experienced in the United States.

Allocation of Resources in Cloud Server Using Lopsidedness

Allocation of Resources in Cloud Server Using Lopsidedness B. Selvi, C. Vinola, Dr. R. Ravi Abstract– Cloud computing plays a vital role in the organizations resource management. Cloud server allows dynamic resource usage based on the customer needs. Cloud server achieves efficient allocation of resources through virtualization technology. It addresses the system that uses the virtualization technology to allocate the resources dynamically based on the demands and saves energy by optimizing the number of server in use. It introduces the concept to measure the inequality in multi-dimensional resource utilization of a server. The aim is to enlarge the efficient resource utilization system that avoids overload and save energy in cloud by allocating the resources to the multiple clients in an efficient manner using virtual machine mapping on physical system and Idle PMs can be turned off to save energy. Index Terms-cloud computing, resource allocation, virtual machine, green computing. I. Introduction In cloud computing provides the service in an efficient manner. Dynamically allocate the resources to multiple cloud clients at the same time over the network. Now-a-Days many of the business organizations using the concept of cloud computing due to the advantage with resource management and security management. A cloud computing network is a composite system with a large number of shared multiple resources. These are focus to unpredictable needs and can be affected by outside events beyond the control. Cloud resource allocation management requires composite policies and decisions for multi-objective optimization. It is extremely difficult because of the convolution of the system, which makes it impracticable to have accurate universal state information. It is also subject to continual and unpredictable communications with the surroundings. The strategies for cloud resource allocation management associated with the three cloud delivery models, Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS), differ from one another. In all cases, the cloud providers are faced with huge, sporadic loads that contest the claim of cloud flexibility. Virtualization is the single most efficient way to decrease IT expenses while boosting effectiveness and liveliness not only for large enterprise, but for small and mid budget organizations also. Virtualization technology has advantages over the following aspects. Run multi-operating systems and applications on a single computer. Combine hardware to get hugely higher productivity from smaller number of servers. Save 50 percent or more on general IT costs. Speed up and make things easier IT management, maintenance, and the consumption of new applications. The system aims to achieve two goals: The capability of a physical machine (PM) should be enough to satisfy the resource requirements of all virtual machines (VMs) running on it. Otherwise, the Physical machine is overload and degrades performance of its VMs. The number of PMs used should be minimized as long as they can still satisfy the demands of all VMs. Idle physical machine can be turned off to save energy. There is an intrinsic exchange between the two goals in the face of altering resource needs of VMs. For overload avoidance, the system should keep the utilization of PMs Low to reduce the possibility of overload in case the resource needs of VMs increase later. For green computing, the system should keep the utilization of PMs reasonably high to make efficient use of their energy. It presents the design and implementation of an efficient resource allocation system that balance between the two goals. The following aids are, The development of an efficient resource allocation system that avoids overload in the system effectively while minimizing the number of servers use. To introduce the concept of â€Å"lopsidedness† to measure the uneven utilization of a server. By minimizing lopsidedness, the system improves the overall utilization of servers in the face of multidimensional resource constraints. To implement a load prediction algorithm that can capture the future resource usages of applications accurately without looking inside the VMs. Fig.1 System Architecture II. System Overview The architecture of the system is presents in Fig.1. The physical machine runs with VMware hypervisor (VMM) that supports VM0 and one or more VMs in cloud server. Each VM can contain one or more applications residing it. All physical machines can share the same storage space. The mapping of VMs to PMs is maintains by VMM. Information collector node (ICN) collects the information about VMs resource status that runs on VM0. The virtual machine monitor creates and monitors the virtual machine. The CPU scheduling and network usage monitoring is manage by VMM. Assume with available sampling technique can measure the working set size on each virtual machine. The information collects at each physical machine and passes the information to the admin controller (AC). AC connects with VM Allocator that activated periodically and gets information from the ICN resource needs history of VMs, and status of VMs. The allocator has several components. The Indicator Indicates the future demands of virtual machine and total load value for physical machine. The ICN at each node attempts to satisfy the input demands locally by adjusting the resource allocation of VMs sharing the same VMM. The hotspot remover in VM allocator spots if the resource exploitation of any PM is above the Hot Point. If so, then some VMs runs on the particular PM will be move away to another PM to reduce the selected PM load. The cold spot remover identifies the system that is below the average utilization (Cold point) of actively used PMs. If so, then it some PMs turned off to save energy. Finally, the exodus list passes to the admin controller. III. The Lopsidedness Algorithm The resource allocation system introduces the concept of lopsidedness to measure the unevenness in the utilization of multiple resources on a server. Let consider n be the number of resources and let consider ri be the exploitation of the ith resource. To define the resource lopsidedness of a server p by considering r is the average utilization of resources in server p. In practice, not all types of resources are performance critical and then consider bottleneck resources in the above calculation. By minimizing the lopsidedness, the system can combine different types of workloads nicely and improve the overall utilization of server resources. A. Hot and Cold Points The system executes periodically to evaluate the resource allocation status based on the predicted future resource demands of VMs. The system defines a server as a hot spot if the utilization of any of its resources is above a hot threshold. This indicates that the server is overloaded and hence some VMs running on it should be migrated away. The system defines the temperature of a hot spot p as the square sum of its resource utilization beyond the hot threshold. Consider R is the set of overloaded resources in server p and rt is the hot threshold for resource r. (Note that only overloaded resources are considered in the calculation.) The temperature of a hot spot reflects its degree of overload. If a server is not a hot spot, its temperature is zero. The system defines a server as a cold spot if the utilizations of all its resources are below a cold threshold. This indicates that the server is mostly idle and a potential candidate to turn off to save energy. However, the system does so only when the average resource utilization of all actively used servers (i.e., APMs) in the system is below a green computing threshold. A server is actively used if it has at least one VM running. Otherwise, it is inactive. Finally, The system define the warm threshold to be a level of resource utilization that is sufficiently high to justify having the server running but not so high as to risk becoming a hot spot in the face of temporary fluctuation of application resource demands. Different types of resources can have different thresholds. For example, the system can define the hot thresholds for CPU and memory resources to be 90 and 80 percent, respectively. Thus a server is a hot spot if either its CPU usage is above 90 percent or its memory usage is above 80 percent. B. Hot Spot Reduction The system sort the list of hot spots in the system in descending temperature (i.e., the system handle the hottest one first). Our goal is to eliminate all hot spots if possible. Otherwise, keep their temperature as low as possible. For each server p, the system first decides which of its VMs should be migrated away. The system sort its list of VMs based on the resulting temperature of the server if that VM is migrated away. The system aims to migrate away the VM that can reduce the server’s temperature the most. In case of ties, the system selects the VM whose removal can reduce the lopsidedness of the server the most. For each VM in the list, the system sees if the system can find a destination server to accommodate it. The server must not become a hot spot after accepting this VM. Among all such servers, the system select one whose lopsidedness can be reduced the most by accepting this VM. Note that this reduction can be negative which means the system selects the server wh ose lopsidedness increases the least. If a destination server is found, the system records the migration of the VM to that server and updates the predicted load of related servers. Otherwise, the system moves onto the next VM in the list and try to find a destination server for it. As long as the system can find a destination server for any of its VMs the system consider this run of the algorithm a success and then move onto the next hot spot. Note that each run of the algorithm migrates away at most one VM from the overloaded server. This does not necessarily eliminate the hot spot, but at least reduces its temperature. If it remains a hot spot in the next decision run, the algorithm will repeat this process. It is possible to design the algorithm so that it can migrate away multiple VMs during each run. But this can add more load on the related servers during a period when they are already overloaded. The system decides to use this more conservative approach and leave the system s ome time to react before initiating additional migrations. IV. System Analysis In Cloud Environment, the user has to give request to download the file. This request will be store and process by the server to respond the user. It checks the appropriate sub server to assign the task. A job scheduler is a computer application for controlling unattended background program execution; job scheduler is create and connects with all servers to perform the user requested tasks using this module. In User Request Analysis, the requests are analyze by the scheduler before the task is give to the servers. This module helps to avoid the task overloading by analyzing the nature of the users request. Fist it checks the type of the file going to be download. The users request can be the downloading request of text, image or video file. In Server Load value, the server load value is identifies for job allocation. To reduce the over load, the different load values are assign to the server according to the type of the processing file. If the requested file is text, then the minimum load value will be assign by the server. If it is video file, the server will assign high load value. If it is image file, then it will take medium load value. In Server Allocation, the server allocation task will take place. To manage the mixed workloads, the job-scheduling algorithm is follow. In this the scheduling, depends upon the nature of the request the load values are assign dynamically. Minimum load value server will take high load value job for the next time. High load value server will take minimum load value job for next time. The aim is to enlarge the efficient resource utilization system that avoids overload and save energy in cloud by allocating the resources to the multiple clients in an efficient manner using virtual machine mapping on physical system and Idle PMs can be turned off to save energy. Fig. 2 Comparison graph IV. Conclusion It presented by the design, implementation and evaluation of efficient resource allocation system for cloud computing services. Allocation system multiplexes by mapping virtual to physical resources based on the demand of users. The contest here is to reduce the number of dynamic servers during low load without sacrificing performance. Then it achieves overload avoidance and saves energy for systems with multi resource constraints to satisfy the new demands locally by adjusting the resource allocation of VMs sharing the same VMM and some of not used PMs could potentially be turn off to save energy. Future work can on prediction algorithm to improve the stability of resource allocation decisions and plan to explore using AI or control theoretic approach to find near optimal values automatically. References [1] Anton Beloglazov and Rajkumar Buyya (2013), ‘Managing Overloaded Hosts For Dynamic Consolidation of Virtual Machines In Cloud Data Centers Under Quality of Service Constraints’, IEEE Transactions on Parallel and Distributed Systems, Vol. 24, No. 7, pp. 1366-1379. [2] Ayad Barsoum and Anwar Hasan (2013), ’Enabling Dynamic Data And Indirect Mutual Trust For Cloud Computing Storage Systems’, IEEE Transactions on Parallel and Distributed Systems, Vol. 24, No. 12, pp. 2375-2385. [3] Daniel Warneke, and Odej Kao (2011), ‘Exploiting Dynamic Resource Allocation For Efficient Parallel Data Processing In The Cloud’, IEEE Transactions on Parallel and Distributed Systems, Vol. 22, No. 6, pp. 985-997. [4] Fung Po Tso and Dimitrios P. Pezaros (2013), ‘Improving Data Center Network Utilization Using Near-Optimal Traffic Engineering’, IEEE Transactions on Parallel and Distributed Systems, Vol. 24, No. 6, pp. 1139-1147. [5] Hong Xu, and Baochun Li (2013), ‘Anchor: A Versatile and Efficient Framework for Resource Management in The Cloud’, IEEE Transactions on Parallel and Distributed Systems, Vol. 24, No. 6, pp. 1066-1076. [6] Jia Rao, Yudi Wei, Jiayu Gong, and Cheng-Zhong Xu (2013), ‘Qos Guarantees And Service Differentiation For Dynamic Cloud Applications’, IEEE Transactions on Network and Service Management, Vol. 10, No. 1, pp. 43-54. [7] Junwei Cao, Keqin Li,and Ivan Stojmenovic (2013), ‘Optimal Power Allocation and Load Distribution For Multiple Heterogeneous Multicore Server Processors Across Clouds and Data Centers’, IEEE Transactions on Computers, Vol. 32, No. 99, pp.145-159. [8] Kuo-Yi Chen, Morris Chang. J, and Ting-Wei Hou (2011), ‘Multithreading In Java: Performance and Scalability on Multicore Systems’, IEEE Transactions On Computers, Vol. 60, No. 11, pp. 1521-1534. [9] Olivier Beaumont, Lionel Eyraud-Dubois, Christopher Thraves Caro, and Hejer Rejeb (2013), ‘Heterogeneous Resource Allocation Under Degree Constraints’, IEEE Transactions on Parallel and Distributed Systems, Vol. 24, No. 5, pp. 926-937. [10] Rafael Moreno-Vozmediano, Ruben S. Montero, and Ignacio M. Llorente (2011), ‘Multicloud Deployment Of Computing Clusters For Loosely Coupled MTC Applications’, IEEE Transactions on Parallel and Distributed Systems, Vol. 22, No. 6, pp. 924-930. [11] Sangho Yi, Artur Andrzejak, and Derrick Kondo (2012), ‘Monetary Cost-Aware Checkpointing And Migration on Amazon Cloud Spot Instances’, IEEE Transactions on Services Computing, Vol. 5, No. 4, pp. 512-524. [12] Sheng Di and Cho-Li Wang (2013), ‘Dynamic Optimization of Multiattribute Resource Allocation In Self-Organizing Clouds’, IEEE Transactions on Parallel and Distributed Systems, Vol. 24, No. 3, pp. 464-478. [13] Xiangping Bu, Jia Rao, and Cheng-Zhong Xu (2013), ‘Coordinated Self-Configuration of Virtual Machines And Appliances Using A Model-Free Learning Approach’, IEEE Transactions on Parallel and Distributed Systems, Vol. 24, No. 4, pp.681-690. [14] Xiaocheng Liu, Chen Wang, Bing Bing Zhou, Junliang Chen, Ting Yang, and Albert Y. Zomaya (2013), ‘Priority-Based Consolidation Of Parallel Workloads In The Cloud’, IEEE Transactions on Parallel and Distributed Systems, Vol. 24, No. 9, pp. 1874-1883. [15] Ying Song, Yuzhong Sun, and Weisong Shi(2013), ‘A Two-Tiered On-Demand Resource Allocation Mechanism For VM-Based Data Centers’, IEEE Transactions on Services Computing, Vol. 6, No. 1, pp. 116-129.  ­Ã‚ ­Ã‚ ­