How to incorporate a business

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Planning is a key factor in the success of any business, and conversely, the failure to plan adequately is one of the fastest routes to business failure. There are many considerations that an entrepreneur must decide such as type of business, legal structure, permits and licenses, market planning, business plan, location, organization management planning, business telephone line, mission statement, and a business checking account. There are many sources of information to help to start a business in an organized way, such as a business plan from the office of Economic Development & Planning located in the County Office Building, or books in that can be found in any library.

The first decision that the entrepreneur must make is what type of business he/she wants to start. The decision should be based on the amount of knowledge and skill that they have in the field that they are considering. The better that they know the industry, the stronger there likelihood they will have a successful business, and the better base they will have for the rest of the decisions that will have to be made in the time to come.

The next important decision in the business planning process is the legal structure of the company. The three legal structures are Sole-proprietorship, Partnership and a Corporation. Each one of these legal structures has its advantages and disadvantages. The different aspects that each legal structure differs are management control, capital, liability, income taxes, business continuity, and government regulations. The understanding of these different issues is crucial to the decision of which structure is the best one for the entrepreneurs business. Be sure to consult an attorney before making this decision.

In a sole-proprietorship, the owner retains total control of all the decisions that need to be made. The ability to raise capital is limited by the financial resources and the credit worthiness of the individual owner. The owner has the ultimate liability for all the actions and debts of the business. A sole-proprietorship is not a separate taxable entity. The individual owner reports business revenue, expenses and net income (or loss) on his/her individual tax return (form 1040). The business ends with death of owner unless previously sold or transferred. The government has very limited regulations, and few records are legally required. A D.B.A. (Doing Business As) form is available at most office supply stores or at a County Department of Economic Development office, which also requires a small fee. Completed form with notarized signatures must be filed with the County Clerk¡¦s Office.

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In a partnership, the control is shared by the partners in accordance with the partnership agreement. If there are two partner¡¦s the agreement does not have to be fifty-fifty. It can be what ever the two decide on in the beginning. The ability to raise capital is expanded somewhat as partners are able to pool their respective financial resources. Both partners have joint and several liabilities for actions and debts of partnership. The partnership is not a separate taxable entity. An information return (form 1065) must be filled out each year to report partnership activity; however, individual partners report their respective shares of income (or loss) personally. The business ends with death of a partner unless written partnership agreement contains transfer conditions. The government has limited regulation and few records are required. They should have a partnership agreement, which is available at most office supply stores or at the local County Department of Economic Development office. Completed form with all signatures notarized must be filed with the County Clerk¡¦s Office. It is advisable to consult a lawyer about a partnership agreement before filing the certificate.

With a corporation, the day-to-day control rests with the hired management team. Ultimately control is vested with the Board of Directors who are influenced through the voting process by the shareholders. The ability to raise capital is potentially greatly expanded because additional shares of stock may be sold. The liability of the individual shareholders for actions and debts of the Corporation is limited to their equity investment. A C Corporation is a separate taxable entity (form 110 is required to be filled out). An S Corporation is taxed essentially like a partnership. An information return (form 110s) must be filled out. The business has a perpetual life distinct from that of its owners. The shares of stock are freely transferable. The government treats a Corporation as a separate legal and taxable entity, and extensive record-keeping is required. There are also complex operating regulations to follow (which differ from state to state). Forms to incorporate are available at any office supply store and should be filed with the Secretary of State in Albany (518-474-600) if planned start up is in New York State.

Licenses and permits are grants of authority from the Federal, State and local political subdivisions to individuals, corporations or partnerships to carry on certain activities. Licenses often involve the payment of fees and proof of qualification by examination. Legally, it is up to you (the business owner) to know if your business requires licensing. Before you start a project, carefully research the applicable state and local laws. For local licenses and permits contact the village/town hall and the county office for local requirements. If you plan to operate a business in your own home, check to make sure you are not in violation of local zoning ordinances. For a construction company the owner or contractor will need to have specific permits and licenses for each job. A call to the County Clerk¡¦s office gets you started with local government. Depending on your plans, you may also need to check with your local planning board, zoning board and building inspector. For construction jobs it is advisable that you check with the DOT regional office in the area of the project to determine if any permits may be necessary for your particular job.

There are many occupations in which various governmental agencies and privately owned businesses require the worker to have a license before he/she can work on the project. Each year there will be fewer trades people, contractors, ect., that will need to be licensed. In the years to come it must be expected that all contractors, trades persons, etc. will be required to be licensed by government authority. The majority of cities in the United States require the trades people to be licensed to conduct their business.

As the business owner and the employer it is your responsibility to determine if a licensed operator is required for the job. If a license is required you must assure that only a properly licensed person performs the job. The failure to make sure that the employee has the correct license for the job can result in severe penalties and possible imprisonment. It is generally required that in larger cities workers such as carpenters, plumbers, welders, truck drivers, crane operators, heavy equipment operators, masons, steel erectors, laborers, etc., all have the proper licenses. Some licenses are state issued and are required in order to work any place in the state (crane operators, truck drivers, etc.).

Let¡¦s turn now to the issues of marketing.

Marketing may be defined as the planning, pricing, promoting, and placing of your product of service. General construction companies have an unusual marketing problem because they are sometimes hard to categorize, especially if their project tends to be unique, as opposed to products of manufacturers, which tend to be massed produced. Some important questions the owner should ask are exactly the same issues covered in the mission statement

„h Who are my customers?

„h Where are they?

„h What do they want?

„h When do they want it?

„h Why should they buy it from me?

„h How do I get it to them?

Pricing, for the construction company, relates to how well the project is estimated. After the contractor estimates the cost of the project they must add a fair profit. At this point it is important to know your competition and to determine construction ¡§profit margins¡¨ for your locale. The better you know your competitors the more competitive you will be. The success of the firm can very well be determined by the skill of the estimator. In the competitive bidding market the lowest reasonable bid most often get the contract.

Promoting is the art of selling and can be accomplished in a number of different ways, such as advertising, brochures, direct mailings, and personal contacts. Your decision on the best way to promote your construction company will depend on the type of contract you are competing for and your market. In the construction business competing for the jobs in your market area is done with bids. The two different types of contracts are public bids, or negotiated bids. For public competitive bids pricing is the primary marketing emphasis, and for negotiated bids contacts are most important. Getting to know other contractors in the area is very important for your business. The relationships developed will enhance opportunities for networking which allows small firms to increase their capabilities by pooling knowledge and other resources together. It also allows one to specialize, and limit the size and scope of the business investments required.

For the construction business, placing the ¡§product¡¨ consist of finishing the project on time in accordance with the estimate. The better your construction firm places the product, the better your reputation. This effort is very much dependent on both the skills of the estimator, and skills of the employees and quality / clarity of the contract, and also the management skill of the firm, and will have a strong impact on your ability to obtain contracts in the future.

A good business plan that is updated periodically makes the most powerful financing proposal a small business can have. A logically arranged and reasonably complete business plan is essential for operating and growing a business in well controlled way. A good plan serves your needs for business analysis, provides a financial forecast based on your rational assumptions about the future. Budgeting guidelines, including a working capital budget and a break-even analysis, help determine the amount and kinds of financing most appropriate for your business. A good plan also helps you present your needs to financing sources. Useful and persuasive information about your business is what lenders and investors need to make swift, accurate and helpful decisions.

There are many suggested outlines accessible available. The best are flexible and can be tailored to your own needs. The following is a good example

Outline of a Business Plan

„h Cover sheet Name of business, names of principals, address and phone numbers

„h Statement of purpose

„h Table of contents

Section One The business

A. Description of Business

B. Product/Service

C. Market

D. Location of Business

E. Competition

F. Management

G. personnel

H. Application and Expected Effect of Loan (if needed)

I. Summary

Section Two Financial Data

A. Source and Applications of Funding

B. Capital Equipment List

C. Balance Sheet

D. Break-Even Analysis

E. Income Projections (Profit and Loss Statements)

1. Three-year summery

. Detail by month for first year

. Detail by quarter for first and third years

4. Notes of explanations

F. Cash Flow Projection

1. Detail by month for first year

. Detail by quarter for second and third years

. notes of explanation

D. Deviation Analysis

H. Historical Financial Reports for Existing Business

1. Balance sheets for past three years

. Income statements for past three years

. Tax returns

Section Three Supporting Documents

A. Personal resume

B. Personal balance sheets

C. Cost of living budget

D. Credit reports

E. Letters of reference

F. Job descriptions

G. Letters of intent

H. Copies of leases, contracts, legal documents

To summarize there are three key reasons that a begging business owner should go though the trouble of writing a business plan. The first one, is the process of putting a business plan together, including the thought you put in before beginning to write it. This forces you to take an objective, critical, unemotional look at your business project in its entirety. Also your finished business plan is good operating tool which, if used properly will help you manage your business and work effectively towards its success. Furthermore the completed business plan communicates your ideas to others and provides the basis for your financing proposal. As you can see a well thought out business plan can be a very useful tool for your new company.

Let¡¦s now look at the issue of location.

Location is a key to help your business to make money. When you first start your business, first try to locate the ideal site, the figure out how close you can come to it. The business owner can get information about specific areas from a local Chamber of Commerce, industrial development commission (they can give you information about tax breaks and financing incentives for business which will employ substantial numbers of people in towns under their commissions), trade sources such as magazines and associations, planning commissions, bankers, and lawyers. For a construction company, the better the owner know the area, the better knowledge he/she will have of where the work is. Also the better that they know the local community people, the more popular they will be when it comes time for work to be done. If you have a good reputation as a competent and courteous professional, the better your potential of being chosen to do the required work.

One should not establish a business in a given location simply because the price is low. Rent and purchase price, are fixed by market forces, and a low price usually reflects desirability. For a construction business this might not be a problem due to the large equipment that the industry requires and the potentially ugly material that sometimes get stored at the business center. The bottom line is that the three most important success factors are said to be location, location and location.

Now lets cut to the heart of success.

Poor management has been identified as the number one killer of small businesses. The key role of management is that it provides leadership and guidance. After establishing goals and objectives for the firm, it then becomes necessary to formulate policies, which are in keeping with those goals, and to communicate those policies to all members of the company. Organization and management planning consists of an operating structure for the company with firm lines of authority, responsibility, and accountability clearly stated. One good way to clearly state this is by distributing organizational charts and job descriptions to all the employee¡¦s. A clear outline of a particular employees responsibilities is even more fundamental for the small business because the individual will be forced to assume several functions with correspondingly large demands on their time. The ability to delegate becomes a critical step in management.

The first step in preparing the organizational chart is performing work analysis. A work analysis is the organization and understanding of all the jobs that need to be done within your company. After understanding the vital activities that need to be accomplished, staffing considerations become very important. Being able to hire the best person for the job will help your business grow and become successful. As mentioned earlier, the estimator can be the key person that gets the contracts or not, so letting him/her understand the importance of their position can help you out. The chart is not static, but should be continually updated to reflect growth and change within the company. A principal management role is to keep the companies energy and efforts focused on the long-term goals and objectives. Performance of the company should be evaluated in relation to these goals.

Some of the other smaller but still important details that have to be taken into consideration are a business checking account, business telephone line, and announcements. It is very important to have you business account separate from your personal account. The bank will require a stamped and certified DBA certification or a copy of your corporation papers with your corporate seals affixed. Also it is important to have a business telephone line installed. This will require approximately a $00 deposit to have the line installed. By having a business telephone line you are entitled to a business listing in the yellow pages. Also consider an answering machine or answering service for calls that come in during you absence. It is also helpful to send announcements of your business start-up to the media, potential customers and friends. Starting a business is an extremely complex process that is crucial to its success.

Most of the aspects have been covered in the above, but there are many more little things that may need to be considered depending on the uniqueness of the business. There are many helpful sources, which will help an individual obtain information on how he/she should start their own business plans. The better organized an individual goes into a business start up the better prepared they will be for the many complicated decisions that will arise in the future.

Please note that this sample paper on how to incorporate a business is for your review only. In order to eliminate any of the plagiarism issues, it is highly recommended that you do not use it for you own writing purposes. In case you experience difficulties with writing a well structured and accurately composed paper on how to incorporate a business, we are here to assist you. Your persuasive essay on how to incorporate a business will be written from scratch, so you do not have to worry about its originality. Order your authentic assignment and you will be amazed at how easy it is to complete a quality custom paper within the shortest time possible!

Bigfoot

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Bigfoot or Sasquatch can be defined as; a warm blooded mammal that is half human and half ape. Bigfoot stands about seven feet tall, and can weight anywhere from 00 pounds to 400 pounds. Bigfoot is said to be a very smart and clever animal. Bigfoot sightings first occurred around the 1800's. But not just in the United States, there have been sightings from all over the world. From the mountains in Tibet, to the forests of Turkey. Bigfoot has always been described as, having dark brown hair, and huge feet. The people who have seen him also say Bigfoot walks with a slight limp. Even though there have been hundreds of documented sighting and detailed deceptions of Bigfoot, many people don't think Bigfoot exists. These people insist that if Bigfoot were real then someone would have captured Bigfoot by now. Or someone would have found the remains of Bigfoot. They believe that there is no way something that big could hide from the ever-growing population as long as it has. Others believe Bigfoot does exist (about 5% of the population). Although the believers know the controversy surrounding Bigfoot is multileveled. However their side of the debate has effectively argued three points that verifies Bigfoot's existence. Why Bigfoot is rarely seen, why Bigfoot has never been caught, and why no one has ever found remains of Bigfoot?

Bigfoot is rarely seen, because Bigfoot lives in areas were people do not exist. Most people believe that we have explored every forest on this planet. In reality there is still about 5% of the forests that have not been explored by humans. The second reason is that, Bigfoot rarely comes out during the day. Bigfoot is mostly a nocturnal animal. Plus, Bigfoot does not come out of its hiding spot unless it needs food, or is threatened. The third reason and the last is, since Bigfoot is a very smart animal, he is almost always watching what people are doing and were they are going. For example some people will set up traps or camera equipment in the woods that can record at night. Chances are they will never see a Bigfoot on their camera. The reason being, Bigfoot probably seen them put the camera up, or he smelled the human sent. So Bigfoot would not even go near that part of the woods. That is why Bigfoot is rarely seen.

. It is difficult to argue why Bigfoot has never been caught, because the majority of the people in this country, which are nonbelievers. Believe since we have the most high tech equipment known to man, then we should be able to catch an over grown ape. They just don't understand that it is very difficult to catch a creature that has virtually one background information about it. Plus, it is very hard to catch something that doesn't want to be caught. Therefore since the Bigfoot explorers have hardly any clues on how Bigfoot lives and what Bigfoot eats, it gives them very little information to work with. For example to catch a rabbit a person could use carrots to make the rabbit come out. But what could a person use to catch a Bigfoot. The last reason why Bigfoot has never been caught is, even though are country has very high tech equipment, and has people that are very rich, that could sponsor the Bigfoot explores, by giving them money to buy state of the art equipment. These people will never do that, because they are afraid that other people would find out they are helping the bigfoot explorers, and be labeled has a crazy person. Therefore the Bigfoot explores have very little money to spend on trying to catch Bigfoot.

Nobody has ever found remains of Bigfoot because of were Bigfoot lives. Since Bigfoot lives in the uncharted forests, there is no one there to explore the grounds. When explores finally do such a new forest it is to late. Other animals have already eaten the remains, or nature has already decomposed the body. The second reason is thought to be; when a Bigfoot dies its family will take the body and hide it or bury it from other animals. It is believed that a Bigfoot family is much like a humans family, in the sense that they are closely bonded together. The last reason, which is more like a theory is, Bigfoot families can live to be hundreds of years old. Therefore there deaths are very rare. There may only be one to two deaths a year, and there is no possible way to know when a death is going to occur.

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There is no doubt that the controversy involving Bigfoot's existence will continue to go on for many years. Bigfoot has become a worldwide argument. In Japan they call Bigfoot a "Yeti" which means giant one. In Holland they call Bigfoot "bearfoot" which means big-footed bear. Some day a Bigfoot will be caught, and there will be no more controversy on Bigfoot. Bigfoot is a one of a kind animal, he and his family has been able to survey for hundreds of years in complete secrecy. Even though Bigfoot explores have found foots prints of Bigfoot that is still not enough proof for the nonbelievers. The explores most come up with better remains of Bigfoot to be taken seriously. Even though Bigfoot believers get laughed at, don't forget about Henry Ford and his invention of the car. Many people laughed at him, but who wand up with the last laugh.

Please note that this sample paper on Bigfoot is for your review only. In order to eliminate any of the plagiarism issues, it is highly recommended that you do not use it for you own writing purposes. In case you experience difficulties with writing a well structured and accurately composed paper on Bigfoot, we are here to assist you. Your persuasive essay on Bigfoot will be written from scratch, so you do not have to worry about its originality. Order your authentic assignment and you will be amazed at how easy it is to complete a quality custom paper within the shortest time possible!

Going Home

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'Going Home' is a short story written by Aboriginal author Archie Weller. It explains to the audience the racist issues that affect the Aboriginals and the Europeans of Australia. 'Going Home' is set in a small town in Western Australia called Koodup, and a small Aboriginal community nearby. Antagonism between the races grows with more anger and contempt, with the whites treating the Aborigines as less than human. The Aborigines seem to have realised that they might never get the chance to live in freedom and success, and become bitter and despairing and take actions that seem inevitably to leave them either dead or arrested.

Such as drinking alcohol, doing drugs and thieving.

Racism has had a major effect on Billy Woodward's life, even during his life in Perth. When Billy finds his drunken uncle on his doorstep, he yells at him and forces him away, and then moves house the next day. This is an example of how Billy is ashamed of his people, and has shunned them in order to claim a high place in society.

Upon arriving home, Billy experiences his first major racist issue. The owner of the local bar uses racist language toward Billy, and refuses to sell him alcohol. When Billy's friend, Darcy Goodrich tells the owner that Billy just got home, the barman immediately says 'Just got home, eh? What was he inside for?' this presumption that Billy was in jail demonstrates that the barman thinks the Aborigines only leave if they are arrested.

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Racism is also a problem with the police in Koodup. An example is when they arrive at the community to investigate a crime which Billy brother had committed the previous night. When they found out the Kingswood belonged to Billy, they placed him, under arrest, without even asking him if he had committed the crime.

'You Woodwards are all the same, thieving boongs.'

Through these actions it is obvious that the police do not care about the Aboriginals rights, and do not treat them as equals.

In the short story 'Going Home' racism is a major issue, and has had a major effect on the different characters, both European and Aboriginal. A result of the racism is that the Aborigines feel they must 'act stupid' in order to get things in the community. In Going Home, Archie Weller use metaphors to emphasise the way the Aborigines are feeling with themselves, and the way they are being treated. An obvious example of this is when Archie writes about the trees, he says they are ``black tortured figures, with shaggy heads and pleading arms. Ancestors crying for remembrance. This tells of the loss of Aboriginal culture, and how they feel they are being tortured, by the racism the whites throw at them.

Archie Weller's contribution to Australian readers is shown through his use of common and slang language in his story, which enables the audience to easily understand the events that occur. The novel 'Going Home' successfully expresses the way racism has effected both Aboriginal and European society, and it shows that it is unnecessary for this treatment to occur.

Please note that this sample paper on Going Home is for your review only. In order to eliminate any of the plagiarism issues, it is highly recommended that you do not use it for you own writing purposes. In case you experience difficulties with writing a well structured and accurately composed paper on Going Home, we are here to assist you. Your cheap custom research papers on Going Home will be written from scratch, so you do not have to worry about its originality. Order your authentic assignment and you will be amazed at how easy it is to complete a quality custom paper within the shortest time possible!

What changes Elie from the devout believer he is at the start of the text to the spiritually empty person he becomes?

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In the times of oppression during World War many individuals lost their lives due to their lost of hope of survival. But for all its seeming cruelty, there were signs of "human behaviours" in a few individuals that assisted Elie to maintain his humanity. It was this and his close relationship with his father, as they support one another that saw Elie develop a strong desire to live essential in his quest for survival.

It was the help that Elie received from his father that played an integral part of Elie's survival. From his loyalty and love for his son, Chlomo helped Elie cope with pain and suffering in the abrasive conditions of the concentration camps. From the beginning when Elie's shock witness at the ruthless slaughter of innocent babies he held onto his father's 'familiar hand,' the one that he could seek comfort and reassurance from. As their journeys became harsh and brutal where they were forced to carry out rigorous labour in order to live, his father goes to a great length to conserve Elie's physical strength. This was apparent when Chlomo had pretended not to be hungry and offered his ration to Elie. Chlomo's action was commendable done from his love for Elie, as a son, and his responsibility to protect him. In effect, Elie came out to have sufficient strength to continue on with his life. Not only did Chlomo helped maintain Elie's physical strength, but also rescued his life in a numerous occasions. This was exemplified when Elie began to fall asleep in the bitter cold atmosphere on the ground Chlomo cried, "Don't let yourself be overcome Elizer…..You might sleep for good." With his persistence, Elie woke up from the dead. In addition, during his transport to a camp on a cattle wagon Elie felt a person's hands on his throat suffocating him. Immediately, his father came to the rescue when he was aware of the incident and instantly removed the prisoner. Chlomo's paternal protection of Elie proved to be fundamental to his survival.

However, when his father grew weaker, Elie's 'natural' instinct forced him to nurture his father, in which he was able to develop a strong, purposeful desire to live. The strong love and connectedness between them helped Elie emerge as stronger and resilient character. This was apparent during the march of Gleiwitiz, where the presence of Chlomo was the only thing that had stopped Elie from 'sliding to the edge of the road.' Elie felt he had an obligation to support his father. Thus, Elie had to survive with a power of will. 'What would he do without me? I was his only support,' he said, 'this was not time to be separated. As his relationship with his father grew, Elie's willpower to survive grew. Elie gave up his ration for his father when his father was in desperate need of food. It was Elie's love that helped him persevere to slap Chlomo from unconsciousness on the cattle wagon. Elie saw the true worth of his father. Unlike 'sons abandoning their father without tears,' Elie recognised that the connectedness and love shared between them had helped him survived the bestial brutality.

Although dehumanisation saw many prisoners being totally indifferent and selfish, there were individuals who offered support to Elie's journey to survive. At Birkenau, kindness saw a prisoner risk his own well-being to advise Elie and his father to change their ages, preventing both being cremated. The advice that the young Polish did offered "provided the first human words' for new prisoners, provided optimism towards the future. The head of the block offered sage advice on how to pass the selection test. Even in times of oppression, a French girl jeopardised her own life to help Elie and Juliek who played his violin to help Elie keep in touch with his 'human behaviours.' These 'human behaviours' exhibit in a few individuals were sufficient to encourage Elie continue to strive for survival in times of privation.

In spite of dire circumstances for the Jews and others in the camps, there were a glimpse of kindness and human spirit seen. The people who helped Elie made him see that evil cannot conquer the resilience of human spirit. In doing so, coupled with the support of his father, Elie was encouraged to see his life to come through the inhumane conditions of the concentration camps, in which he did.

Please note that this sample paper on What changes Elie from the devout believer he is at the start of the text to the spiritually empty person he becomes? is for your review only. In order to eliminate any of the plagiarism issues, it is highly recommended that you do not use it for you own writing purposes. In case you experience difficulties with writing a well structured and accurately composed paper on What changes Elie from the devout believer he is at the start of the text to the spiritually empty person he becomes?, we are here to assist you. Your cheap custom college paper on What changes Elie from the devout believer he is at the start of the text to the spiritually empty person he becomes? will be written from scratch, so you do not have to worry about its originality. Order your authentic assignment and you will be amazed at how easy it is to complete a quality custom paper within the shortest time possible!

Arches Across the World!

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Arches Across the World!

Introduction

According to Robert Templer McDonalds opened its 5,000th branch recently! Anthropologists Find McDonalds May Deserve More Respect in Asia, WSJ Interactive Edition). He also reported that the giant fast food firm began operation in its

117th country. With such international presence it is little wonder that Ronald and the rest of the McDonalds crew pose such a ripe target to foes of globalization. This case study explores two globalization issues that McDonalds success highlights competition and culture.

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Assignment

Based on the information in the Wall Street Journal Interactive Edition article cited below, class discussion, and other sources address the following questions in an essay. Be sure to provide references in a generally accepted format, and be sure to find outside sources (i.e., beyond material introduced through the course). Keep in mind that this assignment is worth 50 points.

1. From the point of view that McDonald's spreading throughout the world is an example of competition in action, discuss the competitive atmosphere that might attract McDonalds into a new area and how that competitive atmosphere might change after McDonalds arrives. (Be sure to consider comparative advantage.)

. Now assess the impact McDonalds has on local culture and the impact local culture has on McDonalds. Include an explanation of the role competition has in this cultural interplay.

[NOTE The competition and culture issues addressed in this case also exist in the more traditional concept of international trade when goods or services are produced in one country and sold in another. In both situations Adam Smiths phrase the invisible hand might come into play.]

Wall Street Journal Reference

Templer, Robert. Anthropologists Find McDonalds May Deserve More Respect in Asia. Wall Street Journal

Interactive Edition. September 10, 1.

(http//interactive.wsj.com/archive/retrieve.cgi?id=SB6077155758.djm)

Other Globalization articles

[The Wall Street Journal Interactive Edition]

July 16, 1

Business and Finance - Asia

Indonesian Retail Group Gets Upset

Over Influx of Big French Markets

By JEREMY WAGSTAFF

Staff Reporter of THE WALL STREET JOURNAL

TWO RIVAL FRENCH hypermarket chains are aggressively expanding in

Indonesia, despite the dire economy, and a local retailers group is crying foul.

In the past nine months, Carrefour SA has opened one emporium in Jakarta and says it plans at least two more this year. Promodes SA already has two Continent stores here, one of which opened just this week.

They sell everything from chilis to high-fidelity systems, dwarfing local rivals and drawing big crowds. Continents flagship in the Kuningan business district is regularly packed. Neither company will release figures, but both say they are happy with their performance so far.

Its a bold move, coming so close on the heels of last years violent looting sprees in Jakarta, which left many shops and malls smoldering.

Indeed, the Carrefour store was partly looted in November, a month after it opened.

The Indonesian Retailers Association, Aprindo, says the giants represent unfair competition in a languishing market. Its executive director, Kustarjono Prodjolalito, also claims they are winning customers by selling products below cost in some cases. He fears a price war that may crush smaller retailers.

Its going to put competition within a three- to five-kilometer radius out of business, says Mr. Kustarjono, adding, Its unfair.

CARREFOUR and Continent deny they sell below cost.

We dont know what theyre talking about, says Handi Liem of Carrefour. But the government may be taking action anyway. The local media reported last week that city retail-trade officials plan to update regulations, to maintain fair business practices among local businessmen. The officials didnt return calls seeking comment.

At least one high-profile U.S. predecessor in the market had a rough time. The U.S. retail chain Wal-Mart Stores Inc. ended a franchise agreement in Indonesia last year, after less than two years, due to weak sales and a row with its local partner, a unit of the Lippo Group, over royalty fees and capital. Other companies such as wholesaler Makro, operated through an advisory contract with local company PT Karabha Unggul by SHV Holdings NV of the Netherlands, have avoided head-on competition with city-center retailers by setting up operations on the edge of cities, rather than in the heart of them, like the hypermarkets have.

Both French companies say their Indonesia strategies were laid in the years before economic crisis hit in mid-17. From 1 to 16, retail sales rose an average 0% a year, says Aprindo. Last year, however, sales fell somewhere between 0% and 0%, compared with the most recent precrisis year, 16. In addition, Indonesias middle class -- the hypermarkets target market -- has been hardest hit, according to World Bank figures.

The November looting raised alarm bells at Carrefour and jeopardized its expansion plans, according to an executive close to the company. The management was traumatized by the looting, says the executive. Once committed to a city, however, theres an inexorable logic to expansion. The big stores produce economies of scale only after a company has opened four in one city, according to Johnny Widjaja, president commissioner of Carrefours local partner, PT Tigaraksa Satria.

AND NOT ALL local retailing organizations are unwelcoming. At a meeting of several associations this month to discuss the issue, the invitees fell short of agreeing with Aprindo to push for a government prohibition on more hypermarkets.

Im happy, actually, because were a distributor and we need the business, says H.A. Parwennei, chairman of the Indonesian Supplier and

Distributor Association.

Syahrir Tanjung, who heads PD Pasar Jaya, a state company running the citys traditional markets, denies any serious effect on his thousands of stall-holders. The problem is how to make competition without killing each other, he says.

Both companies have tried to keep a low profile, and in fact, their managers havent joined Aprindo, says Mr. Kustarjono. The managers declined to comment for this article.

Shifting consumer habits here arent anything new, of course. When supermarket chain PT Hero Supermarket opened its doors in Jakarta in the early 170s, there was widespread fear other supermarkets and traditional markets would be goners, says Mr. Tanjung of PD Pasar Jaya. Not so. They suffered a bit, but just created more competition, he says.

Despite his hypermarket hostility, Aprindos Mr. Kustarjono has passed onto his members several tricks he says he spotted on spying trips to Continent and Carrefour. One of them Shrink-wrap packs of two chicken drumsticks -- its a convenient size for Indonesias growing ranks of divorcees, he says.

We have to follow the changes, he says, adding, We should learn how to be more efficient.

-- Special correspondent Rin Hindryati contributed to this article

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[The Wall Street Journal Interactive Edition]

July 8, 1

International Commentary

The Americanization

Of European Business

By Geoffrey Owen, a senior fellow at the Institute of Management, London School of Economics. He was editor of the Financial Times from 181 to

10.

The political and economic integration of Western Europe is often seen, especially in Britain, as leading inexorably to more regulation of business, higher social costs and more onerous labor laws--all of which are likely to put European companies at a disadvantage vis-a-vis their American competitors. Yet a remarkable feature of the European corporate scene today is the extent to which American ideas and business practices are gaining ground.

This is most clearly seen in the wave of restructuring that is altering the shape and ownership of several major industries. The current takeover battle in France between TotalFina and Elf Aquitaine, following closely on Olivettis sensational victory in the battle for Telecom Italia, is the most recent example of the kind of activity that would have been virtually unthinkable 0 years ago. In many of these cases, the participants are being advised by American investment banks and American lawyers.

The restructuring process is driven by international competition and an increasingly demanding capital market. On both fronts, European integration is providing an additional spur. The arrival of the euro will tend to eliminate pricing differences between member countries, while making it easier for investors to treat Europe as a unified capital market. Steelmaking, for example, once the most nationalistic of industries, is beginning to acquire a global character as more companies seek to strengthen their market position through cross-border acquisitions and joint ventures. The proposed merger between British Steel and Hoogovens of the Netherlands is motivated partly by the quest for cost savings and partly by the need to offer a better service to customers, such as the car manufacturers, which are themselves operating on a European scale. At the same time, the merging companies are under pressure to offer to their shareholders returns that at least match those available on comparable investments in the U.S.

Thanks in large part to former prime minister Margaret Thatcher, Britain started down this path earlier than other European countries. The severe recession of the early 180s, together with the pro-competitive policies pursued by successive Conservative governments, forced British companies to come to grips with their internal weaknesses, raise their performance levels closer to the best international standards and align their strategies to the needs of the world market.

The rehabilitation of British Steel, once the most inefficient steelmaker in Europe, is rightly regarded as a triumph for Thatcherism, but similar, if less publicized, transformations took place in many other firms. The general trend then was toward specialization and internationalization--focusing on businesses that could hold their own on the world stage, and getting out of those that could not. In some sectors, such as television sets and automobiles, gaps left by uncompetitive British firms were filled by foreign companies which built or acquired factories in Britain.

Thatcherism was unique to Britain, a reflection of the dire state into which the country had fallen in the second half of the 170s. But similar forces have been at work in other parts of Europe, not least in Germany. During the 160s and 170s much of German industry was characterized by widely diversified companies that were more interested in top-line growth--a continuing expansion of sales and employment--than in bottom-line performance.

For a mixture of reasons, including the need to satisfy their increasingly numerous non-German shareholders, several of these companies have now drastically revised their strategies. The most celebrated example is the conversion of Hoechst, one of the big three chemical companies, from a chemical conglomerate into a narrowly focused life sciences firm. This has involved a complex series of acquisitions and divestments, culminating in the merger with Rhone-Poulenc of France to form Aventis, which will become one of the worlds largest pharmaceutical manufacturers. The ultimate success of this operation remains uncertain, but what Hoechst has done illustrates the willingness of even the most securely established German firms to make a radical break with their past.

No less significant was last years decision by Siemens, which was incurring heavy losses in semiconductors, to hive off this business into a separately quoted company. The management of Siemens had long argued that vertical integration--making electronic components as well as finished equipment such as computers and telephone exchanges--was an essential part of its strategy. What this meant in practice was that the loss-making semiconductor business was subsidized by the more profitable divisions, dragging down the performance of the group as a whole. This might have been acceptable when shareholders were passive and capital markets quiescent, but those days are over and Siemens has been forced to respond.

Hoechst, Siemens and a growing number of other German companies have embraced (with varying degrees of enthusiasm) the Anglo-American concept of shareholder value as the primary measure of corporate performance. One of the role models for Juergen Schrempp when he took over as chairman of Daimler-Benz in 15 was Jack Welch of General Electric, which had consistently achieved a return on equity of around 0%. As a first step, Mr. Schrempp insisted that every business within Daimler-Benz must aim for a return on equity of at least 1%. The culture change which Mr. Schrempp engineered in Daimler-Benz helped to pave the way for this years merger with Chrysler.

Daimler-Benz, which was in a state of crisis at the time of Mr. Schrempps appointment, may be something of an exception, and there are still many obstacles--in Germany and elsewhere--which are likely to slow down the Americanization process. Despite the Olivetti/Telecom Italia and Total/Elf affairs, hostile takeover bids are still rare on the Continent. The furious political and trade union reaction to Krupps hostile bid for Thyssen in 17 showed the strength of Germanys attachment to the consensual model of industrial change. But the fact that the bid was made (with American investment banks playing an important role) was a sign of how far thinking in German boardrooms had moved in the American direction. Moreover, even though the bid was withdrawn, it led to an agreed merger between the two companies, facilitating a much-needed rationalization of the German steel industry.

Powerful German trade unions undoubtedly will exert a brake on the speed with which the restructuring of firms and industries can take place. But there is a degree of realism among German union leaders which was notably lacking in their British counterparts during the 160s and 170s. Many German companies have been able to negotiate far-reaching changes in working practices without the kind of confrontation with employees that took place in Britain during the Thatcherite 180s. A strong incentive for the unions to cooperate is the ease with which German companies can shift manufacturing operations to lower-cost locations outside Germany.

Another obstacle to change has been the desire by European governments to protect their national champions from foreign takeovers, but here, too, there are encouraging signs of greater flexibility. France, traditionally the most dirigiste of the larger European countries and the most restrictive in its policy on inward investment, has moved a long way in recent years. For example, the French authorities have not opposed the Hoechst/Rhone Poulenc merger, nor have they sought to impose conditions on it.

How far this French tolerance might extend to more sensitive industries remains an open question. The appearance of a foreign white knight in the Total/Elf situation would probably not be greeted with great enthusiasm in Paris, and the same might apply to any outside intervention in the battle currently underway for control of the countrys leading banks. Finance Minister Dominique Strauss-Kahn has already said he would like to see the restructuring of the banking industry remain, at least for now, a franco-francais affair.

But there is a growing recognition, even in an industry as intimately linked to national sovereignty as aerospace, that old-style nationalism is incompatible with global competitiveness. Aerospatiale, the leading aerospace firm, has already been privatized, and it is a reasonable bet that, despite the current stalemate between the partners, Airbus Industrie will in due course become a normal, shareholder-owned company, just like its main competitor in the U.S.

What business can do in the way of restructuring is limited by the social and economic climate in which it operates. And there is an obvious danger that the center-left governments which hold sway in several European countries will, in the interests of social solidarity, impose new restrictions on managers freedom of maneuver. But there are powerful economic forces working for greater liberalization. The tide of Americanization is running strongly, and governments would be well advised not to stand in its way.

--From The Wall Street Journal Europe

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