Major Market Economies Constitute Different Market Characteristics

Question: Discuss about the Major Market Economies Constitute Different Market Characteristics? Answer: Introduction The study demonstrates different market structures of the Albany, capital of New York. In this particular paper, the researcher has been appointed as a consultant by the local mayor of Albany. The researcher would help the mayor to understand the business structures of the city. Further, the researcher would discuss about the role of the government in this particular market. Different Market Structures As mentioned by Dunne et al. (2013), the entire business of an economy runs under four main types of market that include Pure Competition Market, Monopolistic Competition Market, Oligopoly Market, Pure Monopoly Market. In pure competition market, broad range of sellers is involved for selling same products, and thus they confront high competition. Along with this, large number of buyers is also involved. In this particular market, the product price is set by the interaction of the market demand and marker supply. The monopolistic competition market defines a imperfect competitive market where many of sellers as well as buyers are engaged. In this market, the products sold by the sellers can be differentiated from one another. The goods and services produced by the producers are not perfect substitute (Frank, 2013). Mohammadi et al. (2016) added that the firms in oligopoly market confront relatively less competition as small number of sellers are engaged, along with large number of buyers. The oligopolists have the power over the product price, thus the consumers are charged higher price. On the other way, the pure monopoly market defines the market where single seller and many buyers are involved. The researcher has discussed these economic markets as these four markets influence the economy of Albany most. Further, the researcher is going to separate them by their major characteristics. The market characteristics of Pure Competitive Market: In this certain market, the produced goods and services are identical. Thus, the sellers do not have the option to offer different or better products to the consumers. All the sellers have equal power over the market as they are offering same products against same price. There are Low barriers for the new entrants in this market. The new firm can easily enter into as well as exist from the market. The price of the products is set as per the consumers willingness to pay for particular product. Though, single buyer cannot influence the market price (Makowski, 2014). The market characteristics of Monopolistic Competition Market: In monopolistic competition market, the produced goods and services are similar, but not identical. More specifically, the firms sell almost similar products which can be slightly differentiated from one another. Another major characteristic of this market is the extensive knowledge of product price and technology. The consumers have the information about alternative prices as well as the product differences. On contrast, the sellers have the information about the price the other firms charge to the consumers. Along with that, they use almost similar production techniques (Feenstra, 2016). The market characteristics of Oligopoly Market: The oligopolists produce either identical products or differentiate products. In the oligopoly market, some sellers are there who sell identical products, likewise perfect competitive market. On the other way, some sellers sell products that are slightly differentiated from one another, like monopolistic competition. The identical products in the oligopoly market are the intermediate goods such as petroleum, aluminum etc sold to many of the industries. On contrast, the differentiate products are the final goods sold to the consumers for personal consumption. Further, the small firms are dominated by the small number of large firms. The firms have more power of market control in comparison to the monopolistic competitive firms (Sung et al., 2016). The market characteristics of Pure Monopoly Market: In the pure monopoly market, there is a single seller who is the sole source of the produced goods and services. No close substitutes are available in the market. Some barriers are there that prevent its competitors to inter in the market. The barriers include legal barriers, control of resources, and economies of scale etc. Among this, the legal barriers including licenses issued by government, patents, copyrights etc. are the most powerful constraint (Baldwin Scott, 2013). Real life example of a market structure in local city After illustrating all the market structure along with their major characteristics, the researcher brings out an example that would help the mayor to understand the market structure. The fish market in Albany can be considered under perfect competitive market. Large number of seller is engaged in the market to sell the identical product. At the same time, large number of consumers is there with perfect information about product price and product quality offered by the market. Thus, no seller can charge higher or lower price than others. They do not have the power of attracting consumers by the product price or product quality. Further, the existing fish sellers do not have the power to prevent other fish sellers to entering or quitting the market. New sellers who want to sell the same product (fish) can freely enter in the market. Presence of high entry barriers that leads long-run profitability It has been discussed before that in the perfect competitive market, no such entry barriers are there. No economic profit is made by any of the existing firms, as the price continuously decreases till the level of consumers willingness to pay. If one firm charges higher price than any of other sellers, the consumers will purchase from the seller who offers products at lower price. If there can be a stage where most of the firms exit from the market and few numbers of sellers remain in the market. They can charge higher price for making profit. In this situation, more firm are attracted and entry in the market. As a result, supply increases, and thus price drops, and will result zero economic profit (Koschker Mst, 2015). The highest barriers are present in the monopoly market. Thus, the monopolist can make the most profit in the long run compared to other market sellers. The demand curve of the monopolist is the market demand curve. No firms are there to compete with. If the monopolist sell products at lower price that could have been sold at a higher price, the marginal revenue curve will lie below the demand curve. In such case, for the elastic portion of demand curve, the lower price increases the total revenue. On contrast, in the inelastic portion, lower price decreases the total revenue. Thus, there is always a possibility of increasing total revenue by raising the price and lowering production. The monopolist will lower the price until marginal revenue equals marginal cost, which denotes the profit maximizing point. Thus, the monopolist will able to make long run profit. Competitive pressure in market with high entry barriers Moving on, the researcher is going to demonstrate the competitive pressure presents in the market along with high entry barriers. Along with the monopoly market, high entry barriers are there in the monopolistic competitive and oligopoly market as well. The firms do not face any competitive pressure until they provide any strong response to the new comers (Claessens Laeven, 2016). The researcher has considered an example to explain it in a better way to the mayor. Suppose, a firm has strong place in the market of Albany; it produces safe and long lasting small batteries and sell them at reasonable price. The firm who wants to enter in the market has to produce such batteries which can be proved better from every way. The battery should have to be longer lasting and the price should have to equal or lower than the available battery price. Thus, the new firms confront high competitive pressure along with the high entry barriers. Price elasticity of demand and its impact on market As per the statement of Da-Graa Masson (2016), Price elasticity of demand measures the relationship between the change in price as well as the change in quantity demanded for any specific goods or services. It explains the market situation of price sensitivity. The researcher explains to the mayor about the impact of the price sensitivity on each of the above mentioned market. Price changes in the perfect competitive market do not affect the market too much. More specifically, the small change in price has no impact over the demand of the goods and services that are available in the perfect competitive market. A drastic change in price would reduce the quantity demanded for the products. On the other way, if the available materials become restricted or expensive, it will increase the price, and hence affect the demand of the market (Kirzner, 2015). In case of the monopolistic competitive market, a large number of firms are there with low degree of monopoly power. Though, the price hike in this market will retain few of the buyers. On the other way, price fall will create more demand in the quantity of any particular product against its price (Campbell, Goldfarb Tucker, 2015). Few competitors are there in the oligopoly market. A drastic change in product price will drive the firms into either monopolistic competitive market or monopoly market (Ji, Chang Huang, 2016). In case of monopoly market, the seller is the sole source of the produced goods and services. Therefore, price change in the monopoly market results decrease or increase in the total revenue of the single firm. Too much decrease in the revenue will result closure of the firm. On other way, increase in price will allow the firm to generate more revenue as well as profit in the long run (Indounas, 2016). Role of government in each market structure The government of Albany plays an important role in each of the market and influences their pricing ability for their produced goods and services. The researcher elucidates the major role of the government to make the mayor understand the influence factor of price changes. Through implementing tax, government controls the prices of the products. If government imposes more tax on a product, the price of the product will increase. In case of elastic product, the demand for the product will decrease as the price increases. On the other way, if the product is inelastic, the demand will remain same. For example, the cigarette can be considered as inelastic product, without which the addicted person cannot live. Further, government imposes new regulations that affect the production as well as the sale of the products (Wang et al. 2012). Effect of international trade According to Antrs Yeaple (2013), the international trade put impact on each of the market in a different way. In context of trading, the import of a particular goods make fall in the price of its substitutes or identical products available in this country. The firms of Albany will reduce the product price because these are available at a cheaper rate due to importing those from another nation. The researcher can support the concept of the effect of international trade with an example. For example, the call centers are outsourced in order to reduce the expenditure of the company. At the same time, it hampers the job growth of the country. As a result, the market structure and market economy of the country is affected in terms of international trade. Conclusion After conducting the study, the researcher concludes that the four major market economies constitute different market characteristics. Through providing real life experiences, the researcher helps the mayor to relate the market characteristics with the real world. It further concludes that the monopolist make high amount of profit in the long run, whereas long run profitability is not possible in the competitive market. Some of the new firms are there who confront competitive pressure along with high entry barrier, to enter a market. Moreover, the mayor has come to know that price elasticity of demand affect each of the market in different ways. Lastly, the researcher provides the concept of the affect of government intervention and international trade in the economy. Reference List Antrs, P., Yeaple, S. R. (2013).Multinational firms and the structure of international trade(No. w18775). National Bureau of Economic Research. Baldwin, W., Scott, J. (2013).Market structure and technological change(Vol. 18). Taylor Francis. Campbell, J., Goldfarb, A., Tucker, C. (2015). Privacy regulation and market structure.Journal of Economics Management Strategy,24(1), 47-73. Claessens, S., Laeven, L. (2016). Competition in the Financial.Financial Development and Economic Growth: Explaining the Links, 66. Da-Graa, T., Masson, R. (2016). Market demand of smart but uninformed consumers rotates counterclockwise with better information: surprising welfare effects.Applied Economics Letters,23(1), 11-14. Dunne, T., Klimek, S. D., Roberts, M. J., Xu, D. Y. (2013). Entry, exit, and the determinants of market structure.The RAND Journal of Economics,44(3), 462-487. Feenstra, R. C. (2016). Gains from Trade Under Monopolistic Competition.Pacific Economic Review,21(1), 35-44. Frank, K. (2013). Risk, uncertainty and profit. Indounas, K. (2016). The Effect of Market Structure on Pricing Behavior of Industrial Service Firms. InMarketing Challenges in a Turbulent Business Environment(pp. 401-416). Springer International Publishing. Ji, L., Chang, J. J., Huang, C. Y. (2016). Unionization, market structure, and economic growth.Southern Economic Journal,82(3), 935-951. Kirzner, I. M. (2015).Competition and entrepreneurship. University of Chicago press. Koschker, S., Mst, D. (2015). Perfect competition vs. strategic behaviour models to derive electricity prices and the influence of renewables on market power.OR Spectrum, 1-26. Makowski, L. (2014). Perfect Competition, the Profit Criterion, and the Organiza-tion of Economic Activity.Journal of Economic Theory,22, 105-25. Mohammadi, A., Shirazi, A., Talebnezhad, A., Javaheri, A., Javanmardi, E. (2016). The combination of system dynamics and game theory in analyzing oligopoly markets.Management Science Letters,6(4), 265-274. Sung, H. C., Liao, S. L., Yang, J., Yuan, C. (2016). Earnings Target, RD Investment Choice, and Oligopoly Competition.Transylvanian Review,24(5). Wang, C., Hong, J., Kafouros, M., Wright, M. (2012). Exploring the role of government involvement in outward FDI from emerging economies.Journal of International Business Studies,43(7), 655-676.

Supplemental Essay Helps With Fit Supplemental Essay Samples

Supplemental Essay Helps With Fit Supplemental Essay SamplesIf you are in need of essay help, then you will certainly want to use fit supplemental essay samples to increase your odds of getting a good grade. This is an especially good idea if you are a first time writer or you don't have much experience in writing.There are hundreds of topics you can write about for your supplemental essays. Here are a few of the most popular examples:Writing about your childhood and growing up. The key here is to include a lot of detail and do a lot of research. Make sure you highlight how your life has changed due to some situations that came up in your childhood such as your parents divorcing or your father passing away.Writing about a major turning point in your life. A good example would be when you graduated from college. You may have gone through a lot of stress, but you know now that you made a big decision and that it's time to move on.Writing about something that you have experienced in you r current life. For example, if you are currently working, then you should include an essay about how your work has impacted your life.Speaking from experience is an excellent way to make sure your essay is well written. It's important to think of what you would say to someone if you were speaking to them in person. As you write, you should think of your outline and you should have a lot of questions ready to ask your fellow writers.Writing about some situation that happened recently can also be helpful. This could be during your vacation or during a time that was really tough. Make sure that you include details in the essay such as specifics about your surroundings or events that happened in between writing time.Use a combination of fit supplemental essay samples and research when writing your essay. Focus on what your main topic is before you even start writing. This will help you keep your head straight and not end up losing your focus as you read through the story.

muslim vs christanity Essays - Prophets Of Islam,

Christianity and Islam are two of the world?s largest religions. The two are different in beliefs but are similar in origin. Like many religions both Islam and Christianity claim to be the one and only true way to God. Although Islam and Christianity differ in major ways, they also share some similarities. Islam teaches that in order to achieve true peace of mind and surety of heart, one must submit to God or ?Allah? and live according to His revealed Law. Being a Muslim requires willful submission and active obedience to God and living in accordance with His message. Conversely, Christianity does not teach absolute submission to God, but teaches that man is sinful and can never inherit eternal life in the presence of God as a result of the sins of our first parents, Adam and Eve, as well as our own personal sin. Therefore it became necessary for God to become man in the person of Jesus Christ, who as the Son of God was sinless and unblemished. His purpose was to suffer and die in atonement for the sins of all whom accept his sacrifice for sin. Throughout History there has been some conflict between both religions, one of the major events is called the Crusades. The First Crusade was from 1096 to 1099. They were Christian military expeditions and religous wars proclaimed by the people. The purpose of the Crusades was to gain and keep control over Palestine from the Muslims. Palestine was also called the Holy Land because Jesus lived there. Alexius Compenus was a new ruler that came into power in Byzantium in 1081. Constentinople was in danger because the Turks threatened them, so Alexius first called for help to Pope Urban ll who presented a ten-day meeting telling people about Alexius's problem and that they needed to go to war with the Turks, which led to the first Crusade. The Crusades were organized mostly to recover or defend territories that Christians strongly beleived belonged to them by right, such as "The Holy Land." Palestine lay along the eastern coast of the Mediterranean sea, and Muslims had taken control of it from the Christians. In the first Crusade, Christians recaptured Palestine, but in the later Crusades, they fought to protect Palestine or recover parts of it that had been lost to Muslim forces. After reviewing documents of crusaders it is easy to see that most went to battle because they were easily persuaded to do anything for God, they felt a true hatred for the others, as well as the sense of importance and nobility the soldiers gained from going to battle. Crusades played a major role in the High Middle Ages and even though they were not terribly successful, they still are very famous historical figures. This act of God was to help deal with the internal and external conflict that the Roman Church was having in trying to remain in power. However, it also displays that people of this time were very susceptible to persuasion and even propaganda. This period of time truly emphasizes how far people will go in order to obtain power.

Morries Aphorisms essays

Morries Aphorisms essays Using Morrie's Aphorisms as Teaching Tools No bubble is so iridescent or floats longer than that blown by the successful teacher. Sir William Osler (1849-1919), 4 Oct. 1911, Glasgow (quoted in: Harvey Cushing, Life of Sir William Osler, vol. 2, ch. 31, 1925). Mitch Albom wrote Tuesdays with Morrie as a final tribute to his old college professor, Morrie Schwartz, who intended that his death should be his "final thesis." Grim and fascinating, Professor Schwartzs courage in the face of a painful death is truly inspiring. The lucidity and wisdom which Professor Schwartz gained over the years became increasingly pronounced and focused as he contemplated his life and imminent death, as well as his place in the Cosmos while his frail body melted away through A.L.S. (Lou Gehrig's disease). This paper will discuss five of Professor Schwartz aphorisms (or proverbs), which would facilitate learning in subject- specific -and other educational venues. So many people walk around with a meaningless life. They seem half-asleep, even when theyre busy doing things they think are important. This is because theyre chasing the wrong things. The way you get meaning into your life is devote yourself to loving others, devote yourself to your community around you, and devote yourself to creating something that gives you purpose and meaning. (emphasis added) (p. 43) Professor Schwartzs analysis of the "meaning of life" is particularly appropriate for teaching philosophical views and sociological concepts. Since time immemorial, man has contemplated why he is on the Earth and what his place is in the Greater Scheme of Things. While students rush through the educational process in a pinball-like attempt to learn what they need to thrive and survive, they frequently overlook those aspects of their education, which are the most important. When people become self-actualized,...

Influence of Technology on Society Essay Example | Topics and Well Written Essays - 1000 words

Influence of Technology on Society - Essay Example According to the paper findings the impacts of technology are both negative and positive. On the positive side, technology has make things easier in the way people do activities, keeps time, boosts production, and abridges communication, enhanced educational settings and enhanced health care. On the negative side, advancement in technology has made people lazy as most users of technology are so dependent on new advanced tools. The implication is that the laziness has led to reduced innovation, influenced the environment due to increased pollution that has adverse impacts on the Ozone layer resulting in global warming. Technology has also led to increasing risks to health as technology users spend less time on exercise. Regarding education, learners are now more dependent on computers and calculators to solve simple tasks, which mains that they cannot teach their brain to resolve easy tasks that makes them inactive in classrooms. However, the following are positive effects of technolo gy that have transformed lives.This discussion highlights that  advancements in technology have assisted businesses and companies save time and production expenses that have been a benefit to all enterprises as companies manage such improvements to gain competitive advantage.  Advancement in technology in health care and medicine has assisted in saving countless innocent lives. Human health sciences and medicine have improved significantly.

Fish Cheeks Essay Example | Topics and Well Written Essays - 750 words

Fish Cheeks - Essay Example Amy Tan also demonstrates the power of culture and the need to be acceptable. She wanted a slim American nose, and she was terribly embarrassed by her family's distinctively Chinese ways. This is because she grew up in America and had been immersed in its culture, and has come to believe, at least subconsciously, that the American way is the "correct" way. The essay provides us with an honest depiction of the author's youthful self. The story dwells on the ever present clutch of cultural norms and the pressure of "acceptability". I felt invited to consider how the totality of her life was like back then, when she so desired to be American and fit in, while the unfortunate truth was that she was trapped with her "unmannered" family, who became a source of embarrassment to her. The Chinese idea of table manners is burping after a meal to show appreciation. "At the end of the meal my father leaned back and belched loudly, thanking my mother for her fine cooking. "It's a polite Chinese custom to show you are satisfied," explained my father to our astonished guests. The minister managed to muster up a quiet burp. I was stunned into silence the rest of the night." This is totally at odds with the American idea of polite discreteness. She found that her favorite dishes were becoming a source of her embarrassment in front of Robert, particularly when her father "poked his chopsticks just below the fish eye and plucked out the soft meat. "Amy, your favorite," he said, offering me the tender fish cheek. I wanted to disappear. " We can imagine the story having been told in a frenzied and excited manner the reflects how Amy felt back then, but she is reflective and calm throughout the story. She looks back at these events and simply tells the story without implying that she still has leftover emotions from these episodes. She was embarrassed, but not anymore (a bit regretful perhaps). Amy tells us that she has learned from this experience. The reader is rewarded with a little moral, and a little irony at the end. "You must be proud you are different. Your only shame is to have shame." her mother had told her. Now Tan is perfectly honest about her family's "Chineseness," which she used to perceives as shortcomings. We get the idea that she now has a more mature and accepting attitude towards her family. She now realizes that during that Christmas dinner, perhaps the only person who did not act honestly was

Procurement Purchasing Supplier

Procurement Purchasing Supplier After having investigated briefly in general the concept of procurement and the emergence of the concept of procurement , it is imperative for us in this chapter to delve in detail the analysis of the concept of procurement , the various theories which have been predicated at the international level and their relevance for our study under investigation . We would also have to critically scrutinise how the different models of procurement effectiveness measurements can help us in our analysis to delve in greater detail the relevance of procurement from the perspective of SOM . It is important that we have to undertake a holistic approach in the investigation of procurement practices and procurement effectiveness in our literature Review chapter for this forms the foundation of our secondary research. Our primary research which would be delved in detail in the subsequent chapters would be further developed on the strong foundations of this chapter. In the final analysis we would be util ising in adequate measure the concepts from the secondary research as they develop in this chapter and couple it with our derivations from primary research to gain a greater in-depth understanding of procurement practices in Shell Oman and hypothesize relevant recommendations and remedial solutions for bringing about effective changes in the present operational systems at SOM Definition of Procurement Relevance : it is important for our study to understand clearly the meaning and exact phraseology behind procurement for the purposes of investigation of procurement practices in SOM . Since Procurement is an extremely broad concept which has applicability from strategic , operations and tactical level , various definitions would have to be looked into and strategically decipher their level of applicability for our purpose of investigation . Procurement, purchasing, and supplier management are all terms used extensively. They may mean the same or sometimes may have significant differences. Since the term procurement covers many areas, from operational to strategic levels, Knudsen (1999) has summarized the different terms, used for acquiring good and services in the following table. Level Term Meaning Strategic Supply Management To be aware of the strategic impact of procurement and fully exploit it by formulating a supply strategy Tactical Procurement To satisfy internal demands with external sources which adhere to objectives set at the strategic level Operational Purchasing The minimum activities required to obtain external products or services that result in invoice from an external source Timo et al (2005), argued in their document, the quantitative definition of purchasing is not accurate and suggest to a broader scope of purchasing, adding pensions, other personnel costs, financial expenses and increase in assets within the scope. They define Purchasing as: â€Å"Invoices or payments based on exchange of physical objects, services or rights†. There are two basic types of purchasing in the business world: (1) Purchasing for resale and (2) purchasing for consumption or conversion (Dobler and Burt, 1996). Purchasing for resale is performed primarily by merchants. Industrial buyers buy materials, services etc. for manufacturing companies, service business, institutions, utilities, and various government agencies. Other definitions of Procurement are as follows: Procurement is the acquisition of systems, goods or services at the best possible total cost of ownership, in the right quantity, at the right time, in the right place for the direct benefit or use of the governments, corporations, or individuals generally via, but not limited to a contract. (Project Management Body of Knowledge, 2000) Procurement is the process of acquiring goods, works and services, covering both acquisition from third parties and from in-house providers. The process spans the whole life from identification of need, through to the end of a service contract or the end of the useful life of an asset. It involves options appraisal and the critical â€Å"make or buy† decision which may result in the provision of services in-house in appropriate circumstances. (The Procurement process The Buyers Magazine, 2000). In the context of a procurement process, obtaining â€Å"best value for money† means choosing the bid that offers â€Å"the optimum combination of whole life cost and benefits to meet the customers requirement†.† (National Procurement Strategy for Local Government in England, 2003) The Importance of Procurement Relevance : The importance of procurement in the changing face of corporate scenario of today is all the more important as there is a greater strategic interface between the procurement department and the other key departments within functional global corporate entities . In this regard the study of importance of procurement as a terminology would help us in understanding and appreciating the strategic shift in focus of procurement operations from tactical to a crucial strategic level . This would help us in highlighting the importance of procurement practices in organisations such as SOM under investigation Many authors wrote about the importance of procurement function in todays organization and how it can impact the bottom line. Different terms are used in the literature, Procurement, Purchasing or Supply management but they all apply to the process of acquiring goods and services for the business, which account for a huge corporate expenditure. The following main objectives show how the procurement function can contribute to a companys competitiveness (Axelsson et al, 2005): †¢ Cost optimisation (e.g. lower transaction costs and overhead costs) †¢ Asset utilisation (e.g. outsourcing and inventory management) †¢ Value creation (e.g. process/products development and quality improvement) According to Procurement strategy council, the procurement function today is viewed as an important component of a firms strategic arsenal, the modern purchasing department can reduce a firms operational expenditure through streamlined purchasing and price reductions for goods and services. The article discuss that a smart purchasing can reduce costs 20% to 30%, freeing up funds to be used elsewhere. The realization that purchasing can impact bottom line saving has elevated procurements strategic importance. (Procurement Strategy Council, 2001) Improving the Bottom Line Reductions in Procurement Costs Directly Affect Net Income Income Statement (in millions US$) Initial 3% Reduction in OR Revenues $1000$1000 Operating Resources (OR) $350 $339 Direct Materials$220$220 Wages, Salaries, Benefits$200$200 Depreciation$110 $110 Taxes $60$60 Net Income After Taxes $60$71 Reducing purchasing costs translates directly into bottom line savings. By lowering OR costs by $11 million, a firm directly raises its after tax income by the same amount. Source: (Procurement Strategy Council, 2001) Further, van Weele describes in his book, ways that procurement can contribute to the companys competitiveness. They play a critical role in quality assurance by working with suppliers to ensure higher quality standards regarding incoming goods and services. Procurement can also effect how quickly a firm reacts to changes in demand, through increased involvement in supply chain coordination and inventory management. In addition, by reducing purchasing costs the function can contribute to substantial price reductions of the end product. The leverage effect of purchasing can be considerable depending on the purchasing-to-sales ratio and the capital turnover ratio. (van Weele, 2005) Nowadays companies outsource most of their activities, increasing their reliance on the competitiveness of their suppliers. . (J. Hamilton, 2002). As a support case study, the case of Toyota cars (Japan), can be highlighted, wherein 83% of all activities are outsourced form various global suppliers. (Toyota, 2000). This makes the process of procurement quintessential and in fact the most important, in todays business world. If a company procures the right quality products, at the right price, with the right delivery schedule, only then and then alone can it remain productive and competitive in todays environment (Ian McMillan, 2005) This shows that if the procurement process is not right, then the company product, the company image, competitiveness et al would surely take a dive. According to van Weele, â€Å"This is why management has become increasingly aware of the purchasing function†. Once regarded as a reactive activity, the procurement and sourcing process at leading firms is at the forefront of responding to and creating change. (Procurement Strategy Council, 2001) Within the past year, several new research initiatives from different relevant perspectives prove persuasively that excellence in procurement can lead to a host of proven, quantifiable business benefits (Procurement Strategy council, 2001). Lower operating costs, higher ROI, and a direct contribution to the bottom line are among the principal advantages that have been documented. The increased impact from purchasing on corporate performance is supported by a study recently conducted by IBM Business Consulting Services. In the study, called The 2005 Chief Procurement Survey, purchasing managers and other people in leading positions at companies around the world were interviewed concerning the current and future role of purchasing. Many reasons to the increased importance are pointed out, for example the growth in outsourcing, corporate restructuring and increased supplier value adding and risk. (The 2005 Chief Procurement Survey, 2005) Another study, conducted by business consultancy Archstone Consulting, found that nearly 90 percent of participants agreed that procurement plays a strategic role in the competitiveness of their organization, but needs to be further elevated in the organizational hierarchy to be truly effective. (Supply and Demand Chain Executives, 2004) The best-practice companies truly understand the power of procurement, says Pierre Mitchell, a director at The Hackett Group, which recently concluded an in-depth research into the procurement practices of more than 300 companies, found that world-class organizations generate 133 percent greater return on their investment in procurement than the average companies. The bottom line is that world-class companies continue to take a very different view of procurement, looking at it as an investment rather than as a cost center, says Mitchell. This is how they generate the millions of dollars in additional savings that other companies dont see. (Quinn, 2005) Ready or not, procurement is moving to center stage, with top billing on the corporate agenda. At companies around the world, CEOs and boards are counting on procurement initiatives to keep their businesses favourable positioned in todays intensely competitive marketplace. (The Global CPO Survey, 2005) To understand the new found omnipotence of the procurement process in organisational hierarchy, it is imperative to understand the stages of development of the process, right from its inception (Quinn, 2005). Historical Development Relevance : The historical development of procurement would help us to analyse the changing face and role of global procurement practices and understand critically how over the years the concept of procurement has begun to occupy the one of the centre stages for corporate performance . As would be revealed in this section we would find that procurement can no longer be visualised as an isolated entity but has to be strongly viewed as an inherent and integral part of the process of company operations. The historical development of procurement would add on a chronological dimension to understand the growing importance of procurement over the past decades . In the early 1970s, Ansoff, opined that the purchasing process played a passive role in the business organization and did not have any strategic role. (Ellram and Carr, 1994). The 1973-74 oil crisis and related raw materials shortages drew significant attention to the importance of purchasing. However, top management and purchasing professionals, did not react to enhance the role of purchasing in corporate strategy until when Porter came with his famous five force model that shape the competitive nature of industry, identified buyers and suppliers as two of the five critical forces. Thus, the strategic importance of the supplier and the firm as a buying entity began receiving recognition in the mainstream strategy literature. (Ellram and Carr, 1994). Since then 1980s the attitude toward procurement was changes and evolving to a more strategic level. According to the procurement strategy council article, the procurements movement from a tactical to a more strategic role in corporate operations is predicated on a broader shift in corporate strategy. Before World War II, purchasing departments accounted for barely 20% of corporate expenditures. Today, purchasing departments are responsible for 50% to 70% of corporate expenditures. This explanation is supported by Monczka et al. First, that the role of purchasing is presently being reshaped in order to fit the modern economy. This is related to the increasing globalisation, technology development and changing consumer demands. Another conclusion, according to Monczka et al, is that purchasing must continue its integration with customers, information systems, operations etc. (Monczka et al, 2000) The following table shows a compilation of strategic and operation tasks carried out in the procurement function. Strategic Procurement Identify necessary capabilities to match the customers needs regarding flexibility, innovation, agility, quality, responsiveness, cost levels and price levels Assess ones own capabilities (Knowledge, technology, capacity, competence, long term importance, total cost) Assess supplier capabilities (knowledge, technology, capacity, competency, long term imprtance, total cost, type of market, localisation, and substitutability) Model cost drives for items purchased Model Single/ Multiple sourcing effect on total cost Model how supplier relationship affect total cost (cost benefit of engaging in a close supplier relationship) For close supplier relationships share information and knowledge and make relation-specific investments Procurement Process Identify needs Conduct market analysis Send out and expedite RFx Do Background review Negotiate contracts and select suppliers Purchase order fulfilment Monitor supplier performance Internal Tasks Analyse corporate spending Parts bundling Aggregated corporate expenditures Develop relationships with internal customers Reduce maverick buying and promote compliance Disseminating procurement relation information External Tasks Scan for innovations Monitor, disseminate and stimulate Develop new sources Foster external capabilities Source Strategic Procurement Council, 2001. Value Improvement (Value Based Procurement The Organisational Quintessential) Relevance : It is important for us to understand the concept behind value improvements or value based procurement . The fact that tangible and intangible values could be quantified to procurement products and services makes the study of procurement systems all the more interesting for definitive mathematical extrapolation of the relevant results. Value systems and the ability to attribute value systems makes the procurement operational systems multidimensional and unique . Furthermore this is a system which could be aptly applied for effecting improvements in procurement systems for SOM, therefore a thorough investigation of the relevant concept is deemed important for our investigation . To be successful in business, we need to satisfy our customer by providing them with something they perceive as value. Since we are dealing with internal customers and suppliers, the concept of value becomes vital, which is directly linked to customer satisfaction. High customer satisfaction means their needs are met at high level. The customers will be satisfied if the product or service provides them with value. The term ‘value is used in every day business language however it is often misused and misunderstood. The concept of value has many definitions (Zeithaml, 1988; Anderson et al., 1993; Monroe, 1990; Gale, 1994; Woodruff, 1997) but generally they are not distinct. Common themes throughout these definitions are that (Dumond, 2000): Customer value is linked to the use of a product or service, thereby removing it from personal values; Customer value is perceived by the customers rather than objectively determined by the seller; and Customer value typically involves a trade-off between what the customer receives (e.g. quality, benefits, worth) and what he or she gives up to acquire and use a product or service (e.g. price, sacrifices). The concept of value is important for this study since our purpose is to illustrate value improvement initiatives to enhance the current procurement system with Shell Oman Marketing. According to Hill (2005), value can be classified under two headings: Use Value: The properties and qualities that accomplish the function of service or product. Esteem value: the properties, features or attractiveness that causes people to want to own or use it. Value, therefore, consists of a combination of use and esteem properties related to the cost of providing them. However, the measure of value added is directly linked to customer satisfaction. The measurement of procurement activities based on traditional efficiency report, and short terms savings doesnt support value base procurement. In order to reflect shift in the focus in procurement activities, new measurement techniques must be target at those activates which reflect value to the stakeholder. (Butler, 1995). An interesting study conducted by Dumond (1994) about creating a value base procurement. Based on his finding, many firms the operating environment does not support value-based purchasing. Senior management plays a critical role in developing an environment that will support and encourage value-based purchasing, the following steps are recommended: Focus individual purchasers on customers needs and identify the value-adding processes Develop a performance measurement system that emphasizes quality, process improvement, and customer satisfaction Integrate purchasing into the firms communication system (elevate if needed) Educate-not only individual purchasers but also their customers. 2.4Value Analysis Framework To analysis value in a system, it will be useful to the use the value analysis procedure, which is discussed in Terry Hill book of Operation Management (2005). The steps involved are: Select the service or product Gather information about it Analysis its function and its value for money Generate alternative ways to provide the same function through speculation and brain-storming Assess the worth of these ideas. Decide what is to be done Implement the decisions Evaluate the result EFQM Excellence Model Relevance : EFQM system analysis is extremely important for our investigation because EFQM model based on European models of operational management and Quality management help us through an exhaustive interface between strategic inputs and outputs to measure the effectiveness of procurement systems and delve on the findings to derive adequate strengths and measures for any procurement operational system . Since our investigation is essentially based on finding the points of improvement in SOM and capitalising on the strengths an understanding of the relevant model is highly warranted for our investigation and proposed study . Moreover since EFQM model visualise the operational mechanics of procurement system from multidimensional angles it is imperative for us to investigate the mechanics of operation of EFQM model in sufficient details for finding the relevant applicability for our study under investigation . The European Foundation for Quality Management (EFQM) is widely discussed in the literature and many organizations have applied it as a tool for assessing all aspects of an organisations activities and results. According to EFQM, the model is intended to promote continuous improvement and is an aid to effective benchmarking. Excellence Model was introduced at the beginning of 1992 as the framework for assessing organisations for the European Quality Award. Now it became the most widely used organisational framework in Europe and considered as the basis for the majority of national and regional Quality Awards. 2.4.2Benefit of EFQM The EFQM Excellence Model  is a  business model tool  that can be applied in many different ways: As a business model for being able to assess independently the competency of the organization by the organisation itself. As a measure to benchmark other organisational functioning and strategy. As an improvement tool for highlighting areas to improve. As a common denominator, standard measurement scale or a common vocabulary. As a structural guide for the management of any organisation. The fundamentals of the EFQM Excellence model are based on nine criterions which are cannot be prescribed and such are practical in nature and application. Five of these are Enablers and four are Results. What a particular organisation does, those factors qualify as ‘Enablers†. The achievement of an organisation qualifies as the Results Criterion. Results are caused by Enablers and Enablers are improved using feedback from Results. Excellent results with respect to Performance, Customers, People and Society are achieved through Leadership driving Policy and Strategy that is delivered through People, Partnerships and Resources, and Processes. (Procurement modelling-a discussion, Harvard Review Press, 1996) The Fundamental Concept of EFQM Excellence Model are: Results Orientation Every organisation should look for the outcome of â€Å"enablers† to delight customers. . Customer Focus Excellence is creating sustainable customer value. Leadership and Constancy of Purpose Excellence is visionary backed by inspirational leadership, with constancy of purpose. . Management by Processes and Facts Excellence is managing the organisation through a set of interdependent and interrelated systems, processes and facts. People Development and Involvement Excellence is maximising employee contribution through employee development and involvement. Continuous Learning, Innovation and Improvement Excellence is challenging the status quo and bringing change by learning and innovation. Partnership Development Excellence is developing and maintaining value-adding partnerships. Corporate Social Responsibility Excellence is exceeding the minimum regulatory framework in which the organisation operates and to strive to understand and respond to the expectati ons of their stakeholders in society (Harvard Review Press, 1996) 2.5 Procurement Value Improvement Framework (The Shell Oman perspective) The structure of literature is in line with the value analysis framework. First, we identified the service we want to investigate, which procurement activities in Shell Oman Marketing. Secondly, we provided information about the procurement function in Shell Oman and its structure. Thirdly, we use Soft System Methodology (SSM), which is strong in analyzing a holistic situation and capture qualitative data. The SSM will only be used to develop understanding of the challenges exist in the current system. Unstructured Interview is strong in determine many qualities aspect which will be useful in revealing out issues and problems that other method of research can meet this object effectively. Therefore, to get different perception, it will be useful to carry out a survey through an interview with five key internal business stakeholders to analysis the strength and weakness of current contract and procurement activities. Fourthly, we dig in the literature and journals to search for ways o f adding value improvement to procurement function. Plus, interviews with two large companies in similar field to identifying the industry best practice in procurement function. Fifthly, an analysis of all the procurement best practices generated from above stage, which will be discussed in chapter 4 in detail. Sixthly, in chapter 5, based on the analysis, we will recommend the way forward. Unfortunately, this research will be limited at the recommendation stage and will not have the opportunity to implement and evaluation the result. 2.6The Purchasing Maturity (Organisational Stratagem) We can observe that the purchasing role in providing added value has evolved and has been modified along with the importance and the place taken by purchasing in organizations. In figure 3 the main values added by purchasing are related to each of the evolution stages towards purchasing maturity (van Weele, 1998). In the first stage the main value added by purchasing is by assuring the continuity of the supply. In the second stage the already purchased items have an increased importance in companys costing cost structure. The role of purchasing then left is to minimize material costs and improve /up the bottom line. Stage 3 would center on co-ordination between various departments .The main values added by purchasing are greater compliance with pre-negotiated contracts, uniform buying policies and systems and capturing the benefits from internal co-ordination. The next stage lays stress on use of inter-functional teams and the reduction pf the total systems costs satisfaction of the internal customer seems to be the main focus of purchasing then. The supply orientation stage envisages the selection of suppliers on strategic company guidelines, requirements, long-term relationships design, supplier network management and early involvement in the new product development process. In the final s tage the main goal is to design the most effective and efficient value chain possible to serve the end customer. This last stage is characterized by an extensive use of cross- functional supplier development teams and a close collaboration on advance technology with suppliers. (Telgen Sitar, 2001) 2.7 Categories of Value Added Procurement The literature review highlights five main categories of value added procurement which are representative and important for every organization: Better contracts Improved purchasing efficiency Customer satisfaction (improved quality and service) Closer and more cooperative relationships with suppliers Reduced costs, improved quality and increased time to market resulting from an early involvement of the purchasing department in the new product development process (NPD). The first four categories of values added are based on Leenders and Schiele (1999). Basically, the researcher took one aspect from each of the above categories of value added. The role of the purchasing department should be considered from all possible angles and viewpoints. There is an increasing contribution of the purchasing department in the new process development in todays organisations, with specific and special interests in -the contribution of the purchasing department in the areas of quality, cost and time to market resulting from an early involvement of the purchasing department in the NPD process. The Resource Based View of Procurement Relevance : The analysis of this model for procurement is important for adding diversity to our investigation of procurement systems and their mechanics . Resource based view of procurement is one of the important views for procurement practices from the global perspective especially from the point of view of competing firms in highly dense and competitive markets , where because of oligopoly of procurement practising firms each firm would have to build a set of unique identifiable resources to capitalise on a