Human Resource Challenges and Practices in IT Industry

Proceedings of the 5th National Conference; INDIACom-2011 Computing For Nation Development, March 10 – 11, 2011 Bharati Vidyapeeth? s Institute of Computer Applications and Management, New Delhi Human Resource Challenges & Practices in IT Industry Rakesh S. Patil1, Varsha Patil2 and Pratibha Waje 3 1 Head and 3Lecturer 1,3 Sir Visvesvaraya Institute of Technology, Chincholi (Sinner) Nashik-422 101 (MS) 2 SNG Institute of Management & Technology, Rajgurunagar, Pune (MS) 1 [email  protected] com and [email  protected] om ABSTRACT The need of organizations for people and people for organizations will be more difficult to satisfy in the today’s competitive business environment. Organization’s competitive advantage could be generated from human resources (HR) and organization performance is influenced by a set of effective HRM practices. Software is a wealth and job creating industry, which has in just a few years, grown to US $ 1 trillion, employing millions of p rofessionals worldwide. The Indian software industry has burgeoned, showing a nearly 50% compounded annual growth rate over the recent years.Being a knowledge-based industry, a high intellectual capital lends competitive advantage to a firm. With a global explosion in market-opportunities in the IT sector, the shortage of manpower both in numbers and skills is a prime challenge for HR professionals. The related issues are varied indeed: recruitment of world-class workforce and their retention, compensation and career planning, technological obsolescence and employee turnover. This paper explains the HR challenges and practices in software Industries. KEYWORDS HRM, IT,HR Strategy, Services 1. INTRODUCTION The economy has transitioned to what some call „The Age of Information? an economy in which gross domestic product is increasingly dominated by services. Services permeate every aspect of our lives. We use transportation services; restaurant services; hotels; electricity and t elephones; postal, courier and maintenance services; services of hairdressers; services of public relations and advertising firms; lawyers; physicians; dentists; stockbrokers and insurance agents; movie theatres; and swimming pools . When we do buy goods, such as new car or a washing machine, we often still rely on services to keep them running and repair them when they break down.Services allow us to budget our time as well as our money. â€Å"The twentieth century was the age of machine; the twenty-first century will be the age of people† Buzzwords like globalization, empowerment, cross functional teams, downsizing, learning organizations and knowledge workers are changing the way of life of managers and the way they manage people. 2. STRATEGIES & POLICIES OF SOFTWARE INDUSTRIES: 1. Motivation & Retention of Employees Retention and motivation of personnel are major HR concerns today.People a Gartner group company specializing in management of human capital in IT organizatio ns has observed that the average tenure for an IT professional is less than three years. Further, the use of new technologies, the support of learning and training, and a challenging environment ranked higher than competitive pay structures as effective retention practices. Our own recent survey of 1028 software professionals from 14 Indian software companies, showed that while the professional gave importance to personal and cultural job-fit, HR managers believed that the key to retention was salary and career satisfaction.Money was a prime motivator for ‘starters', but for those into their third or fourth jobs, their value-addition to the organization was more important. Monetarily, offering ‘the best salaries in industry' is the minimum every company is doing, apart from performancebased bonuses, long-service awards, and stock options. Many organizations frequently conduct employee satisfaction and organization climate surveys, and are setting up Manpower Allocation C ells (MAC) to assign ‘the right project to the right person'.In fact, some are even helping employees with their personal and domestic responsibilities to satisfy & motivate their workforce! 2. Best Talent Attraction In a tight job market, many organizations often experience precipitous and simultaneous demands for the same kinds of professionals. In their quest for manpower, they are cajoling talent around the world. In such a seller's market, software companies are striving to understand which organizational, job, and reward factors contribute to attracting the best talent one having the right blend of technical and person-bound skills.This would mean a knowledge of ‘the tools of the trade' combined with conceptualization and communication skills, capacity for analytical and logical thinking, leadership and team building, creativity and innovation. The Indian software industry suffers from a shortage of experienced people such as systems analysts and project managers, and attracting them is a key HR challenge. 3. Compensation and Reward Increasing demands of technology coupled with a short supply of professionals (with the requisite expertise) has increased the costs of delivering the technology.This makes incentive compensation a significant feature, with the result that software Copy Right  © INDIACom-2011 ISSN 0973-7529 ISBN 978-93-80544-00-7 Proceedings of the 5th National Conference; INDIACom-2011 companies have moved from conventional pay-for-time methods to a combination of pay-for-knowledge and pay-forperformance plans. With the determinants of pay being profit, performance and value-addition, emphasis is now on profit sharing (employee stock option plans) or performance-based pay, keeping in view the long-term organizational objectives rather than short-term production-based bonuses.Skills, competencies, and commitment supercede loyalty, hard work and length of service. This pressurizes HR teams to devise optimized compensation package s, although compensation is not the motivator in this industry. 4. Increasing loyalty and commitment As with any other professional, what really matters to software professionals is selecting ‘the best place to work with', which is what every company is striving to be. The global nature of this industry, and the ‘project-environment' has added new cultural dimensions to these firms.In a value-driven culture, values are determined and shared throughout the organization. Typically, areas in which values are expressed are: performance, competence, competitiveness, innovation, teamwork, quality, customer service, and care and consideration for people. Flat structure, open and informal culture, authority based on expertise and ability rather than position, and flexi-timings are some of the norms software firms follow. The idea is to make the work place a ‘fun place' with the hope of increasing loyalty and commitment. 5.The Demand Supply Gap Shortage of IT professionals is global in nature and not peculiar to the Indian software industry alone. W. Strigel, founder of Software Productivity Centre Inc. (1999) has projected the shortage of software professionals to be one million by 2006. In fact, a survey reports that 75 per cent of US companies planned to reengineer their applications using newer technologies, but found that 72 per cent of their existing staff lacked the skills needed in these technologies, and 14 per cent were not even retrainable. Graph No. 1.Annual demand for IT Professionals For India, it is predicted that in the year 2004 itself, the IT sector will need 1,95,000 professionals. This trend will continue, and in the year 2010 almost 3,70,000 IT professionals will be required (Strategic Review Reports, NASSCOM 19962001). Consequently, recruitment managers are exploring new sources of IT manpower from non-IT professional sectors, as well fresh, trainable science graduates. 6. Integrating HR strategy with Business Strategy The strate gic HR role focuses on aligning HR practices with business strategy.The HR professional is expected to be a strategic partner contributing to the success of business plans, which to a great extent depend on HR policies pertaining to recruitment, retention, motivation, and reward. The other major areas of concern for HR personnel in this context are, management of change, matching resources to future business requirements, organizational effectiveness, and employee development. 7. Encouraging Quality and Customer focus Today? s corporate culture needs to actively support quality and customer orientation.With globalization and rapid technological change, quality is of utmost importance for the Indian companies, which earn most of their revenues through exports. Hence, the HR professional as a strategic partner needs to encourage a culture of superior quality to ensure customer satisfaction, the only real measure of quality of a product or service. To be competitive today, an organizat ion needs to be customer responsive. Responsiveness includes innovation, quick decision-making, leading an industry in price or value, and effectively linking with suppliers and vendors to build a value chain for customers.Employee attitudes correlate highly with customer attitude. The shift to a customer focus redirects attention from the firm to the value chain in which it is embedded. HR practices within a firm should consequently be extended to suppliers and customers outside the firm. 8. Value Addition training for up-gradation of Skills Rapid and unpredictable technological changes, and the increased emphasis on quality of services are compelling software businesses to recruit adaptable and competent employees.Software professionals themselves expect their employers provide them with all the training they may need in order to perform not only in their current projects, but also in related ones that they may subsequently hold within the organization. As observed by Watts Humphr ey, Fellow of the Carnegie Mellon University, â€Å"as software professionals gain competence, they do not necessarily gain motivation. This is because a creative engineer or scientist who has learned how to accomplish something has little interest in doing it again.Once they have satisfied their curiosity, they may abruptly lose interest and seek an immediate change†. And when the rate of technological change is high may be higher than the time required to acquire competence in one area professionals could undergo psychological turbulence owing to the need to work in a new technology throughout their career. They want to gain new knowledge, which will be utilized by their organization. On the basis of the new learning they want to work in higher segments of software value chain. Therefore, constant up-Copy Right  © INDIACom-2011 ISSN 0973-7529 ISBN 978-93-80544-00-7 Human Resource Challenges & Practices in IT Industry gradation of employee skills poses yet another challeng e for HR personnel. 3. CHALLENGES FOR IT INDUSTRY: The main challenges to the IT Industry are i. Recruitment planning ii. Performance management iii. Training and development iv. Compensation management v. HRM as whole 1. Recruitment Planning: Recruitment planning is most important component in new people management with special reference to IT industry.We have to deal with human assets so it becomes important and have good quality of people in the organization. We have to take the recruitment planning in very serious manner to ensure that we can get best talent in the organization. 2. Performance management: Now the challenges how to manage the performance of your employees. You have to get right person in a organization to manage your business. The challenge should be to create a performance culture where you can provide opportunities for enhance performance, where optimum performance becomes a way life. 3.Training and development: This is another challenging area in IT industry. We have to chalk out a suitable strategy for training & development so that employees are well equipped to handle the challenges in advance. 4. Compensation management: The IT industry is one of the high paying industries. This is very competitive industry, we have to attract best talent, offer best possible compensation package to the employees. Now IT companies are having ESOP with the compensation package. But the really challenge should be how we are able to incorporate all the subsystems in HR.Ultimately this would help the organization for achieving exceptional performance. People have to be groomed to get in with the performance culture. We have to create an environment that stimulates the creation of knowledge, its sustenance will be the challenge for IT companies in the future. HR department cannot function with traditional systems. Now the role will shift to HR facilitator, to facilitate change process. HR facilitator will have to involve the whole organization in this pro cess and act as a guide, coach, counselor and facilitator.Any organization in the IT industry will have to face these challenges like Infosys, Satyam, Pentafour, DSQ Software, Micro soft India, Intel India. These IT companies are leaders in their own stride. They have excellent recruitment policies, huge data bank, and placement agencies. They are also having rigorous tests to ensure that they can get high profile talent that will fit in their culture. They have best performance system that evaluates the organization as whole. They have been able to tackle the quantum of performance with fairly efficient manner.The prime tasks for these IT companies are to build corporate culture. They are diverting all the efforts to build performance driven culture. The major issue for these companies to get right man for right job. We have to find person with the required skills, experiences, mindsets, and also he must be suitable for these organizations. 5. Attrition and Retention: IT companies are having high degree of attrition. The challenges for these companies are to keep this attrition rate as low as possible. Various companies adopt different techniques to retain their employees like high pay packets, ESOP, other benefits.So we have to keep this attrition rate as low as possible to retain super achievers. CONCLUSION With the advent of a work situation where more and more companies are having to concede that their valued employees are leaving them, a new concept of career and human resource management is bound to emerge. The focus of this new paradigm should not only be to attract, motivate and retain key ‘knowledge workers', but also on how to reinvent careers when the loyalty of the employees is to their ‘brain ware' rather than to the organization.With lifetime employment in one company not on the agenda of most employees, jobs will become short term. Today's hightech employees desire a continuous up-gradation of skills, and want work to be exciting an d entertaining a trend that requires designing work systems that fulfill such expectations. As employees gain greater expertise and control over their careers, they would reinvest their gain back into their work. HR practitioners must also play a proactive role in software industry. As business partners, they need to be aware of business strategies, and the opportunities and threats facing the organization.As strategists, HR professionals require to achieve integration and fit to an organization's business strategy. As interventionists, they need to adopt an allembracing approach to understanding organizational issues, and their effect on people. Finally, as innovators, they should introduce new processes and procedures, which they believe will increase organizational effectiveness REFERENCES [1]. Noe, R. A. , Hollenbeck, J. R. , Gerhart, B. and Patrick, P. M. (2007) â€Å"Human Resource Management: Gaining aCompetitive Advantage†, Tata McGraw-Hill, New Delhi. 2]. Prasad, K. (2005) â€Å"Strategic Human Resource Management: Text and Cases†, Macmillan India Ltd. , New Delhi. [3]. Kandula,Srinivas R. (2003) â€Å"Human Resource Management in practice with 300 models : Techniques and Tools†, Sage, Delhi [4]. Rao T. V. , Rao Raju, and Yadav Tara. (2001). â€Å"A Study of HRD concepts, structure of HRD Copy Right  © INDIACom-2011 ISSN 0973-7529 ISBN 978-93-80544-00-7 Proceedings of the 5th National Conference; INDIACom-2011 [5]. [6]. [7]. [8]. [9]. [10]. [11]. [12]. [13]. [14]. [15]. epartments, and HRD practices in India†, Vikalpa, ol 261, No. 1, Jan. -Mar Page 49-62. Siekel Tom. (2002). â€Å"After CRM, it’s ERM: Employee Relationship Management Indian Management†, Vol. 41, Issue 9, July p. 38 Storey J. (ed. ) (1989). â€Å"New Perspectives in Human Resource Management†, Routledge, London, p. 114. Truss Catherine. (2001). â€Å"Shifting the paradigm in Human Resource Management: From the resource based view to c omplex adaptive system†. Published in a Research Paper on Human Resource Management by Kingston Business School, Kingston University Thite, M. 2004) â€Å"Managing People in the New Economy: Targeted HR Practices that Persuade People to Unlock their Knowledge Power†, Response Books, New Delhi. Truss, C. (2001) â€Å"Complexities and Controversies in Linking HRM with Organizational Outcomes† Journal of Management Studies, Vol. 38, No. 8. Walker, J. W. and Stopper, W. G. (2000) â€Å"Developing Human Resource Leaders† Human Resource Planning, Vol. 23, No. 1, p. 38-44. Webb, J. (2004) â€Å"Putting Management Back into Performance: A Handbook for Managers and Supervisors†, Allen & Unwin, Australia.Joynt, P. and Morton, B. (2005) â€Å"The Global HR Manager: Creating the Seamless Organization†, Jaico Publishing House, Mumbai. Jyothi, P. and Venkatesh, D. N. (2006) â€Å"Human Resource Management†, Oxford University Press, New Delhi. Kandol a, R. and Fullerton, J. (1994) â€Å"Managing the Mosaic: Diversity in Action†, IPD, London. Kandula, S. R. (2004), â€Å"Human Resource Management in Practice: With 300 Models, Techniques and Tools†, Prentice Hall of India Private Limited, New Delhi. Copy Right  © INDIACom-2011 ISSN 0973-7529 ISBN 978-93-80544-00-7

Panera Bread Marketing Mix Proposal

Signature Frozen Yogurt Table of Contents Executive Summary For the past 28 years we have been committed to offering a wide variety of healthy entree options at the highest quality for a reasonable price, however, we have never offered a selection of healthy option desserts and therefore have decided to launch a new product, the Signature Frozen Yogurt. This product is a secret blend of all-natural ingredients. One of the most important ingredients is real nonfat milk, which has been certified by the National Yogurt Association to carry the Live and Active Cultures. Regardless of the flavor, our crispy and tangy yogurt is designed to awaken the senses and blend perfectly with each of our freshly cut fruit toppings. It is low in fat, contains no cholesterol, no preservatives, is fortified with calcium, and is made of the highest ingredients. The competitive advantage of this product is the place the product will be sold, at our already established cafes. The cafe already draws in customers and now to complete their meal, instead of having to travel elsewhere for a healthy option desert, they have it already where they are eating, which means no extra traveling costs, or planning is required. The convenience factor is now added which is a very important in the American lifestyle today. Unlike the fast food competitors, our new dessert will keep us at the top of the fast-casual, bakery-cafe industry by continuing to provide for the millions of Americans who are looking to eat healthy. While competitors are struggling to keep up with today’s prominent healthy-eating trend, we remain a valuable asset to the cause. We will use mass marketing techniques in order to target our chosen market for the newly created Signature Frozen Yogurt . The initial market will consist of New York and California, two places which have seen a growing trend in the market for frozen dessert. The population will consist of individuals roughly between 19-35 years of age, both male and female individuals that come from the upper middle class, are health-oriented, and currently frequent Panera Bread, but rarely eat dessert because of the poor healthy choices currently offered, and is currently measured at approximately 7, 927, 516 individuals. We will use price skimming for our pricing strategy. In the past we have not needed to cut the prices of our food as a way to bring in customers. Our company is known to have great quality, and you may have to pay a little extra for it. Since we are an already well-established bakery chain, we have the ability to have the product enter the market with the price skimming strategy. We feel like this strategy best fits our company image as a whole, and will fit in with the prices of our other products. For the communications strategy, our media mix will be fairly standard for a new product being introduced at the national level. We will use mass media exposure. We will use TV, Magazines, Internet, and Outdoors. With TV we will have a wide reach, and will be able to target our demographic specifically through certain TV shows and time slots. We have written, shot and edited our own TV spot for the new product. We have used our original slogan â€Å"A loaf of bread in every arm†¦Signature Frozen Yogurt in every hand†, as well as a summertime theme associated with our frozen yogurt. We will also use magazines, the Internet with our website, Facebook, Twitter, sales promotions including coupons and samples. We pride ourselves in making our bread, salads, sandwiches, and all desserts fresh daily. The actual ingredients used to make these delicious entrees, however, are provided by our own distribution center. We use a vertical marketing channel in which the members act as a unified system in all three stages- manufacturing, wholesaler, and retailer, and each level has an increase of formalization and control. Our goal in introducing the Signature Frozen Yogurt into the described market is to increase our current market share for healthy option dessert and create top of mind awareness of our brand. The goal is to have customers name Panera Bread as their number one option when asked about their preferences of frozen yogurt. Along with the introduction of the Frozen Yogurt into the New York and California store locations will be an initial investment of $685,816, which consists of all the machinery, installation and training costs for all 154 cafes located in the mentioned states. The forecasted return on investment is predicted to be 0. 16, and to break even we would have to obtain sales of 152,765 units at an averaged out price of $4. 9, which takes in account all variations for the different prices for different size containers. Based on our established customer list, we expect that 40% of all the people in the states of California and New York will be our customers and that 30% of these customers will be likely to purchase dessert and one of their store visits throughout the year, which we have calculated to be roughly 12-20 times for each individual. In the first year of im plementation, from April 2010 to December 2010, we expect to have sell approximately 14,408 units and double sales volume by year end 2011. We expect that this project will increase Earnings Before Tax and Interest (EBIT) by approximately $30,593 and increase Net Income by approximately $18, 968. Business Mission and Vision Our mission statement is â€Å"A loaf of bread in every arm and frozen yogurt in each hand. † Our commitment is to actively contribute to the community today through donation of our daily extras to the local community in need, one loaf at a time, feeding the community and wasting not a crumb. We not only have a commitment to giving back to the community but consistently holding the highest standards of quality for every customer regardless of which Panera you dine at. Finally, we also commit to providing a sound environment with integrity present for our employees. Goals and Objectives By entering the frozen dessert market, we will further increase our distinctive qualities because no other competitor in the restaurant industry has a similar frozen yogurt product. The Signature Frozen Yogurt will take on the familiar qualities of all other products by use of the â€Å"Signature† title. This consistence will remind consumers that all our â€Å"Signature† products are similar in an important aspect: quality. Also, our company is creating more value for the new product itself by displaying the ingredients and nutrition facts to prove to consumers that the dessert is a truly healthy one. Finally, our decision to enter this new market gives consumers a much more accessible product. Currently, there are only a few big-name frozen dessert foodservice venues that offer a frozen yogurt product, including TCBY and Baskin Robbins. Our company recognizes the great potential in this growing market, in great thanks to society’s healthy eating trends. The frozen yogurt market is being revitalized now that consumers have realized that with healthy eating comes a great need to satisfy the sweet-tooth cravings, and that is where our Signature Frozen Yogurt comes into play. Our company is introducing a product that satisfies two consumer needs: a truly healthy, low-fat, low-calorie dessert, and a reinvented, flavorful product that used to have an image of plain and boring. So long as Panera Bread keeps these important attributes of our new product in mind, we are sure to be a unique success. The goal for our entire company is to become a leading national brand in the restaurant industry, as well as a leader in the frozen dessert market. The new market expansion will initially include New York and California, and eventually all 50 states, including the western states which we do not have a very strong presence in and can use popularity of the frozen yogurt as an advantage for entry. The global expansion, to be started approximately a year after the successful frozen yogurt introduction in the United States market is also a future goal for the company. In addition, we hope to maintain strong relationships with our franchises to continue working together in efforts to satisfy changing consumer needs. For different regions, our franchises will lend their customer feedback to our company to inform us of new possible flavors and toppings for the Signature Frozen Yogurt that can be introduced in those particular regions. Our goal in introducing the Signature Frozen Yogurt into the described market is to increase our current market share for healthy option dessert and create top of mind awareness of our brand. The goal is to have customers name Panera Bread as their number one option when asked about their preferences of frozen yogurt. We are also looking to increase consumption of desserts at our locations, considering that we acknowledge that the current desserts offered do not accurately fit in the healthy option category. The frozen yogurt will be low fat and encompass fresh fruit among other indulgent toppings that are guaranteed to satisfy every palate. Customers want healthier dessert options that they can trust to be of the highest quality, thus they will have no trouble purchasing our Signature Frozen Yogurt. Our current customers, especially, will perceive the new product as valuable enough to buy because of the firm’s commitment towards providing excellent customer service and a quality experience for any meal served, no matter if it is eaten in the restaurant or taken to go. For new and old customers alike, this product will be received well because few other restaurants in our industry offer a healthy dessert option that can prove its caloric or sugar levels. As to price and value capture, we have been able to build our name and image over the past few decades, all the while having prices set above those of fast food competitors. We have also been able to continuously increase profits because of the perceived value that we offer in making specialty products, as well as hand-made and made-to-order meals, the moment a customer walks in to the establishment. This value-based pricing strategy has worked in our favor as customers feel they are getting a higher quality meal at a slightly higher cost. In addition, we are also looking to increase EBIT constantly through the next three years. The capital investment required will be approximately $686, 916 for the initial cost of the machines to be installed at each of the 86 cafes located in California and the 68 cafes located in New York, their installation cost and training procedures. This will increase cost of goods sold, labor, and other general operating costs by fifteen percent. The projected ROI will be 0. 16 SWOT ANALYSIS COMPETITIVE ANALYSIS We compete in the firm-intensive restaurant industry within multiple markets, including fast food, casual dining, specialty dining, and bakery-cafe. We even compete on a time basis, in other words, breakfast, lunch, PM â€Å"chill out†, lunch at night, and take-home. Competitors include both national chain restaurants, as well as independent local firms. Our recent, most threatening competition comes from restaurant chains that have begun to align their menus with society’s increasing trend for healthy eating. Some of the â€Å"big-name† competitors include McDonald’s, Starbucks, Subway, and Chipotle Mexican Grille, among others. Even with their menu changes, however, we have been successful in maintaining and promoting an image of healthy eating on a higher scale of quality. This particular reputation has helped acknowledge our firm as a leader in the restaurant industry. McDonald’s is one of our largest competitors in the fast food industry. With almost 32,000 establishments operating globally, McDonald’s switch to a new focus on healthier eating habits has helped its company strengthen its position among health-conscious consumers. The chain has introduced menu items that serve as alternatives for their popular, but unhealthy, longstanding products. For instance, McDonald’s offers wraps in place of white bread, grilled chicken instead of fried, and apple slices in place of French fries. Wendy’s and Burger King, as well as many other fast food chains, followed suit after McDonald’s menu changes, further increasing our competition. We are not too concerned about the fast food industry’s push towards healthy food, however, because McDonald’s has been intensely focused on expansion into global markets. Therefore, their attention to the healthy consumer market is nowhere near as intense as it could be. Also, each of these fast food firms are known to be â€Å"hamburger-based,† giving us the competitive edge of offering made-to-order, specialty items of a much healthier caliber. We have not been impacted significantly enough by the fast food giant’s healthy initiatives to feel it necessary to react with our own menu or company changes. Within the fast-casual dining market, Chipotle Mexican Grill, a company of over 800 establishments nationwide, has become a one of our direct competitor, as the company offers some healthier eating selections, quick service, and a casual environment. The main distinction between these two restaurants is their very different menu styles. Chipotle offers Mexican style food, including burritos, tacos, and enchiladas. While Chipotle is now recognized for its healthy veggie options from local supplies and fresh grilled chicken salads as a replacement for the high-calorie burritos, we have the obvious advantage of a menu that is appealing to multiple target markets, rather than just the one market for Mexican-style food lovers that Chipotle caters to. Subway, of the Doctor’s Associates Incorporation, is yet another restaurant competing in the mix of a healthy, fast food type of market. Subway has had a successful impact on health-conscious fast food consumers ever since â€Å"The Subway Guy,† also known as â€Å"Subway Jared† revealed to society that he lost a couple hundred pounds from simple exercising, and most importantly, from eating Subway subs every day. Subway’s profits surged after these commercials featuring Jared were released across the country. While Subway has a presence in our health-conscious target market, their primary competition is more likely to be Chipotle Mexican Grille, instead of Panera Bread. This is due to the fact that both restaurant chains have buffet-style ordering, where customers have complete and total control over their meal. Unlike these firms, we at Panera Bread are in favor of offering our customers a choice of unique, specialty menu items that have been pre-tested in multiple variations until the perfect combinations were found. We want our customers to enter or establishment and enjoy the meal itself and all of its uniqueness, rather han have to create their own. In the specialty cafe market, Starbucks, a company of over 16,000 global establishments, is our foremost competitor. This firm is renowned for its distinctive features, which are similar to our company. Starbucks has the uniqueness of an intimate, yet casual environment, as well as a vast array of specialty coffee products. The main diffe rence is that Starbucks focuses primarily on the beverage market, whereas Panera Bread’s focus is on our variety of food products and specialty breads. Starbucks is an important competitor to watch because much like our firm, their customers perceive the business to be of very high quality. Thus, Starbucks has a similar advantage in having the ability to retain a very loyal customer base. They also have an edge on Panera Bread in terms of their larger company size, for they have more market penetration and therefore a greater influence within the specialty cafe market. Finally, although Starbucks specializes in gourmet coffee beverages, they do have a pastry selection that is comparable to ours. Our firm believes that in the short-term future, Starbucks will not have a presence as strong as that of Panera Bread in the bakery market. In review of the frozen yogurt market, the number one competitor is actually the first ever national frozen yogurt restaurant chain. TCBY, also known as â€Å"The Country’s Best Yogurt,† has been the major source for frozen yogurt for many decades, and thus, their brand recognition is incredibly strong. This firm’s product has always been a favorite frozen dessert alternative for the health-conscious consumer. We believe our competitive advantage lies in the fact that in today’s society, consumers of all demographics are looking for everything they want and need at the reach of their fingertips. TCBY only offers frozen desserts, and while their innovative and specialized dessert options are noticeably unique, the firm simply does not have the vast variety of menu selections that we offer. Our company satisfies much more than just the sweet-tooth cravings of our customers, and this makes us even more distinct than TCBY and similar frozen yogurt competitors. The new Signature Frozen Yogurt is a type of healthy frozen dessert that is not found at our most comparable restaurant competitors. The closest comparison from the fast food industry would be McDonalds’ McFlurry and Wendys’ Frosty, two ice cream-based products that are not low-fat, low-calorie, nor nutritious. Previously mentioned competitors in the fast-casual restaurant industry, however, have no product like the Signature Frozen Yogurt. Our company also has very few competitors in the frozen yogurt market. TCBY is the leading brand for companies selling only frozen yogurt. Other competition in this market comes from small, localized firms that have entered the market within the past ten years, for example, Yogurbella and Red Kiwi in the Southern Florida region and Pinkberry in New York. Overall, the introduction of our Signature Frozen Yogurt is perfectly timed for our firm, as well as society’s growing trend of healthy eating. We have countless unique advantages over the competition. Our strong brand name is an immediate competitive edge because it is associated with our high quality products. The slightly higher prices are reflective of the quality product and overall experience that each consumer receives when he visits a Panera Bread location. This experience can in great part be attributed to the casual, inviting, and relaxing ambience of every establishment. Of course, our bakery expertise, healthy menu options, and artisan breads are a founding pierce of our company’s success. Therefore, our introduction of new products, including the Signature Frozen Yogurt, will have an easier time of gaining market acceptance, as well as our consumer’s confidence. Marketing Strategy Research The U. S. Market for Ice Cream and Frozen Desserts According to trend data, the sales of low fat or diet ice cream are increasing while the sale of regular is decreasing. This shows that the market for healthy frozen desserts is rapidly growing. In addition, consumers are looking for different flavors and type of frozen desserts that will give them a surprise factor. Frozen yogurt which was more popular in the 1980’s and 90’s is making a comeback in more cafe settings that resemble coffee shops. These cafes would offer healthy yogurt as well as premium healthy toppings for the yogurt. They cater to consumers that want the same atmosphere and effect as Starbucks The trend for ice cream in the food service industry is that consumers will pay a little more and wait a little longer for the upscale experience and the atmosphere. In the next three years, frozen yogurt is the one frozen dessert that will experience the highest growth in sales in the food service industry. Projected U. S. Foodservice Sales of Frozen Desserts (in millions) Along with the nformation gathered from secondary research, we also used primary research techniques including a survey (see appendix), of which the results were as follows: Do you like frozen yogurt? {draw:frame} Yes =44 Indifferent =8 No =0 How Often do you go to Panera Bread every three months? {draw:frame} Often (7+ Times) =4 Sometimes (3-6 times) =39 Rarely (0-2 times) =9 Do you think that Panera Bread’s current desserts are healthy opt ions? (Current dessert menu items include: cookies, brownies, pastries, scones, cinnamon rolls, muffins) {draw:frame} Yes =2 Somewhat =16 No =34 Would you be more willing to get dessert at Panera if there were healthier options? {draw:frame} Yes =32 Indifferent =22 No =4 Target Market Strategy Panera has found a home in the niche market of suburban regions, where consumers are looking for quick, convenient, and high quality menu options. We have designed our establishments to allow for a relaxing, lounging environment, as well as just the opposite- a fast moving order line that will have a consumer and his packed to-go meal out the door in just a couple of minutes. We will use mass marketing techniques in order to target our chosen market for the newly created Signature Frozen Yogurt . The initial market will consist of New York and California, two places which have seen a growing trend in the market for frozen dessert. The population will consist of individuals roughly between 19-35 years of age, both male and female individuals that come from the upper middle class, are health-oriented, and currently frequent Panera Bread, but rarely eat dessert because of the poor healthy choices currently offered, and is currently measured at approximately 7, 927, 516 individuals. Ranked the number one option in the cafe/bakery market, we have the highest level of customer loyalty among quick/casual restaurants, according to the Wall Street Journal. We have also received several awards for excellence, and have been named the number one fast food chain for popular salad and healthy option facilities. The introduction of the Frozen Yogurt will The Signature Frozen Yogurt will strengthen our current competitive advantage over the cafe industry and add value to ourcurrent menu. The dessert will be freshly made at each location; it will not be an industrialized food product, thus always guaranteeing its freshness. Customers will be able to customize their choice; they will be able to choose the flavor of the yogurt and what toppings they’d like, therefore always allowing them to have their way. Positioning Statement For the health-conscious consumer, Panera Bread present the Signature Frozen Yogurt, an all-natural, low-fat, low-calorie dessert that will remind consumers why our copmany is such a trusted brand and is nationally recognized for our quality products. The nutritious, low-fat, low-calorie treat is yet another specialty product produced by a company who loves their bread, their employees, and their customers. Unlike the fast food competitors, our new dessert will keep us at the top of the fast-casual, bakery-cafe industry by continuing to provide for the millions of Americans who are looking to eat healthy. While competitors are struggling to keep up with today’s prominent healthy-eating trend, we remain a valuable asset to the cause. Marketing Mix Product The signature frozen yogurt is a convenience type of product. Since it is a dessert the consumer will not put much time in researching where to purchase the product. There are five product flavors: four that are classic flavors and on that is a seasonal flavor and will change every three months. The flavors are as follows: Macadamia Nut, Chai Tea, Dulce de Leche, and Orange Scone. The first seasonal flavored launched will be pineapple upside downflavor. The topping options will be as follows: fresh cut fruit bits (strawberry, pineapple, blueberry, blackberry, raspberry, and banana), pecans, walnuts, chocolate chips, coconut, heath bar crunch, cookie dough, and drizzles (caramel, chocolate, and peanut butter). The signature frozen brand features ingredients including real nonfat milk, so you get all of the benefits derived from dairy, at a fraction of the caloric intake. This differs from other frozen yogurts in the marketplace, which are created using predominantly water, milk and sugar. At Panera, the proof is in the taste. We strive to make each cup of yogurt from the highest quality of ingredients. You know you can tell the difference from the very first spoonful. Our frozen yogurt is a secret blend of all-natural ingredients. One of the most important ingredients is real nonfat milk, which has been certified by the National Yogurt Association to carry the Live & Active Cultures seal. Regardless of the flavor, our crisp and tangy yogurt is designed to awaken the senses and blend perfectly with each of our freshly cut fruit toppings. There are only 90 calories in each 8-ounce serving of Signature Frozen Yogurt. It is low in fat, contains no cholesterol, no preservatives, is fortified with calcium, and is made with the highest quality ingredients. Children, adults and the elderly can enjoy this great tasting healthy option dessert! The product itself is packaged from the distribution warehouse and brought directly to each Panera cafe. There is it dispensed into the frozen yogurt machines at each site. When served to the customer, the yogurt can be served in three different size cups, which will include small (8 ounces), medium (10 ounces), and large (12 ounces). This product is considered a brand extension. The Signature frozen yogurt is adding another product category, which is the category of frozen yogurt under the product line of dessert. Essentially it is adding product depth. We currently have several different product categories under this product line including pastries, cookies, brownies, coffee drinks, and smoothies. Currently, we have not encountered any special issues involved with this product. Since we are striving to provide a healthier item for our dessert menu in order to reach out to those who are conscious about their health, below is the label containing the nutrition facts for the Signature Frozen Yogurt, which will be readily available in all stores and in our company website in the occasion that the customer wishes to inquire about their intake of calories when consuming this item. Nutrition Facts Serving Size: 8 oz Est. Percent of Calories from: Place/ Distribution We pride ourselves in making our bread, salads, sandwiches, and all desserts fresh daily. The actual ingredients used to make these delicious entrees, however, are provided by our own distribution center. We use a vertical marketing channel in which the members act as a unified system in all three stages- manufacturing, wholesaler, and retailer- and each level has an increase of formalization and control. We use product pooling where there is one main distribution center within driving distance from a store. Each store is normally re-stocked twice a week and is delivered the ingredients from our privately owned trucks. Inventory can be delivered on an as needed business if demand is higher than expected. Once the product arrives in the store then the frozen yogurt will be placed in the dispensing machine and ready to be served to the customer. Price We will use price skimming for our pricing strategy. In the past we have not needed to cut the prices of our food as a way to bring in customers. Our company is known to have great quality, and you may have to pay a little extra for it. Since we are an already well-established bakery chain, we have the ability to have the product enter the market with the price skimming strategy. We feel like this strategy best fits our company image as a whole, and will fit in with the prices of our other products. The pricing is as follows, small for $3. 99, medium for $4. 50, large for $4. 99. Each topping is an additional $. 99 cents. Both internal and external factors have been considered when setting the prices. First, we have chosen selective distribution when it comes to the place. We are a well-distributed chain, but not massively distributed across the country and not distributed at all outside the United States. Also, a survey was performed in a randomized sample of 50 individuals who were asked what their maximum willingness to pay would be for the Signature Frozen Yogurt. About 40% of the individuals surveyed said they would be willing to pay at most $5 for a 10 ounce serving of frozen yogurt, thus we priced the product accordingly. We also considered internal factors such as relative dessert prices currently sold at our locations. Some prices for comparison are as follows: chocolate chip cookie: $1. 99, orange scone: $2. 99, and chocolate brownie:$3. 50. In order for the product launch successfully the product must be priced according to the other products offered by Panera. The prices for the products are on the more expensive side but not overly expensive. The higher price of the good is a way to hold up the reputation we have built that we do not sacrifice quality for price. An external factor that has been considered is our current competition. The introduction of frozen yogurt will drive the company to compete with local frozen yogurt vendors, TCBY, and developing yogurt chains such as Yogurbella and Chicberry. Although our product is priced slightly higher than TCBY and about the same as Yogurbella and Chicberry, we wanted this product to be competitively priced but at the same time hold a standard of higher quality, therefore a little higher priced than TCBY. The frozen yogurt industry itself instigates monopolistic competition. There are several competitors and therefore competition is very tough. The key to survival in this market is differentiation. The product itself may not be that different than other local current local vendors beside certain flavors offered or the quality of the taste, but the key to successfully positioning the product in the chosen market is the place. The yogurt will be sold at a cafe that already draws customers in for lunch or dinner, and now to complete their meal, instead of having to travel elsewhere for a healthy option dessert, they have it already where they are eating, which means no extra traveling costs, or planning is required. The convenience factor is now added, which is a huge factor in the American lifestyle today. This will add the competitive advantage to purchasing frozen yogurt at one of our locations, and not elsewhere. The competitors, in response may respond by dropping their prices in hopes that lower prices will make up for the inconvenience factor of having to travel to get your dessert after dinner. Although the competition may be able to lower their price and still make a profit, this may not be enough to sway the competition. Promotion and Communications Advertising The advertising objectives of this new product are to inform consumers about the new frozen yogurt product line that we are beginning to sell. We will emphasize that this is a new product being offered at our locations. We will also emphasize the unique and fresh aspects of ourSignature Frozen Yogurt. Some aspects that make this product ‘unique and fresh’ are the healthy nature of the product, the high quality materials used to produce it, and the relatively expensive price. The message execution of the advertising will be a lifestyle choice; we want to introduce the idea of getting a healthy good tasting dessert at Panera Bread. Our media mix will be fairly standard for a new product being introduced at the national level. We will use mass media exposure. We will use TV, Magazines, Internet, and Outdoors. We will also place a picture of the Signature Frozen Yogurt in all company owned delivery trucks; since all food is delivered via them and it can reach a wide audience while driving. With TV we will have a wide reach, and will be able totarget our demographic specifically through certain TV shows and time slots. We have written, shot and edited our own TV spot for the new product. We have used our original slogan â€Å"A loaf of bread in every arm†¦Signature Frozen Yogurt in every hand†, as well as a summertime theme associated with our frozen yogurt. With the magazines,we can hone in our message to specific demographics that will be interested in our product. The subscribers will also most likely pass along our message to others, and we consider word of mouth to be a powerful, free, advertising tool that can certainly be used to our advantage. We will use our logo to create brand recognition among consumers, and we will use our slogan to create interest. The main message encoded to the consumer will emphasize how this product has a healthy advantage in comparison to other frozen yogurts, and it will emphasize the variety that our product has. With the Internet we can have a wide reach;we can link to detailed content, we can hone into our demographic and we can have interactive features. Through the internet will also use our slogan and logo to foster brand recognition and toemphasize the healthy advantage and the variety of the product. It will have similar encoding and message as our magazine ads. We will advertise our website through print ads and TV, but will also have links to our website from other company websites that appeal to our target audiences. Some types of sites we would like to buy ad space from are health websites, fitness websites, food and entertainment websites, and search engines. We already have a really well established and well formatted website. It is easy to use and readily accessible, meaning we would simply add to its current featuresto include information about Signature Frozen Yogurt. This information would include all sales promotion information as well as details about the product and where it can be found. Outdoors advertising is cheap;we can gain repeat exposure, and we can direct customers to a local store off of the road. The style of this advertising will be more along the lines of flashy and fancy, we want to emphasize the status and the quality of our company. Our timing will incorporate a flighting strategy; we want to initially attack our consumers with our message aggressively and consistently to build a base of consumers that know and understand our message and our new product. This will serve the purpose of informing the customer of our product. Once we feel that our product has become commonplace for our consumer we will convert to a less aggressive strategy, slowing down our advertising. We will increase our advertising once again once we have a new twist on the product or a new feature, such as a new season flavor, that needs to be expressed and told to the consumers. Public Relations Public Relations tools that will be used will be annual reports, electronic media, and media relations. Annual reports will be used to give financial performance information to investors and others about what is going on in the organization. This can provide us with projections for the new product, as well as give us results and an opportunity for analysis in accordance with Signature Frozen Yogurt. Media relations will be used to create news coverage and public awareness of the new product for our company; this will be done by news releases and event sponsorships. In addition, electronic Media will be used to inform, interact and generate a buzz about our new product; this will be done through web sites and email campaigns. Press Release Panera Bread Launches New â€Å"Healthy Option† Signature Frozen Yogurt in Select Markets NEW YORK— April 18, 2010—Panera Bread? officially announced the launch of a new product into select cafe’s in the beginning of May. The product will put a new spin on dessert options offered in their bakery. In the past, Panera? has been known to have indulgent pastries, brownies, and cookies high in calories, sugar, and fat. However, they have also been known to have several healthy options for lunch or dinner, including a wide selection of salads, sandwiches, and soups. So, why aren’t their healthy dessert options as well? This question was raised when the development of the signature frozen yogurt was originally brought up in corporate back in September of 2009. â€Å" We wanted to innovate our selection of dessert. We pride our company on being one of high quality and healthy options, but we weren’t following through with that in our dessert section of our menu,† comments Ronald Shaich,CEO. With the implementation of this new product into the product line we hope to keep our very health conscious customers around for dessert and not travel elsewhere to satisfy their sweet tooth,† says Ronald Shaich. The frozen yogurt is a secret blend of all-natural ingredients. Probably one of the most important ingredients is real nonfat milk, which has been certified by the National Yogurt Association to carry the Live & Active Cultures seal. Regardless the flavor, our crisp and tangy yogurt is designed to awaken the senses and blend perfectly with each of our freshly cut fruit toppings. There are only 100 calories in each 5-ounce serving of Signature Frozen Yogurt. It is low in fat, no cholesterol, low in calories, no preservatives, fortified with calcium, and made with the highest quality ingredients. Panera? plans to launch the product first regionally in the New York and California corporate stores. â€Å" We picked these locations first to test the success of this product because research shows that frozen yogurt is on a rise in these areas especially in cafe like settings,† explains Domenic Colasacc, Lead Independent Director. If the product reaches their goal of sales then it will be released nationwide in the corporate stores and eventually offered to the franchises. Press Contacts: Deidre Novotny [email  protected] com (727) 692-2194 Sales Promotion We are not known for using a variety of advertising on television, such is the case for competitor McDonalds. We choose not to spend large amounts of money on advertising because our loyal customer base is so strong and has so rapidly grown over the years that we feel our brand is well established without enormous advertising campaigns. Since we are introducing a new product that has never been on the menu before, we will strengthen the quantity of advertising so that consumers will be aware of its existence. As always, in-store marketing efforts will be effective for visiting consumers, and as always, their positive word-of-mouth is a great promotion tool. We will use sales promotion tools to create awareness and a buzz about our Signature FrozenYogurt. We will use coupons, samples, and deals. We will use the coupons to give the consumers a discount; this will stimulate demand, and also allowus to directly track sales. This would be active only during our initial campaign for the ad to spread awareness and create an incentive to purchase the newest addition to our menu. The initial coupons will consist of a half off for any Signature Frozen Yogurt. This will establish a customer base, word of mouth, and reduce the risk of our consumer in trying to product. We will use samples to encourage trial, andoffer direct involvement. This method of sales promotion will also create an opportunity to attract consumers, get them to try and enjoy the new product, and if they enjoy the production will create positive word of mouth. This will be standard for the first week after the launch of the product at all Panera Bread stores located in New York and California, and then will cease immediately. This will flood consumers who attend the store regularly with the product, hopefully creating word of mouth and another reason for them to keep coming back to Panera Bread. We will also create deals, for example, buy a sandwich and get a free signature frozen yogurt with your sandwich. This will encourage trial and reduce customer risk. A deal like this will only be implemented in the first two weeks after the launch of the product. Personal Selling There will not be any personal selling necessary for this product, but we will push at the registers for our special sales promotions and educate the customer on the qualities of the Signature Frozen Yogurt if needed, hoping that this will promote the trial and purchase of signature frozen yogurts. Direct and Online Marketing Most of our direct marketing will be done through the internet. Telephone, mail, infomercials, and catalogs as well as other non-internet based marketing did not seem like it would be appropriate or effective. Through internet based direct marketing we can use email to inform our target consumer of our new product. We can also use email to establish our promotional sweepstakes for Signature Frozen Yogurt. Budget Our current market consists of 7, 927, 516 individuals between the ages of 19-35 years of age currently residing in California and New York. Assuming that 25% of these individuals frequent Panera Bread and 30% purchase the Signature Frozen Yogurt , the introduction of this product in the market will affect sales in the following manner: * * 2010* * * * 2011* * * 2012* Return on Investment (ROI): $111,701/$685,916=0. 16 Payback Period (without taking in consideration variable present value): $685,916/111,701=6. 14 years Break Even Analysis: In order to break even, our company would have to sell 152,765 units of Signature Frozen Yogurt, averagely price at $4. 49 per unit. Communications Budget: Advertising will take 2. 6% of annual sales. Therefore, the advertising expense to implement the project will use approximately 40% of the overall communication budget and will be distributed as follows: Magazine/ Newspaper Expense: $1918 Internet/ Search Engine Expense: $1918 TV Commercials Expense: $5,753 Outdoor Commercial Expense: $1918 Total Communication Budget: $11,506 $1,106,295x. 026=$28,764 for the year of 2010 and a forecasted value of $1,194,799x. 026=$31065 for the year of 2011. Implementation Our company has great proficiency in developing, testing, and launching new products. This can be credited to our goal of continuously creating new products to satisfy changing consumer tastes, as well as to reposition ourselves, all the while getting our customers excited about new and improved products for their enjoyment. Our new or reinvented products are introduced on a periodic or seasonal basis, and we call them Celebrations. The most important part of our growth strategy is to carefully evaluate these product launches. For the Signature Frozen Yogurt, we spent our best efforts developing our marketing strategy based on what we believe and know about our consumers’ preferences and what they value. Our product has been chosen; our price has been decided; our places have been selected; and our promotions are ready to be released. The next step is to launch our new product. We will be sending out the press release for our latest Celebration, the Signature Frozen Yogurt, on April 18, 2010. On this date, we will begin executing our various promotional tools as previously discussed, including our product commercial, print ads, and online media outlets, such as Twitter and Facebook, among popular search engines. We will launch the Signature Frozen Yogurt on May 10, 2010. Using test marketing, our company will be launching the product in specified regions. We choose not to launch new products nationwide because it is a very costly decision that cannot guarantee exceptional returns. The regions chosen for this particular mini-launch are New York and California. Our company establishments, as well as franchise establishments, will be adding the Signature Frozen Yogurt to their menus for a specified time period. We have chosen these regions because they are welcoming in a newly revamped, ultra-healthy frozen yogurt market, currently consisting of smaller independent firms. This provides our company with a unique opportunity to take advantage of. Based on various results in a three-month period from the mini-launch, we will then decide whether or not to launch the product nationwide. Customer reactions from regional launches will verify if the marketing plan and strategy chosen for this product were the best choices. Consumers will be questioned and surveyed regarding the new product’s consistency and level of quality, in comparison to our current standards. If customers do not react well, the product will not be launched on May 10, 2010 as according to plan. Instead, the marketing team will revise the marketing mix and strategy, as well as refocus on determining exactly what consumer need they were trying to satisfy. Assuming the mini-product launch is a success, the company will introduce the product nationally. Launches will be put into effect on either a periodic or seasonal rotation, a choice made while keeping in mind the time frame at hand. Competitors, namely fast food firms such as McDonalds and Wendy’s, have recently begun to alter their menus in an attempt to fulfill consumer demand for healthier eating options, therefore, our Signature Frozen Yogurt comes at a possibly risky time, as competing firms are stepping up to participate in society’s healthy-eating trend. Fortunately, we have a sustainable competitive edge because of our long-standing image of a business serving nutritious, quality food, an image that no other firm has in the fast food segment of the restaurant industry. We also maintain our competitive advantages because of our position in a niche market known as â€Å"quick-casual† and â€Å"bakery cafe†. This niche protects our company from competitors; actions regarding menu changes, as well as new product developments, although the recent economic recession in the United States has severely impacted the restaurant industry, mainly because consumers immediately decrease their restaurant outings. For us, our loyal customers have helped the firm verify the strength of their brand and image, even in these tough economic times. We have chosen to not change or lower menu prices because of the recession, instead focusing on further improving the quality of what is offered. As a result of this initiative, it is harder for consumers to completely give up healthier quality food in this economy, especially when it is provided in such a convenient and quick manner. We employ a growth strategy by continuously reinventing the menu, completed through rotations of new and old products, followed by careful evaluation of their performance. Such products are introduced on a regular periodic basis, or on a seasonal basis. It is the hope of the company that the new Signature Frozen Yogurt will find a place on the menu indefinitely. As our brand is already well established, the company will work to increase popularity for the frozen yogurt product. This will be achieved through prominent in-store promotions and sample testing. Advertisements will range from television commercials, to print ads in magazines and newspapers to outdoor advertising. We strive to remain in the evoked mindsets of our loyal customers whenever they think about where they will go for a healthy, guilt-free dessert. No matter what product is introduced and how it performs, our main focus will continue to remain on our employees, channel members, society at large, and most of all, our customers. We strive to provide a fully satisfactory experience each and every time a customer enters a Panera Bread establishment. We offer more than just food; we seek to offer a valuable way to spend time, which is especially precious to each individual customer. Evaluation and Control Ourimplementation approach will have our company focusing on various results from the test marketing stage. For the launch of the Signature Frozen Yogurt, we have chosen to conduct the first performance evaluation after the product’s first three months on the regional menus. Customer reactions from these launches will help us verify whether or not the marketing strategy chosen for the Signature Frozen Yogurt were the best and most efficient choices. Consumers will be questioned and surveyed regarding the new product’s consistency and level of quality, in regards to other products and standards. We then combine these results and information with past sales of comparable products, as well as the projected expectations of the new product. The company then will decide if the product remains on the menu or is taken off. There are two obvious situations that can result from a new product launch; to put it simply, consumers will either accept the product, or consumers will reject the product. If our customers do not react positively to the frozen yogurt, the product will not be launched nationally just yet. The product will be removed from all establishments it was featured in and then the company has two possible plans of action to choose from. One option in this scenario would involve having our marketing team immediately revise the marketing mix and strategy of the new product after it is pulled from the menu, as well as reassess exactly what unfulfilled consumer need they were trying to satisfy. After completing intensive revisions, a new marketing strategy is prepared and the product can be re-launched for the next round of Celebrations. A second option entails putting the product away for at least a three-month period before attempting to reconfigure a new marketing strategy. With this option, members of our marketing and development teams will have an extended period of time to let the failed product concept settle, so team members can recoup and come back to the drawing tables with a refreshed mind. From there, they will begin revising and making the necessary adjustments on the product’s original marketing strategy. A third option, the most drastic one, involves scrapping the new product completely. This occurs in rare situations when a new product fails miserably in the launch regions, to the point where the entire cumulative sales of an individual establishment are negatively affected from the single, new product. In the anticipated case that consumers accept and then demand our Signature Frozen Yogurt, we will launch the product nationwide, in all establishments, in all regions of the country. For the first year of the new product’s life, we will measure its performance every three months. In the product’s second year of life, we will scale back evaluations to every six months. If a new product, including the Signature Frozen Yogurt, has remained on the menu for a third year, performance evaluations will be conducted after 9 months, and this evaluation will be strictly compared against its’ past two years of performance. In evaluating the new Signature Frozen Yogurt product, Panera Bread’s marketing strategy, marketing mix, media mix, and implementation plans will be continuously reviewed and evaluated using a few different methods. Marketing metrics will be used to quantify the trends, dynamics, and characteristics of the frozen yogurt consumption. We will use sales and profits as a measurement tool by comparing our new product’s results to the financial performances of TCBY’s frozen yogurt. We have chosen TCBY as a benchmark company to compare our performance to because although it specializes in only the frozen dessert industry, it is a large, established brand that has been a leader in its industry for many years. We can also compare product performance to the frozen desserts of fast food firms, such as McDonald’s or Wendy’s, because although they are very different types of desserts, these chain restaurants have been competing in the same market for a long period of time. It will be important to factor in the differences of company size and market share of the industry when using these metric tools. The most important measurement tool for our new product will be customer satisfaction. It will be measured using in-store, online, and direct email surveys. This particular evaluation can become more in-depth if deemed necessary. After our managers gather these results, they will make necessary modifications based on why our goals for the new product were, or were not, achieved. Throughout the evaluation process, the current economy conditions will remain factor in actual performance of products. Finally, the managers at each individual location will conduct a portfolio analysis to ensure that if the new product is a success, a proper amount of resources will be allocated to that particular product. Product performances must be strictly controlled for multiple reasons. First, a failing product left on the menu for a time past the set period of three months may result in an unusually difficult task of turning around more than one financial quarter’s declining profits. Second, a failing product that is strongly disliked by consumers may hurt the company’s brand image, and negative word-of-mouth may be spread. Third, a failing product that is harshly criticized by the media will severely hurt the firm’s brand name, image, and reputation, and this would occur in a much more public fashion. Finally, for the opposite situation, an excessively successful product can result in the cannibalization of other products that we offer. In regards to the Signature Frozen Dessert, there is a possibility of the product casting other desserts on our menu into obscurity. By preparing for future possible scenarios before the implementation process begins, we minimize the chance of having to take future corrective actions, and thus, this is the importance of continuous product review, evaluation, and control. For evaluation of our new Signature Frozen Yogurt, the first product review will be conducted on August 10, 2010, three months after the launch date of May 10, 2010. We will gather the financial performance results per location, including sales, costs, and profits. We will then factor in the customer feedback. Managers and marketing team members will also be focusing on evaluations of the strengths, weaknesses, customer satisfaction and acceptance of our new product. After compiling this information, the company has multiple options as to which step to take next. We can launch the frozen yogurt nationally, make improvements on the product and re-launch it in the same or different regions, or we can take the product off the menu completely. We are confident that our upcoming launch of the Signature Frozen Yogurt will be an immediate success, solidifying our entry into the frozen dessert market. Works Cited â€Å"Datamonitor Industry Market Research: United States – Fast Food. † Business & Company Resource Center. DatamonitorMarket Definition, 15 Aug. 2007. Web. 25 Oct. 2009. http://iiiprxy. library. miami. edu:2309/servlet/BCRC? rsn=unknown&rcd=naics&locID=miami_richter&brv=722211&srchtp=ind&ids=restaurant&c=2&iType=naics&mode=i&ste=87&tbst=tsIS&cind=722211+-+Limited-Service+Restaurants&tab=2048&docNum=A169919235&bConts=2306. Jargon, Julie. â€Å"Wall Street Journal: Slicing the Bread but Not the Prices. † Panera. com. Panera Bread, 19 Aug. 2009. Web. 12 Oct. 2009. Minkin, Tracy, and Brittani Renaud. â€Å"America’ s Top 10 Healthiest Fast Food Restaurants. † Health. com. Health magazine, 15 July 2009. Web. 21 Oct. 2009. . â€Å"Panera Bread Co. (NMS: PNRA), Property . † Mergent Online.

Employee Empowerment Essay

1.0 Introduction Employee Empowerment is not something that you simply declare you will initiate and expect that the program will be successful.   It requires good management programs for it to succeed.   This piece purports to show how team building as a management program can be used to make employee empowerment a success. Employee empowerment should be understood to mean a situation where everyone can take action to enhance his/her work, either in personal or organizational terms, and not just delegation of job authorities to job holders.   The essence of employee empowerment is to develop leadership skills (Lashley , 2000). 2.0 Case study Using an organizational culture framework, this case study examines the critical preconditions necessary for employee empowerment and highlights how the multiple cultures within one public bureaucracy differently impacted their implementation. Serve, a large human service organization, initiated an employee empowerment program that contradicted and thus collided with many elements of its overall organizational culture. Despite the best intentions of the organizational leaders, upper management support, and opportunities for participatory decision making, the organization could not foster the critical preconditions needed for employee empowerment. Leaders had difficulty expanding the employees’ power and promoting member inclusion. Concurrently, most employees rejected these new opportunities for control and distrusted the leader’s intentions. Yet, despite the widespread rejection of these empowerment initiatives, most employees described their work lives as empowering the piece discusses how a localized empowerment endeavor may be a more appropriate and feasible focus for public bureaucracies seeking to initiate greater staff empowerment. Particular attention is paid to the interaction between individuals and their environments, and how this interaction affects the empowerment process in light to the whole team building exercise. 2.1 Management Program that could be used in addressing the problem To avoid such instances like the one mentioned above, team building as strategy can be used. Team building refers to improving team performance by developing team working skills by using any appropriate method.   Effective team building and employee motivation fit together.   Successful organizations are not involved in team building as an end to itself but rather because with effective team building employee motivation increases and organizational results are achieved. (Cherney, 2002). 3.0 Review of the research With Adams Associates, enjoyment increased team building effectiveness.   Team building is a tool for employee motivation.   All teams go through very predictable phases.   Knowing and understanding these phases gives leadership the confidence to continue in the team building even when during one of the phases, the employee motivation appears to be declining. A prime example of utilizing and effectively using the method of team work is through a workshop duly created for the purpose of enhancing skills of the employee, creating a spirit of team building, showing how to address conflict management, teaching problems solving skills and enhancing quality management techniques with team work, there is better understanding of the different leadership styles as well as inclination of and empowerment of employees (.Modern Management, 2003). Communication also, as one of the most vital and important methods of any relationship has been observed to lead to a truly cohesive and effective means of accomplishing goals of the organization.   One of the prime examples practiced by a number of organizations includes a morning chat before commencing actual work.   This morning exchange of ideas not only gives impetus to the overall objectives of the organization, they also provide a sense of motivation and empowerment for the numerous tasks and activities that will face the employees during the course of the long working day ahead of them. Though this morning exchange of ideas and sharing of information may not take long, the little time together provides a sense of responsibility amongst team members and leads the team to bring out new ideas that may assist other team members in their course of their day’s normal routine work.   It also allows employees to reinforce ground rules that have already been established by the organization, as well as lead to a truly satisfying and enjoyable working environment. Another important way of enhancing employee empowerment via team building is through enhancing leadership skills among employees.   Good leadership qualities are similar to good parenting. The object is thus to create an environment where employees not only enjoy to utilize their own strengths, but as members of a team also ensure that they become effective and contributing members of the respective organizations. In case of any changes, the workers must be involved or else they will fight progress (Chien, 2004).   In an empowered organization people should not expect to be told what to do but they should know what to do.   There is therefore need to support and stimulate the people co-operate to overcome functional barriers and work to eliminate fear within their team (Hand 1994:25). Research findings concerning self-managed teams have been largely positive.   Proponents claim that self-managed work teams are effective because they empower employees to make decisions that affect their lives.   Thus these teams radically change the way that employees value and think about jobs.   Other benefits associated with self managed teams include greater flexibility to respond to market changes and competitive pressures. 3.1 Companies that have experienced various degrees of success Let us now see why some companies seem so successful while others do not.   Microsoft’s success can be attributed tot heir work place environment, empowerment of employee ideas and their employee benefits.   A motivated work force, coupled with a well built team causes a team of motivated people to work towards accomplishing their goals. In order to achieve its goals, Microsoft hires not only graduates who the company believes will contribute by bringing in fresh innovation and ideas for the upcoming generation.   After hiring these employees, the company ensures that these employees are always focussed and are giving their full potential in delivery of services. Eastman Kodak, a company concerned with developing, manufacturing, marketing imaging products and service for consumers has adapted a Kodak and lean cross-dock projects to oversee that the company is successful.   Lean cross-docks create an environment of empowerment by enabling any cross-dock employee to top and seek help to fix problems.   Employees training encourage empowerment by providing the rationale for why processes are performed in a specified manner.   This not only enhances their employee’s understanding of operations but also facilitates operational improvements. It also practices respect for workers starting with worker safety.   Employee safety is particularly critical at cross-dock because of the fast-faced, high volume material flow.   Respect for workers is also communicated by seriously considering employee suggestions for improvement and reviewing them in a timely manner (Child et al, 1994). In pursuing the opportunity, Kodak used the expertise of Tran freight; a lean-dock specialist.   The team then developed projects objectives based on thorough discussions with Kodak managers.   The objectives included creation of employee-empowered, team oriented in problem solving among others and team building was also at the core of these objectives.   This success enabled Kodak to expand the number of plants and supplies involved in the lean cross-dock operation. With the above two examples, it is evident that team building is crucial for employee empowerment to be a success.   For team building to thrive, the executive leadership needs to clearly communicate its expectations for the team performance and expected outcome.   The team members should understand why the team was created.   The organization on its part needs to demonstrate consistency of purpose in supporting the team with required resources. The members also ought to understand the context.   That is why they are participating on the team.   They should understand how the strategy of using teams will help the organization attain its communicated business goals.   Over and above all, the members should define their team’s importance to the accomplishment of corporate goals and understand where its work fits in the total context of the organization goals, principles and visions. For good team building, the members need to have the desire to participate in the team. The feeling that team mission is important should be entrenched in each and every one of them.   They should perceive that service as valuable to the organization and to their own career, anticipate recognition for their contributions and expect their skills to grow and develop on the team. The management also needs to enhance clarity about the priority of the tasks of the team members.   The organization is required to provide business information regularly.   The team members also need to communicate clearly and honestly with each other and bring diverse opinions to the table as ways of addressing necessary arising conflicts. If these suggestions are not adhered to employee empowerment in an organization is doomed to fail.   These are however not the only reason why employee empowerment fails.   Other reasons are explained herein. Firstly, there is lack of a clear definition of empowerment by managers.   Managers need to clarify such issues as what decisions can be made in their absence by the employees, without their permission or oversight. Secondly, the top management sometimes defines the decision making authority and boundaries with staff but then micromanage the work of employees.   This is majorly because the managers do not trust the staff to make good decisions.   If the staff members know this, they will craftily make decisions on their own and hide the results or come to the manager for everything because they do not know what they really can control (Bateman & Snell, 1999). Sometimes, managers abdicate all responsibility and accountability for decision making when reporting staff for instance is blamed or punished for failures, mistake and less optimum results, they flee from empowerment.   This failure to publicly support decisions and stand behind the employees makes them feel deserted.   As a company’s resource therefore, employees need to be organized forcefully enough to achieve the objectives.   A critical feature of successful teams is that they are invested with a significant degree of empowerment or decision making authority. Equally important, employee empowerment changes the manager’s mindset and leaves them with more time to engage in broad based thinking, visioning and nurturing.   This intelligent and production division of duties between visionary leaders, focusing on emerging opportunities and empowered employees, running the business until day to day provides for a well managed enterprise with strong growth potential. To sum it all up, there are a few things that need to be done for successful employee empowerment as relates to team building.   The top management needs to realize that its behaviour must change too.   They should not expect employees to confidently begin solving problems and making improvements unless they see that the executive group will support it and do it themselves.   Infact, employees will not even bother trying unless they see evidence that top people mean it (Zoglio, 1997). A clear goal needs to be set since groups of employees with no experience working together on business issues will not know where to start.   Focus should be on the real work effort.   Remember, empowerment works best when employees have an important compelling business-related goal such as saving the company from bankruptcy, being the low cost, high quality leader in their field. 4.0 Conclusion For employee empowerment to be a success therefore in any organization, team building is a critical component.   This is because it will ensure commitment which is the foundation for synergy in groups, contribution, effective communication, and co-operation and will also deal effectively with conflict management.

Interview reflection Essay Example | Topics and Well Written Essays - 250 words

Interview reflection - Essay Example Indeed, a calm disposition is an edge over this kind of activity. The question that asked candidates about qualities that commands respect in the classroom was full of insight. First, the personality of the person answering the question would be revealed. If â€Å"grades† were the answer , that reveals the person’s belief in positive or negative reinforcement. Another question that reveals the candidate’s belief is the one that inquires about the stating the goals of a school principal. This clearly shows what the person thinks or believes are the needs of the educational system according to his own perspective. Actually, almost all of the questions were very thought-provoking that required students to practice critical thinking skills and some ethics. The interview activity should always be a part of the class requirements. The activity helps students to understand themselves better and prepare them for real scenarios in the future. Applying concepts learned in the class and communicating them well to other people is a plus factor in one’s

The long-term effects of unemployment on a person Essay - 1

The long-term effects of unemployment on a person - Essay Example Spending is reduced to buying basic items because of the uncertainty of getting a new job. Apart from cutting back on buying certain items the individual may also suffer some personal loss. Especially during this global recession a significant number of persons have lost their homes to foreclosure. It is likely that they may also suffer other financial loss. It is difficult to keep up with car payment, for example. In large families where the recently unemployed is the sole breadwinner the financial effect is more chronic. This can affect the lifestyle of everyone including children. Normal situations such as schooling, entertainment and extracurricular activities can be disrupted. Research has shown that long-term unemployment is experienced more among older as well as blue-collar workers. Many persons in these two categories sometimes do not have enough savings to sustain themselves during the jobless period. In the case of the older worker many of them have to use money from their retirement funds. Another effect of long-term unemployment is strained family relations. The sudden loss of unemployment puts a burden on other members of the family. It causes separation and broken relationships in many families that were already on the verge of break-ups. It takes time for both the unemployed and other family members to adapt to the new situation and status. Although they may realize that it is an uncontrollable situation it is difficult to accept the reality of it. Some persons have reported that they have lost contact with friends during their period of unemployment. The inability to socialize with persons due to lack of extra cash can be a factor. Some persons may have to borrow money from family and friends and the inability to repay these loans can destroy friendships and other relationships. Long-term unemployment can also have rippling effect on other aspects of the family such as the health of the children. In many

The marketing information system (MIS) Essay Example | Topics and Well Written Essays - 1750 words

The marketing information system (MIS) - Essay Example Above all, marketing is a tool that fulfills the needs of the people via a substituting process and creating enduring partnerships. Marketing Information System is created to provide back up when the need to come up with significant marketing decisions (Kotler, Keller, & Lane, 2006, p. 34). This can be explained as a structure where information regarding marketing is officially examine collected, recorded, examined and sent to administrators in reference with their information requirements regularly. According to Kotler, et al. (2006) marketing information system represents individuals, tools and processes that collect, classify, analyze, examine and dispense required, suitable and right information to the marketing administrators. p.42. This paper narrows down the topic to MIS methods and consumer behavior stimuli. It also outlines the link between MIS methods and consumer behavior stimuli. This paper is systematically structured whereby the main methods to develop marketing informa tion are first introduced. Later on in the paper, these three main methods are linked to consumer behavior stimuli, where appropriate MIS methods to address each buyer behavior stimulus (in B2C and B2B), is established. Finally, the paper discusses each Stimulus in relation to the nature and pros& cons of MIS tool. A large number of firms construct wide internal data bases, electrical compilations of data collected from data resources in the firm. Marketing managers have the ability to retrieve and manage the data and information presented in the data base to establish marketing chances and intricacies (Kotler, 1988, p 102). They can outline action plans and analyze the firms functioning from these internal databases. Above all, the information present in the internal data base can originate from a wide range of resources. For instance, the accounts division can come up with financial accounts and maintains

Explain in what ways the corecompetences and resource requirements Essay

Explain in what ways the corecompetences and resource requirements differ between a firsttomarket, secondtomarket and latetomarket innovation strat - Essay Example It is known widely that R & D is much valued in technological firm which increases value of the firm. Patents are looked upon as an offensive and a defensive asset. Offensively, it aids a technological company to earn licensing royalties and/or seeking an injunction to halt a competitor from shipping a product. Defensively, patent portfolio provides leverage to negotiate for a more favorable settlement. Hence, according to Coombs (1996), it is important for innovation firms to have their patent portfolio in line with their corporate strategies. For a first-to-market innovation strategy, patents act as an offensive role in the early stage to achieve market monopoly. However, this is not true for a recent example. Creative's core competency in the portable media player industry lies in its innovative capability to create value through innovations. It was reported that Creative was the first to market its first generation of portable media player in 2000. However, Creative neither achieves market monopoly nor dominates the market currently. After the patent was awarded to Creative in 2005, Creative sought an injunction that stop Apple from selling the iPod. The outcome was that Apple would pay US$100 million licensing royalties to use Creative's "Zen patent" for an MP3 player interface. Creative Technology's profits were then raised a record 11 times due to the lump sum payment from Apple. (News of the profit can be found at http://www.marketwatch.com/news/story/apple-profit-rises-78ipod/story.aspxguid=%7BCCF6CF6B-D2C6-435B-A5B2-E6D92872F777%7D) In this case, "Zen patent" helped to increase Creative's profits in the year of 2006, enhancing its roles. This agrees well with Robinson (1988) where pioneer firms benefit from patents to a greater extent than second-to-market and last-to-market firms. However, Creative Zen's market share is surprisingly lower than Apple iPod. Even though Apple lost to Creative in the court, Apple continued their patent filling for another invention: iPhone. More than 300 patents were applied for iPhone, proving that second-to-market firms do find ways to improve their technologies. On the other hand, last-to-market firms exit earlier than the first-to-market and second-to-market firms in the industry. Late-to-market firms might also have to pay licensing fees to first-to-market or second-to-market firms for the usage of their patents. For them to stay in the industry, they need to have more innovative products with new features which are able to define themselves. One example is Dell who entered the industry in 2003 and made the exit in year 2006. (The news was found in http://www.pocketlint.co.uk/news/news.phtml/) Unlike Apple, Dell was not able to come up with new products. 2.2 Marketing strategy Marketing strategy allows an organization to pool its resources on opportunities to achieve a sustainable competitive advantage. Creative Zen was outshadowed by Ipod in the market even though Creative Zen was the first portable media player in the market. It was reported that Apple dominated the MP3 player market in 2007 with 72.3 % market share. Creative Labs was 2.7 % market share while Dell was not even in the top 5. (News of the market share is found in http://www.bloomberg.com/apps/newspid=conewsstory&refer=conews&tkr=AAPL:US &sid=aggTRzHFt1Do) The market

Starbucks Essay Example | Topics and Well Written Essays - 750 words

Starbucks - Essay Example Back in the US, situations were totally different. The option to drink a cup of coffee that was prepared according to the customers’ preference was not available. The available options were fast-food restaurants or gourmet cafes which were not open in the early morning hours of the day. Schultz was influenced by these three factors; absence of coffee shops in the early morning hours or extended hours of the day, the inability of the shops to prepare coffee according to the choice of customers, and people’s interest in using cafes as places of public interaction. Thus, Schultz started his own Coffee bar that allowed customers to decide the nature of the coffee to be made. Thus, in 1986, Schultz opened his coffee bar in Seattle in the name ‘Il Giornale’ and on the first day, they served 300 customers and precisely according to his observation, most of the customers came in the morning hours. Soon, he acquired the Starbucks’ name and operation. Thus, it is evident that the success of Starbucks was largely dependent on its success in identifying the opportunity and bringing into practice what they have envisioned. 2. The five forces according to Porter’s Five-force model are: a) potential entry of new competitors, b) potential development of substitute products, c) bargaining power of suppliers, d) rivalry among competing firms, and e) bargaining power of consumers. When the first force is considered, the biggest threat comes from McDonalds’ McCafe as it is easy for McDonald to add coffee services to their existing retail services. As per reports, the income from McCafe is 15% higher than the income from a regular McDonald and presently, it is the largest in Australia and New Zealand. In addition, Starbucks has something to worry as it has not started providing canned or bottled coffee; and it is clear that one who wants to save time and money will certainly go for canned or bottled coffee instead of the Starbucks mug (Strategic Management PMS 3393). When the third point is considered, one has to accept that Starbucks is victimized to this situation very often. In 2001, Starbucks was forced to buy coffee bean at a higher price as the suppliers raised the price. However, prior agreements on price will help the company overcome this problem. In machines and technology, the company will have to go for the total ownership of supplies. However, rivalry among competing firms is the most important one. Currently, there are about 14,000 coffee outlets in the US and there are many restaurants and supermarkets where coffee is cheaper than that of Starbucks. Some other important competitors are Dunkin Donuts and Krispy Kreme followed by coffee brands like Tully’s and Pete’s Coffee. In addition, their non-coffee products are threatened by brands like Orange Julius and Jamba Juice (Starbucks: â€Å"The Non-Coffee Treat†). However, as far as Starbucks retains perfection and quality, these competitors will not raise any serious threat. The last point is the bargaining power of customers. It seems that customers bargain only when alternatives are available and hence, this will not create a threat to Starbucks. In addition, its huge popularity reduces the bargaining power of the public. In fact, the situation was totally different in the

Earmarked Tax in Public Sector Essay Example | Topics and Well Written Essays - 4750 words

Earmarked Tax in Public Sector - Essay Example For instance, earmarking of taxes for protecting the environment is commonly applied in the US, Europe and other western countries. Furthermore, taxes that are collected from fuel consumption and motor vehicles are allocated for the construction of national and state roadways (Anesi, 2003). Furthermore, concerned with the increasing health related issues, World Health Organisation (WHO) has further increased the global tax rate of cigarettes and other tobacco related products to 10% which will ensure an additional revenue generation of 7%. However, the revenue percentage generated can increase in higher income countries compared to lower income countries. However, the members of WHO stated that despite the steep increase in the taxes charged for cigarettes and tobacco products, people are not discouraged in limiting their addiction levels irrespective of the income status of the country (Prakongsai & et. al., 2008). Part 1: Literature Review According to Brett & Keen (2000), earmarki ng has the possibility of affecting the electoral outcome due to the decisions of the policymakers and representative voters. It has been observed in this regard that the policymakers often tend to use earmarking to motivate the voters’ belief in order to earn considerable amount of votes against the competing party. Hence, it can be suggested that earmarking of taxes should either be fully implemented or abolished, similar to the strategies adopted by the Australian government which assigns the entire amount of gambling taxes towards serving a particular purpose (Brett & Keen, 2000). However, Garrett (2001) argued that earmarking of taxes is effective in changing the behaviour of the citizens in most of the countries causing a deep impact over the socio-economic trend. However, it is worth mentioning that if earmarked taxes are diverted from their projected purposes, it can create certain limitations for the policymakers (Garrett, 2001). Therefore, it can be concluded that e armarked taxes can be effective in changing the behaviour of the citizens towards certain products and practices that tend to affect the health of the people by a large extent. As observed by Mossialos & Dixon (2002), healthcare systems are based on dependable factors that have an access to human, consumable and capital resources. Availing these dependable factors require adequate financial resources for establishment cost, adequately compensating the employees offering healthcare services and incurring expenses for drugs and other consumable medicines. Moreover, these measures are fundamentally adopted by the governmental authorities for generating revenue, and managing them in according to their importance. Since, the costs are increasing gradually and resources are being scarce, policymakers are facing huge challenges in attaining funds. Therefore, it can be suggested that containment of costs and increasing the funding can improve the healthcare services (Mossialos & Dixon, 2002 ). According to the findings of Kanavos (1999), the total expenditure on healthcare sector incurred by the UK consists of personal medical services which include ambulatory care, medical goods and in-patient care.