In Bruce Gottlieb??™s article ???How Much Is That Kidney in the Window??? Gottlieb argues that the American people should be allowed to sell their kidney. Jack Kevorkian argues that the way that kidneys are recieved from the deceased and from donors does not provide enough kidneys to keep those who need a kidney alive. Kevorkian believes that the sale of kidneys should be permitted and that the lives lost while waiting for a kidney transplant would be saved. Many argue against legalizing the sale of kidneys because of the danger to the donor but there are other procedures being done legally that are more dangerous to the donor than a kidney transplant is. He compares the effect on life expectancy from donating one kidney to be no more dangerous than driving an extra sixteen miles to work each day. Recipients from the sale of a kidney would benefit not only from the fact that there would be more kidneys available but also from the stand point that a kidney from a cadaver last for eight years compared to a kidney from a live donor last more than twice as long. Transplant surgery and postsurgical treatments are very expensive and Medicare pays the medical bills of patients who need dialysis. The federal government and insurance companies could break even within a two year period by purchasing a kidney just from the savings on patients now on dialysis. The government could create a price floor to keep sellers from bidding down the going price for a kidney and should allow the poor to sell a kidney just like anyone else. Legislation could easily draft a law allowing the sale of a kidney but keep other organs from being sold. I agree that the sale of kidneys should be allowed because the recipients and the seller of a kidney would benefit as well as the insurance companies and the government could save a substantial amount financially.
? ? ? ? In response to Bruce Gottlieb??™s essay on the legalization of selling kidneys, there have been many heated debates over the legalizing the sale of a kidney. I am in full agreement with Bruce Gottlieb over the legalization of selling one??™s own kidney. Not only does the donor gain something from being able to make money off such a transplant, but the receiver in need wins as well for getting the life saving treatment he or she needs. Kevorkian states, ???As of April 30, there were 44,989 people on the waiting list for a kidney transplant. About 2,300 of them will die this year while waiting.???(2) That number could be reduced to almost no deaths if the selling of one??™s own kidney was legal. The fact is that not enough people are dying, or dying quick enough to help the people in need in time. If legalized, that wait would be less than half the original waiting period, perhaps even less than that and would save countless lives. I worked in a hospital for five years and seen how difficult it is for people on dialysis to sit for countless hours, and looking exhausted while going through dialysis. I have talked with the staff in dialysis who told me that many of their patients run out of time while waiting for a kidney or just give up and pass away.
The legalization of selling kidneys would decrease the suffering that these patients go through during dialysis treatments. Gottlieb states, ???This brings us to the most powerful objection to the sale of kidneys that, in practice, it would result in the poor selling parts of their bodies to the rich.??? Regardless of whether or not the poor would be more likely to sell to the rich is not an issue if the case was that they decided to donate for their own personal interest. Selling is also another way for the poor to help themselves financially while living in poverty, and as an added bonus they may feel that they have also saved someone??™s life.?
If selling a kidney could save someone??™s life and not endanger their own life, I believe that this is something that should be legalized. The fact that a kidney donated by a living donor last more than twice as long as one from a deceased person, and that more lives would be saved speaks for itself to legalize the sale of kidneys. The savings to the insurance companies as well as the government to buy a kidney and be able to recoup that dollar amount rather than paying for dialysis for seventeen years or more should make the government more open to the legalizing the sale of kidneys.
Area of Study: Retail-Supermarkets in UKTitle: Investigation into control of the supply chain networks by supermarket chains.AcknowledgmentsMany thanks to Kofi Narh-Saam for your clear guidance and to colleagues in my group for your kind support, all without which this report would not have materialised. To my wife Shamie- thanks for putting up with the long hours of silence during my research and for the enduring isolation from your favourite TV programmes.Contents Item Page NumberExecutive Summary 4Introduction 5
Literature review 5Methodology 6Findings 6Analysis 6-10Conclusion 10References 11-12Abstract or summaryThe focus of the following analysis is to investigate the various means by which superstores control the value chain to gain competitive advantage over rivals. It is an examination of the supply chain network covering manufacturing, warehousing, logistics and distribution functions and based on the big four supermarket chains(Tesco, ASDA, Sainsbury??™s, and Morrison??™s).IntroductionThis report is premised on the fact that competition at the till, coupled with changing consumer demands particularly during economic down turn, push supermarkets to adopt cost leadership strategies which involve sourcing products at increasingly low cost in order to offer value to customers at competitive prices. Discount retailers such as Lidl use value pricing strategies to attract brand switching consumers at the expense of supermarket chains. Consequently, the big 5 supermarket chains have repositioned their offering by focusing on cost leadershipSupermarket chains focus on the efficiency of their supply chains to deliver value to the customer at minimum cost often at the expense of manufacturers, farmers and third-party logistics companies. They leverage the scale and scope of their massive distribution capabilities to tilt the balance of power within the supply chain network in their favour. It is therefore paramount that more weight is given to store formats and expansion of stores in this analysis. To limit the scope, the analysis will be confined to mainly the big five supermarkets (Tesco, Sainsbury??™s, ASDA, Morrison??™s) ???who together account for over two-thirds of UK retail food sales??? Fearne (2005, p.570) ObjectivesThis report aims to:
a) Examine the reasons for the supermarkets??™ focus on controlling their supply chains
b) Explore the various strategies employed by supermarkets to enhance their control on their supply chains such as multi format distribution channels, global sourcing, pressure on suppliers, and the use of own labels.
c) Discuss the effects of supermarket control on competitors, suppliers and other supply chain partners
d) Shade light into the future competitive structure in supermarket supply chains in respect of internet retailing.Literature ReviewMichael Porter??™s five forces of competition and the Resource-based view of the firm are applied in this report to explain how both industrial level and firm-specific factors affect the supermarket chains??™ competitiveness. Supermarket chains use their internal resources such as distribution stores as competitive advantage to counter the forces of competition in the industry. The supply chain or value chain networks are discussed as areas where, in the context of the theories, supermarket chains seek competitive advantageCost leadership is a strategy adopted many of the supermarket chains to meet consumer demand for cheap products. It involves competing on price by using economies of scale to source products at low prices.Total logistics concept is applied in the context of movement and warehousing of goods to achieve efficiency and cost reduction by treating the entire process as one rather than fragmented.MethodologyThe following resources were used: books, newspaper articles, journals and websites. While books were used to explain the market structure, they are less significant compared to journals (particularly trade journals) and newspapers in providing up-to -date information.
FindingsSupermarket chains leverage their floor and shelf space to control their supply chains. Supermarkets are under pressure to sell products at cheaper prices and therefore they exercise buying power against the interest of partners in the supply chain.AnalysisPricing strategies and Brand positioning A supermarket??™s pricing strategy relates directly to the way it manages its supply chains. As the global recession hit disposable incomes, consumers are trading down and increasingly demand lower prices. The recession has forced customers to seek value over brand loyalty. In response supermarkets have adopted the discount concept followed by discounter chains like Aldi and Lidl (Euromonitor 2009). Faced with tighter margins as a result of consumer demand for cheaper products and of cut-throat competition at the till, supermarkets have turned to the supply chains to reduce their costs and therefore to fatten their margins. By buying in bulk, supermarkets can squeeze suppliers??™ prices and then sell discounted goods to the consumer. Endless promotions such as buy-one-get-one-free (BOGOF) compliment loyalty cards and other promotional activities designed to drive sales. Discount concept could be counter-productive to the long-term benefit of supermarkets in that it leads to commoditisation of consumer goods and reduce margins to wafer-thin levels.Euromonitor (2009 p.16) point out that ???major grocery retailers are increasingly focusing on private label in order to boost their low-price credentials, with an emphasis on value private label ranges.??? The private label strategy puts supermarkets in competition with manufacturer products and therefore it drives down prices of goods. Supermarkets are also beginning to act like brands giving them the option to segment the market and position some of their brands on premium platform just like the manufacturers. Euromonitor (2009, p.16) highlight the fact that whereas manufacturer ???sub-brands like Flora Pro-Active and Flora No Salt are targeted at distinct customer segments,…retailers can bring out a brand and span it across all categories.??? For example, ???Tescos Organics range is extended across many products ??“ baked beans, fruit and vegetables, bread and so on???- something beyond the means of a manufacturer ( Euromonitor (2009, p.16). According to Mintel (2008), analysis across product categories shows that ???the more local it goes, the more expensive a product becomes regardless of retail channel.??? Supermarkets chains therefore emphasise in their marketing communication on the local sourcing of farm products to enhance customer value perception. However, consumers have objected to the over bearing power supermarkets chains have over farmers when negotiating prices for fresh produce.In the same vein, having the brand associated with ethical organisations or with supply chains endorsed by ethical organisations as environmentally friendly can give supermarkets competitive edge. West (2007) explained that increasing ???consumer sensitivity to corporate social responsibility has resulted in shoppers demanding more information about whats behind the price and that means being able to scrutinise every aspect of production and supply.??? King (2010) as cited by Mortimer and Baker (2010, p. 5) explained that being associated with Fair-trade increased Sainsbury??™s market share of Fair-trade products to the extent that Sainsbury??™s overtook ???Wal-Mart as the worlds biggest retailer of Fair-trade products with one in every four pounds spent on Fair-trade products in the UK spent at Sainsburys.??? Positioning of UK retailersKwiksaveLidlAldiSainsburyTescoAsdaCullensMarks & SpencerHigh
Perceived price level
Perceived quality of store offering
Middle market sector
Premium sectorBased on Mintel dataEconomies of scaleSuperstores give large retailers competitive advantage by allowing them to house multiple brands and categories under one roof, hence providing a one-stop choice for the customer. The retailers leverage their floor and shelf space to pursue a cost leadership strategy by sourcing products from suppliers at lower cost than competitors and then sell them at low prices to drive high revenue. In fact, the strategy depends on the optimisation of the supply chain, which (by definition) implies treating the supply chain as a whole in order to ???synchronise and converge intrafirm and interfirm operational and strategic capabilities??? (Lysons and Farrington 2006, p.95) Furthermore, total logistics cost concept is employed based on the notion that ???decision ??“making concerning the movement and storage of materials should be done as a whole rather in discrete parts??? (Brassington and Pettit 2006, p.556.). The key objective of total logistics is to achieve efficiency and cost reduction in the process of warehousing, transportation and distribution of goods for the mutual benefit of all partners in the value chain.
In reality, as competition increases at the till, supermarkets seek to increasingly exploit the supply chain networks to deliver value to the customers at lower prices than the competition. A tight control of the supply chain not only enables supermarkets to deliver value at cheap prices, it also ensures availability of products at all times. West (2007) points out that Sainsbury??™s lost customers in 2007 because of ???stock-outs.???
In the UK it is now common practice for supermarket chains to vertically integrate their transport, warehousing and logistics functions in the supply chain by getting rid of third party operators in order to improve efficiency and to cut costs. Morrison??™s, for example, runs its own supply chain in order ???to offer fresh food at cheaper prices than would otherwise be possible;??? baking bread in stores and operating its own abattoirs (Bates 2009; cited in Marketing Week 2009, p.30). Ryan (2010), states that Wal-mart intends to pursue a new global sourcing strategy to squeeze out middlemen and save about $12bn in costs.
Reverse logistics, which involves ???removing slow moving, damaged or spoiled goods from stores and shipping them back to suppliers to make room for products that will sell??? is applied across the industry where ???non-perishable non-food items are concerned (Kumar 2008, p.205). New trends in reverse logistics involve returning damaged and out-of-date stock first to a central processing center for sorting, and then to suppliers, a process which has added costs to suppliers while freeing supermarkets shelves of unwanted stock (Kumar 2008, p.205). Technology and innovation
Technology and innovation are fundamental to the overall efficiency of the supply chain as this ensures that shelves are kept stocked at low costs. Wal-Mart which owns ASDA in the UK monitors, in real time, the movement of each of its products through the supply chain anywhere in the world through internet-based networks. In 2003 Wal-Mart ???forced its top 100 suppliers to implement and deploy RFID tagging at the case and pallet level by January of 2005??? in pursuit of its cost-leadership strategy (Woods 2005 as cited by Liu et al. 2008, p.7). The technology enables the supermarket to: ???automate data capture??? (for example, automated discounting to sale perishable food before expiry dates), make ordering decisions, and gain ???product item visibility,??? all of which are critical in the management of perishable food. According to Market Weekly (2007), Tesco has applied Toyota- style lean thinking to its operations to ???cut costs, improve customer service and fatten margins all at the same time.??? West (2007) notes that ???supply chains have become very sophisticated, especially in the chilled products and fresh food areas where retailers are increasingly using just-in-time deliveries.???
Furthermore, with growing consumer interest in ethical and green issues, technology enables ethically-conscious consumers to gain visibility of the value chain so that they can trace products back to their origins which can cement customer loyalty to the brand. Euromonitor (2009, p.23) point out that ???online sales are now so key that almost all store-based retailers have evolved a web-based strategy in parallel with bricks-and-mortar operations.??? Store-based retailers take advantage of ???multi-channel retail, such as collect-in-store options??? (Euromonitor 2009, p.23) to add value to the distribution of on-line products.On the other hand, the power dynamics in the supply chains could be changed by internet shopping. In fact, many suppliers now look to the internet as alternative to supermarket supply chains. According to Euromonitor (2009) the economic down turn gives opportunity to internet retailers to undercut store-based players on price and therefore increase alternative supply chain networks for suppliers and third-party logistics companies. Multiple distribution formatsThe balance of power within supermarket supply chains is a factor of the retail floor and shelf space that the supermarkets have. Fearne et al. (2005, p.507) points out that because ???only a handful of supermarkets control access to consumers means that they are increasingly in a position to exercise buyer power.??? Evidence of retailer excessive power has been highlighted in the press on several occasions. In 1999 Tesco was exposed for ???attempting to pass the costs of an in-store promotion to farmers??? (Fearne et al. 2005, p.507). The suppliers and manufacturers have inherent vulnerability since they have ???no other viable means of setting up distribution channels that offer the same scale and economic benefit??? as alternative to existing supermarket channels (Fearne et al. 2005, p.507).. Suppliers compete fiercely to get supermarket shelf space for their products and in the process suppliers have less bargaining power in negotiating higher prices for their goods with supermarkets. The superstore model (the relocation to larger, out-of-town sites) in the 1980s allowed supermarkets to utilise additional space by extending their offering to include non-food products. According to Mintel (2009), sales of non-foods by grocers have increased ???by 52% since 2003 to reach ?20.4 billion annually.??? Key Note (2008, p. 4.) points out that supermarket are also ???selling services and utilities, capitalising on their trusted brands, and forging partnerships with other companies.???Supermarkets continue to innovate in terms of formats, and ???grocery retailers are attempting to become less reliant on large out-of-town stores in developed markets??? (Euromonitor 2009, p.3). The major supermarket chains are aggressively expanding by acquiring convenience stores (c-store), which include forecourt stores. According to Mintel (2009), a c-store is ???any store which is complementary to a superstore, which is geared to top-up shopping and which gains only a small part of its business from primary shoppers.???
The expansion into c-stores is a strategy by supermarket chains to circumvent planning laws restricting the construction of the preferred large, one-stop and ???out-of-town formats??? by forcing the retailers to prioritise town centres, ???through the so-called sequential test??? (Wood and Browne 2007, p.235). Acquiring smaller stores brings large retailers into competition with ???neighboured retailers??? allowing supermarket chains to leverage their experience, ???complex, efficient supply chains and buying infrastructures??? to outperform smaller players (Wood and Browne 2007, p.235). According to The Grocer (2010, p.44), Tesco Express, dominates the convenience store format in terms of sales, ???number of stores, standards, value and range.??? Tesco convenience store numbers are expanding so rapidly that in 2009 the stores ???increased by 21.7% from 938 t0 1,142 stores??? beating their target of 150 stores a year (The Grocer 2010, p.44).
In future sustaining competitive advantage will be achieved by integrating a retailer??™s offerings in order to optimise service to its consumers. Hough (2010) reported that Tesco plans to develop ???mini-villages??? which include ???a series of smaller mixed homes, shops and leisure developments in Ipswich and the North East.??? The advantages of such a strategy is that Tesco would no longer depend on property developers for expansion and, by creating communities; Tesco would create demand and therefore justify the need for supermarket stores as required by the planning regulation. Furthermore, Tesco could create barriers to entry against competition and therefore further entrench its control of the supply chains. The retailer would have more personal data than the government giving it formidable power to eclipse that of the government (Hough 2010). For the customer, life would revolve around the retailer: it would mean ???buying or renting a home through its estate agent services, securing mortgages through its banking arm and purchasing products on its credit cards through stores??? (Hough 2010)Conclusion and recommendationsThe above analysis highlighted the multiple distribution formats of the major supermarkets as the single most potent competitive advantage upon which supermarket chain rely to control their supply chains. It is equally persuasive to argue that internet retailing offers alternative supply channels for manufacturers and third-party logistics companies to sell and supply directly to the consumer avoiding the supermarket supply chains. In addition to planning and competition laws as well as consumer demand for ethical trading, internet retailing could reduce the dominance of supermarket chains in the supply and distribution of products in the future. This perhaps explains why supermarket chains have entered new markets such as property, finance, and internet retailing to diversify from consumer goods retailing.
ReferencesEuromonitor (July 2009): Global Retailing: New Concepts in Retailing ??“ The thin line between Success and Failure: Euromonitor International. July 2009. London: Euromonitor InternationalEuromonitor (2009) Global Retailing: Expansion Strategies of the Worlds Leading Retailers: Euromonitor International. July 2009. London: Euromonitor InternationalThe Grocer (2010) Convenience power player The Grocer, 22nd May, p.44.
Ryan (2010), Think our sourcing??™s global You ain??™t seen nothing yet…The Grocer, 6th February, p.14.Mintel (2009) Convenience Stores: Mintel marketing report. September 2009. London: Mintel International.Mintel (2008) Locally Sourced Foods: Mintel marketing report. September 2008. London: Mintel International.Mintel (2009) Non-foods in Grocery Multiples: Mintel marketing report. March 2009. London: Mintel International.Key Note (2008) Non-Food Sales in Supermarkets: Key Note Market Assessment. January 2008. Hampton: Key Note LtdWood, S. and Browne, S. (2007) Convenience store location and forecasting-a practical research agenda International Journal of Retail and Distribution Management, 35(4), pp.233-255Hough, A (2010) Tesco mini village building plans will make it more powerful than government [Online] Available from: www.telegraph.co.uk/…/Tesco-mini-village-building-plans-will-make-it-more-powerful-than-government.html. Accessed on: 20/05/10Lysons, K. and Farrington, B. (2006) Purchasing and supply chain management 7th ed. London: FTBrassington, F. and Pettit, S. (2006) Principles of Marketing 5th ed. London: PearsonMortimer, R. and Rosie Baker, R. (2010), Fair-trade is giving us the edge, says Sainsburys. Marketing Week 18th Feb, p.5. Marketing Weekly (2009) Triumph at the tills March 26 Marketing Weekly 26th March, p.30.West, R (2007) Supply chain management; Demand for supply. Marketing Weekly 5th April, p.43.Market Weekly (2007), Business success stories are masterpieces of fiction. Marketing Weekly 8th March, p.28.Kumar, S. (2008) A study of the supermarket industry and its growing logistics capabilities. International Journal of Retail & Distribution Management, 36(3), p. 192-211Liu, X. Tang, O. and Huang, P. (2008) Dynamic pricing and ordering decision for the perishable food of the supermarket using RFID technology. Asia Pacific Journal of Marketing and Logistics, 20(1), p. 7-22.Fearne, A. Duffy, R. And Hornibrook S. (2005) Justice in UK supermarket buyer-supplier relationships: an empirical analysis. International Journal of Retail & Distribution Management, 35(8). P570-582
Money acts as a medium of exchange, unit of account and store of value.
The chief purpose of money is to act as the medium of exchange. Money is used to buy and sell goods. People trade money for goods and goods for money. Without money we would have to use the barter system. The AmosWEB is Economics: Encyclonomic Web*pedia (2000-2012) website states, ???The key to successful barter trades is double coincidence of wants, each trader has wants the other wants and wants what the other has. Without double coincidence of wants, a barter economy can become exceedingly inefficiency. Traders spend more time seeking trades and less time producing goods.??? Therefore money would make transactions easier because money removes the need for double coincidence of wants because everybody is eager to accept money in lieu of goods. I bake cakes and sell them for money and use the money to buy things I need.
Unit of account measure the common values of good and services throughout the economy. Prices of goods are quantified in terms of the monetary unit. Knowing the price of a good, in terms of money, enables both the supplier and the purchaser of the good to make decisions about how much of the good to supply and how much of the good to purchase. For example, cable suppliers charge high rates for cable. You can get every channel or you can buy a few channels. I choose to buy a few channels and opt not to get all of the services.
In order to have a store of value money must be able to be saved and retrieved at a later date and time, hold value and be useful when retrieved. I put my money into a savings account and buy things at a later date when on sell.Reference
AmosWEB is Economics: Encyclonomic WEB*pedia. (2000-2012). Retrieved from http://http:/www.amosweb.com
Control can be defined as a device or mechanism used to regulate or guide the operation of a machine, apparatus, or system. Organizations use controls to regulate their business processes, which include production, distribution, finance, and so on. Controls help organizations to restrain and correct atypical behavior, and to reduce and prevent the spread of problems and errors (Microsoft Technet, 2006). Control is described as one of the four fundamental functions of management which includes organizing, planning, and coordinating where organization controls describe the primary mechanisms that managers use to direct attention, motivate, and encourage McDonald??™s members to act in desired ways to meet business objectives. Control mechanisms is defined by Boland (1979) as seeking compliance with established plans, standards, quality criteria, and in conformance with organizational goals and values in which can be both enabling and constraining to the organization. Control mechanisms are used to monitor progress and evaluate performance. Businesses, like McDonalds must have control mechanism in order to be more efficient in managing their business organization.
Controls are implemented through internal controls, technology, social structure and culture. Internal controls are broadly defined as the standards and procedures that a company establishes to protect its assets (Kelleran, 2006). McDonald grows, it would tend to hire more people to help conduct the business. However, without these policies and procedures in which companies implement, it would be impossible for the company to protect its assets and conflicts may arise between the people in the organization. Standards and procedures must be implemented in the company. Personal control is defined as the dyadic relationship between the direct supervisor and subordinate. While social structure is embedded controls with policies, procedures, rules, well-defined job descriptions, career ladders and incentive schemes. On the other hand, culture is the workers shared norms and values that shape behavior, order perception, and influence attitudes. A shared ideology obviates the need for extensive and explicit procedures and rules, providing a philosophy of interests and norms from which members can deduce an almost limitless number of specific rules to suit varying conditions.
The company??™s Code of Conduct adhere highest levels of ethical business practices in which guidelines for ethical conduct of directors, officers and employees are provided. It is the code in which the company put into practice. It is an expansive statement of principles of the company that should conform to their actions as part of the company. It means ???being at McDonalds is striving toward the highest possible standard of ethical business conduct. In addition, the board of directors has a set of Corporate Governance Guidelines to provide framework so that the management and the board can operate effectively together to achieve the company??™s objectives. Its corporate structure has established appropriate financial controls and internal process management. In order for the company to establish good control over the hired employees, it important to consider having potential employees completes an application form in their own handwriting. It is important also to have the potential employee over a series of two to three follow-up interviews with the other staff member. In the case, hiring is by committee in which one person talks to different people. It is also essential to ask a potential employee tough question. In this manner control of incapable applicants may be avoided and that managing these people would to much easier.
Control mechanism also can by specialization of labor or responsibilities, projects are made by teams. Division of responsibilities would be also a much easier to control since it would be easy to determine which work is effective and efficient and whose work are not. Performance management would be easy to accomplish. Having also specialization gives an individual more responsibilities and the sense of making works more efficient and effective. McDonalds has set policies in their company in order to protect their most valuable assets which are the knowledge workers which are mostly engineers. The following are enumerated by Eric Schmidt and Hal Varian (2005). Hire by Committee in which the person being interviewed would actually at least half dozen of the company??™s management and staff. Cater to every need, provide standard package of fringe benefits, but on top of that are first-class dining facilities, gyms, laundry rooms, massage rooms, haircuts, carwashes, dry cleaning, commuting buses about anything a hardworking engineer might want. Pack them in as McDonalds is team project, and teams have to communicate, employees are put within feet away from each other for ease of communication. Sitting next to knowledgeable employee was an incredibly effective educational experience. Communicate effectively; allow management to stay in touch with what knowledge workers are thinking and vice versa. McDonalds has remarkably broad dissemination of information within the organization and remarkably few serious leaks.