The types of risks and risk management measures which are needed in a Essay - 1

The types of risks and risk management measures which are needed in a financial institution - Essay Example The paper tells that risk is always going to be present in a financial institution and the higher the risk, the higher the return that the institution gets. Basically, risk and return are related in the same direction. A minor example of this would be a bank charging different interest rates on different individuals who have opted for the same loan. The individual who has a relatively poor credit history is likely to receive a higher interest rate as there are chances of him/her not paying the loan bank. Therefore, there is a higher risk and the bank gets a higher return through the higher interest rate charged. However, risk needs to be managed and there can be several huge losses if the financial institution is not ready to deal with it. Risk management is a type of strategy which every financial institution needs to have at its core and there are several parts involved in this including monitoring the risks, measuring these risks and controlling risks. It is the analysis of risk m ixed with the element of quality risk controls. Risk management is required by banks and financial institutions as a safety measure to protect the institution from any major financial problems. The uncertainty and the potential inherent risks that come with the financial markets makes it important for most of the financial institutions and banks to use risk management. The risk management controls are one of the major determinants of the financial stability of a bank. Systematic risk is also known as diversifiable risk. Basically, this particular type of risk means the risk of the change of asset value associated with systematic factors. Therefore, the risk cannot be fully diversified. There are several subcategories under systematic risks and there are various ways in which the value of an asset can be affected. The determinant of the change in the value of the assets owned by the institution and it depends upon natural and economic factors including interest rates affecting the va lue of the assets, an increase in inflation might cause an increase in fuel prices which might affect transportation and stock value and changes in economic conditions which may cause several changes in the value of

Justice John Paul Stevens Case Study Example | Topics and Well Written Essays - 500 words

Justice John Paul Stevens - Case Study Example One of the most important factors of this case is the dissenting opinion of Justice John Paul Stevens. Justice Stevens stated that the judgment reached by the court was a strained decision which was also supported by a reading which was unpersuasive. He continued to say that the decision had overturned a precedent which had stood for a long time and also that the court had bestowed the law in a dramatic upheaval. Stevens states that it was notable of the amendment because it had omitted any of the statement of the needs that were associated with the individual's rights to utilize firearms when hunting or also in self defense and that this rights were present in the Declarations of Rights of Pennsylvania and Vermont (Gary, 2008). The dissent of Justice Stevens can be seen to be focused on four points of disagreement. One of the point of disagreement is that the Founders did not intend to make the individuals rights in possession of guns an aspect of the Second Amendment and if they intended it they would have made that clause expressly in the Second Amendment. The other point of disagreement is that the preamble concerning the militia and that the exact phrase which mentions to keep and bear arms is only applicable to the state militias only and not all individuals according to the Second Amendment.

Curbing College Drinking Essay Essay Example for Free

Curbing College Drinking Essay Essay â€Å"Curbing College Drinking†¦Ã¢â‚¬  The consequences of college binge drinking are more destructive and life- changing than students realize. In the article â€Å"Curbing College Drinking Starts with a Change in Attitude,† by Sara Fritz, published in Pearsons The Effective Reader in 2011, the author explains the problems resulting from excessive drinking on college campuses. Due to the seriousness of drinking, colleges find, it will take the combined effort of parents, students, and college staff to accomplish the best end result. Fritz begins her article exploring the issues that arise within college campuses when college students drink in excess. With much time invested as a college trustee and through many long discussions with students, Fritz is discouraged to discover that students arent convinced of the severity stating â€Å"our parents drank† making it seem as just a stage that one goes through. It doesnt stop thereas scientists study the problem, they believe the entire student population must be changed. Also, they believe the college enviroment must be changed in order to revolutionize at risk drinkers. Although Fritz appreciates the efforts of the scientists and commends them on their work, the findings were inconclusive. Fritz provides many facts and opinions in her attempt to persuade the readers of the severity of drinking on college campuses and ways to solve the growing issue. She expresses her disgust when she sarcastically states What a concept!† Clearly frustrated, the reader can then be convinced that its been a long standing battle within the college and within her career. With little to no progress, Fritz remains bitter. After reading this article, I agree that college drinking is a serious issue. Fritz offered many good ideas for finding a solution to the problem. Through her personal experiences as a college trustee, she has witnessed, first hand, the tragic effects of college drinking. Perhaps, as parents, we should focus on explaining the dangers of drinking to our children. It may be helpful if we relate to them on the issue, rather than pretending its something we have no experience with. I hope that one day a solution will be found to this growing problem.

Schwann Cells and Nerve Regeneration

Schwann Cells and Nerve Regeneration Yinghui Xu   Ã‚   Abstract The majority of the nervous system cells are glial cells, which have various properties and functions. Schwann cells are the principal glial cells of the peripheral nervous system(PNS). In normal nerves, they function to form insulating myelin sheath around axons and provide support to neurons. In injured nerves, however, they change their properties and switch function to that of supporting nerve regeneration. Understanding their ability in the switching process could lead to better treatment for those suffering from nerve injuries. This essay gives an overview of the structure and development of Schwann cells and the causes of nerve injuries. It also provides an explanation in the role that Schwann cells play in supporting nerve regeneration and how different approach could promote nerve regeneration. Introduction to Schwann cells Schwann cells are the most abundant glial cells in the PNS. They are a diverse group of cells originated from neural crest cells and they play an essential role in the PNS of both vertebrate and invertebrate. They can be subdivided by their morphology and anatomical location into four subsets, namely the myelinating Schwann cells, non-myelinating Schwann cells, satellite cells and perisynaptic Schwann cells (Armati Mathey, 2014).These different types of Schwann cells and their anatomical locations are shown in Figure 1. Figure 1 Locations of different types of Schwann cells in the PNS(Armati Mathey, 2007). (a) Satellite Schwann cells in the dorsal root ganglia. (b) Non myelinating Schwann cells in mixed peripheral nerve fibres. (c) Myelinating Schwann cells in mixed nerve fibres. (d)Perisynapic Schwann cells at the neuromuscular junction (NMJ). Each subset of Schwann cells has different functions. For example, perisynaptic Schwann cells are essential for modulating NMJ function whereas satellite Schwann cells have the ability to regulate the neuronal environment (Armati Mathey, 2007). Non-myelinating Schwann cells associate with several axons via a single layer of myelin. Myelinating Schwann cells are the most studied Schwann cell subset and they are most known for their function in speeding up the propagation of action potentials. Myelinating Schwann cells wrap around axons of neurons to form the insulating myelin sheath. Between the myelin sheaths are periodic gaps called nodes of Ranvier where action potentials occur. Action potentials jump from one node to the next node,in a process called saltatory conduction, which increases conduction velocity and allows signals to be propagated long distances without any degradation. In addition to their function in the propagation of action potentials, Schwann cells have many subtle yet essential functions, one of which is its role in nerve regeneration. This essay will focus on the characteristics of Schwann cells and how they respond to injury that allows the PNS to regenerate after damage. Development of Schwann cells The myelinating and nonmyelinating Schwann cells in the PNS are originated from the neural crest, which is a multipotent structure that also gives rise to other glial cells of the PNS. Schwann cell development occurs in well-defined developmental steps, which are strictly regulated by a number of signals. (Figure 1.2). During the first stage of Schwann cell development, neural crest cells produces Schwann cell precursors. These then generate the immature Schwann cells. At birth, the immature Schwann cells differentiate into either the myelinating or nonmyelinating Schwann cells. Figure 1.2 Main stages of Schwann cell development (Jessen, et al., 2015). Peripheral nerve injury Peripheral nerve injury is injury to peripheral nervous tissue. It can occur at any point along a peripheral nerve. Nerves can be damaged by a number of mechanisms such as compression, traction, or a cut. They can also get damaged by toxins, infection and physical agents such as freezing and electrical current (Murray, 2014). 2.1 Structure of peripheral nerves In order to understand the pathophysiology of peripheral nerve injury, it is important to know the anatomical structure of a peripheral nerve (Figure 2). Axon is made up of neurofilaments and microtubules that transport substances between the nerve cell body and the axon terminal. All peripheral nerve axons are associated with Schwann cells. In larger (myelinated) nerves, Schwann cells generate layers of myelin around the axon to form a sheath, whereas in smaller (unmyelinated) nerves a single Schwann cell associates with several axons via a single layer of myelin. The connective tissue (the endoneurium) that surrounds the axon-Schwann cell unit provides structural support to individual axons. Nerve fibres are further protected by a surrounding multipayered cellular tube (the perineurium) that surround nerve fascicles (Jessen, et al., 2015; Murray, 2014). Finally, the entire nerve trunks are protected by the outermost connective tissue (the epineurium) (Murray, 2014). Figure 2 Anatomical structure and main cellular components of a peripheral nerve (Jessen, et al., 2015). 2.2 Pathogenesis of peripheral nerve injury Regardless of cause, there is a limited range of responses to peripheral nerve injury. Wallerian degeneration. Wallerian degeneration occurs when there is a loss of axonal continuity by cut or crush. Communication is lost between the cell body and the segment of nerve distal to the site of injury. As a consequence, the distal nerve segment degenerate. The details of the initiation of this degeneration remain to be fully explained, but evidence shows that an increase in intraaxonal calcium activates proteases, which leads to the degradation of the axon cytoskeleton. Wallerian degeneration is also associated with the degeneration of the myelin sheath by lipases and proteases. Schwan cells (and later macrophages) are involved in further myelin degeneration. Schwann cells also proliferate and undergo morphological changes and are induced to generate molecules that will be required for nerve regeneration later on. Figure 2.2 Wallerian degeneration2.3 Types of peripheral nerve injury There are two main types of peripheral nerve injury (Burnett Zager, 2004). The first type is axonotmesis, in which axons are damaged but the connective tissue sheaths are preserved. This type of injury can be caused by compression, traction and laceration but it is mainly seen in crush injury (Murray, 2014). Axonal regeneration is very effective and function is restored in 3-4 week when modelled in rodents by nerve crush (Jessen, et al., 2015). The second and the more severe type of nerve injury, neurotmesis, involves damage to both the axon and connective tissue sheath. Severe traction, crush and laceration can lead to neurotmesis (Murray, 2014). In this case, functional recovery is generally poor. The Schwann cell injury response When nerve injury occurs, Schwann cells respond rapidly and undergoes a radical phenotypic change. The process has two major parts, one of which is the reversal of myelin differentiation. Molecules involved in forming Schwann cells before myelination are up-regulated while myelin associated genes are down-regulated (Jessen, et al., 2015). The other part of the response involves the appearance of phenotypes that are not associated with normal Schwann cells or immature Schwann cells. These cells have a repair supportive phenotype and contribute to the nerve regeneration process. Schwann cells function in multiple modes during nerve regeneration. There are four main functions that Schwann cells carry out in response to nerve injury (Niu, 2009). These functions include(1) activating macrophages and clearing debris; (2) forming the Bungner band; (3) secreting neurotropic factors; (4) secreting ECM and CAM. 3.1 Schwann cells secrete cytokines to attract macrophages When an axon is cut, the end still attached to the cell body is called the proximal segment, while the other end is called the distal segment. The process of nerve regeneration involves the formation of axonal sprouts at the proximal stump and the growth of axonal sprouts until they enter the distal stump. Efficient nerve regeneration needs a suitable microenvironment which is regulated by macrophages via their phagocytotic and clearing functions (Barrette, et al., 2008). Experiment by Huang et al. showed that Schwann cells can secrete macrophage migration inhibitory factor (MIF) when peripheral nerve injury occurs (Huang, et al., 2002). MIF is a pluripotent cytokine that functions in inflammatory reactions and immune responses. It also plays an important role in macrophage activation, attracting macrophages to clear away debris at the injury site and regulate the microenvironment to allow for efficient regeneration. Nishio et al. administered anti-MIF polyclonal antibody into regenerating rat sciatic nerves using the silicone chamber model. The results showed that the regeneration length of the nerve in the anti-MIF antibody-treated group was significantly shorter than that in the control group at weeks 2,4,6 after surgery (Nishio, et al., 2002). In addition, a large number of apoptotic Schwann cells were observed the anti-MIF antibody-treated nerves. These results suggest that MIF also contributes to the acceleration of peripheral nerve regeneration and the prevention of Schwann cell apoptosis (Nishio, et al., 2002). Besides MIF, other cytokines such as MCP-1 were also secreted by Schwann cells When peripheral nerve injury occurs, Schwann cells secrete MIF and other cytokines which activates macrophages. Invading macrophages also secrete cytokines which contribute to Schwann cell proliferation (Kubota Suzuki, 2000). Injury-induced Schwann cell proliferation plays an important role in axon regeneration as described in the following section. Schwann cells are also capable of phagocytosing myelin and they cooperate with macrophages to clear away myelin and debris (Jessen, et al., 2015), providing a good microenvironment for nerve regeneration to occur. 3.2 Schwann cells proliferate to form the Bungner band to guide axonal growth Schwann cells are highly plastic. The change has been characterised as de-differentiation (Chen, et al., 2007), but it is also seen by some groups as activation (Armstrong, et al., 2007). The two terms seem to be contradictory to each other, but this can have a simple explanation, which is that the change in Schwann cell phenotypes during Wallerian degeneration in fact involves both of these processes. The conversion of Schwann cells to repair Schwann cells involves both a loss- dedifferentiation and a gain-activation of phenotypes In the distal stump of injured nerves, denervated Schwann cells undergo a phenotypic change to form repair Schwann cells. These repair Schwann cells form Bungner bands which are regeneration tracks that provide support for injured nerves and guide regenerating axons to their targets. 3.3 Schwann cells secrete neurotropic factors (NTF) to enhance nerve regeneration NTFs are peptides or small proteins that support the growth and differentiation of neurons. The level of their expression is elevated in Schwann cells during nerve injury. Because of their strong function in promoting neuronal growth, they may be used to prevent the impairment of function or death of neurons during nerve injury (Niu, 2009). Most NTFs produce their effects by signalling through receptor tyrosine kinases (Malenka, et al., 2009). NTFs can be divided by their cellular mechanisms into three families, namely the neurotrophin family, the CNTF family and GDNF family (Henderson, 1996) 3.3.1 Neurotrophin family The neurotrophin family includes nerve growth factor (NGF), brain-derived neurotrophic factor (BDNF) and neurotrophin-3/4/5/6/7 (NT-3/4/5/6/7). There are two receptor types for neurotrophins. The first type is called the tropomyosin receptor kinanse (Trk) which has an high affinity to different neurotrophins. TrkA is the receptor for NGF, Trk B can be the receptor for BGNF, NT-4 and NT-3, and TrkC is activated only by NT-3. The other type of is called p75 neurotrophin receptor which has a low affinity and can bind with all neurotrophins (Niu, 2009).. NGF is the first discovered neurotrophin. It is critical for the proliferation and survival of neurons, especially after nerve injury. Schwann cells express an elevated level of NGF during nerve injury, which promotes axonal regeneration and accelerates the process of nerve repair (Niu, 2009). Recombinant NGF have been produced in laboratory and it is regarded as a feasible therapy for neurodegeneration of the CNS and PNS (Colangelo, et al., 2005). BDNF help to support the survival of existing neurons and promote the growth and differentiation of new neurons (Huang Reichardt, 2001). Schwann cells that are genetically modified to overly express BDNF significantly improve the survival of spinal gangalion neuron (Pettingil, et al., 2008). Takano et al. developed an in vitro model for retinal explants and showed that BDNF greatly promoted the regeneration of neurites from retinal ganglion cells in a damaged retina. A considerabe number of neurites were observed within 24 hour in the group containing BDNF while only a small number of neurites were observed after 3 days in the control group (Takano, et al., 2002). Other neutrophins use different ways to accelerate nerve repair when damage occurs. Using NT-3 alone or in combination with other NTFs can promote nerve regeneration in the injured spinal cord (Taylor, et al., 2006; Arvanian, et al., 2006). Research by English et al. showed that neutotrophin-4/5 is required for the early growth of regenerating axons in peripheral nerves (English, et al., 2005). 3.3.2 Ciliary neurotrophic factor (CNTF) family The CNTF family includes CNTF, leukemia inhibitory factor (LIF) and interleukin-6 (IL-6). LIF and IL-6 can act directly on neurons to promote axonal regeneration (Jessen, et al., 2015). The most prominent function of the CNTF family is its prevention of motor neuron degeneration, which suggests that it can be used as a therapeutic treatment for human degenerative motor neuron diseases (Sendtner, et al., 1992). 3.3.3 GDNF family GDNF is a small protein that supports the survival of many types of neurons including motorneutrons. It can also prevent apoptosis of motor neurons caused by axotomy. 3.4 Schwann cells produce extracellular matrix proteins (ECM) and cell adhesion molecules (CAM) The endoneurium surrounding peripheral axons contain a large amount of ECM secreted by Schwann cells. ECM is rich in collagen and contains glycoproteins such as fibronectin and laminin (Niu, 2009). ECM regulates key aspects of Schwann cell development including the formation and function of myelin (Court, et al., 2006). In addition, they mediate Schwann cell proliferation and axon growth (Armstrong, et al., 2007; Webber Zochodne, 2010). CAMs secreted by Schwann cells are involved in peripheral nerve repair. They play an important role in axon growth and formation of nerve bundles. Study from Lavdas et al showed that Schwann cells have the ability to migrate in the CNS, promoting myelin regeneration and making it possible for remyelination in the CNS (Lavdas, et al., 2006) . Experiment from Park et al. showed that the attachment and proliferation of Schwann cells are affected by special CAMs. It is therefore important to consider choosing optimal CAMs for tissue-engineered nerve regeneration (Park, et al., 2008). Summary Schwann cells use the above four ways to function during peripheral nerve repair. Many years of research have already proved that Schwann cells can secrete a large amount of molecules to support neurons and accelerate the damage repair process. However, further research is needed to show whether As Although the PNS is able to regenerate, much research still needs to done to maximise regeneration potential.      Ã‚  

Edgar Allan Poe :: essays research papers

Edgar Allan Poe Poe, Edgar Allan, known as a poet and critic but most famous as the first master of the short-story form, especially tales of the mysterious and macabre. The literary merits of Poe's writings have been debated since his death, but his works have remained popular and many major American and European writers have professed their artistic debt to him. Born in Boston, Massachusetts, Poe was orphaned in his early childhood and was raised by John Allan, a successful businessman of Richmond, Virginia. Taken by the Allan family to England at the age of six, Poe was placed in a private school. Upon returning to the United States in 1820, he continued to study in private schools. He attended the University of Virginia for a year, but in 1827 his foster father, displeased by the young man's drinking and gambling, refused to pay his debts and forced him to work as a clerk. Poe, disliking his new duties intensely, quit the job, thus estranging Allan, and went to Boston. There his first book, Tamerlane and Other Poems (1827), was published anonymously. Shortly afterward Poe enlisted in the U.S. Army and served a two-year term. In 1829 his second volume of verse, Al Aaraaf, was published, and he effected a reconciliation with Allan, who secured him an appointment to the U.S. Military Academy. After only a few months at the academy Poe was dismissed for neglect of duty, and his foster father disowned him permanently. Poe's third book, Poems, appeared in 1831, and the following year he moved to Baltimore, where he lived with his aunt and her 11-year-old daughter, Virginia Clemm. The following year his tale â€Å"A MS. Found in a Bottle† won a contest sponsored by the Baltimore Saturday Visitor. From 1835 to 1837 Poe

Integration of Social Media, Ethics, and Privacy Policies In the Emplo

Introduction The year is 2013, so there is no surprise that the general public use technology for the majority of our daily lives. We use it for entertainment, business, and day-to-day communication. We also use it to keep in touch with family, friends and old acquaintances. Technology has especially been beneficial for the workplace. Telecommuting and teleconferences are just a couple of alternatives to old fashioned face-to-face business. This, and the rise of various social media sites throughout the past decade has shaped the modern business world. Through these sites, people can share interests, opinions, life events, and random day-to-day activities immediately. With the social media movement growing rapidly every day, the amount of information flowing through cyber space has become harder to contain and protect. To many, privacy is now considered a lost concept. Social media has also become an important tool to use in business and hiring processes. In the minds of human resource departments everywhere, social media sites can be considered a helpful one-stop shop for determining whether or not a candidate is ideal for employment. Sites such as Facebook, for example, can provide employers with insight into a potential employee’s pastimes with a few clicks. A few searches can shed light on violent tendencies, or one’s history with past bosses, supervisors and others in higher positions. Discovering information like these can affect a candidate’s persona and the employer’s initial hiring decisions. White 2 There are many impending questions regarding using social media as a selection tool. First, is it ethical? Does the employee have a right to know if their online profiles are being searched? Are they required to give their ... ..." Labor Law Journal (n.d.): 86-102. Business Source Complete. Web. 25 Oct. 2013. Genova, Gina L. "No Place to Play: Current Employee Privacy Rights In Social Networking Sites." Business Communication Quarterly (2009): 97-101. Business Source Complete. Web. 25 Oct. 2013. McGarvey Hidy, Kathleen, and Mary Sheila E. McDonald. "Risky Business: The Legal Implications of Social Media's Increasing Role In Employment Decisions." Journal of Legal Studies in Business 18 (2013): 69-107. Business Source Complete. Web. 25 Oct. 2013. Mello, Jeffrey A. "Social Media, Employee Privacy and Concerted Activity: Brave New World of Big Brother?" Labor Law Journal (2012): 165-73. Business Source Complete. Web. 25 Oct. 2013. Rao, Pramila. "Are Social Networking Sites Good Recruitment Sources?" Clashing Views in Human Resource Management. New York City: McGraw-Hill, 2011. N. pag. Print.

Airborne Express case Analysis Essay

1 Company Background: Airborne express is an express delivery company and cargo airline, which by1997 had 16% of the domestic express mail market share. They operate in a niche by targeting business clients located in the United States. Their main service is next morning delivery which is also the flagship of the industry. Airborne are Target Business clients  able to differentiate by holding a position as  primarly with next morning  delivery services  cost leaders while providing high quality  services, equal to that of their competitors. In addition, Airborne Express is perceived  as the flexible, solution orientated express  Provide  carrier. They possess the ability of adapting  Able to offer the  Flexible- solution  lowest price on  needs of business customers, without it  orientated  the market  express service  affecting the price structure of their services. Figure 1 Airborne’s wheel of success Competitive advantage: The mail express industry is characterized by a cost structure with high variable costs and relatively low fixed costs. Firms’ competitive advantage lies mainly in providing their service at the lowest possible cost. Airborn Express’ Infrastructure Marketing  and sales and  offer Inbound  logistics Sorting  operations Package Shipping Delivery services Figure 2: Airborne’s express value chain Marketing, sales and technology: ï‚ · Low advertising costs; sales mainly through a strong sales-force that establishes personal relationships with their clients. ï‚ · No research and developments costs in research and development. Ability to copy and integrate quickly when competitors’ adopt new successful innovations. Inbound logistics: ï‚ · Airborne express own its main hub (purchased at a very low price because of rural location) on which it collects its parcels. ï‚ · No landing fees, because of ownership, which substantially reduce their costs. Sorting operations: ï‚ · Sorting operation rely mostly on labor than machines, compared to competitors. As labor is none-unionized labor, it provides Airborne with cheaper labor force. ï‚ · Operations mainly situated in one location (sorting facility and warehouses), allowing a lower cost structure in addition to some economies of scale. 2 Package shipment: ï‚ · Fleet of 175 aircrafts, mostly McDonnell Douglas type, purchased used at low price. ï‚ · Deliveries mostly concentrated in top 50 US metropolitan areas, as most businesses are located in such areas, allowing high utilization rate of aircrafts (80%), and therefore some economies of scale. Delivery services ï‚ · Pickup and delivery services mostly operated by independent contractors (paid by the mile or parcel), 10% cheaper than company owned pickup and delivery services. ï‚ · More parcels per stop because clients are situated in mostly metropolitan areas. ï‚ · No retail service centers (little need as most clients are business clients), compared to competitors who are dependent on such service centers. Industry Analysis: Exhibit 1 gives an overview of attractiveness of industry. Positive for companies operating in this sector is: market for express deliveries is difficult to access. Capital requirements are high; market is saturated with established companies operating the industry. (To FeDex for example, has become synonym to overnight shipping). In addition there is little supplier power. Main suppliers are pickup and delivery service companies, and these are exposed to high competition which contributes to low bargaining power. On the other hand, it is a very saturated market. The market leaders, FedEx and UPS operate in most of the parcel markets (international, domestic, businesses, private †¦). The remaining companies target niche markets and are either direct competitors of either FedEx or UPS. What differentiates them is usually price and image. In general, the industry is characterized by strong competition between firms, as firms provide similar services, with a high degree of substitu tability. With a sector exposed to such competition, profit margins outsights are relatively low. Generic strategies: 100% 80% Market share 60% Airplane utilization rate Operating margins Price/ Performance – Next morning delivery 40% 20% 0% Fedex UPS Airborne Delivery quality Price/ Performance Next afternoon delivery Figure 3: graphs based on numbers from Exhibit 2 3 Operating Margin 10% 10% 9% 9% 8% Average price (all parcel types) $35 8% 7% $34 7% 6% $33 6% 5% $32 5% $31 4% $30 4% 3% $29 3% Average price (all Operating 2% $28 2% parcel types) – next 97% 98% 99% 100% 1% 96% morning Market deliveries 1% 0% Share 0% $25,00 0% 10% $30,00 20% 30% $35,00 40% 50% Both FedEx and UPS are currently looking for marginal revenue opportunities. History of industry has showed importance of innovation .Currently, UPS has adopted a new pricing strategy that has been followed by FedEx. The question is whether Airborne should adapt same pricing strategy as their competitors. Cost/ Benefit analysis Advantages of adopting new pricing system – Maintain pace of competitors, – Not to lose profitability and market share as a result of competitors’ overtaking shorter distance mail market due to lower pricing. – Market sensible to market innovation. Illustrated by the innovation war between FEDEX and UPS in the 90’s. – Brand known as flexible, so why not adopt a flexible pricing system? Disadvantages of adopting new pricing system – Imposing a new costly system – Increase costs and decrease profits if prices are  still lower than competitors in the overnight  morning delivery and in the lower weight  products. – Businesses are the clients, and services are  probably set by contracts and negotiations on volumes and not per unit. – Distance based pricing mostly influence  decisions of consumers rather than businesses. Maintaining the status quo – lose profitability and markets share; competitors’ overtaking short distance mail market due to lower pricing. – Long term effects: Airborne risks operating only on longer more costly transportation routes, and will largely influence profitability if only operating in specific markets. Airborne Express Adotping Not adopting Competitors Little worse This chart chose us the probable effects  of not adapting new pricing system  given that we already know they have  implemented the changes. Much worse Adopting Much better Same Much worse Not adopting Little worse Much better Same Figure 4: Game theory Recommendation The real risk of not following in competitors footsteps is that Airborne express might lose clients, especially smaller business clients. The effects would be the risk of operating in only long distance deliveries, which are also the most expensive. In addition, Airborne has an image of being flexible and solution orientated. Not implementing distance based pricing can dilute their brand image, especially in an industry where innovation is important. Given the risks, recommendations for Airborne Express (in order not to lose paste to competitors), is to implement distance based pricing. 4 Exhibit 1: Porter’s five forces analysis Threat of new Entrants (low) – Saturated markets – High capital requirements – Established brands – Some economies of scale – Low product differentiation Determinants of Supplier Power (Low) -Input, little dependent on suppliers: * aircraft carriers bought used *Pickup and delivery services companies are exposed to high competition, and therefore have little bargaining power. Rivalry among firms (high) – 3 big competitors and 6 second players: * Ups operate in all markets, * Remaining operate in niche markets. – Provide similar services. Fedex Determinants of buyer power (high) – Many suppliers – Low product differentiation – Low switching cost – High variable costs – Some brand loyalty – Low buyer switching costs – Competitive advantage through innovation – Discounts with volume – Price sensitive Threat of substitute products (High) – Low switching costs, unless contracts have been negotiated. – Similar product quality,(99% of package on time with UPS, FED and 97% with Airborne – Prices are similar, except Airborne has lower price for the industries flagship product – Other products such as electronic mail Exhibit 2: Numbers for radar Graph Companies Utilization rate Avg price overnight morning delivery, 1-10 lbs Avg price overnight next afternoon delivery 1-10 lbs Delivery quality Operating Margins (19961997) Domestic market share Fedex 65-70% 20,53 UPS 65-70% 21,54 Airborne 80% 18,55 21,65 18,52 16,63 99% 6.1% 99% 9.1% 97% 7.9% 45% 25% 16% 5