Strategic Position of Baker Hughes Incorporated

Strategic Position of Baker Hughes Incorporated Baker Hughes is a combination of baker international cooperation and Hughes Tools Company in April 1987. A provider of formation evaluation , drilling, completion, production and reservoir consulting to the oil and gas industry with its operations into two Hemispheres, eastern with five regions (Asia pacific, Russia/Caspain, Middle East, Europe and Africa), western with four regions (US Golf, Latin America, US Land and Canada) with 35,000 employees in 90 countries. Setup The aim of this report is to critically evaluate the strategic position of Baker Hughes Incorporated and how its emerging technology in well completion may impact on the future position of the organisation. Background The company is very wide in oil and gas industry, provides reservoir consulting, formation evaluation, drilling, completion and production products and services to the worldwide oil and gas industry. The purpose of this course work is to explore the area of well completion products and services. Baker Oil Tools is a section of Baker Hughes in well completion products and services, its technologies, planning, and approach to avoid risk, reduces production, intervention cost, and extend the life of well. The scope and depth of reliable completion solutions allow you to create the ideal conduit from formation to surface, regardless of your well type or operating environment. This is the key to getting the most returns. For high-rate, big-bore completions to multizone, openhole horizontals in shale gas multilaterals, our completion systems are improving and minimizing life of well cost. The technology associated with this section of the oil and gas industry are artificial lift systems, permanent monitoring system, chemical injection system, integrated operation, wellbore construction and completion, specialty chemical and management. Baker Oil tool is responsible for the provision of equipment, services from its completion phase through the productive life of oil and gas wells. Wellbore intervention products and services are to produce the asset, deals with troubleshooting drilling problems, improve maintenance, and restore economical production. Technologically based tools used in wellbore intervention are tubing fishing system, casing exists, wellbore cleaning and temporary abandonment. (Baker Hughes 2010). 2.1 Profile Baker Hughes (Wikipedia 2010) provides reservoir consulting, formation evaluation, drilling, completion and production products and services to the worldwide oil and gas industry. It has made impact in the oil and gas industry in providing reliable, practical solutions when and where to its customers to reduce costs, risk and improving on its productivity. From reservoir to the refinery, they have created value with high-performance products and services to analyze, drill, evaluate, complete and produce oil and gas reserves and then transport and refine the hydrocarbons. Innovation has been part of Baker Hughes, through conceived ground breaking inventions that has revolutionized the oil and gas industry. They have advanced and searching for solutions to conquer the next frontier in areas such as: Differential performance, Regions and geomarkets, Technology, Technical expertise, Drilling and evaluation, Completions and production, Fluids and chemicals, Reservoir technology and consul ting services. It is a top-tier oilfield service company with a century-long track record which delivers solutions that help oil and gas operators make the most of their reservoirs that provides reliable, practical solutions when and where to their customers at lower costs, reduce risk and improve productivity and helps oil and gas producers by providing practical technology to find, develop, produce and manage petroleum reservoirs. (Wikipedia 2010) 2.2 Mission Strive to build an inclusive culture that values the diversity of our global workforce and sustains an environment in which employees can develop and reach their ultimate potential. 2.3 Vision Global team of diverse, talented, and results-driven people makes Baker Hughes the company of choice for our employees, customers, and communities. ENVIRONMENT The environment comprises of two segments namely the Internal and External Environment. Internal This part of the environment explores the organizations mission, vision, purpose and value, stakeholders and power, culture, organizational balance, process and competence, etc 3.1.1 Stakeholder Stakeholder can be a person, group, organization, or system who affects or can be affected by an organizations actions. According to the definition above, Baker Hughes stockholders comprises of the management, customers, suppliers, government agencies, staff, local community, shareholders, political parties, union, trade association, owners, financial community, activity group, customer association and group, media. Baker Hughes stockholder service is managed by Mellon Investor Services, a transfer agent and registrar who assist in managing the investment, keeps record of every outstanding stock certificate and the name of the person to whom it is registered. When stock changes hands, the agent transfers the ownership of the stock from the sellers name to the buyers name. At the end of each day, they reconcile all transfer records and makes sure that the number of shares debited is equal to the number of shares credited. It also uses the stockholder records to pay dividends and issue proxies. (Baker Hughes 2010) 3.1.2 Stakeholders map Low INTEREST High GROWTH Customers, Union, Media, Trade Union, media Staff, Top Management, Shareholders, Financial Community, Suppliers, Local Community, Customers Government, Shareholders, Management, Political Group, Financial Community Customers, Local Community, Media, 3.1.3 Culture Company culture is the unique qualities of the organisation. It determines how the workers act, energy contributed to overall teamwork, innovation, technology, customer service, productivity, problem solving and quality. Baker Hughes delivers performance at well site through application of technical knowledge, practical experience, and dedication to quality service. This company has built a very high performance culture, based on its Core Values of Teamwork, Integrity, Performance and Learning. Programs in baker Hughes are introduced to encourage, recognize and reward perfect execution at rig site. Baker Hughes field performance is supported with worldwide operations networking organized around specific product lines, to enable best in class planning, logistics, equipment repair and technical service. With the structure of Baker Hughes culture, shareholders can raise opinions and resolve it together, acting on new opportunities, move into new one and, creative in direction. (Baker Hughes 2010) 3.1.4 Balance of the Organization This segment describes the balance of the product and services of Baker Hughes as a company. High SHARE Low GROWTH High Revenue, High Market Share Low Revenue, High Market Share High Revenue, Low Market Share Low Revenue, Low Market Share The Market Growth versus Market Share interprets the organizational balance of Baker Hughes, its growth in product and services, and Market Value. Efficiency and Effectiveness increases their value. Baker Hughes is a supplier of wellbore-related products and services provide products and services for drilling, formation evaluation, completion and production, and reservoir technology and consulting to the worldwide oil and natural gas industry. Baker Hughes business is dependent on the capital of its customers, expenditures, dedication to field development and production, oil and natural gas exploration, customers expectations for future oil and gas prices, economic growth, hydrocarbon demand and current and future oil and natural gas production. The balance of the organisation and its operations is organised into a number of geomarket regions, which report to nine different region presidents, then report to two hemisphere presidents. Product-line marketing and technology report to the president of products and technology. The presidents of Western Hemisphere, Eastern Hemisphere, Products and Technology, Vice President of Supply Chain report to Chief Operating Officer of the comp any. This organizational structure is intended to strengthen client-focused operations by moving management into the countries where its businesses are conducted. The product-line is responsible for product development and manufacturing, technology, marketing and delivery of solutions for customers to advance reservoir performance. While the supply chain is responsible for development of cost-effective procurement and manufacturing of products and services. (Wikipedia 2010) According to Deaton C. C., (2010) Quarter three was a good quarter for Baker Hughes. Our Drilling and Evaluation segment reported record revenue, record operating profit and record operating profit margins with 44% year-over-year incremental operating profit margins. Accordingly, we will continue to invest in manufacturing capacity, make additions to our rental fleets, and hire and train field engineers to support our customers needs through the end of the decade. (Baker Hughes 2010) 3.1.5 Process / Value In Baker Hughes, integrity is the foundation of their individual and corporate actions in honesty, trustworthy, respect and ethical in our actions which drives an organization. The values of baker Hughes are the basis for maintaining a common culture. These cultures are: Integrity, Teamwork, Performance, and Learning. Teamwork enhances their individual abilities and strengths to achieve a common goal. Performance excellence, focusing on things that are important drives the results that differentiates baker Hughes from other competitors in the oil and gas industry. Learning in an environment where benchmarking and adopting best practices is the key to achieving the potentials of individual and the company. According to Bradfield, D. H., (2010) The Company specialises in the design and supply of process packages and completely integrated systems for oil/gas production, refinery waste water treatment, petrochemical and power generation markets. Baker Hughes business is basically in two segments namely drilling and evaluation, and completion and production. The drilling and production provides product and services used to drill and evaluate oil and gas wells, drilling and completion fluids, directional drilling services, measurement while drilling (MWD), logging while drilling (LWD). The completion and production segment provides product and services used in the completion and production phase of oil and gas wells. Its basically offers wellbore construction, casedhole completion, sand control and wellbore intervention solutions. (Baker Hughes 2010) EXTERNAL ENVIRONMENT This section of the organisation is where either the structure, strategy is affected or both. 3.2.1 Five Forces Analysis Five forces analysis looks at five key areas namely the entry, power of buyers, power of suppliers, the substitutes, and competitive rivalry. New Entrants. There is a lot of oil and gas servicing companies all over the earth, barriers to entry into this industry are numerous to scare away the new companies. They vary depending on the area of product and service, market the company is situated. If we consider a company to supply pumping trucks needed at well sites which will very costly at a rate of one million pounds each. While other areas of the oil and gas business requires skilled manpower to handle this equipments. This category of company in the oil and gas sector such as these have higherÂÂ  barriers to entry thanÂÂ  those offering just drilling, support services or services. Sufficient cash is another big barrier to entry. New companies need to have sufficient money to displace the existing ones. These factors are also considered; The economical value, the high or low cost of entry, ease of access to distribution channels , cost advantages not related to the size of the, will competitors retaliate, government action, h ow important is differentiation. , very high if there are few but big players in the industry, the rate of cost reduction when switching customers is always low. Suppliers. ÂÂ   Baker Hughes is one of the leading oil and gas company in the world, much of this section of the business is dominated by powerful companies. Their large amounts of huge capital investment tend to weed out suppliers of rigs, refining pipeline. No much of competition, but have significant power over smaller drilling and support companies. Buyers. Power tends to go towards the buyer but almost all commodities there are no much difference, the buyer goes for where prices are low and a better contract term. Substitutes. ÂÂ   These are generally alternative to oil which includes solar power, wind power, gas, coal, biofuel, nuclear energy and hydroelectricity. Oil is not powering automobile, it is very useful in other materials like plastic. Baker Hughes can withstand the treat of substitute because of its specialty in areas directional drilling and seismic drilling. This company is critically analysed because of their product and services. Rivalry. ÂÂ   The slow rate at which these oil and gas companies grow is what is facing most of them. Almost every company in this industry can do one thing; there is a high exit barrier in the oil and gas companies. Aside of the companys scrap value of the equipment, if it not operating, then, it value-adding capability.ÂÂ  Baker Hughes major rivalry is Slumberger, Halliburton and Weatherford. This is most likely to be high where entry is likely; substitute products, suppliers and buyers intend to control the market. (Baker Hughes 2010) 3.2.2. PESTL NEW ENTRANTS DEEP WELL OIL GAS. INC. SUPPLIERS AMOS INTERNATIONAL TEK OCEAN VTT MARITIME BUYERS ATLAS COPS, NORTH AMERICA COMPETITORS HALLIBURTON WEATHERFORD SCHLUMBERGER SUBSTITUTE BIOFUEL 3.2.3 VALUE CHAIN DIAGRAM Support Activities of the company FIRM INFRASTRUCTURE: Administration, Legal, Financial Management, Accounting HUMAN RESOURCES: Training, Recruitment, Personnel, staff planning PRODUCT AND TECHNOLOGY: Production Engineering, Market Testing, RD, Product and Process Design, Drilling Engineering PROCUREMENT: Specification, Funding, Supplier Management, Subcontracting Inbound Logistics Operations Outbound Logistics Sales and Marketing Servicing Supply Schedules, Raw material, Controls, Receiving, Quality control, Equipments Production control, Manufacturing , Packaging, Quality control, Drilling, Well Completion Delivering, Invoicing, Order handling, Dispatch, Finishing goods Promotions, Market research, Sales analysis, Order taking, Customer Management Education and Training, Upgrades, Maintenance Primary Activities of the company. SWOT ANALYSIS Strengths, Weaknesses, Opportunities and Threats. SWOT is the internal Strengths and Weaknesses of a firm and the environmental Opportunities and Threats facing a firm. SWOT analysis is a technique, which is widely used by managers to analyse a companys strategic situation. Baker Hughes effective strategy is derives from its internal resources (strengths and weaknesses) and its external situation (opportunities and threats). If accurately applied, baker Hughes has powerful implications for the design of a successful strategy. Strengths, Weaknesses, Opportunities and Threats (SWOT) FACTORS Internal Strengths Steady financial performance Strong RD capability Wide product portfolio Wide geographical presence Weaknesses Lack of scale Settlement with DOJ and SEC External Opportunities Growth in global oil and gas drilling Acquisitions of BJ Services Nova Technology Corporation Energy services in China Deepwater Technology Threats Intense competition Risks associated with conducting business outside the US Economic slowdown in the US Seasonal fluctuation Renewable energy Baker Hughes is focused on expanding in high growth regions like Russia, Middle East, capitalizing in high oil price, profitability in the Middle East is far guaranteed. Baker Hughes is learning to swim in deeper waters which is a new demand in oil and gas industry. In deepwater technology, drilling is expensive and oil is drilled thousands of feet below sea level. Seasonal fluctuation poses a threat to baker Hughes profits. Renewable energy also poses a threat to baker Hughes demands. (Datamonitor 2008) STRATEGIC POSITION OF BAKER HUGHES Baker Hughes has invested on people, infrastructure and technology. It served as the foundation for the next of strategy action designed to help increase market share and achieve a long-term profitable growth. Their strategic position is in three-phase Improve customers focus; by improving management diversity and quality, establish market segment to facilitate communication across the enterprise, reorganisation, customer segmentation and people strategy. Achieve operational effectiveness; hiring of the first chief information officer to lead enterprise wide information team, Outsourcing certain finance operations to reduce cost and improve efficiency, Hiring of vice president of supply chain to establish an enterprise approach to supply chain function, e.g. manufacturing, purchasing and logistics. Optimize product portfolio; Build out reservoir technology and consulting group. Targeted research, development and engineering spending in global network of technology on key projects, Establishing of three project centers, namely completion and production; fluid and chemicals; drilling and evaluation. Filling of significant gaps in product portfolio in areas like pressure pumping through the merger and acquisition of BJ Services and its product lines which are; INTEQ: provides drilling and formation evaluation. Baker Atlas: wireline logging services e.g. advanced formation evaluation, production and reservoir engineering, petrophysical and geophysical data acquisition. Baker Hughes Drilling Fluids: Fluid system and services e.g. optimise drilling and completion process, maximise hydrocarbon production and manage drilling waste. Hughes Christensen: provides Tricone TM and PDC drill bits, ream while drilling and casing drilling technology. Baker Oil Tools: completion, intelligent production and intervention solution to manage cost and reduce risk while maximising reservoir. Centrilift: artificial lift systems e.g. submerging pumps ESP, specific engineering, project management, well monitoring services. Baker petrolite: chemical technology solution for hydrocarbon production, transportation and processing, delivers pipeline integrity services. (Baker Hughes 2010) NEW TECHNOLOGIES IN WELL COMPLETION INTERVENTION Baker Oil Tools, world leader in well completion and intervention solutions. Division of Baker Hughes, which provides completion through Packers and Flow Control, Subsurface Safety Systems, Liner Systems and Wellbore Isolation, Sand Control Pumping, Tools, and Services, Tubing-Conveyed Perforating, Systems. This branch of baker Hughes is sealing and anchoring technologies, planning, risk avoidance, maximising production, reduce intervention cost, and extend the life of well. Baker Hughes has made impact in the oil and gas industry, from the reservoir to the refinery they have created value with high-performance in their products and services to analyze, drill, evaluate, complete and produce oil and gas reserves and then transport and refine these hydrocarbons. (Baker Hughes 2010) These are the emerging technologies in well completion and intervention Packers and flow controls: To increase profit by reducing risk and minimizing life of well cost. Subsurface safety system: reduce risk and increase profit using subsurface safety valves. Liner system and wellbore isolation: reduce risk and CAPLEX (Capital Expenses) Sand control pumping, tools, and services: ensures operational excellence in unconsolidated formation at less risk. Tubing conveyed perforation: achieve maximum production using efficient completion solution. Expandable solid tubular system: maximise hole size with significantly reduce non productive time (NPT). Fishing service: reduce the cost of wellbore problem. Casing exit: increase profit by accessing previously uneconomic reserves and bypassing trouble Remedial and stimulation: lower risk, boost effectiveness of remediation and stimulation operations. Baker Hughes has been know for success in technology innovation. Local teams are supported by global centers of excellence where scientists push the boundaries of value-adding technology to find solutions for progressively more complex technical challenges at dedicated innovation centers. (Baker Hughes 2010) IMPACT OF STRATEGIC POSITION The impact of strategy position has enhanced their productivity, efficiency and effectiveness in areas such as: Global Benefits Strategy, Labour and Management Relations, Employee Development, Recruiting and Retention, Global Workforce. Workforce_jobtype_region Workplace Diversity and Equal Opportunity Salary_ratio Turnover Employee_turnover Turnover_region_jobtype Baker Hughes strategic position will impact on a nations economy by implementing programs that provide sustainable benefits to the people and communities operation. Baker Hughes employment program is designed to promote diversity in workplace; varied experiences and skills are highly valued and applied toward common goals. These strategies are implemented through assurance of job opportunities for local citizens at every level of the organization. Also, training and development program to advance and succeed in their different careers. The governments, non-governmental organizations, academic institutions, customers, and employees are engaged to address the social needs of community stakeholders, education is placed as a priority in baker Hughes worldwide contributions. Employees are supported by a culture which values workplace diversity, team work, together across geographies and product-lines to deliver advanced technology solutions. The technology program in baker Hughes promotes professionalism, development of science, engineering and employees with technical abilities in their career advancement opportunities based on their performances and contributions to baker Hughes. Global Learning and Development Program provides non-technical training to professionals in corporate and support roles. (Baker Hughes 2010) Baker Hughes is committed to national content to add people and its economy. Expanding its investments in advanced technology, developing oil and gas markets, identifying national content development, as a measure to operational success. Committed to promoting three key areas:ÂÂ  global workforce, local suppliers and communities. With focus on these areas like :ÂÂ  global workforce, local suppliers and communities, the region and each geomarket management team implement specific plans in adapting with governments legislation, and develop businesses, communities and its local citizens. Engaging customers as partner requires an organisation with the training and experience to deliver effectively. With global workforce, local citizens are represented in managerial, operations and technical positions collectively delivering. There is impact through talent acquisition program; by building students. Baker Hughes is aiming to continue increasing the composition of workplace and career development. In community level, national content is encouraged through social contributions, which are majorly focused on education. In expanding national content plans, baker Hughes is looking for opportunities to build on the success of existingÂÂ  educational programs. (Baker Hughes 2010) CONCLUSION Baker Hughes has invested significantly in people, infrastructure and technology. These investments served as the foundation for the next set of strategic actions designed to help increase market share and achieve long-term profitable growth. Increasing market share and achieving long-term profitable growth requires Baker Hughes to pursue two related enterprise strategies: continue to build global capabilities to serve customers around the world, and deploy customized local solutions to meet customers needs in each geographic market. For these strategies to be achieved, first, improve customer focus, that is understand customers and proactively meet their needs. Second, achieve operational effectiveness and improve overall cost position. Third, optimize existing technology portfolio and fill strategic gaps, including reservoir engineering capabilities and pressure pumping services. To meet this target, baker Hughes needs to carry out a major reorganization and targets more mergers an d acquisitions. (Baker Hughes 2010)

Existentialism & Fight Club Essay

In modern day society, individuals usually experience the same routine over and over again, but rarely become aware of the drudgery of daily life. These people are unable to achieve a higher level of existence by being uniform. Waiting for Godot, by Samuel Beckett, is an existential play where two men are stuck in the same routine day after day. They sit around all day waiting for the inevitable arrival of a man named Godot, who seems like he will never come; the two lose track of time. The men are completely unaware of what day of the week it is; they seem to be achieving nothing in their dull lives due to their tedious ways. Waiting for Godot is more than a mere existential play; there are heavy undertones of Christianity, creating a religious aspect to the play, yet the author manipulates Christian beliefs to strengthen existentialistic ideas. There are many existential elements in this play, mainly monotony and the inability to take action. Both Acts one and two of the play are similar because they contain identical events. First, Vladimir meets Estragon at the same tree. Estragon sleeps in a ditch all night and is continually beaten up. They become acquainted with Pozzo and Lucky, and then a boy notifies them that Godot will arrive tomorrow. At the end of the act, Vladimir and Estragon are unable to leave, and the second act repeats the same sequence of events. Vladimir admits that â€Å"habit is a great deadener† (Beckett 105). A fundamental belief of existentialism is, individuals who repeat the same mundane task will not live life to the fullest and are stuck in a lull. The characters in Waiting for Godot are constantly stating that they will take action but do not acquire the initiative to finalize the task. Their life is not complete or entirely satisfied because of their â€Å"lack of perfection, power, and control†¦over their [lives]† (All About Philosophy). Pozzo realizes his inability to maneuver and remarks, â€Å"I don’t seem to be able†¦to deport† (Beckett 5). Estragon then rejoins stating, â€Å"Such is life† (Beckett 5). People are inflicted with the difficult task of taking initiative and become dormant when they do not choose to take their own future into their hands. According to Kierkegaard, people constantly have to choose what they become of and therefore, â€Å"must take responsibility for [their] future† (Philosopher). The men in this play are unable to take action and need an outer force to act upon them (Philosophy Paradise). They are afraid to â€Å"accept the risk and responsibility of following their commitment wherever it leads† (Age of the Sage). The men do not want to act on their own because they are scared to take a chance. They are unable to determine their own fates and therefore, wait for God to decide. Existentialists believe that the individual should to take charge in what becomes of their fate. That burden cannot be shifted â€Å"onto God, or nature, or the ways of the world. –Professor Robert Solomon† (Dividing Line). By taking control, one can enjoy their life as an individual because they choose what becomes of their existence. Christianity plays a major role in Waiting for Godot, as there are many references relating God to Godot and Jesus Christ to Estragon. During the first act, Estragon decides to walk around barefoot and claims, â€Å"[a]ll my life I’ve compared myself to [Christ]† (Beckett 57). He is able to compare himself to Christ because all men, including Jesus, are God’s children. Moreover, â€Å"Godot stands for God† (New York Times) because â€Å"only God know what the future contains. † (Urbana). This is relevant to Godot because the men are depending on him to decide their fate. They will not settle on a path for their futures until they meet Godot. The two men inquired Godot for â€Å"a kind of prayer† and are waiting for his reply (Beckett 12). This religious act is an allusion the prayers that many Christians make to God. Thus far, the men have not been aquatinted with Godot because â€Å"God does not calculate time as [they] do. † (Urbana). Their day may not be the same amount of time as what Godot designates it to be. The men are forced to wait endlessly for the day that he will arrive. This is yet another allusion to Christianity; the men lingering around for Godot and the Christians waiting for the Lord’s coming. The Christians believe that â€Å"in God’s good time [he will] again enable men to see clear† (Reformation Ink). By allowing men to see clearly, they can make their own decisions in life and become more of an individualist. Christians believe they should live in awareness for a unique time when they are needed to set everything aside to â€Å"receive something from God or to do something for God† (Urbana). When this time comes, one should know the difference between what needs to be done and what is truly important (Urbana). A time when this is relevant, is when Vladimir contemplates whether he should assist Pozzo up or go harass Lucky with Estragon. He discovers that it is important to help Pozzo up. He declares, â€Å"It is not every day that we are needed† (Beckett 90). Vladimir realizes how valuable life is and how â€Å"[f]reedom is a gift from God† (Christian-Philosopher). Both Estragon and Vladimir are, â€Å"waiting for†¦waiting† (Beckett 5o). This is against Christian beliefs because the men are not cherishing the time God has given them. The time God bestows upon them must be spent with responsibility and should be seen as a divine gift (Urbana). Christianity and existentialism are intertwined in Samuel Beckett’s Waiting for Godot. Although they both have different beliefs about the demise of one’s life, they have the same principles on how to live. Christianity and existentialism both believe that time should be cherished. Christians view time as a heavenly offering from God, while existentialists believe that individuals must live in the now, because they will not be on earth for long. When Vladimir and Estragon encounter Pozzo in the second act, Pozzo divulges, â€Å"I don’t remember having met anyone yesterday. But to-morrow I won’t remember having met anyone to-day† (Beckett 101). It has been stated earlier in the play that Pozzo is the â€Å"universe. † He is trying to convey that one day someone is born and the next, another person dies. Eventually there is no recollection of the deceased human, and the world keeps going on. According to both existentialism and Christianity, it is up to the individual to choose what they do in life, since â€Å"time is limited† (Urbana). John Cassidy declares â€Å"[n]o one [can] do their work for them, and no one [can] stand behind† them (Christen-Philosopher). It is up to the individual decide what they become of in life. No one, including God, has to deal with their way of living, except for themselves. They are the ultimate rulers of their existence and â€Å"have some control over the course† their future takes (Urbana). ? Bibliography Banks, Robert. Complete Book of Everyday Christianity. 1997. Urbana. 7 December 2009 Beckett, Samuel. Waiting for Godot. New York: Grove Press, 1954 Cassidy, John. Christian Existentialism. Christian – Philosopher. 13 December 2009 Eiermann, Katharena. DividingLine. com. Dividing Line. 13 December 2009. < http://www. dividingline. com/> Existentialism – A Philosophy. Philosophy All About. 12 December 2009 Existentialism. Philosopher. 13 December 2009 Samuel Beckett’s Waiting for Godot. 2006. Philosophy Paradise. 30 Nov. 2009 The origins of Existentialism. Age of the Sage. 17 December 2009 . Machen, J. Gresham. What is Christianity? Reformation INK. 17 December 2009. Atkinson, Brooks. Beckett’s ‘Waiting for Godot. ’ 20 April 1956. The New York Times. 17 December 2009.

Financial Analysis of AB InBev

The Anheuser-Busch InBev Company (AB InBev) was established throughout the years through mergers and acquisitions. AB InBev is the largest brewery in Jupille, Belgium. They operate in North America, Latin America, South America, Europe, and Asia Pacific. Due to political upheavals in Germany and Bohemia in 1848, many German immigrants settled in St. Louis, Missouri (â€Å"Anheuser-Busch,† 2011). Eberhard Anheuser was a trained soap maker and became part owner of the Bavarian Brewery. By 1860, he bought the investors’ shares and the brewery name was changed to E. Anheuser & Co. Adolphus Busch married Lilly Anheuser, Eberhard’s daughter and later Adolphus purchased half ownership of Anheuser’s brewery, becoming a partner (â€Å"Anheuser-Busch,† 2011). Due to Busch’s innovations, the brewery became the first to use pasteurization, allowing the beer to be shipped long distances without spoiling. By the early 1880’s, the brewer introduced a rtificial refrigeration, rail-side icehouses, and refrigerated railcars. These innovations allowed the company to grow and distribute their beer across the country. To market the beers Busch used traditional selling methods; however, Busch’s methods were more organized and deliberate than his competitors. Busch â€Å"pioneered the use of giveaways and premiums, and used his brewery as a showplace for the public to visit† (â€Å"Anheuser-Busch,† 2011). The brewery company was renamed Anheuser-Busch Brewing Association in 1879 to recognize Adolphus’ efforts. The company became one of the nation’s leading breweries in 1901 when it broke the one million barrels of beer sales mark (â€Å"Anheuser-Busch,† 2011). Over the years, the company grew through acquisitions and mergers and became AB InBev. In 1989, a group of investors purchased Brahma, the number two beer in Brazil. In 1999, the brand took over the number one spot and was combined with its chief competitor to form AmBev. AmBev expanded throughout South America and became the third-largest brewer in the world. In 2004, Interbrew, the European beer company, acquired a majority stake in AmBev, which created InBev. In 2008, InBev purchased Anheuser-Busch; resulting in the new company AB InBev (Allen & Zook, 2012). Anheuser-Busch (AB InBev) The publicly traded company (Euronext: ABI) is based in â€Å"Leuven, Belgium with American Depositary Receipts on the New York Stock Exchange (NYSE: BUD)† (Anheuser-Busch InBev [AB InBev], 2011) and is not only the leading global brewer, but is one of the world’s top five consumer product companies. AB InBev’s portfolio contains over 200 brands of beer with fourteen brands that generate over $1 billion per year in revenue. The brewer invests in their greatest growth potential brands such as Budweiser with 45% of sales originating in North America. The company owns 50 percent equity interest in Mexico’s leading brewer and owner of the Corona brand, the subsidiary Grupo Modelo. With their approximate 116,000 employees based in twenty-three countries worldwide, AB InBev is geographically diversified, along with a balanced exposure to developing and developed markets, the company has a completive edge. AB InBev is a multinational beverage company and is the largest brewer, with almost 25 percent global market share. They are the third largest FMCG company by firm value (AB InBev, 2011). AB InBev was chosen for a financial analysis due to its longevity and innovated ideas and marketing. It is hoped that AB InBev’s financial records will show that their innovated methods will show a continuous financial growth. The Annual Report For this analysis, AB InBev’s 2011 annual report is used and it compares 2010 and 2011. The audit was performed by Pricewaterhouse Coopers. The report is in millions and AB InBev saw a $2,197m in profit gain from 2010 to 2011 and a $1,114m in cash flow from operating activities before changes in working capital and use of provision. The change in working capital was $1,183m resulting in an increase of $2,581m of cash flow from operating activities. There was a negative increase in the investing and financing activities, $185m and $2,239m respectively. In 2010, AB InBev had a net increase in cash and cash equivalents of $602m and $759m in 2011. Overall, in 2011 AB InBev realized $39 billion revenue (AB InBev, 2011). The Balance Sheet When assessing the financial report, it may be difficult to see positive revenue. In order to understand, one must know how interpret the financial statement as a whole. The balance sheet provides information about AB InBev’s assets, liabilities, and shareholder’s equity. Assets are things that a company can sell or use. These items include physical property, inventory, equipment, etc. Intangibles are also assets – things that cannot be touched, but nevertheless have value, i. e. patents and trademarks, investments the company makes. And of course cash is the main asset. Liabilities are amounts that the company owes to others. These amounts can include a loan secured to launch a new product, rent for use of a factory, or money owed to a supplier, etc. Liabilities also include future obligations, i. e. goods or services promised to be provided in the future. Shareholder equity (or capital or net worth) is the money that would be left if a company sold all of its assets and paid off all their liabilities. Any money left over belongs to the owners (or shareholders) of the company. The balance sheet’s â€Å"equation† is Assets = Liabilities + Shareholders’ equity (Garrison, Noreen, & Brewer, 2010). The balance sheet is set up with the assets listed and tallied on the left side, while liabilities and shareholders’ equity on the right. The assets are usually listed in order of how quickly they can be converted into â€Å"real† cash. Current assets are things that the company plans to convert to cash within one year, i. e. inventory. Noncurrent assets are things that are expected to be converted to cash longer than a year. Noncurrent assets include fixed assets (not available for sale, i. e. office furniture). Liabilities are usually listed according to their due dates. Liabilities are either current or long-term. Current liabilities are debts that the company expects to pay off within a year; on the other hand, long-term liabilities are due in more than a year. Shareholders’ equity (SE) is the amount invested by the owners. SE is calculated by subtracting the company’s earnings or losses from the owner’s investment in the company’s stock (Garrison, Noreen, & Brewer, 2010). In assessing AB InBev’s balance sheet for 2011, the company had $39,046 million in revenues, a 4. 6% increase, and a gross profit of $22,412 million. It is stated in the annual report that a selective price increase was taken in the last quarter in anticipation of higher commodity costs. Cost of Sales (CoS) increased by 1. 6%. This increase was due; according to AB InBev in part to lower aluminum can costs in Latin America and procurement savings and implementation of their best practice programs in North America. The total operating expenses increased by 3. 7%. This was partly due to distribution expenses increasing by 9. 2%. Brazil had higher transportation costs, while Latin America South saw higher labor costs and higher transport tariffs in Ukraine and Russia. Sales and marketing expenses increased by 4. 1% because, specifically in North America, more investments in brand offset savings in non-working money. Administrative expenses increased by 0. % due to fixed cost savings in the United States offset by salary increases and expansion costs in China and Brazil. Other operating income was $694 million compared to $64 million in 2010 mainly because of tax incentives in China and Brazil (AB InBev, 2011). The Income Statement An income statement shows how much revenue a company earned and the costs assoc iated with earning said revenue. The bottom line of an income statement normally shows the company’s net losses or earning. This statement tells how much the company has made or lost over the accounting period, usually for a year or a portion thereof. Income statements reports earnings per share (EPS). (To calculate EPS, the total net income is divided by the number of outstanding shares of the company). An income statement also shows how much shareholders would receive if the company distributed all of the net earnings for the accounting period; however, most companies reinvest their earnings (Garrison, Noreen, & Brewer, 2010). Income statements begin with the total amount of revenue made during an accounting period and then deduct certain costs and operating expenses associated with earning said revenue. The bottom line tells how much the ompany earned or lost during the period. The beginning is the â€Å"gross† revenue (or sales). The next line is the amount the company does not expect to collect (referred to as allowances), i. e. discounts, or returns. After deducting these allowances from the gross revenues (or sales), the result is net revenues. The next lines are operating expenses. Although these expenses can be lis ted in various order, the line after net revenues is usually costs of sales. Costs of sales is the amount the company has spent producing the goods or services sold during the accounting period. Subtracting cost of sales from net revenues gives a subtotal of gross profit (also known as gross margin) (Garrison, Noreen, & Brewer, 2010). The operating expenses are listed next on the income statement. These expenses support a company’s operations, i. e. salaries, marketing, etc. Because operating expenses cannot be linked to the production of products or services being sold, they are different from costs of sales (Garrison, Noreen, & Brewer, 2010). Depreciation is also deducted. Depreciation is the amount of wear and tear on assets (machinery, tools, etc. ) that are used over long term. This amount is spread over the periods they are used and is called depreciation or amortization. After this deduction from the gross profit, the income from operations is arrived. This amount is before interest and income tax expenses (Garrison, Noreen, & Brewer, 2010). The next section allows companies to account for interest income and interest expense. Interest income is earned from interest-bearing savings accounts, money market funds, etc. Interest expenses are monies paid in interest on loans, etc. Some companies show these separately and some combine the two. The income and expenses are totaled and then deducted from the operating profit to arrive at operating profit before income tax (EBIT). Finally, income tax is subtracted and the bottom line of net profit or net loss (also known as net income, net earnings, or net operating income) is calculated (Garrison, Noreen, & Brewer, 2010). On AB InBev’s income statement, sales are the same as on the balance sheet. (AB InBev, 2011). In North America, EBITDA increased 1. 5%, $6. 573 million with a margin expansion increase up to 42. 9%, driven by growth in overhead cost reductions and gross profit. In the combined statement (the gathering of all AB InBev’s companies), the EBIT for 2011 is $12,607 million and an EBITDA of $15,357 million (AB InBev, 2011). Cash Flow Statements While a balance sheet is a snapshot and the income statement shows if the company made a profit or lost money, a cash flow statement shows if the company generated cash. Cash flow statements shows the inflow and outflows of the company’s cash. This statement is very important because it proves that the company has enough money to pay expenses, purchase assets, and stay competitively profitable. Whereas other financial statements shows an absolute dollar amount at a particular time, a cash flow statement show changes during the accounting period. The cash flow statement uses the information from both balance sheet and income statement. Cash flow statements are divided into three major sections: operating activities, investing activities, and financing activities. (Garrison, Noreen, & Brewer, 2010). AB InBev’s financial report consolidates the activities, followed by a breakdown of the activities including explanations. Operating activities rose from $9,905million to $12,486 million; investing activities increased from a negative $2,546m in 2010 to negative $2,731m in 2011; and financing activities rose from $6,757m to $8,996m in 2011. However, the net increase in cash and cash equivalents increased from $602m to $759m (AB InBev, 2011). Operating activities. The first section of a cash flow statement analyzes inflow from net income or loses. This section usually reconciles the net income (taken from the income statement) to the actual cash the company received from and used in its operating activities. This process adjusts net income for any non-cash items, i. e. adding depreciation expenses back, and for any cash that was a source or a use provided by other operating assets and liabilities (Garrison, Noreen, & Brewer, 2010). AB InBev’s financial report of cash flows shows an increase in operating activities. This increase is due to a higher profit and strong contribution from changes in the working capital. The increase in working capital is the result of on-going trade initiatives; furthermore, there is an increase in trade payables that are linked to higher capital expenditures. These expenditures have longer payment terms (AB InBev, 2011). Investing activities. Investing activities shows the inflow from all investing activities. These activities usually include purchases or sales of long-term assets, i. e. property, plant, and equipment (PPE) as well as investment securities. If a company buys machinery, this activity would be listed as a cash outflow because cash was used. However, if the company sold some investments from their portfolio the proceeds would be an inflow from investing activities because it is a source of cash (Garrison, Noreen, & Brewer, 2010). AB InBev’s investing activities were $2,731m in 2011, compared to 2010 which was $2,546m. This increase is by higher capital expenditures mainly in Brazil and China. To partially offset this increase, the company sold short-term debt securities. The company invested in 2010 to facilitate liquidity and capital preservation in Brazil. Net capital expenditures were $3,256m in 2011 and $2,123 in 2010. This increase is primarily linked to investments for expansion in China and Brazil in order to meet demands in the growing market. Approximately 57% was used to improve production facilities while 33% was used for logistics and commercial investments. Ten percent was used for purchase of hardware and software and improving administration (AB InBev, 2011). Financing activities. The last section is financing activities. This part of the cash flow statement shows the typical sources of inflow, including cash raised by selling stocks or bonds and borrowing funds from a bank (Garrison, Noreen, & Brewer, 2010). Cash inflow from financing activities was $8,996m in 2011, compared to 2010’s $6,757m. The 2011 amount reflects higher dividend payouts, net repayments, and settlements of derivatives that were not part of a hedge. AB InBev could borrow enough to meet its liquidity needs; the company’s policy is to rely on cash flows from operating activities to fund its continuing operations (AB InBev, 2011). Analysis of AB InBev’s Financials According to the 2011 annual report, Anheuser-Busch InBev saw a year of solid performance and progress. AB InBev experienced growth, expanded their EBITDA margin, grew EPS, and made strides in de-leveraging the balance sheet. AB InBev experienced a strong growth from their three well-known global brands: Budweiser, Stella Artois, and Beck’s. These brands were up by 3. 1%. Stella Artois volumes increased by 5. 9%, with a 24% surge in sales in the United States, 13% in Argentina, and 200% in Brazil. The company continues to expand and grow in China and Brazil. The company raised its dividends to 1. 20 euros per share, a 50 % increase. â€Å"These results were achieved despite weak consumer confidence in several markets and increases in commodity prices. Faced with adverse conditions, our people did what they do best. They took ownership of the situation, focused on what they can impact, and did not let short-term factors distract from our long-term goals of connecting with consumers, driving shareholder value, and working toward our dream: to be the Best Beer Company in a Better World† (AB InBev, 2011). The United States shows signs of an economic recovery. An increase in US profits are supported by the company's new NFL sponsorship. Felipe Dutra, AB InBev’s CFO said the increase could also â€Å"have something to do with the unseasonably mild weather† (AB InBev, 2011). The newly launched Bud Light Lime and Bud Light Platinum performed well. Dutra said â€Å"We believe we have the right brands to exploit that opportunity,† before, during and after the Olympic games. Budweiser has also extended sponsorship of the soccer World Cup through 2018. AB InBev will continue to rely heavily on their strategic brands (AB InBev, 2011). Conclusion A fundamental part of their culture is never being entirely satisfied with their results: â€Å"we always challenge ourselves to dream bigger and achieve more. . . † (AB InBev, 2011). With continued global growth and expansion and early payoffs of debt, AB InBev will continue to see profits. The company’s innovated thinking will carry it into the millennium.ReferencesAllen, J., & Zook, C. (2012, May 4). The strategic principles of repeatability: How nonnegotiable fuel growth. How can a company sustain profitable growth? [brief]. Retrieved fromhttp://www.bain.com/publications/articles/the-strategic-preincipels-of-repeatability.aspx Anheuser-Busch: Dedication to our craft . (2011). http://anheuser-busch.com/index.php/our-heritage/history/ Anheuser-Busch InBev. (2011). ABInBev Annual Report 2011 [Annual report]. Brouwerijplein, Leuven: AB InBev. Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2010). Managerial Accounting (13th ed.). New York, NY: McGraw-Hill/Irwin.

The Importance Of A Universal Health Care System - 2128 Words

Unlike many countries in the world who understand the importance of a universal health care system, the United States are lacking in accommodating their citizens with services that many counties see as a public good or even a human right. For years, American’s have been under pressure to search for health care insurance without the guarantee of coverage (SOURCE MICHEAL MOORE). Health care seems to be on on going topic in American politics and it has its reasons (SOURCE SPRINGER LINK). As of recently, many Americans did not have access to health care without being pummelled by excessive bills. Health care in America is seen as a private good. This seemed to be the reality of many American citizens until March 21st 2010 when The Patient protection and Affordable care act, also known as Obamacare, was passed in the house (SOURCE OBAMACARE). The PPACA is a balance between the states and the federal government ( SOURCE PASCALS WAGER). 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