Subcontractors

Subcontractors 1.0 Introduction Wikipedia (2009) defined subcontractor as â€Å"an individual or in many cases a business that signs a contract to perform part or all of the obligations of another’s contract†. Other authors, Gerald N. Hill Kathleen T. Hill (2005) defined subcontractor as â€Å"a person or business which has a contract with a contractor to provide some portion of the work or services on a project which the contractor has agreed to perform†. Generally, a subcontractor performs his work under a contract with a main contractor who is hired by the employer. In building construction, a main contractor usually hires a subcontractor to perform a specific task such as roofing, plumbing, electrical, cement work and plastering, as part of the overall project. Hence, if the main contractor does not pay for the subcontractor, then the subcontractor has the right to enforce a â€Å"mechanic’s lien† on the real property upon which the work was done to collect. There are three types of subcontractor that is: Nominated subcontractor (Specialist subcontractor) Domestic subcontractor Named subcontractor Nominated subcontractor is essentially selected or appointed by the employer for some specific works. If the employer wants to nominate a subcontractor for an element of work, then he will instruct the main contractor to use the nominated subcontractor through the architect. The element of work usually is the engineering package such as piling, structural frame or some ME services works. In this kind of subcontract, there is a direct contractual relationship between the employer and the subcontractor. On the other hand, domestic subcontractor is selected and appointed by the main contractor who is hired by the employer. The domestic subcontractor doesn’t have the direct contractual relationship with the employer but he contract with the main contractor. Domestic subcontractors usually execute the part of work from the main contract and supply or fix the materials and goods. The employer will not involve in the election of this kind of subcontractor and the main contractor take the responsibility of the subcontractor. The Named subcontractor is contractually same as the domestic subcontractor. However, the different between them is the employer states that which contractor is acceptable without take responsibility for their final selection and appointment. Chapter 2: Forms of Contract 2.0 Forms of Contract 2.1 Review the method of appointing specialist subcontractor JCT 98 The JCT 1998 is the pre JCT Form which was used when selecting and choosing the subcontractor. There are two types of subcontractor in this form of Building Contract which are Nominated subcontractor and Domestic subcontractor. In the JCT Form, except the Employer, the Architect has the highest authority in making decision. Nominated subcontractor is essentially appointed by the Architect or the Employer when they need the subcontractor in some specific works. Daniel Atkinson (1999) defined nomination as â€Å"sub-letting sections of the work allowing the Employer full involvement in choosing the company early and using the subcontractor’s expertise for design or coordination†. There are some reasons that the Employer nominated a subcontractor (Daniel Atkinson, 1999): The Employer can select any company that he likes to be his subcontractor without based on the price. The subcontractor’s design expertise and his knowledge can be utilized due to he can be involved early. Since the specialist subcontractor involves, the Contractor will not waste his time on some particular work which the Contractor does not expert in it. The Employer can understand his responsibilities clearly since the clear contractual liability is established. Delay in time can be prevented by the direct links and involvements are established. According to the Jennie Price (1994), the procedure of nominating a subcontractor under the Standard Form of JCT 1998, Clause 35.4: The Architect sends the both of invitation to tender in part 1 of the standard form of tender, NSC/T, and the relevant section of the employer/ nominated subcontractor agreement, NSC/W, together with the drawings/specification/bill of quantities which describe the work, to those companies the employer wishes to invite to tender. Then the tenderers complete the standard form of tender (part 2 of NSC/T) and the relevant sections of the warranty, NSC/W, and return both documents to the Architect. The Architect chooses the subcontractor, and arranges for the Employer to sign the selected subcontractor’s tender to confirm his approval of it, and to execute the warranty, NSC/W. The Architect nominates the subcontractor to the main contractor using the standard nomination instruction, NSC/N. He also sends the main contractor a copy of the invitation to tender and the successful subcontractor’s tender, the drawings/specification/bills of quantities on which the tender was based, and the executed warranty. After received those documents, the main contractor has the right of reasonable objection to the selected tenderer within 7 days. If he does not object, he must reach agreement with the selected tenderer on the ‘Particular Conditions’ set out in Part 3 of NSC/T. These include the subcontract period, insurance details and the identity of the adjudicator and trustee stakeholder. When agreement on the Particular Conditions has been reached, the main contractor and subcontractor sign Part 3 of NSC/T, and execute the subcontract articles of agreement, NSC/A, which incorporate by reference the subcontract conditions NSC/C. The main contractor sends a copy of the signed NSC/T Part 3 and the executed NSC/A to the Architect for his records. 2.2 Review the method of appointing specialist subcontractor JCT 05 JCT 2005 Form of Building Contract (with quantities) has been updated, amended, merged and retired most of its important contracts. This form was set out in clear, understandable, and well-ordered for the user and it had simplified on wording such as change the word â€Å"Determination† to â€Å"Termination†. There is a little deviation between JCT 1998 and JCT 2005 regarding to the subcontracting. In this form of Building Contract, the nomination of subcontractor has been omitted. According to the Chappell D. (2007), there are a lot of problems arise between the main and subcontractor since a project is not ready for the subcontractor to start his work on the anticipated date. Due to the delay of the commence work, the subcontractor may argue and claims for more money. On the other hand, Ndekugri I. and Rycroft M. (2009) stated that JCT 1998 had extensive provisions on nominated subcontracting but due to the bad experience from the inherent pitfall of nomination of subcontracting and its complexity, the provision has been omitted in JCT 2005. There are three principles of appointing a subcontractor under the JCT 2005 Form of Building Contract: Consent to sub-contracting (Clause 3.7) According to this clause, main contractor cannot appoint or subcontract whole or any part of works to anybody without the Architect’s or the Contract Administrator’s consent. However, the Architect also cannot withhold or delay his consent unreasonably. If the Contractor insists to sub-letting his works to anyone without consent, then the employer entitles to terminate the Contractor’s contract under clause 8.4.1.4. Besides that, under the clause 3.7.2, the contractor cannot subcontract the design portion to anyone without the Employer’s consent. Lists in Contract Bills (Clause 3.8) Under this clause, annexations of lists of subcontractor to work packages which are defined in the Contract Bills are required. Clause 3.8.2 has stated that the list of subcontractor must not less than three persons. Then the Architect has to choose among the three persons to be the subcontractor. It is similar as pervious clause that the Architect cannot withhold or delay his consent unreasonably. If the Contractor submitted the list which less than three persons, then either: The Employer and the Contractor shall by agreement add the names of other persons to make sure the list comprises not less than three persons; or The Contractor carries out the works by himself. Conditions of sub-contracting (Clause 3.9) The subcontract shall state the condition that upon the termination of the Contractor with any reason, then the employment of the subcontractor will be automatically terminated too under the Clause 3.9.1. Besides that, the subcontract shall provide that subcontractor cannot remove the site materials which have been delivered to the works without the Contractor’s written consent except for use on the works. If the materials or goods have been paid by the Contractor, then they will become the Employer’s property and the subcontractor cannot deny it. On the other hand, if the Contractor has paid the subcontractor for any site materials before their value is included in the Interim Certificate, then the materials will become the Contractor’s property. Under the Clause 3.9.4, if the Contractor fails to make the payment to the subcontractor, then the Contractor shall pay simple interest to the subcontractor until the payment is made. Then according to the Clause 3.9.5, the Contractor could get the warranty from the subcontractor for his execution of works within 14 days of receipt of a written request by the Contractor. If the subcontract comply the three principles above, then the Architect could select and choose among the three persons in the list to be the domestic subcontractor. 2.3 Review the method of appointing specialist subcontractor NEC 3 ECC 05 The NEC 3 ECC 2005 is essentially used by Government for public works such as road, bridge etc. In JCT Form, the Architect has the highest authority while the Project Manager has the highest authority in this NEC 3. He plays an important role in this Form of Building Contract especially in subcontracting. The Project Manager is the person who approves the appointment of the subcontractor by the Contractor. In other words, the Project Manager dominates in the selection of subcontractor. Under the Clause 26.1, the Contractor still takes the responsibility to the works even though he had subcontracted the works to the Domestic subcontractor. Therefore, the Contractor must select the subcontractor carefully in case of the omission of the subcontractor. However under the Clause 26.2, the subcontractor who has been proposed by the Contractor must be accepted by the Project Manager. If the Project Manager does not accept the subcontractor, then the Contractor cannot appoint such subcontractor. Under the Clause 26.3, the Contractor has to submit the proposed conditions of contract for every subcontract to the Project Manager for his acceptance and approval unless an NEC Contract is proposed. Besides that, if the Project Manager agreed that no submission is required then the Contractor is not need to submit it. This clause also stated that the reasons that the Project Manager does not accept the subcontractor who is proposed by the Contractor are: The subcontractor will not allow the Contractor to provide the works. The subcontractor does not include a statement that the parties to the subcontract shall act in a spirit of mutual trust and cooperation. Chapter 3: Reasons of why Nomination has been stopped 3.0 Reasons of why Nomination has been stopped In the opinion of Jennie Price (1999), the disadvantages toward the main contractor are some of the reasons that the nomination has been stopped. The Main Contractor will lose his right to choose his favorite subcontractor to carry out the part of works. He would hard to communicate with the subcontractor who is nominated by the Employer thus cannot cooperate well. Since the Main Contractor is forced to employ the subcontractor so he is unable to impose his own terms and conditions which are more commercially advantageous to him. Other than that, the Nominated Contractor is normally difficult to be managed and controlled since their direct link with the professional team and the Employer. They will not easily listen to the Main Contractor on the design works due to the works are their expertise. Since some of employer will repeat the business with the nominated subcontractor, then the said nominated subcontractor will monopoly in this industry. Other subcontractors will not have chance to receive the job and make them suffer in their incomes. On the other hand, quality of the works might be dropped due to some nominated subcontractors handle few projects in the same period. They cannot concentrate on a single project and make the quality of every works will be dropped. 3.1 Advantages and Disadvantages toward the Employer Jennie Price (1999) agreed that Nomination provides some advantages and disadvantages toward the Employer which are shown as below: Advantages to the Employer: The Employer is able to select the person whom he wishes to carry out the subcontract works. Through the warranty NSC/W, the Employer has the direct contractual link with the subcontractor. It can covers matters such as design or materials selection by the subcontractor. Disadvantages to the Employer: The Employer has to take the risks and bear the responsibilities on the Nominated subcontractor due to his omission of works. If any defaults have been found, then the Employer should bear the extra costs. There are no rights against the main contractor in the event of defective design by the Nominated subcontractor. The Main Contractor entitles to claim Extension of Time if the progress of the main contract works is delayed by the Nominated subcontractor. Besides that, he could also claim for the Loss and Expenses due to the delay of works which is caused by the subcontractor. Since the Main Contractor does not take any responsibility on the Nominated subcontractor, there may be lack of management of the progress of the works on site of the subcontractor. 3.2 Opinion for the new appointment procedure of subcontractor In my opinion, the new specialist subcontractor/supplier appointment procedures are more complex to render the duties of the Architect / Project Manager / Quantity Surveyor. This is because the design teams have not direct contact with the subcontractor. All the instructions which are given by the design teams are passed through the Main Contractor. That might be appeared some mistake in the communication. By the way, the design team also cannot directly manage the subcontractor since the subcontractor only contract with the Main contractor. Chapter 4: Conclusion 4.0 Conclusion After the research, we will know that the procedure of nomination in JCT Form 98 and the reasons for nomination under this Form. Then we know that no more nomination under JCT Form 05. We also get the three methods that appoint a specialist subcontractor in JCT Form 05. NEC 3 ECC 2005 is only for the government works and the Project Manager has the highest authority in this Form. As a conclusion, nomination provides some disadvantages to the Main contractor such as difficult to cooperate between them and the main contractor cannot impose his own terms and conditions to the subcontract. Besides that, the main contractor is usually hard to manage the nominated subcontractor because he has the direct link with the professional design team. Other than that, nomination will make the monopolies arise in the construction industry due to the repeat business between the nominated subcontractor and the Employer. Quality of the works is low since the subcontractor cannot concentrate on single project. The Employer needs to bear the risks and take the responsibilities on the nominated subcontractor. Hence, nomination has been stopped. Finally, in my opinion, there are a lot of benefits that nomination has been stopped since there were a lot of disadvantages. Chapter 5: References Atkinson D. (2009), Sub-Contracting. [Online]. Last accessed on 24th July 2009 available at http://www.atkinsonlaw.com/cases/CasesArticles/Articles/SubContracting.htm CHAPPELL, David (2007). Understanding JCT Standard Building Contracts Eight Edition, Abingdon, Taylor Francis. Gerald N. Hill Kathleen T. Hill (2005), Subcontractor [Online]. Last accessed on 24th July 2009 available at http://legal-dictionary.thefreedictionary.com/Subcontractor NDEKUGRI I. and RYCROFT M. (2009). The JCT 05 Standard Building Contract Law and Administration Second Edition, Oxford, Butterworth-Heinemann. PRICE, Jennie (1999). Sub-contracting under the JCT Standard Forms of Building Contract, London, Macmillan Press LTD Wikipedia (2009), Types of Subcontractor [Online]. Last accessed on 24th July 2009 available at http://en.wikipedia.org/wiki/Subcontractor#Types_of_subcontractor Bibliography Barnes P. and Davies M (2008). Sub-contracting under The JCT 2005 Forms First Edition, Oxford, Blackwell. GERRARD, Robert (2005). NEC2 and NEC3 Compared. Great Britain, Bell Bain. ME Contractor Magazine (2005), what sort of subbie are you. [Online]. Available at http://www.eca.co.uk/IndustryGuidance/CCandL/Download/WhatSortOfSubbieRU.pdf

Malcom Xs A Homemade Education Essay -- Papers

Malcom X's A Homemade Education Malcom X's "A Homemade Education" tells a story of how he gained knowledge by himself and how it guided his thoughts and ideas. Reading also molded his political views. Although Malcom X is a very outspoken person about racism in America, and throughout the world, I find that he has a right to be angry, but goes a little overboard on blaming whites. The story begins when Malcom is in jail and is given a book that he cannot understand because he can't read. This angered him a little and sparked a fire inside of him to learn how to read and write. Soon thereafter he went to the library in the jail and checked out a dictionary. He began to copy the whole dictionary learning word after word that he wrote. Upon completion of the dictionary, he started to read anything he could get his hands on. No matter what time it was, Malcom was reading. Despite being in jail, he felt as free as he ever could be. Reading and the ability to learn is what made him feel this way. After becoming a more educated man, he began to study the teachings of Muhamma...

Ace Hardware Store Entering Bahrain Market Essay

We have endeavoured to emphasize on the suggested strategies which will allow Ace Hardware to consider venturing into the Bahraini market. Therefore with the information provided and composed, we have the opportunity to examine comments of Ace Hardware which allows us to highlight key issues faced. Organisations need to recognize and meet demands of the exterior factors which include threats and opportunities to uphold their competitiveness in the market. Henceforth, the intention of this report is to essentially investigate and assess the outlook of Ace Hardware Corporation in relation to expansion and growth in the Bahraini market. . 0 Introduction Bahrain is one of the unique countries in the Middle East. It alone has a stable economic climate and welcomes foreign investment with a highly business friendly culture thus making it an efficient country to start business. Introducing Ace Hardware to the Bahraini market because of a numerous aspects such as retaining 100% foreign owner ship and low taxation, provides a free, open and transparent environment that fosters growth, legal system protects companies’ rights, while their free market environment allows businesses to thrive. . 0 Industry Business Description The ACE Hardware Corporation is a well-known wholesaler of hardware and home-related products; the organisation offerings include safety equipment, plumbing products, outdoor living products, pet supplies, door handles, electrical tools, lawn and garden accessories, furniture, home appliances and many more. ACE has been affianced in the wholesale hardware business and has offered dealerships to retailers of hardware and associated items since the company in Illinois commenced incorporating in 1927. Today, ACE is the largest retailer-owned obliging and vibrant leader in the convenience division of the hardware business in terms of wholesale and retail sales and strength of the brand. 3. 0 Company description According to (Irwin, 2012), Ace Hardware ranks highest in satisfying home improvement retail store customers for a sixth consecutive year according to the J. D. Power of Associates Home improvement Retail satisfaction Study of 2012. This measured customer satisfaction with home improvement retail stores, based on the performance of five factors: merchandise, price, sales staff, sales & promotions and store facility. The organisation emphasizes on service and modern retailing techniques and has helped locally owned operated ACE retail stores confront intense competition from Home Depot and Lowe’s. In addition, it provides numerous value-added services such as marketing, advertising, merchandising and design services to its retail members. ACE’s 4,600 stores in all 50 states and more than 60 countries generate annual retail sales of approximately $12 billion (ACE Hardware Corporation, 2012). 3. 1 Type of business Retail Sales ACE’s 4,600 stores in all 50 states and more than 60 countries generate annual retail sales of approximately $12 billion (Ace Hardware Corporation, 2012). Dubai, Shanghai, Canada etc. Applying a Teradata warehouse permitted 2,500 Ace Hardware retail stores to transmit daily a point of sale (POS) transaction detail. According to (Murphy, 2007), â€Å"Teradata is the world leader in data warehousing solutions with a proven track record in retail, as we discovered when we sought vendor references. That experience, including customer relationship management, category management and business intelligence, made Teradata the right choice for Ace Hardware. † Basically, Ace relies on active warehouse data from Teradata, which has delivered a single repository for retail and wholesale sales, purchasing, customer information, financial data and inventory to essentially support large varied workloads. Wholesale In addition to its 14 retail support centres in the United States and freight forwarding operations on the West Coast and East Coast, ACE features three international distribution centres in Dubai, Shanghai and Panama. The international distribution centres provide: 1. Easier access to core stock of leading brand products and certified ACE products through their global supply warehouse 2. Online ordering systems 3. In-market fully operational support offices. â€Å"It is very useful to have Ace as a partner for this type of market. It is nice to be able to replenish your inventory on a weekly basis, which makes it easier to control. Our goal is to be a one stop shop for everything in your home, and we can do that with Ace. The people in the community can buy the Ace brand with confidence because it’s proven to be a good quality product. Jorge Ossa  Commercial Manager, Cemaco – Guatemala (ACE Hardware Corporation, 2012). ACE has established an accurate and demonstrated operating model for effective and efficient distribution allowing ACE Hardware retailers the wholesale benefit they require to be successful and profitable. Below are the some of the wholesale advantages available for ACE Hardware store owners:- * Lowest cost of goods * Named #1 Distributor according to Home Channel News in 2009, 2010 and 2011. (Home Channel News, August 2011) * #1 in wholesale sales at $3. 5 billion (Hardware Retailing, December 2010 ) * The combined buying power of over 4,100 locations To support the growing number of international ACE retailers and leverage international wholesale opportunities, ACE opened the Ace Global Distribution (ASG) warehouse in Shanghai, China 2006 (ACE Hardware, 2012). 3. 2 Legal Structure Each Ace Hardware store is individually owned and operated by local entrepreneurs – hard-working, passionate business owners who are involved with and, many times, exist in the communities where their stores are based (Ace Hardware Corporation, 2012). . 3 History ACE Hardware organisation was founded when Richard Hesse, Frank Burke, Oscar Fisher, E. Gunnard Linquist, William Stauber unified to form a purchasing and advertising enterprise among their Chicago- area hardware stores. Moreover, their combined buying power allowed the store owners to negotiate lower prices on merchandise acquired from wholesalers. Therefore, embracing the ACE name in 1927 and incorporated the succeeding year. Frank Burke served as president of the group and was succeeded by Richard Hesse in 1930. Over the next two years the firm progressed into a hardware organisation, obtaining directly from producers and storing merchandise in its own warehouse in Chicago. This strategy allowed ACE to further reduce costs by removing ‘middlemen’ wholesalers (Anonymous, 2012). Moreover, during its first half-century of operation, ACE was basically a conformist wholesale group, and its profits were distributed equally among shareholders. The company’s low-cost purchasing and distribution procedures quickly enticed new employees and franchisees. By the mid – 1930’s, the organisation had 41 members and sales of more than $650,000. Throughout history, ACE has accomplished to solidify their position as one of the strongest and leading competitors in the hardware industry. 3. 3. 1 Mission The mission of the ACE team is to ensure that their customers are satisfied. According to (Anonymous, 2012), â€Å"When something goes other than the way it was planned, we do everything in our power to make it right. You have the ACE promise on that†. In relation to corporate social responsibility (CSR), ACE Hardware has partnered with the CMN hospitals to give back to communities. The ACE Foundation has raised over $50 million since 1991 to help sick and needy children through partnerships with Children’s Miracle Network (CMN) hospitals. ACE also supports the American Red Cross Natural Disaster Relief Fund through donations of work gloves, shovels, mops, bottled water and more (ACE Hardware Corporation, 2012). Once again, ACE is proud to serve as a sponsor of the Champions program. The retail stores and ACE foundation organise a myriad of fundraising initiatives, many of which our generous customers are welcome to get involved. Furthermore, these fun and unique experiences raise much-needed funds that essentially result in the power to change lives and treat sick children at the Children’s Miracle Network Hospitals around the United States. Miracle Jeans Weeks is a program where employees throughout the company wear jeans during the company’s five designated Miracle Jeans Weeks each year. Furthermore, with a cost of $1 per day and almost 900 people on campus, it’s never in doubt that thousands of dollars are raised yearly from this enterprise. 3. 3. 2 Goals & Objectives One of ACE’s goals is customer satisfaction as they value their customers. â€Å"We know our customers want to be spoken to in a more personal manner, rather than in a blast† says Rich Neal who is ACE’s one-to-one manager. â€Å"So we have robust analytics team, and follow-up purchases with thank-you emails and direct mail, broken down into eight categories, including grilling and lawn and garden† (Mahoney, 2011). Therefore, for ACE Hardware customer satisfaction isn’t just an idea, it’s basically the entire purpose. According to (Marketing charts staff, 2011), J. D Power and Associates (2011) U. S Home Improvement Retailer Satisfaction Study, Ace Hardware ranks highest in satisfying home improvement retail store consumers, accomplishing a score of 786 on a 1,000-point scale, for the fifth consecutive year.. The study, now in its fifth year, measures customer satisfaction with home improvement retail stores which is built on the overall performance on five aspects: staff and service; store facility (including merchandise and cleanliness); merchandise (product information details); price; sales and promotions. 3. 4 Company Structure Ace’s Board of Directors establishes guidelines for Ace management. There are between nine to 12 director positions. Ray Griffith assumes the role of president and CEO and David Ziegler as the chairman of the board. 4. 0 Ace Product analysis: Ace hardware store offers an extensive range of more than 30,000 quality household products from kitchen mops to garden furniture and camping equipment. Ace’s product range consists of the everyday items such as sponges and shower curtains as well as occasional purchases such as wall paints and lawnmowers. Ace’s Products are categorized into: Outdoor Lifestyle: Ace has a wide range of outdoor lifestyle products to suit distinct tastes and needs -Outdoor furniture -Camping -Barbeque -Pools and spas -Outdoor constructions Gardening: a stimulating selection to meet outdoor gardening needs. -Gardening tools -Seeds -Indoor/outdoor plants -Pots and vases -Watering -Fertilizers and chemicals -Landscaping -Fencing and edging -Water features -Garden decor -Garden lighting -Shades and turf DIY: With the widest product range, competitive prices and informed staff, ACE is the choice for D. I. Y. enthusiasts. All ACE stores offer a wide selection of Tools, components and essentials for DIY as well as the biggest range of world renowned brands in power tools. ACE also provides free advice and solutions on any hardware or D. I. Y problem as well as free repairs on power tools under warranty. -Power tools -Hand tools -Hardware -Fastenings and fixings -Tool Storage -Timber -Electrical -Security Equipment -Safety Automotive: Ace has a wide range of quality automotive products. From accessories, cleaning and car care products, sunshades, 4X4 accessories and emergency kits to enhance the looks and performance of your vehicle. 4Ãâ€"4 adventure -Car Cleaning and Maintenance -Car Interior -Emergency and Safety Painting and Decorating: Ace offers more than 16,000 colors of paints; customers also can mix their own colors to come up with their ideal paint pallet. Ace provides all the necessities needed to complete the process of decorating homes. -Paints -Paint Equipment -Adhesive and fillers -Wall c overing -Arts, crafts and hobbies Home ware: ACE home ware has a complete range of lifestyle accessories all under one roof. -Cleaning, Laundry -Storage, Packaging -Living -Bed and Bath -Kitchen -Electrical -Wellness Pet Care: ACE offers a range of pet supplies and related pet products and accessories catering to dogs, cats, birds and fish. Ranges vary from pet food, toys and other essential pet care accessories. Services: Rental service: The Ace Rental Place offers a wide variety of equipment for rent on a daily, weekly or even monthly basis, great for items required for few usages or simply to try them out before deciding on the purchase. All rental items are well maintained with expert customer service. Customers can rent the following items:- †¢4 Burner Gas Barbeque †¢Upholstery/Carpet Cleaner †¢Generator †¢High Pressure Cleaner †¢Port-a-cool Ladder 16ft Multi-master In store services: -Assembly – Installation/key cutting -Automotive chip key cutting- Pipe Cutting and Threading -Blade sharpening – Screen Repair -Computerized paint – color matching- Small Engine Repair -Delivery- Special Order Services -Glass and acrylic sheet cutting -Glass repair -In store lock servicing 4. 1 Customer profile/demand analysis: Aces vast range of products and services encourages a diverse range of customers with different needs and wants. Hardware stores in general often prioritize their target market as home owners as the products they offer are mostly for household use. Ace is more than just a hardware store that just sells tools for men, it’s a superstore that attracts both men and women who are making decisions in the appearance and upholding of their homes. Loyal customers As part of a customer retention strategy the Ace marketers have focused their attention on customer insights, by creating a card-based loyalty club – the Helpful Hardware Club (HHC) customers at the store can sign up to the program making them eligible purchase discounts and special offers. Ace targeted the Lifestyle segment to boost their retention program causing evenues to rise 5. 4 percent as lapsed customers were enticed by discounts to return to their local Ace stores. (Nielsen 2009) Aces product portfolio also consists of outdoor leisure activities targeting consumers that are not necessarily home owners or prime decision maker with the household. Products for occasions such as camping or barbequing target a segment of active leisure consumers. This segment broadens ACEs target market outside home owners. The demand is not only in home improvement products but also in the items needed to care for them. This demand has forced manufacturers to introduce a large range of new cleaning products which targets upscale shoppers who desire convenience and a more natural, non-toxic product. Current market Bahrain is regionally known for its cosmopolitan lifestyle suggesting sophisticated consumers, with their relatively high purchasing power these consumers have a high willingness to spend especially on premium products and brands. 4. 2 Competitive situation: (Ellen 2010) Ace Hardware Corp the largest retailer-owned cooperative in the hardware industry by sales and the second largest dealer-owned cooperative in the United States. Ace’s innovation is what led them to establish the strong position they hold today. With over 4,000 stores in 60 different countries ACE hardware were ranked 8th in franchise directs top 100 global franchise’s (Francise Direct 2012). Ace hardware store faces intense competition within the United States. The US home center, hardware store and home improvement retail industry includes about 23,000 hardware stores and home centers with combined annual revenue of about $150 billion. The home center segment of the industry is highly concentrated: the top four companies account for more than 90 percent of segment revenue (Hoovers 2012) The success of individual companies depends highly on competing low-cost purchasing, effective merchandising, and competitive pricing. The top three competitors of ACE are:- †¢Lowe’s Companies Inc. †¢The Home Depot Inc. †¢Do it Best Corp Despite the intense competition in their domestic market, ACE has an opportunity in Bahrain as the Hardware store industry is not as well developed leaving space for entry in to the market. However, there will of course still be some Potential Competitors in Bahrain that Ace will have to face:- Ace’s direct competitor in Bahrain will be Manazel Hardware store; Manazel first opened its doors in October 1995 at Salmabad, Bahrain. It is a family owned business based in Bahrain. Carrying more than 50,000 products ranging in over 20 categories, some of which include: Furniture, Home ware, Hardware, Bathroom ;amp; Plumbing accessories, paint and Sundries, Outdoor Living, Garden Furniture and Accessories. Their Materials are sourced from all around the world to provide everything for your home and garden. Manazel 2012) Ace could initially face challenges competing with Manazel due to it being a locally based company, depending on the loyalty of their consumers it could be difficult in convincing them to switch to ACE. Ace has the advantage of being a well-established global brand and with the high rate of expatriates in Bahrain they may naturally prefer to switch to a m ore recognized brand. Ace will also face competition amongst the small local hardware and tool stores. These stores are popular amongst price sensitive customers. 5. 0 Environmental factors 5. 1 Host Country Business Climate: Bahrain offers very distinctive traits in the Middle East. It enjoys a stable economy climate and competitive costs. It has an amazingly business friendly climate which is an attraction for ACE and other companies to do business in this country, it has an excellent regulatory framework, and supportive government policy (Najjar 2011) The Host country for ACE Hardware is Bahrain, Bahrain is an Arab country with a total land Area of 712 square kilometres, a population of about 1,234,571 (end of 2012), out of which 666,172 are locals, according to the central bank of Bahrain. The main towns in Bahrain are Manama and Musharraq, the climate is mainly very hot and humid, language is mainly Arabic, but English is widely spoken. The metric systems used include 1dhara=48. 26 cm, 1 rafa=254 kg, the currency is the Bahraini Dinar (BD) = 2. 65 USD, the Time is 3 hours ahead GMT (Bahrain: Basic Data 2012). Bahrain is an Arab country and has the monarchy system, the ruler, king Hamad bin Isa al-Khalifa is expected to be secure for some ime to come; the Al-Khalifa family has control over most of the executive branches of government and legislature remaining weak. There will however always be primary tension over economic and financial inequalities, with the halting pace of political liberalisation of sectarian discrimination. Real GDP growth for Bahrain was expected to slow down to 3. 1% in 2009, as mainly international demand for Bahrain exports is weakening, but was expected to recover to 3. % in 2010 (Bahrain economy, 2009), and is expected to rise up to 4-5% in 2 012 due to increases in crude oil production, manufacturing and government spending according to the Economic Development Board (EDB) (Andy 2012). Bahrain’s business climate in 2007 attracted almost $1 billion worth of investments in new projects in 2007 as reported by Dr Hassan Fakhro minister of Industry and Commerce, He also went ahead to mention that new investments in the new projects were worth 373. 3m Bahraini currency, which is about $987. 6 million and these new projects also created about 13, 536 jobs in the country (Middle East Financial News 2008). Oil production output from Bahrain’s single aground field is in decline however, and the monarchy government is aware of the country’s vulnerability to changes in oil prices globally, with oil being the major source of government revenue for the country accounting to more than 70% of the economy. The economy of the country also relies heavily on goodwill received from Saudi Arabia, which runs a large offshore oil field whose production it shares with Bahrain. All these limited resources has made Bahraini government to have the strategy of diversification in order to prosper, increase the role of the private sector and provide a welcoming environment for foreign investment. FIGURE 1. 0: BAHRAINI GDP 2001-2012 BAHRAINGDP GROWTH 2001-2012 200120022003200420052006200720082009201020112012 4. 6%5. 2%7. 2%5. 6%7. 9%6. 7%8. 4%6. 3%3. 1%4. 5%1. 8%2% SOURCE: global finance: Bahrain Country Report 5. 2 SWOT ANALYSIS: Strengths; ACE hardware is a strong brand both across the USA and the world stage, with more and more expansion into the global markets into several countries across all the continents of the world. ACE has the resources and ability to pursue growth in multiple directions, with the ACE leadership team making a smart decision of focusing on their paint production, which has made them gain a huge customer base and customer loyalty (Bueno 2012). In 2010 ACE hardware has generated in excess of $3. 45 billion in wholesale and retailers enjoyed the added bonus of collective buying power at this volume by getting a decreased cost in goods, which has built the basic foundation for a more profitable option (ACE 2011). ACE produces many DIY products and many changes have taken place in this market over the last 85 years, ACE ownership however still remains the on top in customer satisfaction according to Business week and was ranked â€Å"highest in customer satisfaction Among home improvement stores four years in a row† (JD power and Associates) ACE hardware also enjoys major success in the market share with the help of top of the range advertisement and reduced goods cost, it has slowly established itself to be a major player in the global market for hardware products. ACE also expanding its wings to get a piece of the business boom, and with the advantage of an established brand name, it will be relatively easy to penetrate under developed markets as more businesses would want a merger with them as opposed to its rival companies. ACE is a sophisticate and established brand worldwide, and has adopted the new technologies as they come which has giving the company a competitive advantage as they are more organised and technologically more advanced, which has led to reduction in production costs for the company. The expansion of ACE into the global market has seen it gain market share, more so than their competitors such as Home Depot, Lowe’s etc. Weaknesses; ACE hardware has relatively small stores, compared to their rival companies like Lowe’s, Home Depot and Menards on selection ACE Hardware in 2008 reported a net income of $10. 8 million for the first quarter of 2008, which was a decrease as compared to 2007 when they reported $14. 1 million which was a $3. 3 million decrease. The company also reported earning s before interests and taxes of $13. million in the first quarter of 2008 as compared to $29. 2 million in the first quarter of 2007 (9) ACE hardware has encountered losses resulting from physical damage to breakdown of its computers in the European market, which has led to replace damaged computer hardware, the reinstatement of lost programs or Data and also had to increase working costs as a result of the problems (10). Opportunities Bahrain’s financial freed om ranking is 77. 7, making its economic system the Tenth freest in this year’s Catalog (2012). Its overall ranking is 1. 4 points higher than last year, with upgrades in trade freedom; investment freedom, work freedom, and freedom from data file crime error. Bahrain is rated 1st out of 17 nations in the Centre East/North African-American area, and its financial freedom ranking is well above the world average (Bahraini economic development Board, 2012) from the perspective of Ace this reduces business constraints giving them the freedom to commercialize their brand and reduces limitations on investment. Situated near commercial establishments in the Gulf with a causeway relationship with Saudi Arabia and the rest of the GCC, Bahrain is seen as a gateway to the Gulf, an industry of over 100 thousand individuals. Bahrain’s variety and openness keeps presenting opportunities for exporters. It has the most varied economic system in the Gulf Bahrain does not currently have a competitive hardware industry with only a few entrants and one major Hardware store giving ACE the flexibility to enter and the means to operate however they choose. The hardware market ACE is involved in is a highly competitive market, it takes a lot of marketing research by ACE and expensive research and new technological adaptations for the company to stay ahead of competition, couple with the reduced purchasing power of consumers due to economic downturns globally have been detrimental to business for ACE. Threats The law requires that you have a local partner who maintains most majority interest and can therefore manage the company and can close it anytime he wishes. The local partner, be it an organization or an individual, does not need to give rise to the start-up financial commitment or take part financially at all. (Bahrain, 2010). This could mean lack of security for ACE as there is the chance of being closed down with no warning or notice. The changes in labor Laws and regulations constantly by the US and other countries have been detrimental to their expansion, other domestic and international factors also have to be considered by ACE before entering into any market in any country, such as culture, corporate social responsibility obligations are all external factors that ACE has to consider. The process of opening a business in Bahrain is complicated and economically dangerous, significance that local information is essential. You must also seek advice from a good attorney from the beginning. A knowledgeable attorney will provide information to you through the signing up complications and his help will be important in defending your interests. This is applicable whether you are starting a moderate shop or a big enterprise (Bahrain 2010) The current Political unrest in Bahrain creates an unpredictable business environment. If the unrest becomes worse this could have major effects on Ace’s business activities in the region, currency fluctuations and could see reductions in the amount of expatriates present in Bahrain causing Ace to lose a large part of their target market. 5. 3 Government constraints in Bahrain Economic growth The economic growth is for Bahrain is likely to slow down in Bahrain; it went down to 3. 3% in 2010 as regional growth in the country as government finances are getting squeezed. Local consumption of private homes and offices is expected to slow sharply, with no a real positive growth in the employment sector. However government consumption growth in Bahrain is forecasted to also slow down. For ACE however the major demeaning factor of business entry into Bahrain would be the limited fiscal constraints in the country, as well as the subdued outlook for global direct investments flows. And the demand for exports and of goods and services is also forecasted to decline, ACE might have a hard time penetrating into the Bahraini market (Ace Hardware 2008). Economic policy An advantage for ACE going into the Bahraini market is the countries determination to move away from the oil sector. The government is determined to stimulate the private sector growth and foreign investments, and address high unemployment problems (Bahrain News Agency 2012) this would be an advantage to ACE as the government will give them an advantage of being accepted into the country without many business constraints. They can be assured of government support which is a large determinant of business success or failure for any business going into another country. Inflation and the exchange rate Consumer price inflation is expected to moderate in the coming years because of slower domestic demand growth. But with a relatively strong currency against the Euro and the Dollar inflation is expected to slow down an average of 1. 8% in 2009-2010. The Bahraini government is intending to enter into a currency agreement with Saudi Arabia, Kuwait and Qatar, and with the UAE, which has pulled out though, and the government and the central bank of Bahrain is expected to maintain the dinar’s value and peg it at the rate of BD0. 67=$1 that has been in place for 3 decades (Bahrain News Agency, 2012). Setting up a business in Bahrain For ACE hardware it would be good news for them to know that Bahrain is ranked first in the Economic freedom index in the Middle East and North Africa (MENA) region, and is seventh overall globally according to the Fraser institute Report 2012. The report by Fraser classifies these countries by using themes such as governm ent volumes, legal system, and intellectual property rights security, accessibility to sound funds, freedom of international trade and organization credit, manpower and companies. All these factors are important criteria to be considered by ACE before going into business in Bahrain. 5. 4 PEST ANALYSIS Political Legal Environmental Laws Bahrain has set up a strict law on polluters as fines of up to $133,000 are issues under Bahrain’s new environmental protection law, this is the first law of it ‘s kind related to anti-pollution in the Persian Gulf state. This law covers everything from car emissions, noise and workplace pollution, as well as handling and disposing of hazardous waste materials and chemicals. This is in accordance with what ACE has to achieve to be successful in Bahrain by practicing Corporate Social responsibility (CRS) to maintain the environment in Bahrain or risk serious government and legal issues (Pittsburgh Post, 1996) Stability of the Government Bahrain has entered into an era of instability due to a combination of the Arab spring recently, longstanding local grievances, the competition of regional powers and other external forces. The solution to this problems can be dialogue between the ruling Al-Khalifa Family and all opposition parties. The crisis has however slowed down in recent times with more and more dialogue and compromises being reached between both parties (Bahrain’s Quest for Stability 2012). Economic GEP growth in Bahrain In 2004 the Bahraini GDP has been reported by the ministry of commerce to have grown by 5. 2% from the previous year, this has been largely due to increase in foreign direct investment flow (Middle East 2004) and has been growing ever since with a reported GDP of 2. 1% increase in 2012. Currency The Bahraini currency is the Dinar and at 0. 67 Dinar to a US Dollar it is one of the strongest currencies when it comes to exchange in the World. Consumer price inflation is expected to moderate in the coming years because of slower domestic demand growth. This for ACE can only mean good news as it will be a positive currency to work with and no inflation worries that have to be considered by ACE. Social Population distribution in Bahrain The Bahraini age distribution has been as of the ye ar 2010 the kingdom was 1,234,571, part of which 568,399 were locals and the other 666, 172 were non Bahrainis. This from 2001 the population was 650, 604, this is an increase of 89. %. However, the population of the locals has decreased from 2001 to 2010 reaching 46% from the previous 62% in 2001. The proportion of the population of Bahrainis in the total population during the period from 2001 to 2010 decreased, reaching 46% in 2010; while the corresponding figure in 2001 was 62%. The percentage of non-Bahrainis increased 54% in 2010 while it was 38% in 2001 (Census, 2010). This shows an increased number of expats coming into the country which will mean for ACE that products should not only be made to suit the local citizens but the majority foreigners, which means overall business strategy has to change. Religion and Language: The official language in Bahrain is Arabic; however English is widely spoken mainly in business meetings and other social interactions. The non-Bahraini in the country mainly speak Farsi an Iranian language, or Urdu which is a Pakistani language. The main religion in Bahrain is Islam, which is the 2nd largest religion in the world, Muslims in fast for a month every year in the month of Ramadan. The Bahrainis though make use of both the Islamic and western calendar but mainly use the western calendar for business operations. Business meeting etiquette Appointments are necessary, morning meetings are preferred. However meetings are not advised during the months of August and July because most Bahrainis travel out the country when the heat is at its worst. , they are quite time conscious, so arrive at meetings on time. Personal topics should generally be avoided unless the relationship has developed or there is need to discuss matters confidentially. Bahrainis usually have an open door policy, so meetings do get interruptions. Business meetings also start after a long talk about health, family etc. Business Negotiation Etiquette The building of trust is important since trust is required in order to conduct business. Bahrainis are very time conscious and time driven, the actual meeting is more important than the timeliness or outcome. Bahraini organizations are hierarchal, the highest ranking employee or worker reaches decision. Decisions are top down and lower level employees usually have no say. Decisions take a lot of time; if you try to rush it will be perceived as rude and disrespectful. Technological The economic system in Bahrain relies upon intensely on innovative petrochemical technology, and many Bahrainis have had or are getting specialized training at several universities all over the country. Technology is just coming up in Bahrain with many projects being undertaken in recent times, but perhaps the most important is the Bahrain Green Tech EXPO which is dedicated to the green consumer products. Due to the high demand for environmental protection globally, Bahrain has taken this as the only business to business trade show focused specifically on ECO friendly consumer products. 6. 0 Business Strategies 6. 1 Product /service positioning Positioning is what the customer believes about your product’s value, feature, and benefits, it is a comparison to the other available alternatives offered by the competition (Jackson, 2012). Some basic strategies include:- By attribute or benefit This is the most frequently used strategy in positioning. In this case, Ace hardware’s products are mostly house used products, and the benefits they can give to the customers are the after service, and the quality. The after service they give is mostly repairing, assembling and delivery. Level of service and quality of a product offering are the main influences of developing a strong brand image. By user Customers often choose brands that identify with their own self-image. Ace should position itself to suit the image of the end user. Therefore ace should focus on the wants and needs of their target audience and how they perceive themselves and the brand. By competitor Competition wouldn’t be much of an issue for Ace since they would be entering a market that is not fully developed in Bahrain with few competitors. But they should remain aware of new entrants which are always a possibility and they need to be aware of the changes that may occur. By price or quality Price and quality are directly related in minds of consumers, People are willing to pay premium prices for premium brands that are have high quality. It is very important for Ace to identify where they want to be placed on the pricing matrix shown in figure 1. Ace product offerings vary in brands therefore prices will also vary depending on brand and quality. 6. 2 Pricing strategy Because of Ace’s diverse product range of brands they would need to use more than one pricing strategy. Using the pricing matrix above ace could use this as a guidance to set appropriate pricing strategies. Premium Pricing: One pricing strategy suitable for Aces different brands is premium pricing. Certain brands offered by Ace are luxurious brands with high quality and high price. It is clear on the matrix for these products Ace should use premium pricing which allocates high prices to those brands Economy Pricing: Ace also offers products at more affordable prices however they may have lower quality then premium brands. These types of products attracts customers that are not willing to spend excess amounts of money and would rather spend less for less quality Competitive Pricing: ACE could also use competitive pricing strategy to set benchmarks on their own prices. This strategy is most effective when there are limited competitors in the market which is the case for ACE and Manazel. Ace has a clear advantage over Manazel as it is a globally established company enabling them to set their prices slightly higher than Manazels. Estimated Selling Price: The estimated selling price for ACE hardware products in Bahrain would have to be set under consideration of several factors, such as the GDP of the country, the purchasing power of the country, the competitor prices and the strength of the Bahraini currency The GDP is the value of all final goods and services produced within a nation over a period of a given year. The Gross domestic products (GDP) of Bahrain is the lowest in the Middle East with a reported $32 billion in 2011, however when it comes to consumer purchasing power of Bahrain, it is ranked fifth in the Middle East with a reported $27,900 in 2011. ACE can base it’s pricing on this and compare to its most similar market which is the UAE which is ranked second on the purchasing power list in the Middle East with $48,800 in 2011 (Index mundi, 2012) The Bahraini currency is a major factor for setting prices, comparing to the UAE market which is the closest to Bahrain both geographically and economically 1 Bahraini Dinar = AED 9. 7 so prices can be higher for the Bahraini market considering the difference in currency strength. Bahrainis live a very cosmopolitan lifestyle and would be prepared to buy from expensive and established brands (Numbeo, 2012), which will mean ACE, shouldn’t face many issues setting medium to high prices in Bahrain. But for the large number of expat s in Bahrain ACE has to adapt itself due to the target market it has set for itself when setting prices. Expats are genuinely not price sensitive when it comes to purchasing from known global brands as they find it easier to trust brands they are familiar with. The most important factor however is comparison of process with its main competitor in Bahrain which is Manazel; this company has built its reputation in Bahrain as one of the best Hardware stores and offers discounts and promotional vouchers to loyal customers (Manazel, 2012) which will mean stiff competition for prices for ACE. However, due to lack of information on actual goods prices for Manazel, ACE can do further research and sets it prices on information found. 6. Distribution and logistics Ace products will be available to customers through two sources: Retail sales: as many of its branches worldwide also provide retail shops, similar shops should also be provided in Bahrain in different major cities, to make the products more accessible to customers in more varieties, and as shopping is part of the Bahrainis past time this will be a major attributor to its overall sales. It will also increase overall brand popularity of ACE in Bahrain. Online store catalogue: ACE provides this service for many of its branches in different countries worldwide, but as internet commerce is not popular in Bahraini ACE should not expect major traffic on these online websites. Ace currently has distribution centers located in various parts of the world to enable more efficiency for their global stores at different pin-points. This way transport costs can be cut as well as time on delivering inventory. The closest distribution center to Bahrain is currently in UAE being operated by the Al Futtaim group. Ace can extend their current agreement with Al Futtaim for them to deliver across to Bahrain and take care of their inventory as well as the UAE. 6. 4 Promotion and Advertising Promotion ACE’s competitor in Bahrain Manazel offers various promotional vouchers and discounts to its customers, should be a model ACE will focus on that will help it gain more popularity with customers. Coupons, discount vouchers, loyalty cards should all be included as promotional tools by ACE and all promotional activity should reflect the goal ACE wants to be perceived as which is ‘the helpful store†. Advertising The most important part of marketing for any product is advertising, there are several tools ACE could you to get its name out in Bahrain which include, word of mouth, billboards on (major signs, buses etc. ) radio adverts, Television and much more. Due to culture and market similarities with the UAE ACE could use existing ads in Bahrain to cut costs in advertising research. 6. 5 Estimated sales/sales mix A sales mix is the specific sales of each product offered by a company in comparison to total product sales. Businesses commonly track this information to figure out exactly how much profit they make or can make when marketing a range of items or services. The sales mix of products will often impact an organization’s bottom line. 6. 6 Production/service strategies Production or operations strategy refers to the pattern of decisions or course of action that the organization takes to produce goods and services. The production strategy shows the direction the production or operations function of an enterprise should take. It has important consequences for the way production resources are selected, deployed and managed (Sarkissian. 2012). 7. Financial Planning â€Å"Financial planning is the process of meeting your life dreams/goals through the proper management of your finance† (Beniwal, 2010). This allows the usage of several financial tools such as Profit and Loss Statements, Cash Flow Projection and Financial Analysis to basically achieve financial objectives. 7. 1 Profit and Loss Statement Below is the Condensed Consolidated Statements of Income (Unaudited) for the three and nine months ended September 29, 2012 and October 1, 2011. ACE HARDWARE CORPORATION| | | | | | | | CONDENSED CONSOLIDATED STATEMENTS OF INCOME| | | | | | | (Unaudited, in millions)| | | | | | | | | | Three Months Ended| | | Nine Months Ended| | | September 29,| | October 1,| | September 29,| | October 1,| | | | 2012| | | 2011| | | 2012| | | 2011| | | (13 Weeks)| | (13 Weeks)| | (39 Weeks)| | (39 Weeks)| | Revenues| $| 949. 9| $| 912. 0| $| 2,929. 0| $| 2,787. 5| | | | | | | | | | | | Cost of revenues| | 826. 1| | | 797. 6| | | 2,564. 3| | | 2,449. 3| | | | | | | | | | | | | | | Gross profit| | 123. 8| | | 114. 4| | | 364. 7| | | 338. 2| | Distribution operations expenses| | 25. 1| | | 26. 2| | | 74. 4| | | 70. 7| | | | | | | | | | | | | | | Selling, general and administrative expenses| | 35. | | | 36. 2| | | 104. 5| | | 104. 3| | | | | | | | | | | | | | | Retail success and developme nt expenses| | 26. 2| | | 27. 6| | | 91. 5| | | 84. 1| | | | | | | | | | | | | | | Total operating expenses| | 86. 8| | | 90. 0| | | 270. 4| | | 259. 1| | Operating income| | 37. 0| | | 24. 4| | | 94. 3| | | 79. 1| | | | | | | | | | | | | | | Interest expense| | (4. 2)| | | (8. 9)| | | (20. 2)| | | (27. 8)| | | | | | | | | | | | | | | Loss on early extinguishment of debt| | -| | | -| | | (19. 9)| | | -| | | | | | | | | | | | | | | Interest income| | 1. 0| | | 1. 5| | | 2. | | | 3. 8| | | | | | | | | | | | | | | Other income, net| | 1. 7| | | 1. 5| | | 5. 0| | | 6. 1| | | | | | | | | | | | | | | Income tax expense| | (0. 9)| | | (1. 4)| | | (2. 4)| | | (2. 4)| | | | | | | | | | | | | | | Net income| | 34. 6| | | 17. 1| | | 59. 7| | | 58. 8| | Less: net income attributable to non-controlling interests| | 0. 3| | | 0. 1| | | 0. 3| | | 0. 3| | | | | | | | | | | | | | | Net income attributable to Ace Hardware Corporation| $| 34. 3| | $| 17. 0| | $| 59. 4| | $| 58. 5| | Accrued patronage distributions| $| 33. 3| | $| 15. 2| | $| 57. 0| $| 53. | | See accompanying notes to the condensed consolidated financial statements. | | | | | Ray AGriffith, GuziK, William M & Gast, Erik D. , 2012). | | | | | | | | | | | | | ACE HARDWARE CORPORATION| | | | | | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS| | | | (Unaudited, in millions)| | | | | | | | Nine Months Ended| | September 29,| | | October 1,| | | 2012| | | 2011| | | (39 Weeks)| | | (39 Weeks)| Operating Activities| | | | | | Net income| $| 59. 7| $| 58. 8| Adjustments to reconcile net income to net cash provided by operating activities:| | | | | | Depreciation and amortization| | 30. | | | 29. 0| Amortization of deferred gain on sale leaseback| | (0. 9)| | | (0. 9)| Amortization of deferred financing costs| | 1. 6| | | 2. 2| Gain on disposal of assets, net| | -| | | (2. 0)| Provision for doubtful accounts| | 2. 8| | | 3. 2| Loss on early extinguishment of debt| | 19. 9| | | -| Other, net| | 0. 2| | | -| Changes in operating assets and liabilities:| | | | | | Receivables| | (43. 2)| | | (39. 0)| Inventories| | (28. 9)| | | (68. 9)| Other current assets| | (2. 6)| | | 2. 7| Other long-term assets| | (7. 0)| | | (8. 0)| Accounts payable and accrued expenses| | 32. 6| | | 72. | Other long-term liabilities| | 6. 0| | | 2. 2| Deferred taxes| | 1. 1| | | 5. 0| Net cash provided by operating activities| | 71. 3| | | 56. 6| Investing Activities| | | | | | Purchases of marketable securities| | (9. 0)| | | (46. 1)| Proceeds from sale of marketable securities| | 8. 6| | | 46. 3| Purchases of property and equipment| | (31. 2)| | | (19. 5)| Decrease in notes receivable, net| | 1. 6| | | 1. 4| Other| | 0. 1| | | 0. 1| Net cash used in investing activities| | (29. 9)| | | (17. 8)| Financing Activities| | | | | | Net borrowings under revolving line of credit| | 113. 0| | | 9. | Proceeds from issuance of long-term debt| | 200. 0| | | -| Redemption of senior notes| | (301. 3)| | | -| Principal payments on long -term debt| | (7. 5)| | | (4. 0)| Payments of deferred financing costs| | (5. 2)| | | -| Payments of cash portion of patronage distribution| | (27. 7)| | | (26. 4)| Cash Flow Projection Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 29, 2012 and October 1, 2011 Payments of patronage refund certificates| | (17. 3)| | | (17. 3)| Proceeds from sale of noncontrolling interests| | 0. 3| | | 8. 8| Other| | 0. 6| | | 0. | Net cash used in financing activities| | (45. 1)| | | (29. 2)| (Decrease) increase in cash and cash equivalents| | (3. 7)| | | 9. 6| Cash and cash equivalents at beginning of period| | 15. 8| | | 9. 3| Cash and cash equivalents at end of period| $| 12. 1| $| 18. 9| Supplemental disclosure of cash flow information:| | | | | | Interest paid| $| 21. 3| | $| 20. 1| Income taxes paid| $| 0. 9| $| 0. 5| See accompanying notes to the condensed consolidated financial statements. | | | | 6| | | | | | (Ray A Griffith, GuziK, William M & Gast, Erik D. , 2012 8. 0 Management considerations ACE will undertake a big change in bringing ACE hardware to Bahrain, Bahrain overall will be a good prospect as the company has penetrated a similar market in the Middle East (i. e. United Arab Emirates) and with a very stable economy and freedom of business with no government interruptions it will be a relatively easy venture for an established brand such as ACE. However the management at ACE has to consider several factors that will make the venture a more smooth transition, such as trying a joint venture with a local business, culture considerations so as not to put out unethical products. 8. Personnel/sales force factors A sharp forecast of more and employees getting into the professional field in Bahrain, and the stiff rise in population over recent years and also the preferences giving to the locals in hiring, ACE hardware has to take into considerations means and processes of hiring its employees, personnel training and qualification has to be of the highest standard and profe ssional communication skills has to be a criteria in hiring employees 8. 2 Business Advisors: With the help of a business advisor Ace could more effectively implement their strategy to break into the market in Bahrain. An effective business advisor would ensure a smoother transition by assisting ace in dealing with the laws and regulations entering the market and guiding them through government policies. Due to Aces existing established stores already present in the UAE the corporation already has knowledge on the different structures of setting up business in the Middle East. Business advisors in Bahrain would help them in ways more specific to the Bahrain market and can also help them with most effective Methods of Marketing in the country and the most effective locations to set up stores. 9. Recommendations/Conclusion Ace should undertake an aggressive marketing campaign upon entering the market in order to create brand awareness using ‘Coming soon† promotions to build up the hype of the store. Ace should engage with local business advisors in Bahrain to help guide them with cultural differences and deal with government legislations and regulations. Ace should undertake further Exten sive research to gain a better understanding on aspects of the Bahrain hardware market and to know their potential competitors and their offerings more in order to price, promote and operate more effectively.

LSD and the 60s Music Scene Essay - 2457 Words

In the sixties, the psychedelic music scene was at its prime and the world was full of hippie musicians that loved to drop acid and create some of the most interesting and innovative music known to man. During this time, drugs were a very popular part of the hippie culture and the prevalence of LSD helped to create the distinct genre of psychedelic music known as psychedelic or acid rock. Many bands and artists such as Grateful Dead, Jefferson Airplane, The Beatles, and The Byrds were heavily influenced by LSD, which led to the creation of some very popular music. This decade was full of adventure, music, sex, and drugs, and it was all made possible due to this powerfully trippy drug. In 1938, Albert Hofmann discovered lysergic acid†¦show more content†¦The goal of LSD, along with other psychedelic drugs, was to open the mind and â€Å"find a new light to look upon things† (Bacig). Many artists took this approach to their music and would drop acid before composing music. This gave the music of this era a distinct sound and without LSD, the world would not have psychedelic rock. During this time, many artists referenced LSD in their songs because of the profound effect it had on them. In order to produce the psychedelic feel, the artists would write â€Å"esoteric lyrics, often describing dreams, visions, or hallucinations† as well as use other techniques such as distorting and delaying the sound, and playing sections of the song backwards. Another important part of psychedelic rock is the influence of Indian music. Bands such as The Beatles popularized this technique of using †exotic instruments like the sitar, the tambura, and the tab la† in their music (Psychedelic Rock). The Beatles were a very well-known and popular band in the sixties. The use of LSD and other drugs heavily influenced two of their albums, Revolver and Sgt. Pepper’s Lonely Hearts Club Band. Their first experience with the drug within the band was when John Lennon and George Harrison accidentally took acid in 1965. After their eye opening incident, Lennon and Harrison decided that Paul McCartney and Ringo Starr needed to try it as well because they found that â€Å"[they] couldnt relate to them any more. Not just on the oneShow MoreRelatedLSD and the Psychedelic Scene Essay516 Words   |  3 Pagesthe sixties, the psychedelic music scene was at its prime and the world was full of hippies. During this time, drugs were a very popular part of the hippie culture and the prevalence of LSD helped to create the distinct genre of psychedelic music. Many bands and artists such as The Beatles, The Byrds, Jimi Hendrix, Jefferson Airplane, and Grateful Dead were heavily influenced by LSD, which led to the creation of some great music. This decade was full of adventure, music, sex, drugs, and explorationRead MoreThe Vietnam War And The Cold War946 Words   |  4 PagesFor a while there was really only one scene, the main scene. In some eyes, society had a way prior to the 60 s to fixate only on what certain people thought were appropriate. Aspects such as the masculinity of America, white prowess, and the professional look, in a sense plagued America and beyond. Also, the United State s government was war hungry, after WW2 we put ourselves in conflicts: the Korean War, Vietnam War, and the Cold War. These were truly scary times for the people. Fast forward toRead MoreEssay on Drugs and Rock and Roll653 Words   |  3 PagesFrancisco, music and drugs will forever be inter-linked. Hippie bands such as the Grateful Dead, the Allman Brothers, and Phish are associated with marijuana, mushrooms, and LSD. Modern electroni c â€Å"rave† , or club music is associated with MDMA or Ecstasy. When one thinks of rock and roll, sex and drugs immediately come to mind. While the use of drugs is not essential for the creation or performance of all new music, it was certainly in important factor for the counterculture music of the lateRead MorePsychedelic Rock : The Defining Music Genre Of The 1960 S1717 Words   |  7 PagesPsychedelic Rock: The Defining Music Genre of the 1960’s â€Å"Through all of history, mankind has put psychedelic substances to use. Those substances exist to put you in touch with spirits beyond yourself, with the creator, with the creative impulse of the planet.† says Ray Manzarek, a member of the psychedelic band the Doors. The mid-to-late 60s marked a point when drugs were commonplace throughout life, and music was one of them. Psychedelic rock was often underground and was outshined by the previousRead More 1960-19701279 Words   |  6 PagesUnited States was going through a lot of social changes. One of the major trends was the widespread use of illicit drugs. The most common drugs used were hallucinogens, marijuana and LSD. Two men, Timothy Leary and Ken Kesey, were known as the so-called acid gurus of the sixties. They helped gain the recognition of LSD seemingly overnight. Leary and Kesey made very public exploitations and wrote many books to explain and vilify this phenomenon. It all happened so suddenly and soon after y oung menRead MorePsychedelic Musicians in Rock and Roll Essay2742 Words   |  11 Pagestheyre gonna steal our thunder. With their mix of blues, music hall influences, Lewis Carroll references, and dissonant experimentation, Pink Floyd was one of the key bands of the 1960s psychedelic revolution, a pop culture movement that emerged with American and British rock, before sweeping through film, literature, and the visual arts. The music was largely inspired by hallucinogens, or so-called mind-expanding drugs such as marijuana and LSD (lysergic acid diethylamide; acid), and attempted toRead More Raves And Drugs Essay1346 Words   |  6 PagesEcstasy(MDMA), Speed(amphetamine) and other acids like LSD. These drugs are called the Techno Drugs for that reason and most of the time have uplifting and sensatory effects. To understand more clearly the relationship between the raves and these drugs, we first have to understand the philosophy behind the Techno era, and a little about the music . â€Å"Techno, can lift the spirit and become a new world of freedom and peacequot;(DVox Magazine The first electronic music Magazine). Most raves are covered with propagandaRead More Grateful Dead Essay1500 Words   |  6 Pages Throughout history there have been many musical quot;influencesquot;. One extremely important influence to modern music is The Grateful Dead. The group was formed in 1965 by bluegrass - enthusiast Jerry Garcia on guitar and vocals, Ron quot;Pigpenquot; McKernan on vocals and organ, Bob Weir on guitar and vocals, classical music student Phil Lesh on bass and vocals, and Bill Kreutzmann on drums. From the beginning, they brought together a variety of influences, from Garcias country backgroundRead MoreSummer of Love3032 Words   |  13 Pageswould just naturally travel over to the Haight-Ashbury. The Summer of Love would not have been the same without the usage of LSD and marijuana, free love, and the all famous rock and roll music. Drugs seemed to be the way of life for the hippies; they were using all kinds of drugs throughout the decade but the two drugs that were most associated with the Summer of Love were LSD and Marijuana. To the hippies they used the term â€Å"dope† instead of â€Å"drugs† because dope was good; but drugs included bothRead MoreThe Impact of Groups Such as The Beatles on the Nineteen-Sixties865 Words   |  4 PagesLiverpool. John Lennon, Ringo Starr, George Harrison and Paul McCartney would set about changing popular music forever. The Beatles had many musical influences ranging from Elvis Pressley to Chuck Berry. There performances were famed for being long and amazing on some occasions it was known that they continued to play non stop for 8 hours. Much of there early music could be heard in the back streets of Liverpool, in clubs like the cavern and small clubs in the German