The Cost Leadership Strategy

The Cost Leadership Strategy From his literature research, Porter found the complete framework of Porters Five Forces and Generic Strategies. The long development of Five Forces Analysis has brought to the fact that those forces become the determinants of the industrys competition. These five forces are treat of new entry, rivalry among existing firms, treat from substitute products, bargaining power of buyers, and bargaining power of suppliers. Furthermore, five forces analysis is treated by the organization to measure the level of competition, besides that, it is used as a strong first step in understanding how one industry compares to another and also to determine industry profitability because they influence the prices, costs, and required investment of firm in an industry. In order to be competitive enough, a normal company that seeks profitability would have to understand how they work in its industry and how they affect the company in its particular situation. Therefore, Three Generic Strategies were implemented to establish a strategic agenda for dealing with these five forces. Porter (1980) proposes that if firms pursue any of his three recommended generic competitive strategies they will be able to outperform competitors who do not pursue such strategies. The recommended strategies are cost leadership, differentiation, and focus strategy. Cost Leadership Strategy This type of strategy meant for organizations that has goal to achieve the overall lowest cost structure in an industry. This can be fulfilled through applying efficient business system in an organization. An efficient business system creates cost efficiencies and economic of scales to allow a firm to become the lowest-cost producer. Normally, economists believed that an increase in accumulated experience of a firm in producing or distributing a product or service could decrease the cost of producing or distributing a product or service. However, lowest-cost structure cannot be achieved by cutting the cost alone in one area of business; it demands a reduction in costs on all the departments. Cost leadership not only helps a firm to take down the competitors but also increase market share along with better profit margins. Furthermore, this strategy is believed to work best in the certain circumstances. Firstly, the cost leadership strategy can be applied when the price competition among rival sellers is especially strong. Secondly, the strategy is suitable for standardized product or readily available from other sellers in the industry. Thirdly, it works best when organization could have few ways to achieve product differentiation, so that buyers get very sensitive to price differences. Unfortunately, this strategy has weakness since it concerns cost reduction rather than quality of the product that leads to decline in the popularity. It is also supported by the fact that nowadays customers are really critical about the quality of the product that makes more customers choose quality rather than cost conscious. In addition, this strategy will become ineffective with an increase in overall cost of a firms production inputs. Automatically, an organization will find it hard to hold a cost advantage over a longer time in business environment that keeps changing rapidly. Differentiation Strategy Nowadays business environment is really competitive, marketers cannot achieve its goals unless they hold some differential advantage over their rivals. In recent years, much attention has been committed by the marketers to maintain specific competencies; uniqueness could be a strength that makes an organization looks better from its competitors in the eyes of customers. Therefore, uniqueness can be used in gaining a competitive advantage. Obviously, the distinctive competencies also bring incremental value to the market offering when compared to the other offerings to the customers. In consequence, an organization must use different sources of differentiation at different times to build an importance image to its customers. For examples, better features and quality, efficient distribution, research and development, better image of product or service, and also the most important improved customer services. Marketers have realized how customer services could create the business image a nd also build the strong relationships with customers. In the opinion of Thompson and Strickland (1999, cited et Sahaf, 2008) differentiation strategies work best in the some markets circumstances where there are many ways to differentiate the companys offerings from that of rivals and many buyers perceive these differences as having value. In addition, it is also match with the market where buyer needs and uses of the item or service are diverse, few rival firms are following a similar differentiation approach, and technological chance is fast-paced and competition revolves around evolving product features. Although differentiation strategy looks perfect but it also gives some challenges to the organization to complete it. Firstly, it is a difficult task to identify the sources of differentiation that are important for the customers and difficult for the competitors to copy. This task is time consuming and not suitable to the business environment that rapidly changes. Secondly, many of people still prefer to buy low-priced products or services over the products that have desirable features since people have mindset why they should purchase the more expensive one if that the products do not give any incremental value for the customers in a firms market offering. Focus Strategy Focus strategy as suggested by Porter (1985, cited et Sahaf, 2008 ) is based upon the choice of a narrow competitive scope within an industry. By attempting this strategy, it means the organization tries to focus on a particular market segment and to achieve its objective by becoming the market leader in a niche market. The segment may be a group of customers that differentiated by ages and sex. It is believed that an organization can be more efficient and effective by focusing its efforts to a narrow target rather than broad target. Accordingly, this strategy has objective to employ either cost leadership strategy or differentiation strategy to a part of market. A cost focus strategy aims to lowering the prices of the product or service by controlling costs in a narrow target market. For example, a firm is able to be the low cost producer in only one product line. Meanwhile, a differentiation focus strategy means striving to tailor made products to the specific needs of the market s egment. Thus such a strategy could utilize some element of differences of firms market offering to a narrow market segment. For example, a firm may employ its distinctive competencies to focus on one or a few target markets. Thompson and Strickland (1999 cited Sahaf, 2008 ) added that focus strategy will be useful enough to apply on the following circumstances. Firstly, it works best when it has no other rival is attempting to specialize in the same target segment, added with the fact that is quite hard for multi-segment competitors to meet the specialized needs of the target market niche. This strategy also fits when a firm does not have sufficient resources or capabilities to go after a bigger piece of the total market so focus strategy will work well on this situation when it concerns on one market segment. Although the focus strategy looks popular among the organization over past decade, there are some risks that need to be considered if a organization commits to this strategy. Firstly, by focusing only to narrow target, the organization doesnt entitle to enjoy the benefits of the economy of scale that generally occurs in the wide target. Other risks come from the fact that the success of focus strategy over last few years has been attracting many rivals who may think to join the industry that resulting in an increase in the strength of competition. It is believed that an organization not only needs to have entire knowledge about the events and happenings in the industry but also requires choosing among the above mentioned three generic strategies in order to ensure a better marketing performance. Different strategies suggested by Porters generic model call for different organizational systems and capabilities. For example, organizations with adequate resources and good controlling systems may prefer to engage cost leadership and a firm with strong Research and Development facilities may get better results through differentiation strategy. Whereas a small firm with poor resources and inadequate RD facilities may be better off by serving niche markets, therefore, will be more comfortable with focus strategy. three generic strategies.jpg Relationship between Porters Generic Strategies Analysis and Industry Forces The three generic strategies suggested by Porter can be effectively utilised to defend against competitive forces in the business environment. The industry forces take the form of competitive rivalry, barriers to entry, threat of substitutes, buyer power and supplier power. The relationship will be explained below. 1. Competitive Rivalry Competitive rivalry or also called the competition among existing competitors takes many familiar action such as price discounting, launching new product, advertising campaigns, and service improvements. The competitive rivalry signs that it will limit the profitability of an industry because the cost of competition will tend to increase. Highly competitive rivalry normally occurs when the industry is a mature, growth slowly and the players that take part into the competition also have the same strength or size. The only way that company can expand or increase the market share is by attracting the customers so that customers could be commit and loyal. In such situation, the benefits of a cost leadership strategy would be that competitiveness in price. For example, Southwest Airlines Company offers low cost air fare to the customers by eliminating some features or services such as no meals on the board, no assigned seats, interline baggage checking, or premium classes of service. Thus, price tells everything that normally people who want to save cost will go for the lower price. Besides that, Southwests frequent departures and low fares attract price-sensitive customers who used to travel by bus or car, and convenience-oriented travellers who would choose a full-service airline on other routes. This is a proof that cost leadership strategy can be implemented in this type of industry, and resulting in good benefits to the companies. However, as competitors pay high attention to price, cost leadership strategy may not be a favourable as all companies would apply the same strategy too and it ends up by reducing their price dramatically. As such situation, differentiation strategy may give better opportunity to the company because it would able to retain loyal customers and they may stay with the company. The reason why it could retain some loyal customers is the task may seems hard to accomplish for competitors to cope with specialised needs of customers who are part of a niche segment in the market. For the example at here is Starbucks, is a well know coffee company that is differentiated by top of the line image and reputation of twin-tailed mermaid. Starbucks spends a lot of time and energy differentiating itself from the competition such as its design of coffee shops, the music played there and the types of products it sells, such as tumbler, coffee-brewing equipment and jazz CDs. As for focus strategy, companies have the benefits of keeping the differentiation-customers needs so that their rivals are not able to bet them. It cant be denied that companies who applying such strategy have the possibility to charge a premium price for superior quality or may be offering low price product to a small and special group of buyers. Companies like Chanel, Gucci, Four Seasons Hotels and Resorts make use of successful differentiation-based focused strategies targeted at wealthy buyers wanting high quality of products and services with world-class attributes. 2. Barriers to Entry Industries that have potential ability to be profitable could attract the outsiders ( companies that dont involve in the particular industry) because there is chance of entering the industry and taking a part in the profit making. New entrants may create the competition, since it has targeted for the same customers that will lead to higher levels of marketing, sales, and promotional expenses by all competitors as the requirements for differentiation continually increase. If a company employing any one of the three strategies would find it easy to create barriers for new entrants. The barriers that cost leadership strategy could offer is economies of scale. It may be considered as one of the barriers. In some industries a companys ability to compete will based on whether it can produce its product or service at a cost that is low enough to offer low competitive price. The experience that company gain for over the years cant be defeated easily for new entrants to compete on price. For example, economies of scales can be found in practically every activity in the value chain; which ones are most important varies by industry. In microprocessors, incumbents such as Intel are protected by scale economies in research, chip fabrication, and consumer marketing. Intel has been dominating the market for a long time and it really difficult for a new entrant to enter because it will require large capital. For differentiation strategy, it is an advantage to the company who adopt this strategy because normally those companies have huge amount of loyal customers toward the companys brand. Thus by knowing this fact, it could discourage the potential entrants to enter the industry. For the instance take the trend of smartphone industry all over the world. This smartphone industry involves three major players that are Blackberrys Research In Motion (RIM), Googles Android, and Apples Iphone. New entrants do not dare to enter the market because they worry whether they are able to compete with the existing players. In addition, also companies that employing the focus strategy over time often develop an understanding through research of their customers preferences, which is a very difficult task for a potential entrant. By doing this way, focus strategy can act as an entry barrier too. 3. Threat of Substitutes Substitutes could have two effects on industry competition and profitability. First, the substitutes products establish a maximum price for products and services in the industry; exceeding the maximum would prompt customers to move to the substitute products that are available. Second, substitutes can shape the competition in an industry to rise their marketing and promotional efforts to stem the outflow of customers. Automatically, it gives pressure to the competitors in the industry to keep the prices as low as possible and to spend more much fund to attract and retain customers, which can depress sales and profits in the industry. For the example, downloading mp3 music to the mp3 player compared to buying CDs in music stores. In order to survive or fight this force, company could apply the cost leadership strategy that aims lower price production against the substitutes. Selling price is one of factors that influence the customers decision whether to purchase the product or service or just switch to the substitutes. Take IKEA as an example, IKEA offers the furniture style at low cost to the customers who are happy to do self service rather than employing a salesman. Furthermore, customers are expected to do their own pickup and delivery so that it helps cutting the selling price of the products. By doing so, IKEA can compete with its substitituttes and retain the customer loyalty. Other than cost leadership strategy, differentiation strategy may also be considered as the method to eliminate or minimize these threats of substitutes. If the companies offer products that are differentiated which have no substitute product, it will minimize the threat. For the example, pharmaceutical companies that offer patented drugs with distinctive medical benefits have more power over health maintenance organizations, hospitals, clinics, and other drug buyers such as drug companies. Also by applying differentiation-focused strategies, it does effectively reduce the threat of substitutes. Threat of substitutes is reduced in case of the differentiation-focused strategy due to customer loyalty to the unique aspects of a particular product or service. Again we can take IKEA as an example at this strategy; IKEA has differentiated its marketing strategy on how to attract the young customers. IKEAs marketing concept its unique and not offered in other furniture companies. IKEA displays every product it sells in room-like settings, so customers dont need a decorator to help them imagine how to put the pieces together. And every product has a tag that explains the product materials, size, and price. 4. Buyer Power In the business world, buyers play the main role in the existence of the organization. As we know, buyers action will affect the profitability of the industrys competitors with their purchase choices. The profitability levels in any industry come from the bargaining power that buyers have in purchasing services and products offered. Buyers may affect profitability by demanding that competitors spend money to deliver other valued dimensions such as improved product quality, extended payment terms, promotional support, and other services. Buyers can be said powerful if they have the ability to negotiate leverage relative to industry players, especially if they are price sensitive, using their influences primarily to pressure price reductions. Nevertheless, the buyers power is able to change because it depends with the three generic strategies. Company might attract the large and powerful buyer if the company adopting cost leaders because it has the distinctive capability to offer lower price options to that kind of buyers. It is a benefit to the company to be a cost leader in the industry, one of the benefits is to get customers trust and confidence to the company. Hence, the company can maintain its competitive advantage in the market as other rivals would not able to get strong and powerful buyers. On the contrary, companies employing the differentiation and focus strategies would have a different scenario. It means that buyers in case of these two strategies would have less power as there are few alternatives available to them. For the example, the buyers of Windows operating system for computer or laptop, produced by Microsoft have much less power due to the fact there are not many other alternatives available to them. Even, there is alternative, it is not common to use since people are comfortable using the Windows operating system. Thus, Microsoft not only maintains it competitive but also controlling the market of this industry that actually created the monopoly market. 5. Supplier Power Generally, suppliers that are called powerful will keep more of the value for themselves by charging higher prices, restricting quality or services, or shifting costs to industry participants. In addition, powerful suppliers can press profitability out of an industry that is unable to pass on cost increases in its own prices. At this case, again Microsoft could be a good example; it has contributed to the erosion of profitability among personal computer (PC) producers by increasing prices on operating systems. Definitely, the industry of PC is competing extremely for customers who can easily switch among the producers. As a result, PC producers at this situation have limited freedom to increase their prices. If the supplier has a significant impact on a companys profitability, then it hold substantial power. For example, there is no substitute for what the supplier group provides, the suppliers would have major power and control in the industry. Pilots unions, for example, exercise considerable supplier power over airlines partly because there is no good alternative to a well-trained pilot in the cockpit. Thus, it proves that such companies would have ability to pass the price increases of suppliers to their final customers, through the premium pricing strategy in the scenario of differentiation and focus/niche strategies. What makes differentiation and focus strategy different is the low volume that owned by employing focus strategy even though the firm that applying differentiation-focused strategy is able to pass on supplier price increases easily. Meanwhile in the case of cost leadership strategy, they are isolated from powerful supplier. It normally occurs in the industry that suppliers have essential customer. Hence, suppliers profitability will be closely tied to the industry, and they will want to protect the industry through reasonable pricing and assistance in activities like RD and lobbying (Porter, 1979). . Read more: http://www.ukessays.com/essays/housing/industry-forces-and-generic-strategies.php#ixzz2B36ZAXOp http://www.marketingteacher.com/image/content/five_forces.gif , http://www.managementstudyguide.com/porters-model-of-competetion.htm

Molecular Mechanisms of Membrane Fouling

Molecular Mechanisms of Membrane Fouling The membrane fouling problem is still the main obstacle that faces the application of membrane technology at the industrial and environmental application. So, the main motivation for this work is to develop an enhanced performance of commercial desalination membranes with polyamide barrier layer. In this study, we will use Layer-by-Layer (LbL) modification with tailored macromolecular surface modifiers in order to coat the membranes so that stable zwitterionic surface properties (for reduced fouling) and minimal loss in permeability are achieved. In order to study in detail this novel modification, we will use a model oligoamide system on surfaces which allow using analytical methods which cannot be used on real membranes. The deposition conditions for model surface preparation, the composition of tailored zwitterionic/cationic copolymers used for LbL modification as well as the LbL modification conditions will be optimized. The characterization tools are x-ray photoelectron spectros copy (XPS; also known as electron spectroscopy for chemical analysis, ESCA) for determination the elemental composition of the deposited layer while scanning electron microscopy (SEM) is used to show the topography of the formed layers. Ellipsometry can be a useful tool in identification the thickness of the deposited layers at nano-scale. In addition, the surface plasmon resonance (SPR) will be used for testing the protein resistance of the deposited layers. Other physical and chemical properties will be detected such as the wettability of the layers using contact angle measurement, and the kind of surface charge and their quantity via zetapotential measurements. After model investigation steps, the same LbL sequence (with the optimum conditions) will be applied for a selected range of commercial nanofiltration (NF) and reverse osmosis (RO) membranes with polyamide barrier layers. The permeability and salt rejection will be measured using dead-end and cross flow mode. The formation potential of biofilm will be also detected. Keywords: Desalination, Fouling, LbL, Protein resistance and Oligoamide. A major problem in the membrane technology for purification applications is membrane fouling, which is the accumulation and adherence of colloidal organic matter [1,2] inorganic salts (scaling), or bacteria that form biofilms (biofouling) [3]. Engineering strategies for mitigating fouling depend on the accurate characterization of the fouling mechanism on reverse osmosis (RO) and nanofiltration (NF) membranes using flux decline measurements [4] or studies of the physicochemical properties of the membranes, such as hydrophobicity, charge density, surface roughness, and porosity [5]. An extensive research has been devoted to understand the molecular mechanisms of fouling using a variety of techniques. For example, atomic force microscopy (AFM) was used to relate the surface chemical character to protein adsorptions or organic fouling intermolecular forces [6] , adsorption of proteins and detergents to surfaces, measured by SPR, was correlated with surface wettability [7], quartz crystal microbalances were used to study organic fouling mechanisms [8] and novel fluorimetric assays were used to characterize protein adsorption [9]. Recently, the effects of surface-exposed chemical groups on scaling were assessed by surface pressure–area (Langmuir) isotherm measurements [10] where aromatic polyamide films are an integral component of RONF membranes and they cannot be isolated from their supports for physicochemical studies. In addition, the supporting porous polymer layer prevents incorporation of polyamide into analytical devices and interferes with measurements. But this problem can be simplified by modeling RONF membranes using surfaces with well-defined and homogeneous chemistry. There is a history for using model compounds of polyamide from twenty century that model polyamide. One of these studies is using a benzanilide derivatives, to test the resistivity toward active chlorine [11]. But, there was unsuitability for the surface adsorption studies for these small compounds. In addition to the above mentioned fact, trials were done to prepare analytical sensors using spin-coating techniques that obtained different surface chemistry from that obtained from polyamide RO membranes [12]. So applying the LbL method, which typically involves the alternating adsorption of polycations and polyanions, with water rinsing between each adsorption, will help in adsorption of polymer layer on any substrate (silicon or gold wafers for example) [13]. In recent study done by Wang et al [14], they prepared low-pressure water softening hollow fiber membranes by polyelectrolyte deposition with two bilayers. Where they used PES UF as supporting layer which modified with the polycation and polyanion LbL deposition to separate the divalent ions from monovalent ions. Another work carried out by Zhao et al [15] in which zwitterionic hydrogel thin films anchored as antifouling surface layers of polyethersulfone ultrafiltration membranes via reactive copolymer additive. The main advantage of these hydrogels are their excellent durability in long term tests and hemocompatability. In another work, the Polyelectrolyte multilayers as anti-adhesive membrane coatings for virus concentration and recovery. In our suggested modelling work to develop an oligoamide coating system as a surface mimetic for the polyamide barrier of the commercial desalination membranes, there is a need to neglect the effect of supporting layer so we choosed silicon and gold wafers which does not exhibit any selectivity by itself, the separation function for the composite membrane can be exclusively ascribed to the deposited polyelectrolyte multilayer [17] which will give the accurate modeling data for the surface that will be used in our work . And , learning from previous works, we decided to make model studies to identify the best system with respect to well-defined and stable building units of synthesized nanolayers. These nanolayers will be optimized in terms of the number and thickness of building units, the concentration of the used zwitter ionic copolymers, charge polarity and density, roughness and swelling can be determined via various techniques while these parameters can be easily controlled by varying polyelectrolyte types or/and other deposition conditions [18]. Finally,The fouling resistivity of the model system will be followed via surface plasmon resonance (SPR) measurements using bovine serum albumin as model foulants. Additional foulants may be also used. 2. Experimental Part 2.1. Materials and Chemicals Commercial reverse osmosis (RO) and nanofiltration (NF) membranes. Polystyrene sulfonic acid. bovine serum albumin (BSA), sodium chloride (NaCl), humic acid (HA). Silicon / Gold wafers/quartz. m-phenylene diamine(mPD), dimethyl formamide (DMF), triethyl amine (ET3N), trimesoyl chloride (TMC), dichloromethane (DCM), Cysteamine and Ethanol. Cuprous chloride (CuCl2), Tetrahydro furan(THF), Methanol (MeOH), 10 nm titanium nanoparticles and 30 nm gold nanoparticles. Some chemicals will be added according to the applied procedures and optimization processes. 2.2. Synthesis of the Support Substrate and the Zwitterionic Polymer 2.2.1. Synthesis of the Zwitterionic/Cationicpoly (2-(N,N,N-trimethylamino)ethyl methacrylate)-co-(2-(N,N-dimethylamino-N-propanesulfonate)ethylmethacrylate) PTMAEMA-co-PSPE (cationic building block for LbL modification) The LbL method, which typically involves the alternating adsorption of poly-cations and poly-anions, with water rinsing between each adsorption. So, here in this work we will synthesize the zwitterionic polymer starting with free radical polymerization step of (N,N-dimethylamino-N-propanesulfonate) ethyl methacrylate (DMAEMA). The obtained polymer then undergoes partial conversion to zwitterionic side groups in presence of THF. And at last step, methylation of quaternization side groups to get the desired zwitterionic polymer. 2.2.2. In-situ Synthesis of Oligoamide According to Kasher 2011 [19] (model studies) Oligoamide is synthesized according to Kasher et al. 2011 applying LbL methodology. In this work we will make preparation of the gold surfaces with an oligoamide layer that resembles the surface chemistry of RO/NF aromatic polyamide films and that can be tested in fouling and adsorption studies using a wide range of physical methods. The synthesis protocol can be ascribed as follow (steps starting from 1 to 4 represents one cycle that can be repeted): Surface cleaned gold coated silicon wafers will immersed in 1 mM cysteamine/ethanol for 24 hours then in 2) 1% triethylamine/dimethylformamide (ET3/DMF). Immersion in trimesoyl chloride/dichloromethane (TMC/DCM), ET3N for 15 minute. Then in mPD/DMF for 15 minute and then washing with water for 10 minute. 2.2.3. Studies with the Model Surfaces 2.2.3.1. Coating and Characterization the Synthesized Oligoamide with the Synthesized Zwitterionic Polymer Applying LbL Methodology. Coating the synthesized oligoamide with the synthesized zwitterionic copolymers. The formed thin films will be characterized using ellipsometry technique. Other characterization methods will be used such as FTIR, XPS and SEM. The reaction conditions will be also tested such as (type of anionic building block, coating conditions, thickness as function of anionic building unit plus the coating condition). Depending on the obtained characterization data, the number of layers will be optimized. The optimum conditions will be applied to modify the surfaces of commercial RO/NF membranes. Ellipsometry, which is a nondestructive and sensitive optical measuring method mostly used for the analysis of thin films, where here in our work we suggest using gold wafers as supporting substrate for this methods. Via these mechanistic technique we will optimize the number of applied layers on the model oligoamide layer. And, SPR will be used to measure the fouling resistivity of the model oligoamide la yer. 2.2.3.2. Evaluation of the Synthesized Oligoamide System Two strategies will be used to evaluate the synthsized system, first one is depending on the characters that gathered from the different characterization techniques. While, The second strategy is by doing a complete assessment the antifouling properties of the synthetic moeites via: Flux measurements via dead-end mode and cross flow mode. Measuring MWCO of the synthetic moites via GPC (Gel permeation chromatography) Rejection of some organic pollutants such as BSA (bovine serum albumin) 2.3.3. Modification and Evaluation the Commercial NF/RO Membranes Based on the best characters that grasped from the above sections, the best condition will be used for modification of some commercial NF/RO membranes using the synthetic zwitterionic polymer applying LbL assembly. The modified membranes will be characterized as mentioned in the above sections. The evaluation also will be done as mentioned. This work mainly aims to fulfill the following SIX goals Synthesize model surfaces for desalination membranes (oligoamide system) on silicon or gold substrates Synthesize novel cationic and zwitterionic copolymers as building block for layer-by-layer (LbL) modification Study in detail LbL modification on model surfaces (layer thickness and stability as function of novel building blocks, respective anionic building block and coating conditions) with focus on nanoscale analysis with ellipsometry Study in detail the resulting surface and anti-fouling properties, with focus on contact angle, zetapotential and foulant deposition measured with surface plasmon resonance Transfer the best modifications to commercial membranes with polyamide barrier layer Evaluate the performance of those modified membranes vs. state-of-the-art with focus on permeability, salt rejection and long-term fouling behavior. Benefits that will be expected from this work can be summarized as follow: Increasing the fouling tolerance of the commercial membranes increasing the life time of applied membranes in addition to low maintenance periods. transfere the gained experiences to the National Research Center to help in establishing the membrane technology as a successful technology in many applicable fields.

Choctaw indians :: essays research papers

The Choctaw Indians   Ã‚  Ã‚  Ã‚  Ã‚  The Choctaw Indians is a tribe of Musksgean stock .The Choctaws were once part of a larger tribe that included the Greeks and Seminoles and are considered one of the five civilized tribes (Cherokees , Greeks, Choctaws , Seminoles, and Chickasaws) . At one time Choctaw territory extended from Mississippi to Georgia, but by the time Europeans began to arrive in North America they were primarily in Mississippi and Louisiana.   Ã‚  Ã‚  Ã‚  Ã‚  The Choctaw Indians were into cultivation , they hunted and raised corn along with a host of other crops. One of their chief religious ceremonies was a harvest celebration called , â€Å"The green corn dance.† According to one legend, the Choctaw were created at a sacred mound called Nanih Waiya, near Noxapater ,Mississippi.   Ã‚  Ã‚  Ã‚  Ã‚  In 1540, the Spanish explorer Hernando De Soto led the first European expedition through Choctaw territory. Fighting broke out after the Choctaw refused to supply the Spaniards with a guide and transportation. The Spaniards were in the wrong because the Choctaw Indians were friendly especially with the French and allied with them during the intercolonial wars between France and England . Some Choctaws fought with Jackson at New Orleans against the British.   Ã‚  Ã‚  Ã‚  Ã‚  In 1830, the United States Government passed the Indian removal Act. This act called for Eastern Indians to be moved West to make room for white settlers. The Government then forced the Choctaw to sign the Treaty of Dancing Rabbit Creek. The Treaty exchanged the Tribe’s Eastern land for an area in the Indian territory, in what is now Oklahoma.

An Analysis of the Poem A Prayer for My Daughter by William Butler Yeat

"A Prayer for My Daughter" is a poem written by William Butler Yeats in 1919. This poem is a prayer-like poem. And it generally tells about the poet's ideas about his daughter who is sleeping at the same time while the poem is being told. Throughout the poem Yeats reflects how he wants his daughter's future to be. This essay will analyze the poem in three sections: 1- What does this poem mean?, 2- The poetic devices, imagery, rhyming, figures of speech, used in the poem and mood, diction, language, and the structure of the poem, 3- An essay in a feminist point of view titled "What does the poet want his daughter to become?" . 1-WHAT DOES THIS POEM MEAN? The poet is watching his infant daughter sleep. In the first stanza he starts with describing the setting of the poem. It is stormy outside, there is a kind of dark and gloomy weather and he prays for her. And he says that he has gloom in his mind and we will understand that what gloom is that in his mind. In the second stanza the poet describes the things while he was praying for his daughter. He walks for an hour and notices the "sea-wind scream upon the tower", "under the arches of the bridge", "in the elms above the flooded stream." They probably represent the dreaming of the human beings and they are decisive. They are all about the present things and they block people from thinking about the future events. The last four lines of the second stanza clearly explain this idea: "Imagining in excited reverie That the future years had come, Dancing to a frenzied drum, Out of the murderous innocence of the sea." In the third stanza he prays for her beauty, but not too much. He considers the beauty as a decisive element for choosing the right person to ma... ... parts of the ideal woman he has in his mind or its opposites. He supports that a woman should be "a flourishing hidden tree", who is not well-known but beautiful. She shouldn't be anything but "merry." " Innocence" is beautiful in women, that's why if his daughter keeps her innocence inside and do not abuse it, she will not be affected by the "wind." He thinks that too much beauty distorts women, and causes them to destroy the gifts that are given by "Horn of Plenty" thus he wants his daughter to use the gifts wisely and properly. And he wants his daughter to learn the fact that "hearts are earned", and the men, who are deceived by just beauty, will notice their mistake later. He wants her daughter not to have strong opinions like hatred, because he thinks that hatred is the worst thing in the world. He hopes she will marry, and her house will be full of customs.

Essay --

Non-Small Cell Lung Cancer: A Review of the effects of Chinese Herbal medicine in NSCLC treatment By: Jay Shah December 11, 2013 Pharmacology 5600 Herbal medicine, like any alternative forms of medicine and therapy has its share of critics, but like most herbal medicine, it has been developed and practiced for millennia. The first known record of Chinese herbal medicine was found in the â€Å"Wushier Bingfang† (prescriptions for fifty-two ailments) silk manuscript from the Han Dynasty around 206 BCE (Zhang et al, 2012). It contains two hundred and fifty herbal cures to issues such as hemorrhoids, arthritis, inflammation, seizures, warts and many others (Zhang et al, 2012). Historical records of Chinese herbs include over a hundred thousand medicinal recipes to thousands of issues, mostly consisting of plant extracts (Chen et al, 1999). The understanding behind Chinese herbs is an elemental approach that looks as humans as a component of nature and hence can be cured of ailments through natural elements (Chen et al, 1999). Image 1 depicts various Chinese herbs including, ginseng, Astragalus, lilyturf and others. With the development of allopathic medicine from the western world, herbal medicine from around the world has been castigated out of the mind for the majority of the world due to its lack of proper scientific evidence. Recently however, herbal medicine, especially Chinese and Indian has seen somewhat of a resurgence on the global scale in terms of credibility thanks to new research and data from around the world. The National Institute of Health recognizes Traditional Chinese Medicine (TCM) as a viable source of alternative treatment for various ailments and says that over a million people as of 2004 regu... ..., Zhang L, et al. (2011) Effect s of chemotherapy combined with Chinese herbal medicine Kangliu Zengxiao decoction on tumor markers of patient s with advanced non-small cell lung cancer: a randomized, controlled trial. J Chin Integr Med 9: 525–530. 11. Li G, Shu-Ping B, Ling Z, Xiao-Hong W (2009). Astragalus polysaccharide injection integrated with vinorelbine and cisplatin for patients with advanced non-small cell lung cancer: effects on quality of life and survival. Journal of Medical Oncology s12032-011-0068-9. 12. Liu QY, Yao YM, Zhang SW, et al. Astragalus polysaccharides regulate T cell-mediated immunity via CD11c (high) CD45RB (low) DCs in vitro. J Ethnopharmacol. 2011; 136(3):457–64. 13. Clement-Kruzel S, Hwang SA, Kruzel MC, et al. Immune modulation of macrophage pro-inflammatory response by goldenseal and Astragalus extracts. J Med Food. 2008; 11(3):493–8.

Pnl Explain

P&L Explain – Bonds and Swaps Tony Morris antony. [email  protected] com MICS – DKS Manila Contents 1. Bond Pricing – basic concepts 2. P&L sensitivities of a bond i. PV01 ii. CS01 iii. Theta iv. Carry 3. Extension to interest rate swaps 1. Bond Pricing – basic concepts Let’s say you have a 4 year 10% annual coupon bond, with a yield (‘yield to maturity’ or ‘yield to redemption’) of 12%. From this information, the price can be calculated as 93. 93%. The price is calculated by pricing each of the bond’s cash flows using the yield to maturity (YTM) as a discount rate.Why? Because the YTM is defined as the rate which, if used to discount the bond’s cash flows, gives its price. We could picture it like this: Bond Cash Flows on a Time Scale Each fixed coupon of 10% is discounted back to today by the yield to maturity of 12%: 93. 93% = 10 + 10 + 10 + 110 (1. 12)1 (1. 12)2 (1. 12)3 (1. 12)4 All we are doing is obse rving the yield in the market and solving for the price. Alternatively, we could work out the yield if we have the price from the market.Bond price calculators work by iteratively solving for the yield to maturity. For a bond trading at par, the yield to maturity and coupon will be the same, e. g. a four year bond with a fixed coupon of 10% and a yield of 10% would be trading at 100%. Note that bond prices go down as yields go up and bond prices go up as yields go down. This inverse relationship between bond prices and yields is fairly intuitive. For our par bond above, if four year market yields fall to 9% investors will be willing to pay more than par to buy the above market coupons of 10%. This will force its price up until it, too, yields 9%.If yields rise to, say, 11% investors will only be willing to pay less than par for the bond because its coupon is below the market. For a detailed example of the bond pricing process, see Appendix 3. For now, note that the dirty price of a bond is the sum of the present values of the cash flows in the bond. The price quoted in the market, the so-called â€Å"clean† price or market price, is in fact not the present value of anything. It is only an accountants’ convention. The market price, or clean price, is the present value less accrued interest according to the market convention. . P&L sensitivities of a bond As we saw above, the price of a bond can be determined if we know its cash flows and the discount rate (i. e. YTM) at which to present value them. The yield curve from which are derived the discount factors for a bond can itself be considered as the sum of two curves: 1. the â€Å"underlying† yield curve (normally Libor), and 2. the â€Å"credit† curve i. e. the spread over the underlying curve The sensitivity of the bond price to a change in these two curves is called: i. PV01, and ii. CS01 respectively. Related essay: â€Å"Support Positive Risk Taking For Individuals†In terms of the example above, the discount rate of 12% might be broken down into, say, a Libor rate of 7% together with a credit spread of 5%. (Note, in the following, it is important not to confuse the discount rate, which is an annualised yield, and the discount factor, which is the result of compounding the discount rate over the maturity in question. ) In addition to the sensitivities described above, we can also consider the impact on the price of the bond of a one day reduction in maturity. Such a reduction affects the price for two reasons: ) assuming the yield curve isn’t flat, the discount rates will alter because, in general, the discount rate for time â€Å"t† is not the same as that for time â€Å"t-1† b) since one day has elapsed, whatever the discount rate, we will compound it based on a time interval that is shorter by one day The names given to these two sensitivities are, r espectively: iii. Theta, and iv. Carry Note that, of these four sensitivities, only the first two, i. e. PV01 and CS01, are â€Å"market sensitivities† in the sense that they correspond to sensitivities to changes in market parameters.Theta and Carry are independent of any change in the market and reflect different aspects of the sensitivity to the passage of time. i)PV01 Definition The PV01 of a bond is defined as the present value impact of a 1 basis point (0. 01%) increase (or â€Å"bump†) in the yield curve. In the derivation below, we will refer to a generic â€Å"discount curve†. As noted earlier, this discount curve, from which are derived the discount factors for the bond pricing calculation, can itself be considered as the sum of two curves: the â€Å"underlying† yield curve (normally Libor), and a credit curve (reflecting the risk over and above the interbank risk ncorporated in the Libor curve). The PV01 calculates the impact on the price of bu mping the underlying yield curve. Calculation For simplicity, consider the case of a zero coupon bond i. e. where there is only one cash flow, equal to the face value, and occurring at maturity in n years. Note, though, that the principles of the following analysis will equally apply to a coupon paying bond. We start by defining: P = price or present value today R(t) = discount rate, today, for maturity t FV = face value of the bond Then, from the above, we know:P = FV/(1+r(t))^n Now consider the impact a 1bp bump to this curve. The discount rate becomes: R(t) = R(t) + 0. 0001 The new price of the bond, Pb(t), will be: Pb = FV/(1+[r(t)+. 0001])^n Therefore, the sensitivity of this bond to a 1bp increase to the discount curve will be: Pb – P = FV/(1+[r(t)+. 0001])^n – FV/(1+r(t))^n Eqn. 1 The first term is always smaller than the second term, therefore: * if we hold the bond (long posn), the PV01 is negative * if we have short sold the bond (short posn), the PV01 is pos itive We can also see that: the higher the yield (discount rate), the smaller the PV01. This is because a move in the discount rate from, for example, 8. 00% to 8. 01% represents a smaller relative change than from 3. 00% to 3. 01%. In other words, the higher the yield, the less sensitive is the bond price to an absolute change in the yield * the longer the maturity, the bigger the PV01. This is more obvious – the longer the maturity, the bigger the compounding factor that is applied to the changed discount rate, therefore the bigger the impact it will have.To extend this method to a coupon paying bond, we simply note that any bond can be considered as a series of individual cash flows. The PV01 of each cash flow is calculated as above, by bumping the underlying yield curve at the corresponding maturity. In practice, where a portfolio contains many bonds, it would not be practical, nor provide useful information, to have a PV01 for every single cash flow. Therefore the cash f lows across all the positions are bucketed into different maturities. The PV01 is calculated on a bucketed basis i. e. by calculating the impact of a 1bp bump to the yield curve on each bucket individually.This is an approximation but enables the trader to manage his risk position by having a feel for his overall exposure at each of a series of maturities. Typical bucketing might be: o/n, 1wk, 1m, 2m, 3m, 6m, 9m, 1y, 2y, 3y, 5y, 10y, 15y, 20y, 30y. Worked example: Assume we hold $10m notional of a zero-coupon bond maturing in 7 years and the yield to maturity is 8%. Note that, for a zero coupon bond, the YTM is, by definition, the same as the discount rate to be applied to the (bullet) payment at maturity. We have: Price, P = $10m / (1. 08)^7 = $5. 834mBumping the curve by 1bp, the â€Å"bumped price† becomes: Pb = $10m / (1. 0801)^7 = $5. 831m Therefore, the PV01 is: Pb – P = $5. 831m – $5. 835m = -$0. 004m (or -$4k) Meaning In the example above, we have calcul ated the PV01 of the bond to be -$4k. This means that, if the underlying yield curve were to increase from its current level of 8% to 8. 01%, the position would reduce in value by $4k. If we assume the rate of change in value of the bond with respect to the yield is constant, then we can calculate the impact of, for example, a 5bp bump to the yield curve to be 5 x -$4k = -$20k.Note, this is only an approximation; if we were to graph the bond price against its yield, we wouldn’t see a straight line but a curve. This non-linear effect is called convexity. In practice, while for small changes in the yield the approximation is valid, for bigger changes, convexity cannot be ignored. For example, if the yield were to increase to 9%, the impact on the price would be -$365k, not -(8%-9%)x$4k = -$400k. Use The concept of PV01 is of vital day to day importance to the trader. In practice, he manages his trading portfolio by monitoring the bucketed yield curve exposure as expressed by PV 01.Where he feels the PV01 is too large, he will perform a transaction designed to either flatten or reduce the risk. Similarly, when he has a view as to future yield curve movements, he will position his PV01 exposure to take advantage of them. In this case, he is taking a trading position. ii)CS01 The basis of the CS01 calculation is identical to that of the PV01, only this time we bump the credit spread rather than the underlying yield curve. The above example was based on a generic discount rate. In practice, for any bond other than a risk free one, this rate will be combination of the yield curve together with the credit curve.At first glance therefore, we would expect that, whether we bump the yield curve or the credit spread by 1bp, the impact on the price should be similar, and described by Eqn. 1 above. What we can also say is that, bumping the yield curve, the overall discount rate will increase and therefore, as for PV01: * if we hold the bond (long posn), the CS01 is neg ative * if we have short sold the bond (short posn), the CS01 is positive From the same considerations as for PV01, we can see that: * the higher the credit spread, the smaller the CS01 * the longer the maturity, the bigger the CS01In practice, when we look at multiple cash flows, the impact of a 1bp bump in the yield curve is not identical to a 1bp bump in the credit spread. This is because, inter alia: * the curves are not the same shape and therefore interpolations will differ * bumping the credit spread affects default probability assumptions that will, in turn, impact the bond price In general though, PV01 and CS01 for a fixed coupon bond will be similar. The exception is where the bond pays a floating rate coupon. In this case, the sensitivity to yield curve changes is close to zero so, although the PV01 will be very small, the CS01 will be â€Å"normal†.Worked example: A worked example would follow the same steps as for PV01 above, only this time we would bump the cred it spread by 1bp rather than the underlying yield curve. Theta and Carry We now look at the two sensitivities arising from the passage of time (â€Å"1 day decay†, to use option pricing terminology). First, let’s calculate what the total impact on the value of a position would be if the only change were that one day had passed. In particular, we assume that the yield and credit curves are unchanged. Again, for simplicity, consider the case of a zero coupon bond i. . where there is only one cash flow, equal to the face value, and occurring at maturity in n years. Again, we note that the principles of the following analysis will equally apply to a coupon paying bond. Following the previous notation, the value (or price) today will be: P(today) = FV/(1+r(t))^n The value tomorrow will be: P(tomorrow) = FV/(1+r(t-1))^(n-1/365)Eqn. 2 There are two differences between the formula for the value today and that for tomorrow. Firstly, the discount rate has moved from r(t) to r(t- 1). Here, r(t-1) is the discount rate for maturity (t-1) today.We have assumed that the discount curve does not move day on day, therefore the rate at which the cash flow will be discounted tomorrow is the rate corresponding to a one day shorter maturity, today. Secondly, the period over which we discount the cash flows has reduced by one day, from n to n-1/365 (we divide by 365 because n is specified in years). Theta and Carry capture these two factors. P(tomorrow) – P(today) gives the full impact on the price due to the passing of one day. This impact can be approximated by breaking down the above formula into its two component parts i. e. he change in discount rate and the change in maturity, as explained below. iii)Theta As before, we define: P = price or present value today r(t) = discount rate, today, for maturity t FV = face value of the bond In addition, we define: r(t-1) = discount rate, today, for maturity t-1 (e. g. for a bond with 240 days to maturity, if the 240 day discount rate today is 8. 00% and the 239 day discount rate today is 7. 96% then: r(t) = 8. 00% and r(t-1) = 7. 96%) We now define Theta as: FV/(1+r(t-1))^n – FV/(1+r(t))^n We can see that, compared to the formula for the full price impact above (Eqn. ), this sensitivity reflects the change in the discount rate but ignores the reduction by 1 day of the maturity. In other words, Theta represents the price impact due purely to the change in discount rate resulting from a 1 day shorter maturity but ignores the impact on the compounding factor of the discount rate resulting from the shorter maturity. Note that the sign of Theta, in contrast to PV01 and CS01, can be both positive and negative. This is because r(t-1) can be higher or lower than r(t), depending on the shape of the yield curve.That said, in practice, given that yield curves are normally upward sloping, we would expect r(t) to be higher than r(t-1). Therefore Theta will normally be positive. In the same way, if th e yield curve is flat, then Theta will be zero. iv)Carry Using the standard notation, we define Carry as: FV/(1+r(t))^(n-1) – FV/(1+r(t))^n Comparing to the formula for the full price impact above (Eqn. 2), we see that this sensitivity reflects the change in maturity on the compounding factor to be applied to the discount rate but ignores the impact on the discount rate itself of moving one day down the curve.In other words, Carry represents the price impact due purely to the change in discount factor resulting from a 1 day shorter compounding period but ignores the impact on the discount rate resulting from the shorter maturity. Where discount rates are positive (r(t) > 0), Carry will always be positive since the first term will be larger than the second. Using the Taylor expansion, we can obtain a simplified approximate value for Carry. Remembering that: 1/(1+x)^n = 1 – n. x + (1/2). n. (n-1). x^2 – †¦ we have: Carry = FV. 1-(n-1/365). r(t)) – FV. (1-n. r(t)) = FV. r(t). 1/365 Note that r(t). 1/365 would represent one day’s â€Å"interest† calculated on an accruals basis since, in the case, the yield equals the coupon rate. (Note, where a position is accounted for on an accruals basis, and therefore valued at par, the yield will always equal the coupon. ) In other words, this definition ties in to the intuitive idea of carry that we have from, say, a deposit where the carry would be equal to one day’s interest, based on its coupon.We can also see that Carry is directly proportional to the yield. We have now seen that, between them, Theta and Carry attempt to capture the two components affecting the price move arising from the passing of 1 day, all other factors being kept constant. There will be certain â€Å"cross† effects of the two that will not be captured when performing this decomposition. In other words, Theta + Carry will not exactly equal the full impact (as per Eqn. 2). The difference, ho wever, will not normally be material.In general, for a long bond position, both Theta and Carry will be positive as, with the passing of one day, not only will the annualised discount rate be less (reflecting the lower yield normally required for shorter dated instruments) but the compounding factor will be smaller (reflecting the shorter maturity). Worked example: Assume we hold $10m notional of a zero-coupon bond maturing in 240 days and the yield to maturity today is 8%. Also, the yield today for the 239 day maturity is 7. 96%. Theta = $10m/(1. 0796)^(240/365) – $10m/(1. 08)^(240/365) = $23,159 Carry = $10m/(1. 8)^(239/365) – $10m/(1. 08)^(240/365) $20,047 Theta + Carry = $43,205 To compare, the full price impact of a 1 day â€Å"decay† is: $10m/(1. 076)^(239/365) – $10m/(1. 08)^(240/365) = $43,113 Summary We have now analysed the key sensitivities that explain the 1 day move in a bond’s mark to market value. To summarise some of the main featur es; for a long bond position: PV01 / CS01: * negative * for a fixed coupon or zero coupon bond, PV01 and CS01 will be similar * the higher the yield/credit spread, the smaller the PV01/CS01 * the longer the maturity, the bigger the PV01/CS01 for a floating rate coupon (with a Libor benchmark), PV01 will be very small but the CS01 will be â€Å"normal† Theta * positive * the flatter the curve, the smaller the Theta Carry * positive * proportional to the yield 3. Extension to interest rate swaps In essence, all the above applies equally to interest rate swaps (IRSs) when calculating/explaining daily P&L. We start by noting that an IRS is simply the exchange of two cash flows, one fixed and one floating. Extending the analysis we made for bonds, we can say: a) The PV01 of the floating rate leg will be close to zero. This is as noted for a floating rate bond.In both cases, as the yield curve changes so do the expected future cash flows but, at the same time, so will the discount rates at which they are PV’d. The two effects will broadly cancel out. (The PV01 will not be exactly zero because, once the Libor fixing occurs, the next cash flow becomes fixed and therefore effectively becomes a zero coupon bond, on which there will be PV01. ) b) The fixed leg is similar to the fixed coupon stream on a bond and can be considered as a series of zero coupon bonds. Therefore the exact same analysis as applied to bonds above will apply to the fixed leg. An IRS that ays floating and receives fixed will have a PV01 sensitivity similar to that of a long bond position. c) IRSs are normally interbank trades where it is assumed that there is no credit risk over and above Libor. Therefore, the CS01 will be zero. d) Theta and Carry may be either positive or negative. Appendix 1 : Date Conventions There are several methods for computing the interest payable in a period and the accrued interest for a period. A particular method applied to a transaction can affect the yie ld of that transaction and also the payment for a transaction. Counting the Number of DaysThe conventions used to determine the interest payments depend on two factors: 1) The number of days in a period and 2) The number of days in a year. The conventions are: 0 Actual/360 1 Actual/365 : sometimes referred as Actual/365F (seldom used now) 2 Actual/Actual 3 30/360 European: sometimes referred to as ISMA method (30E/360) 4 30/360 US (30U/360) The first three methods (Actual/360, Actual/365 and Actual/Actual) calculate the number of days in a period by counting the actual number of days. For each method the number of days in a year is different. Actual/365 and Actual/Actual are similar except: 1.Periods which include February 29th (leap year) count the number of days in a year as 365 under Act/365 and 366 under Act/Act; 2. Semi-annual periods are assumed to have 182. 5 days under Act/365 and however many actual days under Act/Act. Eurobond markets use the 30E/360 basis. This calculatio n assumes every month has 30 days. This means that the 31st of a month is always counted as if it were the 30th of the month. For 30E/360 basis, February is also assumed to have 30 days. If the beginning or end of a period falls on a weekend the coupon is not adjusted to a good business day.This means that there are always exactly 360 days in a year for all coupons. For example a coupon from 08-November-1997 to 08-November-1998 of 5% is a coupon of 5%, even though 08-November-1998 is a Sunday. There is no adjustment to the actual coupon payment. The various European government bond markets are described below: Country| Accrual| Coupon Frequency| Austria| Act/Act| Annual| Belgium| Act/Act| Annual| Denmark| Act/Act| Annual| Finland| Act/Act| Annual| France| Act/Act| Annual| Germany| Act/Act| Annual| Ireland| Act/ActAct/Act (Earlier Issues)| AnnualSemi-Annual| Italy| Act/Act| Semi-Annual| Luxembourg| Act/Act| Annual|Netherlands| Act/Act| Annual| Norway| Act/Act| Annual or Semi-Annual| Portugal| Act/Act| Annual| Spain| Act/Act| Annual| Sweden| Act/Act| Annual| Switzerland| Act/Act| Annual| United Kingdom| Act/Act | Semi-Annual| Appendix 2 : Calculating Accrued Interest Even though Eurobond coupons are not adjusted for weekends and holidays, the accrual of a coupon for any part of the year has to use the correct number of days. The difference between European and US 30/360 method is how the end of the month is treated. For US basis the 31st of a month is treated as the 1st of the next month, unless the period is from 30th or 31st of the previous month.In this case the period is counted as number of months: | 30/360 European| 30/360 US| Beginning DateEnding Date| M1/D1/ Y1M2/D2/Y 2| M1/D1/Y1M2/D2/Y 2| If D1 = 31| D1 = 30| D1 = 30| If D2 = 31| D2 = 30| If D1 = 31 or 30Then: D2 = 30Else: D2 = 31| The difference occurs when the accrual period starts and ends at the end or beginning of a calendar month: European and US 30/360 Examples Start| End| European| US| Actual| 3 1-Jul-01| 31-Oct-01| 90| 90| 92| 30-Jul-01| 30-Oct-01| 90| 90| 92| 30-Jul-01| 01-Nov-01| 91| 91| 94| 29-Jul-01| 31-Oct-01| 91| 92| 94| 01-Aug-01| 31-Oct-01| 89| 90| 91|Euro money markets: 0 Day count basis: actual/360 1 Settlement basis: spot (two day) standard 2 Fixing period for derivatives contracts: two day rate fixing convention Euro FX markets 3 Settlement timing: spot convention, with interest accrual beginning on the second day after the deal has been struck 4 Quotation: ‘Certain for uncertain’ (ie 1 Euro = x foreign currency units) U. S. Conventions Product| Day Count Convention| USD LIBOR| Act/360| USD Swap Fixed Rate in U. S. | Act/Act s. a. | USD Swap Fixed Rate in London| Act/360 p. a. | T-Bills| Act/360 discount rate| Government Bonds| Act/Act s. a. |Agency and Corporate Bonds| 30/360 s. a. | Appendix 3 : Detailed worked example of bond price calculation We can check the pricing of bonds in a more complicated example by using the following German governmen t bond (or Bund) : German Government Bund (in Euros) Coupon:| 5. 00%| Maturity:| 04-Feb-06| Price (Clean):| 102. 2651%| Yield:| 4. 43%| We are pricing this bond on 27/July 2001. It matures on 4 Feb 2006 and has a coupon of 5%. The table below shows that the bond price (the ‘dirty price’ or invoice price) is simply the sum of the present value of all of the coupons discounted at the yield to maturity.Pricing the German Euro Denominated Bund Dates| AA Days| Periods| Cash Flow| Cashflow PV| 04-Feb-01| | | | | 27-Jul-01| | | | 104. 6350%| 04-Feb-02| 192| 0. 5260| 5. 00%| 4. 8873%| 04-Feb-03| 557| 1. 5260| 5. 00%| 4. 6800%| 04-Feb-04| 922| 2. 5260| 5. 00%| 4. 4814%| 04-Feb-05| 1288| 3. 5260| 5. 00%| 4. 2913%| 04-Feb-06| 1653| 4. 5260| 105. 00%| 86. 2950%| The market convention uses the yield to maturity as the discount rate, and discounts each cash flow back over the number of periods as calculated using the accrued interest day-count convention.In the case of Bunds, the day -count convention is the Act/Act convention. Appendix 1 contains more details of date conventions – it is recommended that you read this at the end of the module. The part of a year between the settlement date (27 July 2001) and the next coupon (4 February 2002) is: Day Count 192/365 (ie Actual days/Actual days) = 0. 5260 The price of the first coupon can therefore be calculated in the following way: PV of First Coupon = 4. 8873% All of the other cash flow present values are calculated in the same manner. Adding them up gives us the price of the bond.Accrued interest is calculated from 04 February 2001 to 27 July 2001 (173 days) : Accrued Interest Accrued = 5% x 0. 47397 = 2. 3699% There is more detail on Accrued interest in Appendix 2. It is recommended that you read it at the end of this module. Notice that the quoted price of the bond (the ‘clean price’) is 102. 2651% not 104. 6350% (which is the ‘dirty price’ or invoice price – ie the pric e actually paid for the bond). The dirty price is the sum of the present values of the cash flows in the bond. The price quoted in the market, the so-called â€Å"clean† price or market price, is in fact not the present value of anything.It is only an accountants’ convention. The market price, or clean price, is the present value less accrued interest according to the market convention. Practitioners find it easier to quote the clean price because it abstracts from the changing daily accrued interest (i. e. it avoids a â€Å"saw-toothed† price profile). This publication is for internal use only by Deutsche Bank Global Markets employees. The material (including formulae and spreadsheets) is provided for education purposes only and should under no circumstances be used for client pricing.Examples, case studies, exercises and solutions may use simplifying assumptions that do not apply in practice, and may differ from Deutsche Bank proprietary models actually used. The publication is provided to you solely for information purposes and is not intended as an offer or solicitation for the purchase or sale of any financial instrument or product. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed.

PESTEL Viet Nam Analysis Essay

A. Introduction of Viet Nam Vietnam is approximately 331688 km2 in area and occupied the eastern coast of the Southeast Asian peninsula. The northern part of the country part consists mostly of highlands and the Red River Delta. The south is divided into coastal lowlands and extensive forests. Because of differences in latitude and the marked variety of topographical relief, the climate tends to vary considerably from place to place. During the winter or dry season (November to April), the monsoon wind blowing from the northwest brings considerably moisture. Consequently the winter season in most parts of the country is dry. Major Vietnamese cities include Hanoi in the north, Da Nang in the mid coastal region, and Ho Chi Minh City (formally known as Saigon) to the south. Vietnam has considerable energy resources such as oil, gas and coal and its 41,000 km long waterways provide the basis for hydropower. The country is rich in minerals such as bauxite, iron ore, lead, gold, precious stones, tin, chromate, anthra cite, granite, marble, clay, white sand and graphite. In addition, Vietnam has a considerable fresh and saltwater fauna, dense tropical forestry resources and it possesses great agricultural potential. The history of Vietnam, reference to the Geneva Accord signed in 1954. The accord ended French colonial rule, and the country was partitioned into the Democratic Republic of Vietnam, led by Ho Chi Minh and the Republic of Vietnam in the South. The capitals were Hanoi for the North and Saigon for the South. Fights led by Ho Chi Minh to unite the country started in 1959 and lasted until 1975. Hanoi became the capital of the country whilst Saigon was renamed Ho Chi Minh City. Following reunification, the Vietnamese government’s initial plan was to manage the economy via methods of central planning. Based on experiences gained during the 1976-1980 five years plan, subsequent central plans introduced more relaxed policies with respect to agricultural collectives, State Owned Enterprises and allowed more scope for private initiatives. These measures were instrumental in elevating poverty.  Growth rates during the early 80’s were higher than during the 1976-1980 five year pl an, however it became evident that further policy shift were necessary to enable the Vietnam economy to perform closer to its potential. Economic reform was the key point of discussion at the Sixth National Party Congress held in December 1986. The process then initiated of moving from a centrally planned economy to an open, socialist-oriented and multi-sector market economy known as Doi Moi (renovation). In 1992, the National Assembly revised the post-unification constitution to better reflect the aspirations articulated in the Doi Moi process. Economic performance since 1986 has justified the policy of relaxation of central control, the challenge faced by Vietnam has been the maintenance of rapid economic growth and integration into the global economy. B. â€Å"P.E.S.T.L.E† REPORT ON VIET NAM 1. Politics The Socialist Republic of Vietnam is a single-party state. Its current state constitution, which replaced the 1975 constitution in April 1992, asserts the central role of the Communist Party of Vietnam in all organs of government, politics and society. In 2011, Viet Nam held the 11th Congress of Vietnam Communist Party, in which happened the Election of the Party Central Committee for the new term. Mr. Nguyen Phu Trong was elected to be the General Secretary. After the Congress, there happened the fist Congress of the Parliament, term 13th, in which Mr. Nguyen Sinh Hung was elected to be the President of the Parliament, Mr. Truong Tan Sang the President of the Country, and Mr. Nguyen Tan Dung was elected to continue the position of Prime Minister. This Congress also issued 4 degrees: first, approving the State Budget, second, agreeing on the program of building laws and ordinances in2012, third, beginning the study of the amendments and supplements of the 1992 Constitution and establ ishing the revised draft of the 1992 Constitution, and finally, the degree on the issuance of certain additional tax measures to remove difficulties for enterprises and individuals, contributing to economic development in 2011. In 2011, the disputes over the East Sea was the main cause of some changes in relations between Vietnam and some important countries in the world, especially the  Vietnam – China and Viet Nam – U.S. Tension in the East Sea has escalated due to China’s provocative acts in May, 2011. Then happened many anti-Chinese protests in Ha Noi and Ho Chi Minh city. In this context, the relation between Viet Nam and the U.S was proclaimed to be elevated to strategic partnership.4 And late 2011, the tensions in the Vietnam-China relations down to the visit by the senior officials of the two countries. In terms of politically domestic policy, the government kept a political stability, and showed some positive signs. For example, the freedom of the press seemed to be extended. In addition, the government was also more aware of its limitations and of the policy mistakes. Concretely, at the Fourth Conference of the Party Central Committee (XI), Mr. Nguyen Phu Trong said: ―Besides the achievements, the Party building work still has many limitations and shortcomings, weaknesses, even spanning multiple defects; these limitations would reduce people’s trust in the Party; if not corrected, they will be the challenge for leadership of the Party and the survival of the regime. 2. Economy The year of 2011 was important for the economy of Viet Nam because this is the first year in the latest Socio-Economic Development Strategy (2011-2020), with the goal of becoming an industrialized and modern economy by 2020. This strategy goes on to identify the country’s key priorities to meet this ambitious target: stabilize the economy, build world-class infrastructure, create a skilled labor force, and strengthen market-based institutions. According to Vietnam Development Report (VDR) 2012, meeting these aspirations will not be easy. In fact, the country has experienced bouts of macroeconomic turbulence in recent years—double-digit inflation, depreciating currency, capital flight, and loss of international reserves—eroding investor confidence. Besides, rapid growth has revealed new structural problems. The quality and sustainability of growth remain a source of concern, given the resource-intensive pattern of growth, high levels of environmental degradation, lack of diversification and value addition in exports, and the declining contribution of productivity to growth. Vietnam’s competitiveness is under threat because the power  generation has not kept pace with demand, logistical costs and real estate prices have climbed, and skill shortages are becoming more widespread. And these difficulties strongly existed in 2011. Concretely, the inflation in 2011 was 18.13%; the growth of GDP has slowed (5,89%). Domestic and international gold price gap increased. The Corruption index 2011 from Transparency International ranked Viet Nam at the position 112. This shows that Viet Nam has been faced one of the most difficult challenges of economic development. In terms of financial, according to the document of World Bank, in 2011, foreign direct investment inflows (to Viet Nam) continued at a steady pace, although new commitments declined. International reserves increased in the first half of the year while the Vietnamese dong benefitted from a period of relative calm. In the last quarter of the year, however, exchange rate fluctuations increased due to volatility in gold prices, deepening uncertainties and the seasonal increase in demand for foreign currency as the year end approaches. With approximate 9 billion U.S. dollars, the amount of money coming from overseas Vietnamese was one of the biggest sources of foreign currency in 2011. This amount is equivalent to the amount of FDI. Hong Kong, Singapore, and Japanese are the countries that contributed the biggest investment to Viet Nam in 2011. Hai Duong, Ho Chi Minh city, and Ha Noi are three places that has been most invested in recent time. The sectors that most attract the attention of foreign investors are processing industry, electricity supply, and accommodation and dining service. However, according to the analysis of a chief economist, Dr. Allan Pham, though facing the difficulties as mentioned above, the economy is coming to a better prospect in 2012, especially with a certain success in the fight against inflation of the country (the inflation has been trending down since the 4th quarter of 2011). Following is the figure of the selected macro indicators of the economy in recent years: Key Indicators 2007 2008 2009 2010 2011 2012 GDP growth (%) 8.5 6.2 5.3 6.78 5.8 6.0 CPI (%) 12.6 23 6.52 11.75 18.0 12-14 Trade deficit (USD) 12.5 17.8 12.2 12.4 12.1 13.3 Exports (USD) 48.4 62.5 56.6 71.6 80.2 86.5 Imports (USD) 60.8 80.3 68.8 84.0 92.4 99.8 FDI commitments (USD) 21.3 66.5 21.5 18.6 15.0 18.0 FDI disbursement (USD) 8.0 11.5 10.0 11.0 12.0 12.5 Credit growth (%) 54 21 37.7 27.6 15 18 SBV Base rate 8.2 8.5 8.0 9.0 9.0 9.0 Deposit rate (%) 7.0-8.0 7.0-8.5 9.5-10.5 10.0- 11.0 14 12.0 Lending rate (%) 10.0-12.0 10-12.5 10.5-12 13.0-13.5 18-20 14-16 USD/VND (bank rate) 16,016 17,468 18,600 19,500 21,500 22,500 Foreign Affairs At present, Vietnam has established diplomatic relations with 168 countries, and it has economic and trading relations with about 165 countries. Vietnam joined the United Nations in 1977. Vietnam became an official member of the Association of South East Asian Nations (ASEAN) in 1995, and has concluded a cooperation agreement with the European Community. Relationships with multi-national financial institutions such as the World Bank (WB), the International Monetary Fund (IMF) and the Asian Development Bank (ADB) have been re-established. Viet Nam has been participating in the ASEAN Free Trade Area (â€Å"AFTA†) since 1996 and became a member of the Asia Pacific Economic Cooperation Forum (APEC) in 1998. Vietnam became an official member of the World Trade Organization (WTO) on 11 January 2007. In January 2008, the country started a two year term as an elected non-permanent member of the UN Security Council. Vietnam signed the bilateral trade agreement (BTA) with the United Sta tes in 2000. Besides aspects of international trade, the BTA covers a variety of other areas, including intellectual property rights, trade in services, development of investment relations, business  facilitation and the obligation to ensure transparency of laws and regulations. The BTA essentially constitutes a commitment by both countries to open their markets to each other. Intellectual Property In recent years, the Government has taken various measures to increase the legal protection of intellectual property and has created an environment of respect for intellectual property as compared to other neighboring countries. Intellectual property rights are protected by the Civil Code (1995 and 2005), the Law on Intellectual Property (2005) and a host of subordinate legislation. Vietnam is a long-time signatory to the Paris Convention, the Madrid Agreement on International Trademark Registration, and the Patent Cooperation Treaty (â€Å"PCT†) and became a member of the World Intellectual Property Organization in 1976. On 27 June 1997, Vietnam entered into an Agreement on copyrights with the US. According to the Viet Nam-US Bilateral Trade Agreement, Vietnam is under the obligation to adhere to the Berne Convention. The National Office of Intellectual Property (â€Å"NOIP†) is the authority responsible for the registration of industrial property and for the resolutio n of disputes with regard to industrial property in the first instance. Foreign organizations and individuals seeking to register their industrial ownership should file their applications through an authorized agent, who will transfer their application to the NOIP. The Office of Copyright Protection under the Ministry of Culture, Sport and Tourism has also been established and is responsible for the protection of copyright. Works may be registered with the Office of Copyright Protection; however, registration is not a prerequisite for copyright protection. Currently, patents are protected for a period of 20 years. A certificate of utility solutions may be granted for 10 years. A certificate of industrial design is granted for 5 years and may be renewed every 5 years. However, the total effective period of a certificate cannot exceed 15 years. Certificates of trademarks are granted for 10 years with no restrictions on the number of renewals. Investment Guarantees The Government of Vietnam guarantees fair treatment for investors. Capital and other legal assets of investors will not be expropriated or confiscated by law or administrative measures and businesses with foreign-invested  capital will not be nationalized. Foreign investors are allowed to remit abroad investment capital and profits, loan principal and interest, and other legal proceeds and assets. Expatriates working for businesses with foreign-invested capital or for a business cooperation contract are permitted to remit their income abroad. The Vietnam government respects intellectual and industrial property rights and the interests of foreign investors relating to technology transfers into Vietnam. Economic Risks Global Finance Crisis is the hottest issues that people discuss most in this few years. The global financial crisis that started from the United States raises a very broad impact to Vietnam. Inflation Inflation has been in double digits since 2007 and peaking at 28% in August 2008. The fiscal deficit accounted for 4.5-5% GDP in 2008 while trade deficit reached US$17.5 billion (or over 20% of GDP), a level that signals vulnerability to a sudden drop in external demand (Figure 2). A high rate of investment combined with a sizeable fiscal deficit resulted in rapid growth in aggregate demand in the first half of 2008. Massive capital inflows generated asset price inflation, especially in real estate and land prices. Export Decline Vietnamese exports have suffered the strongest negative impact. With economic problems in the US, EU and Japan, which together account for more than 60% of Vietnamese exports, Vietnam saw a significant decline in export revenues. Vietnam’s export revenues fell 6.5% in November 2008 and a further 24% drop in January 2009 (year-on-year) (Figure 3). Orders for manufactured exports including garments, footwear and furniture dropped quickly, while seafood5 producers are also under pressure. The decline of orders has caused great difficulties for exporting companies, many of them are at risk of closing down.6 Vietnamese exports’ growth is forecasted to decline from 30% in 2008 to 13% in 2009. Unemployment Unemployment has worsened. At February 28, 2009, 66,700 workers (out of 45 million workers) lost their jobs in 2008 with national unemployment rate of 4.65%. Thus, it is estimated that over 80,000 workers lost their jobs  nationwide in 2008. The latest forecast of Vietnam Labor and Employment Agency estimates the figure to hit 400,000 nationwide in 2009. Job cuts are rising especially in big cities11 with industrial, processing and exporting zones. The situation may worsen in 2009 with an unemployment rate of 5% and at a projected economic growth of 6.5%. High unemployment has already affected domestic demand and consumers’ sentiment in Vietnam, which are bearish in recent months. 3. Socio-Culture 3.1 Education Viet Nam’s population enjoys a relatively high standard of education. In fact, Confucian ethics has strongly influenced upon Vietnamese’s viewpoint of social values, and education has always been considered as one of the best values that a person should desire to achieve. Nowadays, education has been still considered as one of the most important issues that the country has to pay great attention. Recently, at the 11th Party Congress, the government is determined to develop a national education policy as one of the priorities of the country. As a result, the country has gained big success in education. Concretely, according to the 2009 Census results, there are only nearly four million people who have never attended school (5.0% of the total population aged 5 years and over) and as compared with the 1999 Census this number has decreased 5% (6.9 million people, account for 10.0% of population aged 5 and over). This shows the significant progress of Vietnam’s educat ion sector in minimizing the number of people who never go to school. The official figures also point out that the literacy rate for the population aged 15 years and over increased by 3.7% (from 90.3% in 1999 to 94.0% in 2009). The female literacy rate increased 4.9%, while the male literacy rate increased 2.2%, significantly narrowing the literacy rate gap between men and women. Ha Noi, Hai Phong and Ho Chi Minh City are three provinces having the highest literacy rate (97.9%) while Lai Chau has the lowest (59.4%). This data shows that the literacy rate was not only increased quite rapidly but also express successes of Vietnam’s gender equality work in the education sector.13 Certainly, besides such successes, Vietnamese education system also has faced many challenges,  including poor infrastructure, lack of equipment and teaching materials, low wages precipitating an acute shortage of skilled teachers and academic staff, a relatively poor linkage of higher education with research, production and employment, and some contradictions of the system. As the analysis of RFA, the situation of education in Viet Nam in 2011 had some notable points as following: There were three positive points of the education in Vietnam in 2011. The first point is the plan of â€Å"reducing the load of textbooks† from primary to secondary school of the Ministry of Education and Training. The second is the plan of achieving universal preschool education for children of 5 years old. In this plan, the Ministry of Education will build public kindergartens for children at age 5 in the mountainous areas; and the poor students will be exempt from tuition fees, with the plan of over 95% of children enroll in 2 sessions / day by 2015. And the third is the policy of training and vocational training in poor areas such as the Highlands. On the contrary, there were also many crucially negative points of the education in 2011. First of all, there was the imbalance in enrollment in universities and colleges between students with practical needs. The sectors of social sciences, agriculture, forestry and fishery were registered by only 2.5% of exam registration reco rds (while Vietnam has up to 70% of the population are farmers). And the sectors in demand such as business, tourism †¦ had to be encountered the difference between training and recruitment practices; and this leads to the fact that graduates get difficulty to find job. Secondly, teacher’s salary does not meet their living when inflation is high; and this leads to some problems: the teachers could not focus on their business as they had to find extra jobs, or to open extra classes. Thirdly, there has existed the problem of the degradation in social ethics of many students, due to lack of paying attention on humanity teaching, which can be proved by many cases of students committed violent guilty or crime. 3.2 Human Resource The national average population in 2011 estimated 87.84 million, up by 1.04% compared to 2010, including male population 43.47 million, (49.5%), and female population 44.37 million, (50.5%). Urban population is 26.88 million,  (30.6%); rural population is 60.96 million (69.4 %). According to the official report, the population structure by age in Vietnam is in a positive change. The population in the working age is 46,48 million, increased 0,12% compared to 2010. The proportion of workers in the agriculture, forestry and fisheries declined from 48.7% in 2010 to 48.0% in 2011; in industry and construction rose from 21.7% to 22.4%; and in the services maintained at 29.6%. The unemployment rate in the working age was 2.27% in 2011, of which the urban areas account for 3.6%, the rural areas 1.71%. This is the period of the country with advantages in labor force, also known as the â€Å"demographic window period†, which began in 2003 and may last from 30 to 50 years. This is cons idered as a big advantage for the industrialization and modernization of the country, if it takes advantage of the superiority Vietnamese on the labor force. 3.3 Traffic: Conditions And Problems Highway system The road system consists of over 200,000 km network including over 10,000 bridges. However road conditions are not ideal, less than half of the national highways have two lanes or more. In addition, road congestion is increasing in major cities. In recent years, the Government has mobilized a significantly large amount of capital to upgrade the highway system with financial support from international lending agencies. Railway The rail network consists of about 2,600 km of single–track line covering several routes. There are about 260 stations in the network. The longest and most important route is the Hanoi – Ho Chi Minh City line, which stretches for 1,730 km. This line is now serviced by an express train, which makes the journey in approximately 29.5 hours. The lines connecting Vietnam to China were re-opened a few years ago. Inland Waterways Often overlooked by foreign investors, the inland waterway system offers a cheap and flexible mode of transport. Vietnam has more than 2,300 rivers and canals with total length of 198.000 km. Currently, the inland waterway has a system of over 61,000 km. The two major inland waterway systems serve as major transportation outlets. The first major inland waterway system is in  the Red River area in the north which stretches for approximately 2,500 km. Along this system there are five main ports, of which Hanoi is the largest. The second major inland waterway extends 4,500 km along the Mekong River and its tributaries in the South and boasts about 30 ports, including Ho Chi Minh City. The larger river vessels are tug-drawn barges. Official estimates put the fleet capacity at about 420,000 tons with speeds ranging from 2 to over 20 km an hour. Smaller, wooden barges are mostly privately owned. Ports Vietnam has eleven major seaports. Ho Chi Minh City serves most of the South and now boasts modern container loading facilities. Just a few hours’ drive from Hanoi, Hai Phong serves much of the North. Given the rapid rise in trade volume, increasing port capacity is a national priority. Airports and Civil Aviation There are three international airports: Ho Chi Minh City, Hanoi and Da Nang. Currently, the Government has significantly upgraded international airports to handle the increase in the volume of traffic associated with Vietnam’s invigorated economy. A new international terminal of the Tan Son Nhat airport in Ho Chi Minh City, capable of handling up to 10 million passengers a year was opened in December 2007. Noi Bai airport in Hanoi was upgraded, enlarged and completed for operation in 2002, construction of a second terminal is expected to start in October 2008 and completed in two years. Four new international airports are planned to be constructed in Phu Quoc, Dong Nai, Lao Cai and Quang Ninh provinces. Preparations for the new Long Thanh International Airport, 40 kilometers from Ho Chi Minh City in Dong Nai province is underway. The airport is scheduled to open in 2010 and by 2015 it will be further expanded to reach an annual transportation capacity of 80 to 100 million pass engers, becoming one of the biggest airports in the region. In addition, there are 16 other domestic airports around the country. Culture and Social Vietnam is a country located in Southeast Asia, Vietnam is a culturally rich country whose distinct history played a role in the development of the modern day state. Vietnamese practices of Confucianism and showing reverence towards ancestors are evidence of China’s historical influence on Vietnamese  society. Vietnam became an independent state in the tenth century but was colonized by the French in the mid 1800s. Vietnam gained independence in the mid twentieth century but still retains traces of French culture which are visible in the way people communicate verbally and nonverbally. Though Vietnam has struggled over the past century through colonial rule, the Vietnam War and recent economic upheavals, it is now rebuilding itself to be able to compete on a global scale. Having a comprehensive understanding of Vietnam’s unique cultural values and traditions can allow the company to develop strong and successful business relationships with Vietnamese counterparts. Language Vietnamese is the official language, although there are distinct northern, central and southern dialects and accents. It is a tonal language, with each syllable; there are six different tones that can be used, which change the definition and it often makes it difficult for foreigners to pick up the language. There are other languages spoken as well such as Chinese, Khmer, Cham and other languages spoken by tribes inhabiting the mountainous regions. Although there are some similarities to Southeast Asian languages, such as Chinese, Vietnamese is thought to be a separate language group, although a member of the Austro-Asiatic language family. In written form, Vietnamese uses the Roman alphabet and accent marks to show tones. This system of writing called â€Å"quoc ngu†, was created by Catholic missionaries in the 17th century to translate the scriptures. Eventually this system, particularly after World War I, replaced one using Chinese characters (chu nom), which had been the u nofficial written form used for centuries. Non-verbal communication For certain feelings, Vietnamese people favor non-verbal communication. Vietnamese do not express feeling of thankfulness of apology in verbal communication, but non-verbal through silence or a smile. The proper respectful behavior is to avoid eye contact when talking to person who is not equal status or of the same gender. The smile is another non-verbal symbol conveying the feeling of respect in Vietnamese culture. It is used as an expression of apology, or as expression of embarrassment. For the Vietnamese a smile is a proper response in most situation in which verbal expression is not necessary, or appropriate. Confucianism The teachings of Confucius influence the Vietnamese describe the position of the individual in Vietnamese society. Confucian teachings emphasize the importance of relationships, responsibility and obligation. This philosophy is still a vital component of Vietnamese society and is prevalent in Vietnamese business culture in conserving the harmony of the collective good. The basic tenets are based upon five different relationships: Ruler and subject Husband and wife Parents and children Brothers and sisters Friends Hierarchy As like other group-oriented societies, Vietnam hierarchical structures are very much based upon age and status. This derives from Confucianism, which emphasizes social order. Everyone is seen as having a distinct place and role within the hierarchical structure, be it the family or workplace. An obvious example is seen in social situations where the oldest person in a group is greeted or served first. Within the family the head would be responsible for making decisions and approving marriages. Therefore companies that want to invest in Vietnam are made sense to give more authority to local managers to control the subordinates. The organization structure can be designed as hierarchical, with power derived from prestige, force, and inheritance. Collectivism Vietnam is a collectivist society in which the needs of the group are often placed over the individual. Family and community concerns will almost always come before business or individual needs. Family in particular plays an important role in Vietnamese society. You will notice that close ties between extended families and communities can have a major influence on individual behavior and oftentimes there are multiple generations living under one roof. For this reason, the company of the investor can pay more attention to their employees’ family members for example provide free medical treatment, childcare leave, family trips, etc. This can increase the employees’ loyalty to the company. Besides, in order to increase efficiency of Vietnamese employees, the company should assign tasks to them by group rather than individual. Religion Religion in Vietnam is closely related to the history of Vietnam and most importantly the culture of Vietnam. The earliest established religions in Vietnam were Mahayana Buddhism, Confucianism and Daoism (called the ‘triple religion’). These religions have been co-existing in the country for centuries and mixed well with the Vietnamese tradition of ancestor worship. This special mix explains why the Vietnamese people find it hard to say exactly which religion the belong to. They usually classify themselves as non-religious, despite visiting religious temples several times every year. At the year 2006, the major religious affiliations amongst Vietnam born people were Buddhism (58.6%), Catholics (22.1%), other (4.6%), and no religion (11.03%). From the data, we were found that Buddhism, Confucianism and Daoism have greatly affected the Vietnamese’s behavior. The foreign investors should take note there are quite a large number of vegetarian in Vietnam, because of th e Buddhism religion. Food of Vietnamese Food is a very important part of Vietnamese culture. The Vietnamese not only enjoy eating but believe eating good food can bring harmony and closeness to the family and relationships. The types of foods are chosen to bring luck and these vary from province to province. Buying daily for fresh food is essential for all Vietnamese cooking. In general, Vietnamese people are not as concerned about nutrition as Westerner. They are more concerned with the quality of the foods. Concepts of Time Like most Asians, the Vietnamese have a more extended concept of time than that of most Americans. The agrarian nature of their traditional society focuses on seasons rather than days or weeks. And this tradition is reinforced by the Confucian tradition of respect for earlier generations. Americans measure time by the clock, Vietnamese by the monsoon. Although this is changing somewhat, Vietnamese can still be expected to take a longer view of time and be suspicious of the need for urgency in making decisions  or culminating a business deal. Patience remains the ultimate Confucian virtue in personal life as well as in business. Personal Relationships In Vietnam, propriety and courtesy play a major role in personal relationships. Vietnamese are generally more interpersonally formal than are Americans. This formality decreases the uncertainty surrounding interpersonal contacts in Vietnamese society and is carried over into the business realm for the same reasons. During initial meetings with Vietnamese officials, you can expect little real business to be accomplished. The Vietnamese will concentrate on getting to know you–your background, your expertise, your character. In their high-context communication culture, they will depend heavily on non-verbal clues to assess meaning. By becoming acquainted and establishing a personal relationship with you, they are merely trying to understand you better. Vietnamese society is comprised of an interconnected network of personal relationships, all of which carry obligations on both sides. These mutual obligations are the underpinnings of social order in Vietnam, so they are taken very seriously. Americans need to understand and be sensitive to the serious nature of what may seem to them to be casual business relations. Failure to do so could easily result in a loss of trust or credibility, with obvious implications for longer-term relationships. 4. Technology In terms of technology, Viet Nam is a rapidly developing country. The year 2011 was the beginning of the strategic plan of economic and social development, period 2011-2020, in which infrastructural building is considered as one of main targets. With this plan, the country has been building many expressways and will let the local transport network be eventually upgraded to meet the requirements of rural industrialization and modernization, and connect itself with the national system. In addition, the above plan also includes a project which will work to narrow its scientific and technological gap with the world in some key fields by 2020. To launch this project, the Government will give top priority to enhancing the competence of scientists and related managers while encouraging the organization of training courses partnered with foreign competent partners. According to the project, the Government will focus on scientific and technological renovation to sharpen the competitive edge of local products and assisting businesses to purchase patents in some prioritized areas: biotechnology, information technology, new materials technology – Nano technology , manufacturing technology and automation. 5. Legislation The communist party-controlled government of Vietnam has ruled under four state constitutions. The first was promulgated in 1946, the second in 1959, the third in 1980, and the current in 1992 (amended in 2001). Significantly, each bore the mark of its time. On paper, all these constitutions seem to establish a solid democracy. In fact, the purpose of the 1946 constitution was essentially to provide the communist regime with freedom of speech, the press, and assembly. The second constitution was explicitly communist in character. Its preamble described the Democratic Republic of Vietnam as a â€Å"people’s democratic state led by the working class,† and the document provided for a nominal separation of powers among legislative, executive, and judicial branches of government. The 1980 Constitution concentrates power in a newly established Council of State much like the Presidium of the Supreme Soviet, endowing it nominally with both legislative and executive powers. Many functions of the legislature remain the same as under the 1959 document, but others have been transferred to the executive branch or assigned to both branches concurrently. The executive branch appears strengthened overall, having gained a second major executive body, the Council of State, and the importance of the National Assembly appears to have been reduced accordingly. The role of the Council of Ministers, while appearing on paper to have been subordinated to the new Council of State, in practice retained its former primacy. Having inherited the previous constitutions with substantial and basic changes, on the one hand, the 1992 Constitution continues reaffirming the basic principles in the constitutional history of Vietnam. First, it reiterates the target of socialist construction in Vietnam and the popular nature of the State. Second, the 1992 Constitution continues affirming the Communist Party of Vietnam’s leadership over the State and the society.  Third, it continues affirming the mechanism of State powers performed by the people through the National Assembly and the People’s Councils, the organization and operation of the State under the principle of concentrated powers; the concentration of State powers uniformly into the National Assembly with the division of responsibility among State bodies for the exercise of the legislative power, executive power and judicial power. On the other hand, the 1992 Constitution sees big changes: Vietnam decided to take economic renewal as the cent ral task, First, building the multi-sector and multi-ownership market economy along the socialist orientation. open-door policy and international economic integration. In reality, however, final authority on all matters rested with the Political Bureau; especially, the guarantees provided by the constitutions for freedom of speech, the press, and assembly has been never intended to be carried out. The constitutions eventually show its limitations since Vietnam has joined the stream of globalization, especially in the field of human rights and land-ownership law. In a report made public at the Conference on the Rule of law for human rights in the ASEAN region held by the Human Rights Resource Centre for ASEAN (HRRCA) in Jakarta, Indonesia on 30 April 2011, Mr. Vo Van Ai, President of Que Me: Action for Democracy in Vietnam and the Vietnam Committee for Human Rights called on Vietnam to urgently reform its legal system and bring domestic legislation into line with international human rights laws. Mr. Vo Van Ai declared: ―36 years after the end of the Vietnam War, the rule of law exists only in theory in Vietnam. The government has incorporated human rights into its 1992 Constitution. Yet it has also adopted a whole arsenal of Laws, Decrees, Ordinances and Decisions which restrict or even nullify the exercise of these rights, in total violation of the UN Covenant on Civil and Political Rights (ICCPR) to which Vietnam adhered in 1982â€â€". At the beginning of the New Year 2012 (Jan 1, 2012), there happened The Tien Lang land withdrawal case: in Tien Lang district (on the outskirts of Haiphong, a port city east of Hanoi) a fish farmer, Doan Van Vuong, and his family had resisted a large force moving in to enforce an eviction order. With an improvised mine and muskets bought on the black market, they’d wounded two soldiers and four policemen, including the local police chief. Prime  Minister Nguyen Tan Dung himself had to meet the Haiphong City authorities to resolve the case; and finally came to the conclusion on Feb 2 that the Haiphong government was absolutely wrong in the case; and he ordered the Haiphong City authorities to review their wrong works as and repair the situation. This case is just one among so many cases that show matters association with the land law. And this shocked case has raised the question of reforming the land law, which has been ambiguously claimed by the constitution as ―land is possessed by the whole peopleâ€â€". Mr. Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, comments that ―it’s possible to see the recent incident at Tien Lang as a climactic demonstration of the faults in our Land Law and how it is implemented at the local level. A good farmer, pure, simple and hardworking, who’s driven to defend his right to his land with home-made weapons – what misery! Everybody believes that there’s such a thing as justice and that the law ensures it. Certainly that’s what the farmers who built the fish ponds at Tien Lang believed. They went to the court expecting fair play, but the simple truths they understood proved elusive. The hopelessness of their situati on drove them to take desperate measures. As mentioned above, the 11th Congress of Vietnam Communist Party held in 2011 issued four degrees; and one of them is beginning the study of the amendments and supplements of the 1992 Constitution and establishing the revised draft of the 1992 Constitution. This is urgent and necessary for the development of the country. 6. Environment Viet Nam is blessed by the nature, with a great ecological and hydrological diversity. The country is made up of equatorial lowlands, high, temperate plateaus and cooler mountainous areas. It lies in the inter-tropical zone and local conditions vary from frosty winters in the far northern hills to the year-round subequatorial warmth of the Mekong Delta. At sea level, the mean annual temperature is about 27 °C in the south, falling to about 21 °C in the far north. Geographically, it stretches over 1600km (1000mi) along the eastern coast of the Indochinese Peninsula; and has two main cultivated areas, that are the Red River Delta (15,000 sq km/5400 sq mi) in the north  and the Mekong Delta (60,000 sq km/23,400 sq mi) in the south. Vietnam also has diverse wildlife, with rare and precious fauna such as elephants, rhinoceros, tiger, leopard, black bear, snub-nosed monkey, crocodile and turtle. Forest area accounts for 2% of total forests in East Asia and Pacific. Fish catch is amon g the 10 highest countries in the world, with 1,451,800 tons per year. However, as the report of the World Bank on the environment in Viet Nam, ―Rapid economic growth in Vietnam over the last ten years, and its associated industrialization, urbanization, as well as increased exploitation of natural resources, has created significant pressures for the environment.â€â€"35 For example, the diverse wildlife is in precipitous decline because of the destruction of habitats, illegal hunting and pollution. In fact, Viet Nam Rhino was officially extinct in 2011. One of the most obvious examples for illustrating the environmental pollution is the phenomenon of getting narrowed of the lakes in Ha Noi. According to the Hanoi Construction Department, there are 111 ponds and lakes in Hanoi which cover a total area of 1165 hectares. The total area of lakes has decreased sharply during the urbanization, while a lot of them have disappeared. It is estimated that 80% of the lakesides have got polluted, 71% of lakes have suffered from pollution, 26% of the lakes still do not have embankments, while 8% of lakes have partial embankments. Environmentalists have called on to take urgent actions to protect the remaining lakes, or they would also disappear one day. Vietnam is among the countries that can be seriously affected by climate change. And the fact shows that the increasing deterioration of environmental conditions is emerging as a barrier to growth and development in recent years. In fact, according to the General Statistics Office, domestic natur al disasters occurred in 2011 has made 257 people dead and missing, 267 wounded; nearly 1.2 thousand houses collapsed and swept away; 391.8 thousand houses were submerged or damaged; more than 760 km of dykes, and the 680 km road motorized traffic bursts, landslides; 867 power poles broken or poured; nearly 54,000 hectares of rice and vegetables has been lost; more than 330,000 hectares of rice crops were flooded or damaged. Total value of damage caused by natural disasters in 2011 was estimated at over 10 trillion VND. Thus, this is really a big challenge of the country; and it needs a national and urgent action to prevent an ecological and hydrological catastrophe. C. BRIEF CONCLUSION With the aforementioned analysis of ―P.E.S.T.L.Eâ€â€", we see that in 2011, on the one hand, Viet Nam constantly attempted to keep its strategic plan of development, and also has obtained some important goals; on the other hand, the country had to face many difficulties and challenges which came both from outside and from inside. In my opinion, there are some main issues that the government should pay great attention in the coming years: reforming the education system, fighting against corruption (especially, promoting fiscal transparency and the public availability of economic data and information), reforming the state-owned sectors, amending laws, narrowing the gap between the Kinh, the Hoa and the ethnic minority groups, and improving environmental conditions.