Understanding The General Environment Of Esprit Business Essay

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The organization cannot directly control its own general environment different industry settings, understanding the present conditions of the market and global scenarios forecasted and actually occurrence is critical. The study provides the hard readiness and litheness when its environment strategic possibilities and strategic limitation (threats) can improve and achievement of the strategic competitiveness. The technology based organization is usually unstable to the environmental changes.

Esprit fit in to the standard cycle markets, the performance report in the financial year 2005-2006 to shareholders showed considerable prejudice of sales for most of its products lines in the European countries especially in the Germany. This is very interesting because esprit headquarters are located in Hang Kong, the founder belongs to USA and its European business history only began after 20 years of American and Asian exposure.

Influential Segments, Esprit Actions/ Responses and Outcomes

Technological Segment

In the first of 21st century, Asia pacific and Australian retail business stores are using the very old computers with the operating system MS-DOS and old communication technology with the dial-up technology. All the software and hardware troubles are not backed by dependent IT personnel. The systems further very slow, labor intensive and expensive processes and facilities. And also faces the more human errors and security problems like banking transactions and real time sales reports are detriment. The inefficiency of technology causes the obstruction to reach the competitiveness. Resolve customer satisfaction issues. The technology problems result fails to satisfy the customer and unnecessary trade-offs of in the clouds costs and sales.

Esprit is taken a response action and announced an upgrade the technology. In all the regional stores has the chance to replace the old system. The upgrade contract own by the Rosser communications. Stores and offices all are increase the security and created the internet links and increases more security in the electronic fund transfers. The links are created like sender and receiver and back-up options for any link failed. IT personnel remotely support for solving the procedural errors and resolve the human errors.

  The advances technology gives the positive effect in the business. This decreases the personnel difficulties from the old system and improved the customer service. This improves the communication with the number of customers and payment with efficiency. Customers get the fast transactions and good shopping experience with in the less time. New technology do the work efficiently and silently. This is very useful to attract the new customers and keep the old customers

Global, Political and Demographic Segments

Esprit market existence is very good in the European countries. These sections are considered critical to the frequent success of the firm. The United Kingdom government developed the agenda in the older people services to improve using the department of health's. Government announcement of new health care system to increasing the quality and minimize the differences in the health services. This framework is given the messages to public and private institutions about the health requirements of the growing population of the older people. This is given platform to the age structure of market propriety.

Esprit was chosen to help the generally responsible, Atkins Management Consultancy, for the publicly funded project that will last for ten years.  Its contribution range was to determine strategies to address change management, data management, management control and technology.  In effect, the firm did not only affect the outcome of the plan and its effect to industries but also internalize its quasi-consultancy services.  It created Esprit Gateway Solution that organize, categorize, link and access real-time data across corporate operations that is both beneficial to internal and outside users of company information.  The basic hindrance of sharing information and integration of database and technological costs is resolved due to the project and the firm's participation to it. 


            The establishment of Esprit Gateway benefits stakeholders in various ways particularly the customers.  Both young and old people can have access, in which at least 50% of the country's households are internet connected, to firm's product developments and new services.  They will prevent ordering an item at zero stock deepening inconvenience and inferior service quality detrimental to the new policy and customer satisfaction alike.  Older people will feel accepted by the society.  As a result, self-actualization can be relived providing possible market segmentation on the part of the firm to exploit the opportunity of catering the clothing-stylish need of the older age bracket.  The new policy ignited the restructuring of the firm's resources to better meet the needs of customers.  In effect, marketing programs are not merely advertisement-based rather intensifying product value through excellent customer relationship derives at convenience and ease of transaction.


            However, the new policy would also require Esprit competitors to upgrade their electronic platforms.  As a result, a clear competition in continuous improvement in the electronic presentation and database will be apparent that can signal shift of firm investment from different media advertisement into technological and service improvement.  Being an official member of working committee building the policy strategies, however, Esprit have the upper hand and first mover advantage in this area against rivals.  With the necessary knowledge to adapt its gateway in the present needs of customers across age structures and its relative competitive stance from others, marketing decision are made within a direction and objectivity. 

Task 2

Common and conflicting interests of stakeholders

The stakeholder groups have interests are common with other stakeholder groups and different or conflict also.

Examples of common interests:

Depending on the success of the company shareholders and employee have the common interests.

Increase in the profits will lead to increase in the dividends and security of the job

Management and Suppliers have an interest in the increase and wealth of the firm.

Examples of conflicting interests

Salary increase may be is expense of the dividend.

Managers have an interest in organizational growth but this might be at the expense of short term profits.

Growth of the organization might be at the expense of the local community and the environment.

Thinking about stakeholder power

The following study of the stakeholder not a incomplete decryption of organization impacts on the stakeholders. In the context of strategy, what is more important is the power and influence that a stakeholder has over the organization and its objectives.

Stakeholder influence:

Current and future strategies of the organization are affected by:

External pressure from the market place, including competitors, customers, suppliers, shareholders, pressure groups threatening a boycott, the government (through taxation and spending).

Internal pressures from existing commitments, managers, employees and their trade unions.

The personal ethical and moral perspectives of senior managers

(adapted from Newbould and Luffman, Successful Business Policies 1979).

The importance of profit maximization

Traditional economic theory is based on the assumption that firms seek to maximise profits.It must be appreciated that this does not mean "any old level of profits" or even a certain target level of profits but it means squeezing the last penny of profits out of the firm's operations.

This assumption was based on the circumstances of 19th century business where owners acted as managers and could ignore the interests of stakeholders such as the employees and the community.

Stakeholder theory

The profit maximizing theory of the firm that characterised Neo-Classical Economics has to be modified to taken into account the power and influence of stakeholders.

Various writers have put forward theories based on an alternative to the profit maximising aim:

Baumol (1959) put forward a theory based on a sales maximising objective.

Williamson (1964) offered a theory based on managers setting the objectives to maximise their personal satisfaction.

Marris (1964) offered theory based on growth as the key concern.

In all three cases:

The objective the result of managerial power over decision making.

Reflected the interests of managers rather than shareholders.

There was a limiting factor- these objectives are pursued subject to producing a satisfactorylevel of profits.

Behavioral theory

In "A Behavioral theory of the Firm" (1963) Cyert and March argued the goals of an organization are a compromise between members of a coalition made up of the stakeholders.

The outcome of decision making is a compromise or "trade off" between the interests of the various stakeholder groups.

In the process leading to compromise much will depend on the relative power of the different stakeholder groups.


The Cyert and March theory of decisions being a compromise between the different stakeholders has certain features in common with the idea of satisficing behaviour which is associated with Herbert Simon.

Simon argued that decisions are taken in conditions of uncertainty and ignorance.

Rather than an exhaustive search for the best or ideal solution, decision makers seek an acceptable or satisfactory outcome. This is chosen because of the internal and external constraints such as time pressure, lack of information and the influence of powerful stakeholder.

Shareholders influence

In small private firms shareholders are in direct contact with managers and in, many cases, are directors of the company. They have the ability to influence the objectives and directions of the organisation.

But the individual shareholder in a large public company has very little influence.

In theory they can exert influence through voting at the annual shareholders meeting but unless individuals group together their votes will have little impact. In any case they are likely to be outvoted by the big institutional investors (e.g. pension funds) who own large blocks of shares. However, shareholders can exert influence through threatening to "vote with their feet" by selling shares. As a result, managers and directors must at least keep shareholders satisfied.

Determinants of stakeholder power

For stakeholders to have power and influence the desire to exert influence must be coupled with the means to exert leverage on the company. How much power the stakeholder can exert will reflect the extent to which:

The stakeholder can disrupt the organisations plans.

The stakeholder causes uncertainty in the plans.

The organisation needs and relies on the stakeholder.

Levers operated by internal stakeholders

Internal stakeholders have their own interests which they might pursue - e.g. managers might seek organisational growth over profits, employees seek high wages and favourable working conditions.

Managers make decisions and therefore have extensive power.

Internal stakeholders

Have negative power to impede the implementation of strategy.

Can threaten industrial action

Can threaten to resign

Might refuse to relocate.

Levers operated by connected stakeholders

Shareholders have voting rights and can sell shares thus making the company vulnerable to take over.

Creditors can refuse credit, charge high interest rates, take legal action for non-payment and, in extreme cases, initiate moves to liquidate the company.

Suppliers can refuse future credit.

Customers can seek to buy goods/services elsewhere and enjoy consumer protection rights.

Levers operated by government & pressure groups

The government can exert influence through taxation, government spending, legal action, regulation and threatened changes in the law.

Community and pressure groups can exert influence by:

Publicising business activities they regard as unacceptable.

Political pressure for changes in the law

Refusing to buy goods/services fro named firms

Illegal actions such as sabotage

Stakeholder analysis

"All animals are equal but some are more equal than others"  [George Orwell, Animal Farm]

Inequality of influence:

It is naïve to believe that the stakeholders have equality in terms of power and influence. 

Managers have more influence than environmental activists. At the same time the institutional investor with 25% of shares will have a greater influence that the small shareholder. Banks have a considerable impact on firms facing cash flow problems but can be ignored by a cash rich firm.

Primary and secondary stakeholders

A distinction can be drawn between the two groups of stakeholders.

Primary stakeholders;

Those most vital to the organisation.

A group without whose continuing participation the company cannot survive as a going concern.

e.g. customers, suppliers.

Secondary stakeholders:

Those without whose continuing participation the company can still exist. e.g. the community.

Active and passive stakeholders

This is an alternative categorisation of stakeholders.

Active stakeholders

Seek to participate in the organisation's activities. e.g. managers, employees, pressure groups.

Passive stakeholders

Do not normally seek to participate in an organisation's policy making. e.g. most shareholders, government, local communities.

Esprit stakeholder

Today we believe that our long-term profitability, brand reputation and customer loyalty depend on our commitment to deliver unsurpassed value to our stakeholders while voluntarily conducting our business in a way that advances ethical and legal expectations, lessens our impact on the environment, and provides high quality of life for our customers and employees. When buying goods from developing countries and emerging markets, we select our suppliers carefully and monitor them on an ongoing basis assuring that they share our commitments to a higher standard.

Task 3

Social responsibilities

As a global company, Esprit believes in developing and maintaining sustainable relationships with all its stakeholders. We demonstrate our commitment to our employees, business partners and customers by ensuring a healthy and innovative working environment.

Responsibilities to employees

Esprit recognises the importance of human capital and that our continued success depends on the commitment, enthusiasm and energy of our staff around the world. We are committed to developing a positive and respectable working environment that encourages collaboration and cooperation between employees. The Group promotes inter-company communication and we welcome ideas and feedbacks from our staff. Through quarterly newsletters and the Group's global intranet, we aim to improve company-wide communication and connect our 8,400 plus employees around the world to the Esprit family.

We strive to be an attractive company for the talented and motivated. The Group places heavy emphasis on staff training and development to capitalize on the potential within every one of our employees. The Group readily provides resources for the organization of workshops and seminars. Our remuneration package is performance based and takes into account business performance, market practice and competitive market conditions. To ensure staff members are rewarded on a clear and fair basis, an annual performance and salary review system had been adopted. Share options and discretionary bonuses are also granted to staff that deliver outstanding performance.

Responsibilities to business partners

At Esprit, we aim to develop and maintain long-term relationships with our business partners based on openness, honesty and trust. We seek to understand their business needs and aim to provide mutual support to ensure establishing sustainable business partnerships. 

We are committed to conducting business in a responsible and suitable manner. Our vendor compliance manual offers suppliers strict guidelines in regard to child labor, workplace safety, working hours and compensation based on national labor laws and international best practices. Social audits were carried out to foster the majority of suppliers in achieving and maintaining these guidelines. 

We are a member of the Business Social Compliance Initiative (BSCI) established by the Foreign Trade Association (FTA). We emphasize our dedication to the BSCI principles such as compliance with human rights and minimum social standards by communicating such principles to our vendors across the world.

Responsibilities to the community

Through grants, donations in kind and volunteering activities, Esprit and its employees worldwide take pride in making contributions to the community. Employees have responded enthusiastically to a variety of relief initiatives organised by charitable organisations, such as the Hong Kong "Walks for a Million" organized by the Community Chest. Throughout FY2005/2006, Esprit supported various charity organisations across the globe by making generous donations. We donated to The Community Chest's Corporate and Employee Contribution Program to benefit the youth leadership program organised by its member agencies. We also pride ourselves on our donations to support the construction of 4 primary schools in China.

In supporting a fund raising campaign initiated by the FIFA WorldCupTM 2006 in association with SOS-Children's Village to build six new Villages for children across six countries, Charity wristbands were sold in Esprit stores and Esprit donated 1 Euro from every wristband sold to SOS-Children's Village. Esprit also supports human and social commitment projects such as Regenbogenland Children's Hospice in Germany, a place of peace and rest for seriously ill children and their families; and SOS Kinderdorfer, providing a home and education for orphan children as well as Jugendsport Rot-Weiss Essen, an institute for youth sports.

The ESPRIT project seeks to strengthen the education and research capacity and academic synergies of its African partner HEIs in the field of sustainable dryland management. This will be done by bringing together the expertise available in all five participating institutions by joint research and publications, and the development of courses through multiple South-South and South-North missions by African staff. Other joint project activities such as organising and visiting seminars and conferences will further strengthen the interlinkages between the African partner institutions. In all activities, the European partners will play a supportive, co-ordinating and monitoring role.


The ESPRIT research will focus on carefully selected study areas in the Sahelian and Niger River Basin zones in three African countries that are known for the sustainability problems described above. Master students, PhD students and staff of the African partner HEIs will work at the recognition and subsequent modelling of drivers of land use change, and at the role of biodiversity use and protection through sustainable management. Ultimately, the project aims to identify key mechanisms of current unsustainable land use practices so that sustainability recommendations to (non) governmental actors can be made. The results will be published in the form of theses and articles in peer-reviewed journals such as the African Journal of Environmental Sciences. This journal, first published in 2004, is supported by the ESPRIT project for the release of new issues.


Stakeholder meetings with local actors such as farmer organizations, village chiefs, NGOs and local and national governments at the beginning and the end of the project allow gearing the research subjects to locally felt needs and to give feedback about the project's results. In addition, there will be systematic bilateral contacts between the African partners and the stakeholder organisations. Such contacts already exist but will be intensified so as to guarantee optimum information exchange. Other specific outreach activities include, in addition to the scientific journal mentioned above, presentations at appropriate platforms and conferences and an international seminar to be organised by the University of Ouagadougou.


The ESPRIT course development activities will concentrate on the elaboration of two new Masters-level courses of 60 hours each in the field of sustainable dryland management. The contents of the new courses will be closely linked to the problems addressed and methodologies applied by the ESPRIT research component described above. Knowledge in this field is already available within the five partner institutions, but it is scattered, incomplete, and partly overlapping. Bringing together this knowledge (and partly filling in the gaps with the results of the joint research) will allow the construction of up-to-date education modules that are currently lacking within the African partner institutions. The outcome will be the teaching materials and the teaching capacities for these courses. When the project ends, the courses will be taught fully or partially in each African partner institution, embedded in the wider university curricula.


The ESPRIT project will foster the academic integration of the three African partner institutions and will increase their educational and research capacities in the field of sustainable dryland management. The incorporation of the developed courses into the existing university curricula is essential for raising awareness and supplying information to future executives and policy makers with regard to sustainable agricultural intensification and biodiversity management. In this way, the higher education system of the African partner countries will be enriched with knowledge concerning one of their most massive and pressing sustainability problems, namely the future of their millions of dryland farmers.

Task 4

Overseas marketing

International marketing involves recognising that people all over the world have different needs. Companies like Gillette, Coca-Cola, United Airlines, BIC, Cadbury-Schweppes and Nissan have brands that are recognised across the globe. While many of the products that these businesses sell are targeted at a global audience using a consistent marketing mix, it is also necessary to understand regional differences, hence the importance of international marketing. Organsations must accept that differences in values, customs, languages and currencies will mean that some products will only suit certain countries and that as well as there being global markets e.g. for BIC and Gillette razors, and for Coca-Cola drinks, there are important regional differences - for example advertising in China and India need to focus on local languages.

Just as the marketing environment has to be assessed at home, the overseas potential of markets has to be carefully scrutinised. Finding relevant information takes longer because of the unfamiliarity of some locations. The potential market size, degree and type of competition, price, promotional differences, product differences as well as barriers to trade have to be analysed alongside the cost-effectiveness of various types of transport. The organisation then has to assess the scale of the investment and consider both short- and long-term targets for an adequate return. Before becoming involved in exporting,

An organisation must find the answers to two questions:

1. Is there a market for the product?

2. How far will it need to be adapted for overseas markets?

The product must possess characteristics that make it acceptable for the market - these may be features like size, shape, design, performance and even colour. For example, red is a popular colour in Chinese-speaking areas. Organisations also have to consider different languages, customs and health and safety regulations. If a company offers a product, which is undifferentiated between any of the markets to which it is offered, then standardisation is taking place. The great benefit of standardisation is the ability to compete with low costs over a large output.

The diagram below illustrates the use of a standardised products and marketing mix: > In most markets, however, there are many barriers to standardisation. It is not difficult to think about the standard marketing mix for a product and how this might vary from one country to another. For example: *product - tastes and habits differ between markets *price -consumers have different incomes *place - systems of distribution vary widely *promotion - Consumers' media habits vary, as do language skills and levels of literacy.

With differentiated marketing, on the other hand, an organisation will, segment its overseas markets, and offer a marketing mix to meet the needs of each of its markets. The great benefit of standardisation is that costs are lowered, profitability is increased and the task of supplying different markets becomes substantially easier. The diagram illustrates the process of adapting the marketing mix to meet the needs of different geographical markets: However, it could also be argued that the success of many products in international markets has come about because marketers have successfully adapted their marketing mix to meet local needs. To a large extent the standardisation/adaptation dilemma depends upon an organisation's view of its overseas markets and the degree to which it is prepared to commit itself to meeting the needs of overseas customers.