Foreign Exchange Market Summary Finance Essay - Free Essay Example

Sample details Pages: 4 Words: 1179 Downloads: 8 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? The proceeding textual work summaries both the fundamentals and mechanisms of the gold standard, and highlights the functions of the worlds major foreign exchange markets. The foreign exchange market is a global entity. The foreign exchange market (FOREX) is dissimilar to a market like the Hong Kong Stock Exchange, the New York Stock Exchange, and the Australian Securities Exchange, where trades of stock are conducted in centralized locations. In the FOREX market major international banks that participate in currency trading for risk-seeking investors who do not mind engaging in speculation. Currency is bought, sold, and traded (swapped) through the foreign exchange market. The exchange rate is determined independently by each bank yet will essentially is determined by the driver of supply and demand. Employing two rudimentary systems to establish the exchange rate between nations, the floating exchange rate system (free-floating and managed-floating), and the fixed exchange rate system, the foreign exchange market may be described as a market where the value of one nations currency is converted to another national monetary equivalent. Under the fixed exchange rate system, the exchange rate converts one countrys currency into anothers anchored in a pre-established fixed rate established by a countrys government and cannot be altered because of change occurring in a private market or with regard to supply and demand for that currency. The floating exchange rate is the exchange rate for transferring one nations currency value into another nations currency, and governed by the supply and demand for that currency in a private market operated by international banks. Because this form of exchange is dependent upon current exchange rates (values and variables), the rate of exchange does not always prove to be a profitable move. Moreover, values may be appreciative or depreciative. For instance, the dollar appreciates with respect to the yen if the yen to dollar exchange rate rises and conversely, the dollar depreciates if the yen to dollar exchange falls. Monetary exchanges that transpire over the telephone or via other electronic util ity are termed, over-the-counter. Spot exchanges occur instantaneously. Don’t waste time! Our writers will create an original "Foreign Exchange Market Summary Finance Essay" essay for you Create order On December 22, 1717, Sir Isaac Newton, master of the English mint, established the price of gold at 3 pounds, 17 shillings, 10.5 pence per ounce. England was then on the gold standard and stood willing to convert gold to currency, or vice versa, until World War I, except during the Napoleonic Wars. During that period, London was the dominant center of international finance. It has been estimated that more than 90 percent of world trade was financed in London.(Ball, et al., p.147, 2006) Akin to Sir Isaac Newtons ideals, each country set a certain number of units of its currency per ounce of gold, and the comparison of the numbers of units per ounce from country to country was the exchange rate between any two currencies on the gold standard. The gold standard is the recognized benchmark to which currency is calculated in relation to its gold equality value and where currency is exchangeable for a specific amount of gold. Since, the gold standard was espoused by the bulk of industria lized or trading countries. Under this standard, paper or coin currency may be exchanged for its equal value in gold. Essentially, individuals were permitted to exchange cash or coins for pure gold. Due in part to this open exchange for gold, governments were to maintain gold reserves of adequate proportion to satisfy these gold exchanges. While the majority of worldly nation held dollars, pounds, or gold in their reserve, the United Kingdom and the United States held the needed gold in reserve. With regard to the gold standard, World War I and the Great Depression signaled eras of dramatic change. In 1933, when President Franklin D. Roosevelt outlawed private gold ownership (except for the purposes of personal adornment (jewelry), the gold standard effectively evaporated in the United States of America. Officially, the U.S. went off the gold standard in 1971. Until recent years, the gold standard was all but abandoned. Advocates, like Jacques Rueff, hold that the gold standard as a form of international monetary is quite practical. Why? The monetary purchasing powers of nations operate independently, free from government and political policy influence. Under this system no one country, despite size, economic status, or BOP can produce more currency than its reserve worth. In other words, under this advantageous system of control, the gold standard limits the power of governments to regulate the price of inflation by production of excessive currency; forming an effective mea ns of evading inflation and unemployment. Advocates also edify that gold is an asset that is superior to any form of world currency. Additionally, and importantly in a world of international trade, no government, be it foreign or domestic is able to produce currency that is not recognized under the statues of the gold standard. Likewise, the gold standard system prevents any nation from expanding its supply of currency in efforts to compensate for its debts. The international gold standard system is one of tender, whereas exchange rates are at fixed priced and a system in which exchange rates between countries are at the fixed level. If the rates rise or fall the gold standard rate would be fixed shifting gold from one nation to another nation. This generates certainty for international trades and affords the luxury of exchange rate patternization. Yet, the gold standard is interlaced with its share of negative characteristics. The largest negativity or downplaying attribute is the simple fact that countries without any or little gold are at a competitive economic disadvantage. Separately however, this drawback is an advantage to the United States the second largest gold mining nation in arrears of South Africa. The largest part of gold mining within the U.S. transpires on federally owned domain, and the grounds in Nevada being the principal source for domestic gold. Second, without an expanded money supply, the economy may stagnate. Obviously, if gold denominations are minted again; individuals will perpetrate acts of gold hoarding, removing gold from circulation. In sharp contrast to what proponents claim, those in opposition to a gold standard believe that nations would be incapable of protecting from a disaster occurring in another nation, exemplary in the case of a depression. Also, as is true with all commodities and most utilities like petroleum, gold market price fluctuates; and therefore does not possess a fixed rate suitable for currency exchange. Others find the observation that there is an inadequate supply of available gold to permit economic verve and continued growth. Last and most important of all for all who live here is that should the world opt to change to an international gold standard, at present rates, the U.S. does not even have an adequate amount of on-hand gold to reimburse its debt owed to foreign investors. Perhaps a desirable solution, which both the advocate and opponent would find comfort in is that an absolute and universal value be placed upon gold; paving way for a gold standard in the truest sense, standard never fluctuating. No, thats has been tried before by the Gold Pool.

Analysis Of Oliver Twist, A Christmas Carol, And A Tale Of...

Oliver’s Twisted Story In February of 1837, Charles Dickens’s first installment of Oliver Twist was published. These installments continued to be published monthly until April of 1839. London during this time period was split almost directly down the middle, the upper class and the lower class, the middle being almost nonexistent. In the nineteenth century, the English government was ran adjacent with the church, although the harsh truth of lower class cruelty corrupts this image. The country, despite its relationship with the church, did not run on the concept of Christianity but the warped perceptions of the Bible and the desire for money. Charles Dickens’s Oliver Twist unknowingly sparked the social changes in nineteenth century London by exposing the harsh conditions of the lower class through the life of an innocent child. Charles Dickens, born February 7, 1812, wrote many classic novels including Oliver Twist, A Christmas Carol, and A Tale of Two Cities. Dickens grew up in a lower class family, because of that his father, John Dickens, was arrested and put in jail for debt when Charles was twelve years old. Soon after this, Dickens had to stop school and go into work at Warren’s Blacking Factory, a shoe polish factory (Cody). By the time his father was released and Dickens was able to leave the factory, he had already suffered through many harsh conditions that affected him for the rest of his life. The feeling of abandonment and betrayal he felt from that soon becameShow MoreRelatedNarrative techniques of Charles Dickens in Oliver Twist and David Copperfield6299 Words   |  26 Pagesthesis Charles Dickens’s â€Å"Oliver Twist† and â€Å"David Copperfield†: Two novels compared (Narrative techniques) Mentor: Student: Dr. Muhamet Hamiti Arbnesha Kusari Table of Contents 1. Introduction†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦3 2. Biography of Charles Dickens†¦.†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..†¦Ã¢â‚¬ ¦....4 3. Oliver Twist†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.5Read MoreDavid Copperfield9349 Words   |  38 PagesDavid Copperfield by Charles Dickens†¦. Analysis by: Shrook Essam El-Din Table of Contents: a- Abstract . b- Charles Dickens life . c- Similarity between Charles childhood and David Copperfield . d- Autobiographical Elements of David Copperfield . e- Plot summary . f- Major themes . g- List of references . a- Abstract : David Copperfield captured the hearts and imagination of generations of readers since the day of its publication. Charles Dickens chose the mainRead MoreProject Mgmt296381 Words   |  1186 PagesLeadership Chapter 2 Organization Strategy and Project Selection 1.4 Projects and programs (.2) 1.4.1 Managing the portfolio 1.4.3 Strategy and projects 2.3 Stakeholders and review boards 12.1 RFP’s and vendor selection (.3.4.5) 11.2.2.6 SWAT analysis 6.5.2.7 Schedule compression 9.4.2.5 Leadership skills G.1 Project leadership 10.1 Stakeholder management Chapter 11 Teams Chapter 3 Organization: Structure and Culture 2.4.1 Organization cultures [G.7] 2.4.2 Organization structure

Understanding Customer Relations for Optus Pty. Ltd -myassignmenthelp

Question: Discuss about theUnderstanding Customer Relations for Optus Pty. Ltd. Answer: Introduction The kings of the market are the customers and hence developing relation with them has been considered as one of the empirical task for any of the business organization. Establishing and enhancing relations with the customers will be proven beneficial for the business entity on various grounds. In simple terms, the concept of CRM (customer relationship management) has been referred to the tools, mechanisms, practices and procedures adopted by the business enterprises for interacting and analyzing the data of the customers throughout the customer lifecycle. The prime objective of this mechanism is enhancing the services offered to the customers and thus driving desired outcomes (Fitzgerald, Kruschwitz, Bonnet and Welch, 2014). In todays era, every organisation needs a digital technology to promote its services and products and enhances the visibility of an organisation. These tools enhance customers behaviour by improving their experiences and building trust among customers. The below presented report analyses the use of digital technology, social media and websites for advancing the CRM and also the relationships with the customers of the Optus Pty. Ltd is second largest telecommunication brand name in Australia. Use digital technologies for enhancing the visibility Organisation use digital technology to enhance the visibility by using apps, websites or social media platforms. Digital technology helps an organisation to reach to wider audience and learn more about the competitors market. These technologies are also used to promote the goods by launching new programs to reach to larger customers and gain branding. Digital marketing is an easy tool or better marketing and creating awareness among the audience. It impacts the customer behaviour by boosting customer experience. It helps in building loyal customers that improves customer engagement (Sia, Soh and Weill, 2016). These tools help an organisation to design plans accordingly to the competitors. Numerous digital technologies are available but focusing on social media platforms to develop customer relationship management. Social media platform touches every door of customers. For business perception social media helps in making good profit by showcasing the products online. Social media plat forms also allow users to give feedback so that improvement can be made. Social media is a cost effective approach as marketing plans are designed according to the customers interest (Matt, Hess and Benlian, 2015). Products and services are advertised on social media platforms, as everyone is present on the social media sites so that they will become aware about the services. Optus Pty. Ltd use these digital technologies to improve its services by gaining responsible growth in the society. They promote their services for economic growth and have beaten their competitors in the market. As Optus has started developing new digital products and services by providing new ways to people for communicating the information. For example, previously things which were done are now done electronically (Barrett, Davidson, Prabhu and Vargo, 2015). Optus use various digital technologies for exploring the products digitally. They develop products and services using mobile devices by suitable applications. The digital portfolio of the company is also available that covers all the cloud based services available like online storage and backup plans. They have effective digital services available which enable them to take proper backups. They offer their services on any device may be mobile phones or computers. The business organizations have a need of to evolve for addressing the changing business trends and landscapes (Barrett, Davidson, Prabhu and Vargo, 2015). And generally, making expenses on IT has been considered as the fulfilment of one of the basic and prime requirement for any of the business corporations and same is with Optus. As Optus is a telecommunication brand the digital platform will be proven advantageous on various grounds. Digital transformation has been defined as the methodology in which the business corporations transform and develop business models, and cultures by utilizing digital technologies. The below presented are some of the advantages that will be attained by Optus in terms of enhancing customer relation by adopting digital technology: Empower employees to work better, smarter and faster One of the basic needs for any of the business organization is that the employees should work smarter, faster and better and this is to be done for attaining the expected goals. And this is made possible by providing them with innovative solutions for interacting collaborating and exchanging data without any restrictions (Fitzgerald, Kruschwitz, Bonnet and Welch, 2014). Being innovative worker will be leading the employees towards advancements in their performance and productivity and delivery of services. Better performance and delivery of services within Optus will tend to bring an enhancement in the services offered and establishment of strong bonds will also be made possible. The below presented are some of the methodologies through which the digital technology will be advancing the customer relations within Optus: The objective of Optus in terms of customers relations management is creating steadfastness. There's no preferable method to do that over to offer quality items and benefits and to be receptive to the clients. Be that as it may, as new innovations have come to market to make it less demanding for organizations to give client benefit, they may likewise be expanding the quantity of channels through which the workers cooperate with clients and the multifaceted nature of those connections (Valentine and Stewart, 2015). Accenture, the innovation counselling firm, recommends that organizations that need to utilize innovation to raise the nature of their client benefit centre around the accompanying: Data administration and examination: Utilizing information gathered from client to break down their inclinations. Insight-driven advertising: Picking up bits of knowledge into your business from client information so you would more be able to successfully target showcasing. Marketing computerization. Streamlining and robotizing business procedures to enhance proficiency and minimize expenses (Straker, Wrigley and Rosemann, 2015). Self-benefit advancement: Discovering routes for clients to associate with your business when they need. Workforce viability: Urging your staff to grasp new ways enhancing client treatment by giving apparatuses and preparing to convey better administration. Optus maintains the customer relationship management by serving the products that meet the expectations of customers by delivering the services in a way that long term trust is built. As for Optus customers satisfaction is the major concern (Rodriguez, Peterson and Ajjan, 2015). They maintain the relation by keeping them in touch and introducing new ideas to beat the challengers serving the same products. Moreover, there are some prime areas in which the digital technology will be providing advantages to the business corporations in engendering customer loyalty by advancing the customer services: Websites: Optus Pty. Ltd should provide feedbacks and also allowing ground and space to the customer where they are able to revert and give their opinions freely and seek answers from others will be proven a significant step in developing relations with the customers (Jaber and Simkin, 2017). Emails: Making use of emails for regular interactions with the customers, replying on their queries and acknowledging their feedbacks will be proven an advantageous step for Optus in terms of developing and advancing relations with the customers. Communications: Amalgamating communications will be proven beneficial for the entity as in case if the customers have sent a voice note with the email few days ago. Use of social media for advancing customer value and experience, building customer loyalty Considering social media platforms like Facebook and twitter, they are used for promoting services delivered by Optus as these sites are easy to use and have engaged audience of every kind. Facebook can be considered as the most active social media platform because majority of population is active on Facebook all day long (Palacios, Pealvo, Stantchev and Misra, 2017). Other than that twitter is also useful as it engages customers by simply posting services and gaining interest from audience. These channels are beneficial for Optus to gain more customers. Digital marketing can be treated as a best marketing channel for engaging new customer or keeping the old customers stable. Social media marketing helps in expanding the business by providing various facilities through promotion. Optus being a telecommunication company helps in nurturing the customer relationship by promoting the services and offers in the section where wider audience are present. The business organization focuses on keeping the customers stable and for a longer run this is attained by posting the offers on regular basis (Mozaheb, Alamolhodaei and Ardakani, 2015). This helps in pitching the customers by actually providing what they want. Moreover, social media plays a significant role in increasing and driving the value and experience of the customers (Kaur, 2016). Driven by innovation, the client journey has been considered not any more consecutive. It's hard to achieve clients given the quantity of channels accessible to them on the web. The sheer volume of messages went for leaders makes it trying to emerge among contenders and a since quite a while ago, divided purchasing venture makes it hard to remain best of brain. Basically, the purchaser is presently in full control (Kumar, 2015). Social media will offer Optus the capacity to affect a client's choices and conduct at each phase of the purchasing venture, so it's nothing unexpected that social is turning into a favoured channel for organizations around the globe. As per Hootsuite and We Are Social's recent Digital in 2018 report, worldwide online networking use has expanded by 13% over the most recent a year, achieving 3.2 billion clients (Maven 2018). This implies 80% of the world's web clients are likewise dynamic online networking clients. This dynamic has perpetually adjusted the client travel as customers and B2B experts progressively lead explore, settle on purchasing choices, look for help, and suggest marks on social. One of the biggest and empirical organizational goal of any of the business firm is not only creating customer satisfaction but also developing and generating customer value. There are some factors or elements that can be provided by Optus for offering and increasing customer value: Quality products and services Value pricing Unique and differential services and products Offering a feeling of belongingness and togetherness by making them feel that they are part of the firm or are a part of the group (Nair, Khasgiwala, Mishra and Student, 2016). Social media has been considered as a supporting marketing strategy that can be adopted by the business corporation for increasing the customer value. Social media can be an integral element a supportive marketing strategy and communication channel for spreading information about the features and characteristics of the products and services (Josiassen, Assaf and Cvelbar, 2014). It has been observed that the customer largely trusts and depends on the opinions posted on the social networks and platforms as compared to the commercial messages. This as a whole will also lead the customer to show their repeat intention and will result in an increase in the customer loyalty. Implications of digital technology tools for systems and processes and strategic customer management Digital technology has been proven as a revolutionary concept and has provided the business environment with varied range of advantages. One of the prime benefits of the making adoption of this mechanism is proper management and advancement of the customer relationship (Dar and Ahmad, 2015). Optus one of the leading brand names in the sector of telecommunication and for attaining high peaks of success and growth implementation of digital technology will be proven an effective step towards advancing the relations with customers. Moreover, making use of other mechanisms and tools of digital technology such as e-mails, social media will also aid the entity in enhancing the relations with the customers all over the globe. Conclusion In the limelight of the above executed analysis it has been inferred that making use of digital technology for enhancing the customer relations and increasing their value and experience will be proven an advantageous step. Optus a telecommunication brand in Australia needs to make adoption of digital technological tools for developing CRM. Bibliography Barrett, M., Davidson, E., Prabhu, J. and Vargo, S.L. (2015) Service innovation in the digital age: key contributions and future directions. MIS quarterly, 39(1), pp.135-154. Colomo-Palacios, R., Garca-Pealvo, F.J., Stantchev, V. and Misra, S. (2017) Towards a social and context-aware mobile recommendation system for tourism. Pervasive and Mobile Computing, 38, pp.505-515. Dar, W.M. and Ahmad, M. (2015) Impact of Customer Relationship Management Capabilities on Organizational Performance with CRM Technology as Mediator. Arabian Journal of Business and Management Review (Oman Chapter), 4(10), p.30. Josiassen, A., Assaf, A.G. and Cvelbar, L.K. (2014) CRM and the bottom line: Do all CRM dimensions affect firm performance?. International Journal of Hospitality Management, 36, pp.130-136. Fitzgerald, M., Kruschwitz, N., Bonnet, D. and Welch, M. (2014) Embracing digital technology: A new strategic imperative. MIT sloan management review, 55(2), p.1. Jaber, F. and Simkin, L. (2017) Unpicking antecedents of CRM adoption: a two-stage model. Journal of Strategic Marketing, 25(5-6), pp.475-494. Kaur, S. (2016) Importance of Customer Relationship Management (CRM) in the Indian banking Sector. Imperial Journal of Interdisciplinary Research, 2(12). Kumar, V. (2015) Customer relationship management (CRM) in services companies. International Research journal of Management Sociology Humanities, 6, pp.521-525. Matt, C., Hess, T. and Benlian, A. (2015) Digital transformation strategies. Business Information Systems Engineering, 57(5), pp.339-343. Maven, M. (2018) Marketings role in driving customer value through social media [Online]. Available from: https://www.martechadvisor.com/articles/social-media-marketing-2/marketings-role-in-driving-customer-value-through-social-media-2/ [Accessed on 12th April 2018]. Mozaheb, A., Alamolhodaei, S.M.A. and Ardakani, M.F. (2015) Effect of customer relationship management (CRM) on performance of small-medium sized enterprises (SMEs) using structural equations model (SEM). International Journal of Academic Research in Accounting, Finance and Management Sciences, 5(2), pp.42-52. Nair, A., Khasgiwala, R., Mishra, S. and Student, S.S. (2016) Improving Customer Relationship Management Using Data Mining. International Journal of Scientific Engineering Research, 7(2). Rodriguez, M., Peterson, R.M. and Ajjan, H. (2015) CRM/social media technology: impact on customer orientation process and organizational sales performance. In Ideas in Marketing: Finding the New and Polishing the Old (pp. 636-638). Germany: Springer, Cham. Sia, S.K., Soh, C. and Weill, P. (2016) How DBS Bank Pursued a Digital Business Strategy. MIS Quarterly Executive, 15(2). Straker, K., Wrigley, C. and Rosemann, M. (2015) The role of design in the future of digital channels: Conceptual insights and future research directions. Journal of Retailing and Consumer Services, 26, pp.133-140. Valentine, E. and Stewart, G. (2015) January. Enterprise Business Technology Governance: Three competencies to build board digital leadership capability. In System Sciences (HICSS), 2015 48th Hawaii International Conference on (pp. 4513-4522). IEEE.

Evaluating The New Line of Production

Question: Describe about the Evaluating of The New Line of Production. Answer: 1. Analyzing these two I would say it would be wise to venture into the new line of production of organic cosmetics. Norton points the fact that they are supposed to work on moving into organic cosmetics quickly as she sees that they could become the leader of the universe in a short while (Berle, 1993). She backs this up by the fact that the company has a good reputation and an excellent brand recognition Norton believes that the continued trajectory in the market and the launch of the new cosmetic line could increase Seasides revenues by 75% by the coming year. She estimates that if the company would raise prices on seasides skincare line of production by 10% and lower line by 5% then the company would be at an absolute position to fund the development of the proposal suggested by Suriala. She supports this after doing some rudimentary business plan provided they maintain their yearly growth rate (Houben, Lenie and Vanhoof, 1999). Mackintosh weighing the options of launching the new proposed line of production could prove disastrous. She believes that the current market for organic personal care is fragmented as shown by the research they did last January (Robinson, 2006). However she forgets that the market for organic foods in the 1990s wasnt so much appreciated by the consumers but as the years went by as the consumers realized the dangers associated with continuous exposure to chemicals in the non-organic products they started shifting their preference to the organic ones and there has been a continuous growth of roughly 10% on the organic product market since then (Berle, 1993). The same can happen people will start realizing the dangers of inorganic cosmetics and shift their interest to the organic ones and if the company will have engaged in its production then there will be a tremendous growth in revenue and Nortons 75% target of revenue could be realized rate (Houben, Lenie and Vanhoof, 1999). The res earch also revealed that the slightest price increase would make the company lose their existing customers and they really can't afford that. Mackintosh supports her opinion by saying that raising the prices of their current product could be dangerous especially now that they have to catch up to the growth of the last couple of years and do some planning (Hargroves and Smith, 2013).However, Mackintosh provides a better plan that if they could increase the coming years revenue by 25% by channeling their focus on increasing their retail distribution of the current products. He claims that by increasing their retail distribution they have a better chance of expanding internationally unlike starting a cosmetic line of production which could drain their resources and even affect the existing brand (Hargroves and Smith, 2013). This fact provides a clear proof that Norton is an entrepreneur and sees an opportunity, a potential market gap and wants to use the resources of her company to fill the gap. Mackintosh, however, provides an opposition, she clearly is not ready to take a risk ( Mircea, Ghilic-Micu and Stoica, 2011). She bases her claims on how currently the companys financial situation is. She goes ahead to support her arguments with a research done to determine the consumers take on the proposed line of production that Norton wants to venture in saying it proves very risky (Bloisi and Hunsaker, 2007). However, Norton already did analysis on how the business is going to come up with the capital to finance the new line of production. She sets hers focus on the reward of a 75% increase in revenue. The company is definitely poised for future success. If they are to conduct several market research then they would have a better and clear vision of the consumers wants. Given the recent trend of a shift of preference from inorganic to organic products and the statics giving the facts that although the organic skin care growth is much higher than that of organic cosmetics but their growth forecast as per the year 2020 are similar ( Mircea, Ghilic-Micu and Stoica, 2011). Although the market research also revealed that that the slightest price increase would make the company lose their existing customers but if the two are to settle on a middle ground and Norton accepts Mackintoshs suggest that they increase the coming years revenue by 25% by focusing on increasing their retail distribution of the current products then they could have enough capital to start the new line of production that Norton proposes. By increasing their retail distribution they have a better chance of expanding internationally and this will give the absolute financial basis in which they can start and run the new line of production (Bloisi and Hunsaker, 2007). 2. Sarah Norton should deal with her difference with Mackintosh by accepting to expand the line of production and establish new distribution links into new areas (Baron, 2006). By so doing they would increase the income revenue by 25% as Mackintosh suggested then at the very time convince Mackintosh into venturing into the new line of production and because they now have the capital they will be no need of trying to maintain their yearly growth rate and raise prices on seasides skincare line of production by 10% and lower line by 5% since they will have the capital with them. Just like in the years before 2010 Norton had a vision of expanding Seashore into a new customer segment and still Mackintosh was in contrast. Although the company did undergo some challenges and decided to give off the project to Roland they finally emerged very successful as the risk was taken and the rewards were realized (Drummond, 2009). 3. If Sarah Norton isnt able to persuade Mackintosh of her business opportunity. Then she will have an option of using her personal saving and venture into the business (Drummond, 2009). She can also team up with people like Roland who founded a manufacturing of organic personal care commodities and also who happens to be so good in the entrepreneurial drive in resolving manufacturing challenges and together they can start the production of organic cosmetics. Another option since Norton is the majority shareholder she can just endorse her plan and put everything in action by trying to maintain their yearly growth rate and raise prices on Seasides skincare line of production by 10% and lower line by 5% and get enough capital and start the production of organic cosmetics as she desires then drive the company towards her 75% revenue increase goal (Baron, 2006). References Baron, R.A., 2006. Opportunity recognition as pattern recognition: How entrepreneurs connect the dots to identify new business opportunities. The Academy of Management Perspectives, 20(1), pp.104-119. Berle, G., 1993. The green entrepreneur: Business opportunities that can save the Earth make you money. Bloisi, W., Cook, C.W. and Hunsaker, P.L., 2007. Management organisational behaviour (2nd European edition). Berkshire: McGraw-Hill Education. Crilly, D. (2012). STAKEHOLDERS: THREAT OR OPPORTUNITY. Business Strategy Review, 23(4), pp.59-61. Drummond, H. (2009). How to be a successful entrepreneur. London: Kogan Page. Hargroves, K. and Smith, M.H., 2013. The natural advantage of nations: business opportunities, innovation and governance in the 21st century. Earthscan. Houben, G., Lenie, K. and Vanhoof, K., 1999. A knowledge-based SWOT-analysis system as an instrument for strategic planning in small and medium sized enterprises. Decision support systems, 26(2), pp.125-135. Mircea, M., Ghilic-Micu, B. and Stoica, M., 2011. Combining business intelligence with cloud computing to delivery agility in actual economy. Journal of Economic Computation and Economic Cybernetics Studies, 45(1), pp.39-54. Robinson, J., 2006. Navigating social and institutional barriers to markets: How social entrepreneurs identify and evaluate opportunities. In Social entrepreneurship (pp. 95-120). Palgrave Macmillan UK.

Marlboro Cigarette company case Study

Executive Summary The effects of tobacco use on human health have triggered a number of anti-tobacco campaigners; the campaigns are targeting casual/addicted users, social tobacco user and those people who have not started the habit. The anti-tobacco campaigners use both public education and legal legislations approach to control the use and sale of tobacco products.Advertising We will write a custom research paper sample on Marlboro Cigarette company case Study specifically for you for only $16.05 $11/page Learn More Marlboro is an international cigarette manufacturer and distributer, in 2010, the company’s products were the most used in Saudi Arabia; Saudi Arabia is among the few countries that have recorded an increase in tobacco use in the recent past. The increase in tobacco use in Saudi Arabia is evident despite governments’ and non-governmental movement’s campaigns to change peoples behavior. Anti-tobacco campaigns have been s uccessful in enacting policies that control marketing approach of tobacco products. This paper analysis the tobacco industry in Saudi Arabia; it will evaluate the effects of tobacco marketing control legislation on Marlboro Cigarettes Company as well as how the company has responded to the controls. Towards the end, the report will offer marketing recommendations that the company can enact to remain competitive in the fast growing Saudi Arabian market. Introduction The world tobacco industry has been facing challenges from strong advocacy against tobacco use by national, international, and non-governmental agencies; dispute the challenges, the companies in the industry has to sell their products. However, according to Euro-monitor report on tobacco use in Saudi Arabia, the country experienced an increase in volume and value terms of tobacco use, the country is having an increasing tobacco users. The above report was different from what was recorded in European and American Markets w ere tobacco consumption has drastically reduced (Euromonitor). Marlboro, is an international cigarette manufacture and distributor with its main operating base at Philip Morris USA (the Brach concentrates on the United States market) and Philip Morris International that concentrates on the company sale abroad; currently, Marlboro is the world largest cigarette company in the world and has its head quarters at Richmond, Virginia. Marlboro Company names its brands Marlboro that was a name borrowed from its initial location in the United Kingdom at Great Marlborough-Street. In Saudi Arabia, Marlboro products are imported into the country by corporate and individual importers; the brand is more considered and regarded for the well to do in the community. The tobacco industry has been facing numerous challenges, especially when it comes to marketing and advertising for the products.Advertising Looking for research paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Diseases caused by tobacco use have claimed a number of lives in the world and remain to be the world’s largest killer; these statistics has been the strongest point of anti-tobacco campaigners. International Agency for Research on Cancer (IARC) has massive campaigns that advocate that there are no safe cigarettes; players in the industry are only left with the task of counter attacking these campaigns. The effects that the industry has had on human health has made the industry a monolith in terms of scope and coverage when relating to consumers; the marketing approach adopted by Marlboro minds consumers welfare at the same time selling its products; a conflict of interest (Engstrom 1-75). Since the 1998 Tobacco Settlement Agreements marketing has become a challenge to Marlboro, this paper diagnoses the marketing problems faced by Marlboro as it markets its in domestic and international markets; the paper will focus on Saudi Arabia . As European countries embark on campaigns that hinder the sale of tobacco and its products, Saudi Arabia is showing a reduced strength in its campaigns against the use of the products, the industry is growing and likely to grow further (Euromonitor). Company Background: Overview Marlboro first branch was established at Great Marlborough, London, it is from the name of it first location that the company derived its brand and factory name. in the company targets the United states in t1902, however the strength of the company was seen in 1924 when it when Altria Group Philip Morris International, the company’s founder, developed an advertising campaign selling filter-less cigarettes to women under an advertising campaigns named â€Å"Mild as May†. By then smoking was considered a social and acceptable until the late 1940’s when medical practitioners started to research on possible effects that smoking had on human health; with the wave to no smoking, the company established a niche market that previous campaigns did not meet, men. It then diversified its focus and campaigns to men segment of the market. The wave of the anti-campaigns and warning from health was a big blow to the industry coupled with the Second World War; the company was pulled out of the market only to return with filtered cigarette in 1955. The company’s management team is lead by Michael Szymanczyk, the company’s chairman; the chief executive officer is William F. Gifford. The leadership mission as advocated for by the chairman is, â€Å"My vision is that leadership becomes a defining factor that sets us apart from other organizations.† The company’s mission and vision are contained in four operating paradigms as adopted by the company, they are:Advertising We will write a custom research paper sample on Marlboro Cigarette company case Study specifically for you for only $16.05 $11/page Learn More Invest in Lead ership: the company aims at offering appropriate leadership that can assist the company add value to its stake holders align with Society:  the company aims to add value to societies that its operates Satisfy Adult Consumers:  the company has a target to produce satisfying brands to its customers as it tries to win others Create Substantial Value for Shareholders: the company has high value for its shareholders and aims at adding value to them To fulfill the above elements of vision and mission, the company operates under the frameworks of five values they are: Integrity, trust and respect. Passion to succeed. Executing with quality. Driving creativity into everything, we do. Sharing with others. The effect of tobacco industry products span further than the consumer of the product to have an effect on both consumer and those people around smokers, the major health complications brought about by the consumption of tobacco are pulmonary illnesses and other conditions that could be described as cancerous in nature like bronchitis, emphysema, and lung cancer. Despite the health dangers that the industry products on the health of human beings, the use of the products still is on the increase; Marlboro Company realized the life threatening danger that its products have , however there is insatiable market that it has to supply for (RE 996-1003). The tobacco industry in Saudi Arabia Saudi Arabia is the world largest Muslim country, however, there are rises in tobacco use among the population despite shisha culture and efforts made by the government and international bodies to curb the use of the products. Pipe tobacco remains as the most proffered method of taking tobacco, its products in the country, in 2009, the country recorded the highest sales in cigars, and the growth of smokers is evident in the count. According to the countries industrial analysis in 2010,   Philip Morris International Inc   (Malboro) had the highest share of the market in volume a nd sales. The report by Euro-monitor suggested that the major likelihood of the increase in tobacco use in the country can be contributed to the economic well being of the country that enable the population afford luxury commodities more easily (Ministry of Health in Saudi Arabia). In the country, the control of purchase of the commodity has been limited, in 2009, almost in all supermarkets had a cigarette vending machine that was efficient and offered buyers good chances of buying the commodity. other than the vending booths, the country is having increasing specialized suppliers of tobacco leading to an increased accessibility of the products in the country; the products are also sold in independent small grocers and hotels/bars/restaurants, convenience stores, and forecourt retailers. The future of the industry in Saudi Arabia is expected to be on the rise especially with the improved access of the products in among the youth.Advertising Looking for research paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The effects that tobacco use has had on Saudi Arabia is evident, in 2006, the government threatened to sue the national and international cigarette companies to cater for the cost of curing those people affected by use of tobacco. In 2006, the country is estimated to have been using 5bn riyals ( £683m; $1.3bn) a year. According to world health organization reports of 2006, 10% of Saudi Arabians are smokers, the figure has also been challenged for having underestimated the case with some analysts being of the view that the rate may be as higher as 30% (Euromonitor). Problem Statement The main problem facing the company is how to market its products amidst aggressive campaigns against consumption of tobacco supported by legislations against the products consumption. The  World Health Organization  (WHO) and U.S. Centers for Disease Control and Prevention  (CDC) are among the leaders in the campaign against tobacco consumption; they have enacted restrictions to hinder and contr ol marketing and advertising tobacco. In Saudi Arabia, the ministry of health during Ramadan of 2009, launched an anti-tobacco campaign and legislation; the program was launched to enforce the countries Tobacco Control Program, it aimed at setting the platforms of selling tobacco in the country, it controlled the use of the product in public places and advertising. Advertisement is means to reach a certain target market with certain information that a company intends to pass, when the information gets to the customer, then he can be persuaded to use the advertising company’s products. In the case of Marlboro, the marketing team has the role of ensuring that cigarette brand from the company are getting to the market segment they were meant to reach as well as increase the market base. However, the efforts are controlled and limited by legislations controlling the industry; other than coming up with marketing strategy, the company has to ensure the strategies do not contravene legislations regulating the industry. Coming to think about it, who are new entrants that the company are trying to get to the net of using the products, are they are the innocent youth and non-smokers in a community? According to the company’s website, it does not aim at increasing smoking rates in a country but it competes for available adult smokers, the market becomes further competitive from other companies, and the fast dying (from tobacco related diseases) and quitting (after being convinced of the dangers of smoking) population. The controversy comes between the company’s core objective of increasing business through offering satisfying products and services to its customers. The following are the specific problems that the company is facing: How can the company advertise and sell its products without negative effects of anti-tobacco campaigns How can the company sell and market its products to people of majority age without influencing the desire of taking to bacco on people of the age of minority Which tools can the company use to give back to the community after â€Å"killing† its people What is the best way to enlarge their market and remain an accepted company in the community Marlboro marketing team is actively involved in getting answers to the above burning questions; it want to be a country with high reputation and one that adds value to community and people around, however in the industry has been blamed for causing harm to the communities. To market and remain a respected company among community that company has to build a name despite the already existing negative perception and it need to build its own platform. Specifically, the study will focus on how the company can convince existing adult smokers to use its products; this will call for persuading consumers from other companies to use Marlboro products in the growing market of Saudi Arabia. To give an elaborate analysis, the paper will be divided in different parts each having certain issue, it aims at tackling; all the issues will be tied to the company’s strategies (Dewhirst and Brad 81-92). Historical background of the problem or contributing factors The cigarette market segment has been skewed to a minimal number, the population that the major players are expected to target is adult smokers, and the players in the industry should not try to increase the number of smokers. however, it should only be interested with the existing groups in the community who are smokers and of the age of 21 and above. The  American Cancer Society International Agency for Research on Cancer (IARC), Tobacco Control Program in Saudi Arabia, Saudi Arabian anti tobacco policy, Tobacco Settlement Agreements and the  U.S. Surgeon General, prohibits promotion of tobacco products to non-users and the youth, the agencies also regulate the marketing approaches that companies in the industry should use. Other than the skewed market, the market is suffering fro m high death rates fro use of tobacco products and quitters from smoking after an effective â€Å"stop-smoking-campaign†, this has made the market smaller and more competitive (Tobacco Industry Profile: United States 1). Literature review According to Reuters Anti-Smoking Society, every year, 22000 people in the Saudi Arabia die out of tobacco products use; report by Ministry of Health  in  Saudi Arabia in 2009 said that the world had lost 29 million people of tobacco use; this alarming statistics has yielded less to the behavior change in Saudi Arabia. Adverting is a crucial part in selling of a company’s products; it creates awareness and used as a tool to enlarge a company’s market base. In the tobacco sector, different people have their own tastes that they seem to be loyal and persuading a customer to shift to ones products needs a lot of energy and use of resources. On the other hand, it is more ethical to persuade customers leave their smoking behavio r instead of persuading them to change brands. Marlboro as well as other companies in the industry opts to concentrate on getting convince the existing ones to shift to its products than new smokers on board than tying. The main form of advertising and outdoor customer reaching method that Marlboro has been using (before the ban on public advertisement in Saudi Arabia) is the use of billboards and sports, the sport that the company is known to support is rallying. the young and the old are the target of the advertisement campaigns however the campaigns have influence minors to take the products, which is against the requirements of World health Organization as well as the company’s intentions/motives. Ministry of Health  in  Saudi Arabia, anti-tobacco legislations are hindering the company’s traditional marketing approach has been challenged by legislations controlling the industry (Ministry of Health in Saudi Arabia). Other than the difficulty that the company fac es from convincing existing smokers to shift to the company’s products, the rate of death from tobacco related products is on the increase, the death is in among the old smokers, thus the company has minimal option other than target the young population. According to statistics, user of tobacco products are more likely to start taking the products before they are of the age of majority, if the company has to campaign aiming at getting the non smokers, then the adverts must be seen to be inclined towards the age of majority, this is unethical and unaccepted. the company is left at deadlock of the way forward since the most probable way that it can earn customers is against the societal expectations and needs. Tobacco is addictive thus, when a company is able to win a customers, it is on the higher side to have earned a lifetime customer, this is reinforced by the loyalty that smokers have for their brand. The notion and the behavior of consumers make marketing cigarettes chall enging especially if the focus is to win existing adult smokers. When using direct means of marketing like advertising, health advocators are of the opinion that continues advertisement of the companies’ products is likely to result to an increase use of the products among the youth and children. they have thus pushed for enactment of policies that limit direct advertising of cigarettes, the move is seen as one aimed at controlling the growth of the number of smokers in the community (Mejia and PM 78-87). The nature of Saudi Arabian tobacco industry market-situation is that that can be classified as a sticky market where players earn customers for â€Å"lifetime†. this sticky character means that the growth of the industry can only be attained if the new entrants exceed the total of those dying because of smoking and those quitting smoking; it is a give take industry. The very nature then determines the approach that a company in the industry is going to use; it is the approach to attract more smokers as the old ones are retained. With the trend and approach as used by tobacco industry, Saudi Arabian anti-tobacco campaigners are using the same approach but in a different angle. Anti-tobacco campaigners target the young population in the community to warn them on the dangers that smoking tobacco is likely to have on their health, they directly ask the young to keep off the smoking behavior/menace. To do this the campaigners give statistical data on the effect that tobacco has done in the world and suggest the best most method to keep off the problem is through complete abstinence the product, they also target those people taking the products with a message of hope and the will to rehabilitate and help them change the behavior. Their approach is more direct and seen as more ethical than the approach adopted by Marlboro and other companies in the tobacco industry. For example it is more welcoming for anti-tobacco campaigners to go to high schools se lling their products but its is never welcoming to have cigarette manufacturing companies advertising in high schools, which can be seen as unethical and as a promotion o deviant behavior among community. The ethical approach of the market and anti-campaigners leave the company at cross road on the right approach it can get an increased business. Anti-tobacco campaigners suggest that cigarette-manufacturing companies should switch their campaigns to prevention of the use of the products since it leads to more damage among communities than the goods it brings. The benefit that comes from the companies in the form of taxes, employment and agriculture promotion is highly lower than the health implications that the uses of the products have. The Ministry of health in Saudi Arabia is on the forefront enacting campaigns that target at reducing the rate of consumption of tobacco in the country; for example, it is illegal for the use of the products in public offices and buildings (Ministry of Health in Saudi Arabia). The sale and marketing department at Marlboro has to come-up with an approach that erode and deletes the negative perception created by anti-campaigners and enforce the habit of smoking among the youth. This is a double sword that the company needs to employ; the approach to advertising is seen as a marketing from a negative market persuasion and going to the building to a positive market (CL 283-294). In Saudi Arabia, over 20% of those people who are suffering from lung cancer and other complications from the use of tobacco continue to use the products despite their health and medical advice. Cigarette smoking yield some poisonous gasses and thousands of chemicals that find their way to human system, the chemicals are harmful and affects the health and physical appearance of the smoker and those people around him/her as smoking takes place. The ingredients found in cigarettes are toxic and addictive; thus when someone starts the behavior he is more unli kely to leave; campaigners against smoking used the weapon of the deadly diseases that can be gotten with the use of the drug to warn people against the products. Marlboro has been targeting the existing users of its products with the aim of maintaining and winning their loyalty; to do this the company tries to put a face that discourages the behavior however, it ensures that it sells its products effectively. In recognition of the danger and according to the law, the company has to give a warning on its products that smoking is dangerous for one’s health. Individuals suffer from tobacco related ailments like heart failures and emphysema, which is a fatal illness that affects lungs and entire respiratory system; however, users of tobacco products continue to use them despite the dangers; one strong point of the industry that maintaining the existing customers is not a challenge. Numerous marketing and advertising controls that have been made by the company, they include not a dvertising for the youth and not using television and radios to advertise the products, on the other hand, advertising of tobacco has been controlled by national and international legislation promoting health (Chee-Ruey 795-804). The main players or actors who contributed to this problem Marlboro is facing challenges from different corners; they are from people who are advocating for anti-tobacco players at national and international players they include: Anti-tobacco players and ministry of health They are groups sponsored by governments and other financing channels with the aim of information the youth about the dangers they are exposing themselves to when they are taking tobacco products. In Saudi Arabia, the ministry of health has a Tobacco Control Program at the ministry; the main aim of the program is to ensure that the population stops tobacco use. These groups target the youth who have nit started the behavior as well as those people who are using the products. When these gr oups conduct their sensitization, which they do with verifiable facts on how tobacco products have affected people, then the population that is likely to form customer base for the likes of Marlboro is limited. The approach of these organizations has stepped a notch higher when they have included the parents and advised them on how to smoke away from their children, and not to send their children cigars and cigarettes, these groups are determined to hamper campaigns that lead to the use of cigar and their products. The Saudi Arabian government and ministries of health are other players who have anti-tobacco campaigns, they feel the behaviors has resulted to an increased budget in the economy; they feel the economy can be relieved this duty. One of the main roles that a government aims at is to improve the welfare and health of its population, when the government is doing this task; they discourage people from taking tobacco products. In different countries, governments have enacted rules that hinder the use and advertising of the products, for example in Kenya, an African country, cigarettes are not supposed to be advertised through the national media, companies in the industry has to look for other measures advertise their products; this has limited the use of the products. In the United States, there is a legislation that defines the where people should be taking the products; local councils have the responsibility of maintaining smoking zones and ensuring that everybody smoking is in the zones. As much as this is seen as a good policy to prevent the effect of the products, it has influenced negatively to the companies in the industry. The Saudi Arabian health policy has a number of legislations aimed at protecting the health of the people; they include Anti-tobacco rules and Tobacco Control Program at the ministry. The legislations were aimed at prohibiting the use and sale of tobacco to underage people; the following are some of the specifications of the l egislations: Prohibit the sale of tobacco using â€Å"self service† Establish the minimal age of selling cigarette (the age was set at 18 years) Required that all consumers should get identification document to people expected t be of less than 27 years In 2009 alone, there was none underage legislations that were made to prohibit the sale of tobacco products to underage and prohibit the use of tobacco in public places. In the United Kingdom, advertisement of tobacco and their products has been limited, the legislators in the country are of the opinion that advertising the products have a close link between their uses among the youth so they have controlled the marketing approaches used. One such approach that seems to have been accepted internationally is the use of a warning message with every advert and on the packets with the message that smoking of tobacco is harmful to one’s health. For example, The United States of America Food Drug Administration (FDA  orà ‚  USFDA), is mandated with the role of protecting and promoting  public health. It fulfills its task through delegated powers from United States Department of Health and Human Services to regulate and supervise the provision of food and medical service/product. One of the areas that the body looks into is the tobacco consumption and the use of tobacco products. The authority was mandated with the rule of regulating tobacco on June 22, 2009, when President Obama signed a clause that allowed the authority to regulate tobacco industry. It has set high standards of tobacco use and discouraged the use of the commodity in human arenas and prevents any move that could give the impression that smoking is less risky or contains low nicotine, it prohibits the use of the words like â€Å"light,† â€Å"mild,† or â€Å"low†, they were thought to create a perception that smoking. Such corporations are also placing blame on tobacco manufacturing companies that they are resp onsible of the current tobacco consumption trend in the world. The power that such organizations are getting from the acts of parliaments that have enacted them is making them able to use direct attacks method to campaign against the use of tobacco products (Any tobacco use in 13 States — behavioral risk factor surveillance system 946-950). In Australia, the use of mass marketing for campaigning against the use of tobacco was started when there was Sponge advertisement in the original ‘Quit. For life’, this was in 1970’s. National Tobacco Strategy 2004–2009, has the mandate to ensure has the mandate to ensure that there are campaigns that are aimed at reducing the consumption of tobacco in the society. It aims to attain this strategy by alighting users on the dangers that they are posing to their bodies when they use tobacco, the country aims at informing its citizens on the danger that can be suffer from when they take tobacco products Encourage u sers to quit using these products, the country has developed some coaching, counseling and rehabilitation centers that aim at assisting people already addicted by tobacco use to change their addiction behavior developed a quitting process and increase understanding of the quitting process, and Enhance treatments and services to those who are already using the products; the heath care sector has been enhanced with modern equipments to cure those people suffering from tobacco related complications. When such government and ministry policies have been set in places, then marketing and advertising of tobacco products have been hampered. It acts like a pull push game where the powerful side wins the battle. China has the world largest market for tobacco products followed by Brazil, the United States fall in third in production and use, while Saudi Arabia is the second largest growing user of tobacco products, the sale of the product and importation has been restricted in many countries with tariff and not tariff approaches. For example in the 1985, the United states was challenged for bleached agreements made under General Agreement on Tariffs and Trade (GATT), when it refused the importation of tobacco products from China, although the move was condemned the country under USTR was able to convinces the world the need to contain the use of tobacco in the country. This made tobacco an exemption from some international trade laws. Heath personnel’s and practitioners Saudi Arabian government and private good health campaigners and the growth of health industry and ease of passing information among people is contributing negatively to the industry, health workers are having programs to train people on how they should be save from diseases especially life threatening diseases, tobacco is a culprit in life threatening diseases. When the practitioners are aiming at improving the welfare of the people, they are injuring the company on the other side. One special an d positive attribute that tobacco companies benefit from is the fact that the products are addictive, medical experts who have come up with tools that can cure any addition have hindered the move. The international community Internationally, some programs that target tobacco and its use directly, they include world cancer day that creates awareness on the dangers that can be gotten when someone is taking tobacco products. Tobacco control movement is an international body that aims at creating more awareness on the danger of tobacco use, the programs has the main role of educating the young people on the advantages of not engaging into smoking at the same time offering hope to the addicted people. Some rehabilitation centers have been established with the aim of changing the addition behavior. For a number of years World Health Organization and the International Union Against Cancer (UICC) has been concerned on the use of Tobacco among the people, it pointed out the dangers that cons umption of the same have on the users and on partial smokers. The two international organizations are of the opinion that if appropriate measures are put in place, then tobacco consumption can be reduced. In periodical health results and analysis, WHO has been condemning the use of tobacco; in some countries that rely heavily on the production of tobacco, the organization has sponsored farmers to plant other plants that they advise are more economical than tobacco but the main aim is to fight the tobacco tread. Indirect players The danger of tobacco has become real in some people and is using every opportunity to discourage its use, for instance parents might have suffered from their tobacco use habits and children learn from them. Environments conservatisms have also a role to play, they are discouraging the use of tobacco products as they damage the environment. There have been concerns that the growth of tobacco has negative effect on soils that they are grown. Taxation in the in dustry is another move that different government have used in the efforts of discouraging the use of the drug, in the republic of south Africa, the country has high taxation on tobacco products; many are the times that budgets have increased the products tax rates. The government has also regulated the packaging and displays that cigarettes should have in the country; for example, shops should not display the products and should only sell in packages of ten. This discourages the expansion of the market as the products become expensive and unaffordable. Challenges, issues, and prospects Despite the prevailing campaigns against smoking, the Saudi Arabian Market is on the rise, Marlboro has to advertise and come up with strategies to win more customers. According the company’s website, sales for 2009 declined by 8% in the United States but in 2010, the company’s sales were at their peak in Saudi Arabia, the trend was expected to increase because of anti-tobacco campaigns as well as competition in the industry. The design of the approach aimed at increasing the company’s share of the market without recruiting other smokers. To remain afloat in the fast growing and competitive Saudi Arabian tobacco industry, the company has embarked on brand strengthening strategy where adult smokers are targeted to buy the company’s brands. The advertising and marketing approach adopted by the company aims at creating brand awareness, recognition and loyalty among adult cigarette smokers; to attain this goal, the company has enacted a personalized selling approach where it sells via emails to customers, retails outlets and running of occasional promotional campaigns to support the marketing campaign. The advertising strategy operated by the company has made the company’s brand to be the ninth strongest brand in the world; though the target of the adverting cannot be really be stated as a certain age, there are some successful adverts that even a ten-year-old person can establish and relate with Marlboro. An example of the advert is Joe Camel, in the advert, the company presented a case that a horse was seen restless but after smoking a stick of cigarette, the animal is seen to relax and becomes rejuvenated. Such an advert is a psychological approach where the company communicates in depth but using a rather indirect method. The characters chosen in adverts are characters that show boldness and the boldness is associated with the brand that the company is trying to promote. Marlboro uses image-character adverting, in the billboards it uses characters that are seen to be bold and highly valued among communities; when such an approach is adopted, then people are more likely to associate the character in the advert and the products and eventually they end up smoking. When posing the adverts, Marlboro seeks to create an impression hat it has the aim of entertaining the community however a close analysis of the adverts can revel the intention that they want to create, they always aim at associating greatness with the products. The form of image advertising is mostly very successful among the youth people and has a psychological effect on smokers who feel their mightiness when smoking the product; this creates loyalty to the products. Since there is a challenge in direct advertisement, the company uses some elements of the same in private areas and places, for example, it uses the adverts in movies and television shows, whether directly or indirectly. for example, the main character of a movie may be portrayed taking a stick of the Marlboro, in most case, this is the person whom the youth can associate or would like to be associate with, in so doing, the young get persuaded to use the products. The company has been using paid adverts in feels and movies to ensure that when the movie is selling the message has been passed to the customer. The move however was present in the 20th century but the government has strengthened and controlled the film industry to avoid such moves. As a form of indirect marketing, the company supports youth activities especially sporting activities, like sports. There are some sporting clubs and organizations that the company supports. For example in Latin America, the company runs a football-sporting tournament where it aims at creating awareness of its products indirectly. When looking for the function to support, the company is keen to venture in those projects that can calls for high mass following of the youth. In times of peaceful and guaranteed demonstrations, the company chips in to assist in the preparation and even offers some packets of the products to the demonstrators. This creates the brand identity and increases awareness of the brand among the youth (Michael 222-233). Implications for future use In November 1988, the company with other major tobacco producer signed an agreement with some American and European countries on how the industry could be managed. Some of the countries involved in the signing were Florida, Minnesota, Mississippi and Texas, the agreement was called Tobacco Settlement Agreements, and the agreement was aimed at monitoring the use of tobacco products. The agreement was entered for health interests but offered restrictions that affected Marlboro and other companies in the industry, the following are some of the restrictions as per the agreement: The companies should not engage in adverts that target the youth; the adverts were aimed to be to already existing adult smokers The agreement prohibited the use of cartoons and animations in advertising, promotion, packaging or labeling of tobacco; the use was thought to have the likelihood of influencing the youth to take tobacco products The agreement barred the use of billboards, stadium and outdoor/transit advertisements like on vehicles, taxis, trains, ships, boats and bus stops The agreement prohibited the distribution of caps, shirts and backpacks, be aring tobacco brand names and logos; this was a challenging decision but the companies had to comply The following were the advertising areas that the agreement allowed: Advertising on magazines and periodicals, however the adverts should not target youth and children Since 2005, the company placed no restriction to advertising news papers and dailies (Sundaram and Kaushik 194-204) In the future if the company maintain effective marketing approaches, then it can outdoes other players in the industry and earn an increasing share of the market despite a reduction in cigarette consumption rate. Alternative solutions as to how this problem can be implemented Saudi Arabian tobacco industry seem to be offering a future to Marlboro’s sales, in 2010, the company was the leader in the sale of cigarettes in the country, however, Marketing cannot be ignored for the success of Marlboro. the challenging thing is the approach that the firm should use that is likely to benefit the compan y and create no harm to the community, and the most strategy is an indirect marketing and selling approach. Under this approach, the company should aim at creating a strong brand name and if possibly try to win the already existing smokers. The marketing department has the role of establishing what can be referred to as soft selling and psychological selling; by this approach, the company will not target groups and the youth directly. However, it will create such needed relationship that can trigger the minds of people of the company’s superiority, the approach should be in line with the legislations enacted in the industry. When promoting the products, the company should use a push approach of marketing, this is an advertising approach where the company makes its products so good to resist, for example, it can have cheap products for the masses and have some other products sold at a premium for the well to do in the society. Some of the indirect marketing exercises that the company can adopt include the use of corporate social responsibilities and corporate governance. In the efforts to ensure that it has created healthy suppliers relation, the company should target farmers. It should empower farmers to produce sorter by the use of good pays, guaranteeing that they will buy the products as well as selling shares to farmers. When such an approach is used, then the company will have guaranteed supply of tobacco in its lifetime. When selling to consumers, there is always, the feeling that a consumer feels attracts him or her to a certain brand, Marlboro should engage in massive market research to establish the approaches that it can adopt to win the masses, there should be continuous development of products, tastes and processes. When the company come up with better and more diversified tastes, the masses are likely to divert their attention to the company’s products. In the massive campaigns against smoking and use of tobacco products, the company should aim at a campaign that does not seem to contradict the campaigns since at the end of the day they have an upper hand and when fighting them the company is likely to face repulsion from the communities. The approach should be tactical and well through; creating an impression of promoting bad life threatening behavior should be avoided. On the other hand, in the efforts of ensuring there is no confrontation with the authorities, the company should aim at complying with all set regulations. Domestic legislations varies with countries, there are some countries who have lose legislations on tobacco and its products for example Saudi Arabia; the company should consider tapping such markets as a way of diversifying sales and increasing the sale volume. Such countries include Cambodia and Jamaica; they seem to have little concern on the advertising methods and the use of tobacco products among its population. When venturing in these markets, the company will be greatly be assisted b y having a variety of brand. The company should aim at developing smoking not as a habit but a social thing, an approach that aims not to create addicts but to have some people who smoke occasionally. Such an approach should be borrowed from beer companies; in the world the greatest position of alcohol products consumed in the world is by social drinkers, they take the products over the weeks or such times, this has no effect on the communities. When such a policy has been enforced, then the company will be able to grow sales without having a huge negative effect on the community taking the products. The approach can be reinforced further by the manufacture of low nicotine Products, they should be seen as products that have minimal effects on human health, and thus people can use the products without considering much danger. Although high restriction of tobacco advertising in the Saudi Arabia, some areas that the country has allowed for advertising; the county prohibits advertising of the products through televisions and radio stations but it does not prohibit the use of print media. This should be seen as a loophole that the company should exploit. The most important thing in an advertising campaign is to create awareness, print media may have limited assess to the people that the case world have been for televisions however if well utilized the message can be passed effectively. The company should diversify its resources in buying space in dailies, periodical and magazines. Periodically, the company should be producing a magazine that handles different issues in life and market its products inside. The magazines should be attractive to the target customers to increase their sales. Marlboro is known for the use of billboards, although it has been successful in this area, it has not exhausted the approach; it should diversify the approach in all it selling countries. Although the company has diversified in different countries, the company has not fully taken a dvantage of international trade and globalization; the marketing should have developed aggressive foreign countries marketing approach to win a larger market. Another area that the company has not exploited fully the use of internet as a marketing tool, with the high rise of use of computers, the company can tap the international community and the youth. The company should have entertaining and catching adverts posed in the internet and places like you-tubes and social network. Although the company has a social network page, it should be more robust advertising and marketing its products via the website. For instance, it should have an automatic friend’s acquisition and a site where smokers can offer their experience with the products. So far you tube is considered a private affair and when used to air out interesting scripts advertising Marlboro products can be an effective method. The videos created can be passed over in the social net works; when there is an interesting vi deo, it is likely to reach a number of people. It should carry a message that can persuade customers to use the products. Social networks are growing fast and the young are the main users of the sites so when targeted they can be of great benefit to the company. The use of sports as an indirect advertising tool can be an effective way of advertising cigarettes; although Marlboro is using golf and rally sporting to advertise, the company is seen to have concentrated on one segment of the market and forgot there are other people who can offer it good market. The use of the bottom of the pyramid approach should be implemented; when such an approach issued, then the company will aim at targeting the masses with great tastes at an affordable price. When the approach is used, the company is likely to benefit from increased sales. Some of the games that the company can use are football tournaments fully supported and named as the company and when the game is on, and then the company will h ave a chance to sell its products to the communities. From the way things look, the company can only be successful if it personalizes its sales and advertising campaigns, they should target micro groups and individuals. The company should use the general behaviors of the youth who are known to cope with each other, when one section of the young is taking cigarettes then the entire group of the young is likely to start taking the product. When among other smokers, the company should aim at winning the markets and persuading people to start taking its products; the policies to win such groups include products improvement and having more tastes that can attract a higher customer base. The use of mail advertising is a good approach by the company however, the company should consider other form of individualized customer approach like the use of mobile phones and social networks accounts. The company should also use a retailer marketing approach; this is where the company offers incentiv es to consumers to stock its products, the advantages include a higher profit margin doorstep delivery and ensuring that retail outlets are well stocked with the commodity. This should be done alongside line extension and strengthening relationship between adult smokers and their preferred brands; study of the market will assist the company establish the new tastes they can come up with for more customer base (Oriola 828-840). Retailers should be well advised on the approach they should take when selling the company’s products so that at any one point, they will not be violating the legislations by domestic and international bodies. Conclusion and Recommendation Marlboro is an international cigarette company that has been in the business for over a century; marketing in the tobacco industry is challenging because of restrictions put by national and international anti-tobacco campaigns. Restrictions in the industry have limited the advertising campaigns enacted by Marlboro how ever, the company is using the limited allowed tools of advertising, and they include magazines, social networks and mail advertising. Despite the successful campaigns, in 2009, the company recorded an 8% decline in sales; however, the sales were at their pick 2010 only in Saudi Arabia. The best marketing approach in Saudi Arabia that the company can adopt is one that targets adult smokers and persuade them switch to its products, instead of targeting non-smokers. To target effectively the existing smokers, the company should embark on corporate social responsibilities programs and creating good smokers-company relationship. Works Cited â€Å"Any tobacco use in 13 State behavioral risk factor surveillance systems, 2008.† MMWR. Morbidity And Mortality Weekly Report 59.30 (2010): 946-950. Print. Chee-Ruey, Hsieh. â€Å"Health risk and the decision to quit smoking.† Applied Economics 30.6 (1998): 795-804. Print. CL, Perry. â€Å"Associations between tobacco marketing and use among urban youth in India.† American Journal of Health Behavior 32.3 (2008): 283-294. Print. Dewhirst, Timothy, and Brad Davis. â€Å"BRAND STRATEGY AND INTEGRATED MARKETING COMMUNICATION (IMC).† Journal of Advertising 34.4 (2005): 81-92. Print. Engstrom, McClave. â€Å"Adult Tobacco Survey — 19 states, 2003-2007.† MMWR Surveillance Summaries 59.3 (2010): 1-75. Print. Euromonitor. Tobacco in Saudi Arabia. Oct 2010. Web. Marlboro Official Website. Responsibility, 2011. Web. Mejia, AB, and PM Ling. â€Å"Tobacco industry consumer research on smokeless tobacco users and product development.† American Journal of Public Health 100.1 (2010): 78-87. Print. Michael, Cummings. â€Å"Usage patterns of stop smoking medications in Australia, Canada, the United Kingdom, and the United States: findings from the 2006-2008 International Tobacco Control (ITC) Four Country Survey.† International Journal Of Environmental Research And Public Health 8.1 (20 11): 222-233. Print. Ministry of Health in Saudi Arabia. Ministry of Health In Saudi Arabia Launches Anti-smoking campagin During Ramadan. Web. Oriola, TA. â€Å"Ethical and legal analyses of policy prohibiting tobacco smoking in enclosed public spaces.† Journal of Law, Medicine Ethics 37.4 (2009): 828-840. Print. RE, Malone. â€Å"If you know you exist, it’s just marketing poison†: meanings of tobacco industry targeting in the lesbian, gay, bisexual, and transgender community.† American Journal of Public Health 98.6 (2008): 996-1003. Print. Sundaram, Davis, and Kaushik Mitra. â€Å"ETHICAL EVALUATION OF MARKETING PRACTICES IN TOBACCO INDUSTRY.† International Journal of Business Research 7.2 (2007): 194-204. Print. â€Å"Tobacco Industry Profile: United States.† Tobacco Industry Profile: United States (2010): 1.Print. This research paper on Marlboro Cigarette company case Study was written and submitted by user Finn Z. to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

Information and Media Imperialism Essays

Information and Media Imperialism Essays Information and Media Imperialism Essay Information and Media Imperialism Essay New imperialism Information and media imperialism? n Christian Fuchs University of Salzburg, Austria ABSTRACT This article explores whether contemporary society can be characterized as demonstrating a new form of the Marxist notion of imperialism and as informational/ media imperialism. In an attempt to answer this question, I employ Vladimir Lenin’s analysis of imperialism. Paying particular attention to the relevance of media and information, I test Lenin’s theories against macroeconomic statistical analysis of existing data. My analysis is structured according to Lenin’s five characteristics of imperialism: (1) the role of economic concentration; (2) the dominance of finance capital; (3) the importance of capital export; (4) the spatial stratification of the world as result of corporate dominance; and (5) the political dimension of the spatial stratification of the world. The results demonstrate that Lenin’s theories should be reloaded for contemporary media and communication studies. KEY WORDS communication n globalization n Lenin n media n new imperialism Introduction In recent years, the notions of imperialism and capitalist empire have gained importance in critical globalization studies. This discourse forms the background and context for this paper. In the 20th century, the notion of imperialism has been primarily advanced by Marxist theorists, such as the classical theories of imperialism (Nikolai Bukharin, Karl Kautsky, Vladimir Lenin, Rosa Luxemburg, etc. ). Within this context, thi s paper deals with the question: Is the new imperialism an informational imperialism? My goal is to make a contribution to the new imperialism debate rom an information-, media- and communication-studies perspective. The notion of imperialism employed is Lenin’s classical one, so the task becomes to analyse the role of the media in a contemporary reactualization of Lenin’s notion of imperialism. The main section of the paper is structured according to the Global Media and Communication [1742-7665(2010)6:1] Volume 6(1): 33–60 Copyright  © 2010 SAGE Publications (Los Angeles, London, New Delhi, Singapore and Washington DC: http://gmc. sagepub. com)/10. 1177/1742766510362018 33 34 Global Media and Communication 6(1) sequence of the five characteristics of imperialism employed by Lenin (1917). Each of these sections discusses the question if a specific quality of imperialism is topical. The interest in Lenin’s theory is analytical and grounded in the recently emerging academic debate on the role of Lenin’s theory today (cf. e. g. Budgen et al. , 2007; Lih, 2005; Zizek 2004a). Contemporary theories of imperialism, empire and global capitalism can be categorized on a continuum that describes the degree of novelty of imperialism. At one end of the continuum there are authors who argue that imperialism no longer exists today and that a post-imperialistic empire has emerged. The stress is on discontinuity (e. g. Hardt and Negri, 2000, 2004; Negri, 2008; Panitch and Gindin, 2004, 2005; Robinson, 2004, 2007; for a discussion of Hardt and Negri see Buchanan and Pahuja, 2004; Callinicos, 2003b, 2007: 345; Laffey and Weldes, 2004; Zizek, 2004b). At the other end of the continuum there are authors who argue that contemporary capitalism is just as imperialistic as imperialism 100 years ago or that it has formed a new imperialism. The stress is on continuity (Callinicos, 2003a, 2003b, 2005, 2007; Harvey, 2003, 2005, 2006, 2007; Wood, 2003; Zeller, 2004a, 2000b). A middle ground is the assumption that imperialism has re-emerged and been qualitatively transformed, that through capitalist development and crisis new qualities of capitalism have emerged and others been preserved, and that the new qualities on the one hand constitute a return to capitalist imperialism, but that on the other hand there are aspects of imperialism today that are different from the imperialism that Lenin, Luxemburg, Kautsky and Bukharin described 100 years ago (O’Byrne, 2005; Sklair, 2002). For Lenin, there are five characteristics of imperialism: 1) The concentration of production and capital developed to such a stage that it creates monopolies which play a decisive role in economic life. 2) The merging of bank capital with industrial capital, and the creation, on the basis of ‘finance capital’, of a financial oligarchy. 3) The export of capital, which has become extremely important, as distinguished from the export of commodities. 4) The formation of international capitalist monopolies which share the world among themselves. ) The territorial division of the whole world among the greatest capitalist powers is completed. (Lenin, 1917: 237) Lenin defined imperialism as: capitalism in that stage of development in which the domination of monopolies and finance capital has established itself; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun: in which the division of a ll Fuchs New imperialism 35 the territories of the globe among the biggest capitalist powers has been completed. (Lenin, 1917: 237) Lenin gave close attention to the empirical data that was available at his time. He undertook ‘enormous preparatory work’ (Labica, 2007: 223) for his work on imperialism that is documented in his 21 ‘Notebooks on Imperialism’ (Lenin, 1912–1916), which contain notes on 150 books and 240 articles. To re-engage with Lenin’s theory of imperialism today should therefore be an examination and update of his theoretical arguments and the support of these arguments by data in the same empirical rigour that Lenin showed in his own work and that contemporary works unfortunately frequently lack. Updating Lenin can be undertaken by substituting ‘for the data he presented what we have available today’ (Labica, 2007: 232). To repeat and reload Lenin today means ‘to retrieve the same impulse in today’s constellation’ (Zizek, 2004a: 11; see also Budgen et al. , 2007: 1–4). This also means to take Lenin as a theoretical and methodological impulse for contemporary critical globalization studies. The connection of imperialism and the information sector is not specific for new imperialism. So, for example, Boyd-Barrett has shown that already in the 19th and early 20th century the big news agencies Havas, Reuters and Wolff ‘were based in imperial capitals’ and their expansion ‘was intimately associated with the territorial colonialism of the late nineteenth century’ (Boyd-Barrett, 1980: 23). At the time of Lenin, they served as government propaganda arms in the First World War (Boyd-Barrett and Rantanen, 1998: 7). For example, Reuters ‘was for the most part the unofficial voice of the Empire, giving prominence to British views’ (Thussu, 2006: 11). Winseck and Pike (2007) show with the example of the global expansion of cable and wireless companies (such as e. g. Western Union, Eastern Telegraph Company, Commercial Cable Company, Atlantic Telegraph Company or Marconi) in the years 1860–1930 that at the time of Lenin there was a distinct connection between communication, globalization, and capitalist imperialism. The growth of a worldwide network of fast cables and telegraph systems, in tandem with developments in railways and steamships, eroded some of the obstacles of geography and made it easier to organize transcontinental business. These networks supported huge flows of capital, technology, people, news, and ideas which, in turn, led to a high degree of convergence among markets, merchants, and bankers. (Winseck and Pike, 2007: 1) 2 The new imperialism and the information economy In the next five subsections, I will analyse which role information industries play in each of the five characteristics of imperialism today. The sequence of discussion is structured according to Lenin’s five qualities of imperialism. 36 Global Media and Communication 6(1) 2. The concentration of capital in the information sector The enormous growth of industry and the remarkably rapid process of concentration of production in ever-larger enterprises represent one of the most characteristic features of capitalism. (Lenin, 1917: 178) Lenin identified an antagonism between competition and monopoly as an immanent feature of capitalism (Lenin, 1917: 180, 185, 236, 260ff. ). The formation of monopolies and the concentration of capita l are for Lenin not an exception from the rule of competition, but a necessary outcome of capitalist competition. Concentration indicators that Lenin used included: the development of the number of large enterprises; the share of workers in the economy that are employed by large enterprises; and the share of output in an industry that is produced by large enterprises. One way in which industries become more concentrated is through mergers and acquisitions (MA). Figure 1 shows that the finance sector accounted for the largest share of the mergers and acquisitions (MA) in 2006: 24. per cent (1717) of all MA, whereas the transport, storage and communication sector accounted for 5. 4 per cent (379) of all MA and the printing and publishing industries accounted for 2. 0 per cent (142). All of these sectors have experienced dramatic rises in the number of MA, but the largest and most rapid increase is in finance, which is an indication that finance is the most heavily concentrated sector. Figure 1 Total number of mergers and acquisitions in selected industries Source: Author’s figures based on UNCTAD data. Fuchs New imperialism 37 Figure 2 Share of the number of large corporations (gt;250 employees) in total number of corporations (EU27 countries) Source: Author’s calculations based on Eurostat. Within the framework of the study of capital concentration, one can analyse the concentration of information sectors. Large informationproducing companies, which are those firms that have more than 250 employees, make up only a small share of the overall number of information companies in the EU27 countries (Figure 2). In information-producing branches, a small number of large companies accounts for a large share of the total employees, total turnover and total value added. These shares are higher than in industry and services in general for most information branches. This applies especially in the areas of post/ telecommunications and the manufacturing of communication equipment (Figures 3, 4, 5). In post and telecommunications, large companies make up 0. 9 per cent of all companies and account for 87. 8 per cent of all employees, 87. 2 per cent of total turnover, and 91. per cent of total value added. In the manufacturing of communication equipment, large companies make up 1. 6 per cent of all companies and account for 65. 5 per cent of all employees, 84. 1 per cent of total turnover, and 76. 8 per cent of total value added. A high concentration of information industries is not only specific for Europe, but can also be found in the United States (Figure 6). In the entire US media sector, there we re 330 large corporations (gt;1000 employees), which accounted for 0. 01 per cent of all media corporations in 2002, but controlled 78 per cent of all revenues. In the telecommunications sector, 72 large corporations made up 0. 9 per cent of all companies in the industry, but controlled 88 per cent of all sector-wide revenues. 38 Global Media and Communication 6(1) Figure 3 Share of large companies (gt;250 employees) in total employees (EU27) Source: Author’s calculations based on Eurostat. Figure 4 Share of turnover by large companies (gt;250 employees) in EU27 countries Source: Author’s calculations based on Eurostat. Information industries are not the only ones that are highly concentrated. So for example in the EU27 countries, value added is very highly concentrated in the mining of coal and lignite and the extraction of peat (large companies account for 4. 9 per cent of all companies and for 92. 9 per cent of sectoral value added), the manufacture of tobacco products (20% are large companies and account for 93. 7% of value added in the industry), and the manufacture of coke, refined petroleum products and nuclear fuel (9. 9% are large companies and account for 93. 1% of sectoral value added) (data for 2005, Eurostat). Fuchs New imperialism 39 Figure 5 Share of value added (at factor cost) controlled by large companies (gt;250 employees) in EU27 countries. Source: Author’s calculations based on Eurostat. Figure 6 Media concentration in the USA Source: Author’s calculations based on US 2002 Economic Census 40 Global Media and Communication 6(1) Information sectors, such as publishing, telecommunications and the manufacturing of communication equipment, do not form the most concentrated economic sector, but are among the most highly concentrated industries. . 2 Finance capital and information capital [Finance capital] is the bank capital of the few big monopolist banks, merged with the capital of the monopolist combines of manufacturers. (Lenin, 1917: 237) Under imperialism, finance capital commands: almost the whole of the money capital of all the capitalists and small businessmen and also a large part of the means of production and of the sources of raw materials of the given country and of a number of countries. (Lenin, 1917: 190) The banks’ control of the flow of investment money that is used for operating corporations gives them huge economic power for controlling the capitalist economy (Lenin, 1917: 194). Lenin mentioned that banks are influential in accelerating technical progress (Lenin, 1917: 202). Capital concentration and the formation of finance capital are connected developments (Lenin, 1917: 203). Finance capital aims at generating extraordinarily high rates of profit (Lenin, 1917: 210). A finance oligarchy consisting of rentiers would emerge in imperialism (Lenin, 1917: 213). The indicators that Lenin used for verifying the second characteristic of imperialism, included: development of the percentage of total deposits controlled by banks of a certain size (measured by total controlled capital); development of the number of holdings and establishments of certain banks; development of the number of letters received and dispatched by certain banks; development of the amount of capital held by certain banks; development of the capital invested by certain banks in a country; development of the profit rate of certain banks; and development of the total securities issued by certain banks. How important are information companies in comparison to finance corporations in the world economy? In order to give an answer, I have analysed the 2008 Forbes list of the world’s 2000 biggest companies by economic sectors. The results are presented in Figure 7. Finance companies and financial service corporations together accounted for the vast share of capital assets in 2008 (75. 96%). The second largest sector was oil, gas and utilities (5. 82%). The third largest sector was the information sector (4. 3%), comprised (for statistical reasons) of the following sub-domains: telecommunications; technology hardware and equipment; media content; software; and semiconductors. Fuchs New imperialism 41 5. 82% 4. 63% 1. 96% 1. 51% 1. 48% 1. 36% 1. 29% 0. 97% 75. 96% Finance (Banking, Financials, Insurance) Oil Gas Operations, Utilities Information (Telecommunications, Technology Hardware Equipment, Media, Software Services, Semiconductors) Consumer Durables Food (Food, Drinks Tob acco; Food Markets; Hotel, Restaurants Leisure) Conglomerates Materials Transportation Construction Figure 7 Share of selected industries in total capital assets of the world’s largest 2000 corporations. Source: Author’s figures based on Forbes 2000, 2008 list. Information companies are important in the global capitalist economy, reflecting a trend towards informatization, that is, the rise of the importance of information in economy, but they are far less important than finance and the oil and gas industry. Fossil fuels are still very important in the contemporary economy. This is an indication that industrial society is not over, and that we have entered a hyperindustrial area, in which information production, selling and consumption becomes an important factor of the overall economy, but are still no substitute for the economic importance of finance capital and fossil fuels. Financialization, hyperindustrialization and informatization characterize contemporary imperialist capitalism. The data in Figure 8 are for the year 2007. Data for the year 2008 (Forbes, 2000: list for 2009, available online at Forbes. com), which was the year a new worldwide economic crisis started, show that the financial sector suffered tremendous losses. The world’s biggest 176 diversified financial corporations had combined losses of $46. 27 billion, the world’s 92 largest insurance companies sustained losses of $61. 8 billion. Nonetheless, the financial sector still accounted for 74. per cent of all assets of the world’s 2000 largest corporations, oil, gas and utilities for 6. 2 per cent, and the information economy for 4. 6 per cent. These are only minor changes in comparison to 2007, which shows that the economic crisis did not undermine the inner-capitalist hegemony of financial capital. 42 Global Media and Communication 6(1) 2. 3 Capital export and the information industries Under modern capitalism, when monopolies prevail, the export of capital has become the typical feature. (Lenin, 1917: 215) The goal of imperialism is for Lenin the achievement of high profits by exporting capital to countries in which `capital is scarce, the price of land is relatively low, wages are low, raw materials are cheap (Lenin, 1917: 216). Indicators that Lenin used for verifying the third characteristic of imperialism included the absolute amount of capital invested abroad by certain nations and the geographical distribution of foreign direct investment. What are the most important economic sectors in capital export and the outsourcing of production? In which areas is the economy most globalized? What is the role of the information sector? Figure 8 shows that transport, storage and telecommunications has been the fastest growing sector of foreign direct investment (FDI) in the past 20 years (from 1. 6% to 7. 6% of all FDI inflows). Nonetheless, information industries are not dominant; more important in FDI than transport and communication are the sectors of finance, mining/quarrying/petroleum, and trade. Figure 8 Selected sectors of FDI (inflows). Source: Author’s figures based on data from UNCTAD. Fuchs New imperialism 3 A number of authors have argued that global/transnational media organizations have emerged (Appadurai, 1990/2006; Herman and McChesney, 1997; McChesney, 1999; Rantanen, 2005; Schiller, 1991/2006; Sklair, 2002: 164–207; Sreberny, 1991/2006). Herbert Schiller (1991/2006: 297) speaks in this context of ‘transnational corporate cultural domination’. Edward Herman and Robert McChesney (1997 , see also McChesney 1999: 78–118) argue that global media advance corporate expansion by advertising and create an ideological environment for a global profitdriven social order. Neoliberalism and mergers and acquisitions would have resulted in a tiered global media system dominated by a small number of colossal, vertically integrated media conglomerates (measured by annual sales), such as News Corporation, Time Warner, Disney, Bertelsmann, Viacom, ATT (TCI), Vivendi (Seagram acquired MCA in 1995 and Polygram in 1998 to became the Universal Music Group, which became part of Vivendi in 2000), General Electric (NBC), or Sony (Herman and McChesney, 1997: 52ff. , 72–105; McChesney, 1999: 86ff. ). The main feature of the global media system is, for Herman and McChesney (1997: 152), the global implantation of a model of privately owned commercial media. Possible negative effects would be the global spread of consumption as lifestyle, the displacement of the public sphere with entertainment, the strengthening of conservative political forces, and the erosion of local cultures (Herman and McChesney, 1997: 154ff. ). Other scholars are more sceptical, doubt the emergence of global media, or argue that their existence is a myth (Flew, 2007; Hafez, 2007). Terry Flew (2007: 87) lists data on the foreign asset share, the transnationality index, and the foreign revenue share of Time Warner, Disney, News Corporation and Viacom for the year 2005, in order to argue that ‘media corporations are less globalized than major corporations in other sectors’, globalization of media and entertainment is moving slowly, and that News Corporation is the only truly global media company (Flew, 2007: 87ff. ). This analysis is not convincing because inductive generalizations from data for four companies are not conclusive, the indicators are mainly consumption- and not production-oriented (in contrast to, for example, the share of foreign employees), and other information sectors are not taken into account. Not only media content producers are media companies, but also media infrastructure capital and media technology capital (telecommunications, software, hardware) should be taken into account. Also the internet, the computer, and the mobile phone are media. Colin Sparks (2007: 172–4) analyses the foreign assets and sales of News Corporation and Viacom (for 2002) and Time Warner (for 2004) and argues that global media are ‘centred in a single â€Å"home† country’ (Sparks, 2007: 174). 44 Global Media and Communication 6(1) Table 1 Transnationality index of the world’s largest information corporations Year Top 100 average TNI of all included corporations Information corporations’ average TNI N (Number of information corporations in ranking) 2001 55. % 60. 2% 26 2002 57% 55. 0% 22 2003 55. 8% 55. 3% 21 2004 56. 8% 55. 9% 21 2005 59. 9% 59. 5% 20 2006 61. 6% 61. 7% 18 Source: Calculations based on World Investment Reports 2003–2008. I have analysed the transnationality data that is published in the annual World Investment Report by UNCTAD. UNCTAD’s transnationality index (TNI) measures the global dimension of a company by a composite measure that covers the world largest companies’ shares of assets, sales and employees outside of the home country. Table 1 shows the average TNI of the top 100 corporations listed in the World Investment Reports (UNCTAD, 2003–2008) and the average of information corporations. Information/media corporations are in this context defined as all companies from the domains of computer and related activities, electrical and electronic equipment, media, printing and publishing, and telecommunications. Media content capital and media infrastructure capital have a common referent – information – so summarizing these companies under the category of information corporations or media corporations is feasible. The data show that the TNI of the largest information corporations has in the years 2001–2006 been close to the total average and that the information companies covered by the TNI are more global than local in their operations, which casts doubt on the assumption (made by Flew, Hafez, and others) that there are no global media corporations. Table 2 shows further indicators for the degree of transnationality of information corporations: the average share of foreign ssets in total assets, the average share of foreign sales in total sales, the average share of foreign employment in total employment, and the share of foreign affiliates in total affiliates. The values for the 18 information corporations that are included in the 2006 list of the world’s top 100 TNCs are compared to the total average values for all 100 included companies. For calculating these shares, I treated all companies (and respectively information companies) as a totality (what Marx [1867: 344] termed à ¢â‚¬Ëœcollective capital’) so that the shares were calculated based on aggregated values. Fuchs New imperialism 45 Table 2 Indicators of the degree of transnationality of the world’s largest Information corporations (N = 18) Average of all corporations Foreign assets share Foreign sales share Foreign employment share Foreign affiliates share 61. 39% 64. 35% 60. 48% 69. 38% Information corporations: average 62. 50% 64. 05% 58. 36% 68. 15% Source: Calculations based on data for 2006, World Investment Report 2008 Statistical data suggest that the globalization of media/information corporations is not a myth, as claimed by scholars like Hafez and Flew. There surely is not a purely global media system – as transnational corporations are grounded in their respective national economies. But global production in the form of outsourcing, subcontracting and spatially diffused production seems to be an emergent quality of capitalism and therefore also of information corporations. Indicators such as the transnationality index, the foreign assets share, the foreign sales share, the foreign employment share, and the foreign affiliates share allow measuring the degree of transnationality of information companies. Data for the world’s largest information companies suggest that although they are fairly grounded in national economies, they follow the general trend of TNCs to have the majority of their assets, sales, employment and affiliates located outside of their home countries. This is not a uniform pattern, but a general trend. Emergent qualities are additions to old qualities that transform systems, but do not supersede and eliminate them. Transnationality is not something entirely new; instead – it is a degree, measure and tendency. Globalization of the media is something different from fully global media: certain media corporations become more global, parts of production are outsourced to other countries and parts of sales are achieved in other countries. The degree of sourcing, investment, affiliations, employment, assets, sales and profits outside the home country are indicators for the degree of globalization of a media corporation. That the calculated average shares are close to 60 per cent is an indication not for the emergence of fully global information corporations, but for the globalization of the operations of information corporations. These information TNCs are all capitalist in character, each focuses on capital accumulation on national and transnational levels that are interlinked. 46 Global Media and Communication 6(1) Transnationality is an emergent quality of the informational dimension of new imperialism. Transnationality is not entirely global, but an emergent quality in comparison to Fordist capitalism, in which many corporations were either state owned or rather nationally contained by regulation. Concerning the world’s largest information corporations, corporate structures have become global and ever more influenced by media and information. Media globalization then means that corporatism – the structuration of media organizations according to the logic of capital accumulation and profit maximization – has expanded its worldwide scope. Corporatism rules the world, therefore it also rules media and information organizations, which have increasingly been transformed into media corporations in processes of accumulation by dispossession that transform information and technology into commodities or intensify their commodity character. A further aspect of media globalization is that in the 20th century, global communication networks (telephone, internet) have emerged (Thompson, 1995/2000), which today allow communication and the transmission of information in real time over distance by time–space compression. How important are information products and information services in world trade? Figure 9 shows that fossil fuels are the most important goods in the world trade of manufactured goods, followed by media products, and transport vehicles. Fossil fuels and the car have been characterized as being characteristic for Fordist industrialism or for the third and fourth long wave (Boyer, 1988; Freeman and Perez, 1988; Mandel, 1972/1998), whereas microelectronics is frequently considered as ‘post-industrial’. Concerning world trade, the data show that post-industrialism has not superseded industrialism, the information economy and the traditional industrial economy exist together. The only claim that could be made based on this data is that the structure of world trade is characterized by the dominance of a ‘mobilities paradigm’ – the trade of goods that allows ‘the movement of people, ideas, objects and information’ (Urry, 2007: 17). UNCTAD launched the Creative Economy Database in 2008. The creative economy is defined as consisting of the ‘creation, production and distribution of goods and services that use creativity and intellectual capital as primary inputs’ (UNCTAD, 2008: 13). This includes products in the areas of cultural sites, traditional cultural expressions (arts, crafts, festivals, celebrations), performing arts, audiovisuals, new media, design, publishing and printed media, visual arts, and creative services (architectural, advertising, creative RD, culture, recreation). Figure 10 shows the development of the share of creative industry exports in total Fuchs New imperialism 47 Figure 9 Share of specific product groups in total exported goods. Source: Author’s figures based on data by UNCTAD. exports in the years 1996–2005. Related industries cover supporting industries or equipment, such as media infrastructures. The combination of creative goods (3. 2%), creative services (0. 8%) and related industries (5. 5%) accounted for 9. 55 per cent of world exports in 2005. This again confirms that information products and services are important in world trade, but not more important than fossil fuels and vehicles, and therefore not dominant. Finance, mining/quarrying/petroleum, trade, and information are the most important economic sectors of foreign direct investment. Finance is the dominant sector in both FDI and world trade. Figure 10 Share of creative industries in world exports. Source: Author’s figures based on data by UNCTAD Creative Economy Database. 48 Global Media and Communication 6(1) Transnational information corporations do not operate entirely globally. They are grounded in national economies, but a certain degree of their operations, assets, employees, sales, profits and affiliates are located beyond their home economies so that a national–transnational nexus is established. Transnationality is an emergent quality, a measure, degree and tendency. Media globalization furthermore also means the global influence of the neoliberal logic of accumulation by dispossession on media. In world trade, information goods and services are the second most important category, and transport vehicles the third most important sector. The data indicate that capital export and world trade are not dominated by the information sector, but that financialization, hyperindustrialization by continued relevance of fossil fuels and the car, and informatization are three important economic trends of the new imperialism. Financialization is the dominant factor. 2. 4 The economic division of the world and information corporations Lenin argued that under imperialism, big companies dominate the economy. They would divide among themselves spheres of influence and markets and would make use of cartels, syndicates and trusts. Finance capital struggles ‘for the sources of raw materials, for the export of capital, for â€Å"spheres of influence†, i. e. , for spheres of good business, concessions, monopolist profits, and so on; in fine, for economic territory in general’ (Lenin, 917: 266). Lenin used the following indicators for the fourth characteristic: the number of sub-companies of certain corporations, the development of turnover, the number of employees, and the net profits of specific big companies. Whereas the third characteristic focuses more on economic activities that cross nation-state borders and the economic benefits that are derived from it, the fourth characteristic covers the spatial dimension of these activities. This distinction is indicated by the term ‘division of the world among capitalist combines’ (characteristic four) in contrast to the term ‘the export of capital’ (characteristic three). The two characteristics are nonetheless certainly closely linked. Table 3 shows the share of corporations based in developing and developed countries in the industries that constitute the Forbes 2000 list of the world’s biggest corporations. The share of corporations that have developing countries as their home bases ranges between 0 and 20 per cent, which is a low value and corresponds to the general unequal global division of the economy. Information industries and services are no exception from this unequal economic geography. Fuchs New imperialism 49 Table 3 The spatial dimension of the world’s largest 2000 corporations Share of corporations in developed countries (high human development, UNHDR, 2008) (%) 100 80 94. 6 87. 7 93. 4 90. 7 87. 2 89. 7 95 100 91. 9 100 100 96 97 94. 4 79. 8 98 87. 8 98. 6 81. 3 84. 80. 9 80. 6 95. 8 86. 6 92. 4 Share of corporations in developing countries (medium and low human development, UNHDR, 2008) (%) 0 20 5. 4 12. 3 6. 6 9. 3 12. 8 10. 3 5 0 8. 1 0 0 4 3 5. 6 20. 1 2 12. 2 1. 4 18. 7 15. 6 19. 1 19. 4 4. 2 13. 4 7. 6 Industry Aerospace defence Banking Business services supplies Capital goods Chemicals Conglomerates Construction Consumer durables Diversified financials Drug s biotechnology Food, drink tobacco Food markets Health care equipment Hotels, restaurants leisure Household personal products Insurance Materials Media Oil gas perations Retailing Semiconductors Software services Technology hardware equipment Telecommunications services Trading companies Transportation Utilities Source: Author’s calculations based on data by Forbes 2000, 2008 list As world trade is overall stratified, also world trade in informational goods and services is stratified. In 2002, low-income countries accounted for 0. 6 per cent of all exports of cultural products, high income countries for 82. 2 per cent. North America accounted for 21. 4 per cent of book exports, 23. per cent of newspaper/periodicals exports, 18. 5 per cent of recorded media exports, and 7. 8 per cent of audiovisual exports. The shares of Europe were 60. 9 per cent, 70. 4 per cent, 61. 3 per cent and 30. 2 per cent. Asia’s shares were 13. 7 per cent, 3. 3 per cent, 18. 2 per cent and 50 Global Media and Communication 6(1) 50. 5 per cent, the shares by Latin America were 2. 9 per cent, 1. 8 per cent, 1. 3 per cent and 10. 9 per cent, and the African shares were 0. 1 per cent, 0. 08 per cent, 0. 05 per cent and 0. 001 per cent (data: UNESCO, 2004). One can say that theories of media imperialism, communication imperialism and cultural domination (see e. g. Boyd-Barrett, 1977, 1998; Galtung, 1971; Golding and Harris, 1996; Mattelart, 1979: 57–70; Roach, 1997; Said, 1993; Schiller, 1969/1992, 1976, 1989, 1991/2006; Sparks, 2007: 81–104; Thussu, 2006: 46–57; Tomlinson, 1991) have described Lenin’s fourth characteristic of imperialism in relation to media and culture: the domination of the info sphere by large Western corporations. At first, such concepts were focusing on the control of ownership, structure, distribution or content of the media in one country by another country (Boyd-Barrett, 1977: 117) or by the US (Schiller, 1969/1992). Later, they were updated in order to reflect the reality of media globalization (see e. g. Boyd-Barrett, 1998; Schiller, 1991/2006; Thussu, 1998) so that concepts such as transnational corporate cultural domination (Schiller, 1991/2006), global media empire, or Murdochization (Thussu, 1998) emerged. This updated version is suited for theoretically describing Lenin’s dimension of corporate economic domination in the attempt to apply imperialism theory to informational capitalism. The problem with most cultural imperialism approaches is that they do not explicitly embed their theories into classical theories of imperialism. So for example Boyd-Barrett mentions that the concept of media imperialism is ‘indebted to the works of Marx, Lenin and Rosa Luxemburg’ (Boyd-Barrett, 1998: 158), but he does not further outline this connection. The paper at hand is an attempt to contribute to the closure of this analytical gap. The stratified geography of capital export and world trade repeats itself in the sector that covers the production and diffusion of information goods and services, which is, on the global level, dominated by Western corporations. 2. 5 The role of information in the political division of the world Lenin defined the fifth characteristic of imperialism as the ‘monopolistic possession of the territories of the world which have been completely divided up’ (Lenin, 1917: 237). Finance capital ‘strives to seize the largest possible amount of land of all kinds and in any place it can, and by any means’ (Lenin, 1917: 233). Each dominant state would exploit and draw super-profits from a part of the world (Lenin, 1917: 253). ‘Each of them, by means of trusts, cartels, finance capital, and debtor and creditor relations, occupies a monopoly position on the world market’ (Lenin, 1917: 253). Lenin argues that under imperialism, all territories on the globe have Fuchs New imperialism 51 come under the influence of capitalist countries. A re-division would be possible at any time, but not a new seizure. In imperialism, there are not just simply colonies and colony-owning countries, but also a semi-colony, politically independent countries, which are ‘enmeshed in the net of financial and diplomatic dependence’ (Lenin, 1917: 234). Formal dependence would, under imperialism, ‘become a link in the chain of operations of world finance capital’ (Lenin, 1917: 235). Indicators that Lenin uses for the fifth characteristic include: the development of the percentage of territories that belong to the European colonial powers, and the development of the area size and population number under the control of certain colonial powers. The United States certainly is the dominant global military power today and has been successful in imposing its will by military means without much resistance from Europe, Russia, China, or other countries. The difference in military power can be observed, for example, by government expenditures. In 2006, the EU25 countries spent â‚ ¬79,392. 7 million on defence (10. 8% of total government expenditures), â‚ ¬95,005. 1 million on education (12. 9%), and â‚ ¬138,144. 5 million on health (18. 8%). In comparison, the US in 2008 spent $467,063 million on national defence (17. % of the total expenditures), $87,734 million on education (3. 2%), and $306,585 million on health (11. 2%). That the US is a dominant global military power only means that the US has been successful in being hegemonic, which does not mean that it will never again be challenged by others with military means (which it still is, although not by Europe, Russia, China, or other important countries, but by groups like Al-Qaeda and countries like Iran, North Korea or Venezuela that pose potential military threats for the US). There are several competing explanations for the US invasion of Afghanistan and Iraq (see Callinicos, 2003a, 2005, 2007; Harvey, 2005, 2006; Panitch and Gindin, 2004, 2005; Wood, 2003): securing access to oil as an economic resource; securing worldwide geopolitical hegemony; the expansion of US economic power in the face of the deterioration of US economic power in the exports of capital and commodities and the strong position of Europe and China; and the conquest of strategic countries in the Middle East in order to be better equipped for limiting the influence of Islamic nations and groups that challenge the Western dominance of the world or the struggle for the extension of neoliberal capitalism all over the world. It is imaginable that the causes of these wars are a combination of some or all of these elements. No matter which factors one considers important, the wars against Afghanistan and Iraq, global terrorism and potential future wars against countries like Iran, Pakistan, S yria, Lebanon, Venezuela, or Bolivia, shows 52 Global Media and Communication 6(1) that war for securing geopolitical and economic influence and hegemony is an inherent feature of the new imperialism and of imperialism in general. Although investment, trade, concentration, transnationalization, neoliberalization, structural adjustment and financialization are economic strategies of imperialism that do not resort to military means, it is likely that not all territories can be controlled by imperialist powers and that some resistance will emerge. In order to contain these counter-movements, overcome crises and secure economic influence for capital in the last instance, warfare is the ultimate outcome, a continuation of imperialism with non-economic means in order to foster economic ends. Statistical data show ex-post that economic ends could be important influencing factors for the wars in Iraq and Afghanistan. Figures 11 and 12 show that foreign investments have boomed in Afghanistan since 2002 and in Iraq since 2003. Oil is the main economic resource in Iraq. In 2002, 99. 3 per cent of all exports from Iraq were fuels. In 2006, this level remained at a high degree of 93. 9 per cent (data: UNCTAD). In 2006, the value of annual Iraq oil exports was 2. 3 times the 2002 value. Figure 13 shows the increase of Iraq fuel exports in absolute terms. In the same time span (2002–2006) as fuel exports from Iraq climbed, the value of oil imports by the US increased by a factor of 2. 8 and the value of oil imports by the UK by a factor of 3. 8 (Figures 14 and 15). These data suggest that investment opportunities and resource access were important, but certainly not the only factors in the invasions of Iraq and Afghanistan by the US and the UK. Figure 11 FDI in Afghanistan Source: Author’s figures based on data by UNCTAD. Fuchs New imperialism 53 Figure 12 FDI in Iraq. Source: Author’s figures based on data by UNCTAD. Figure 13 Fuel export from Iraq. Source: Author’s figures based on data by UNCTAD. In 1988, the annual military expenses of the US were $484 billion. There was a drop in spending after the end of the Cold War (1998: $329 billion). The new wars in Afghanistan and Iraq resulted in a rise to $441 billion in 2003 and $547 billion in 2007 (all values in constant US dollars, source: SIPRI Military Expenditure Database). In 2007, the US accounted for the largest share of world military spending (45%), followed by the UK and China (each 5%) (SIPRI, 2008). Comparing annual US military spending for the years 2001 and 2006 shows a growth of 30 per cent for 54 Global Media and Communication 6(1) Figure 14 Fuel imports by the UK. Source: Author’s figures based on data by UNCTAD. Figure 15 Fuel imports by the USA. Source: Author’s figures based on data by UNCTAD. military expense, 47 per cent for military operations and maintenance, and 58 per cent for research, development, test and evaluation (SIPRI, 2007: 276). In 2006, 41 US companies accounted for 63 per cent of the sales of the top 100 arms-producing companies in the world (SIPRI, 2008). In the period 1998–2007, annual world military expenditures increased by 45 per cent (SIPRI, 2008). These data show that the new imperialism is based on a US military hegemony in military outlays and activities. Fuchs New imperialism 55 The US-led war in Iraq and Afghanistan is the practical validation of the presence of the fifth characteristic of imperialism today. Military conflicts that aim at territorial control and global hegemony and counterhegemony are immanent features of the new imperialism. Lenin (1917: 264) argued that imperialism leads to annexation and increased oppression and consequently also to increased resistance. The attacks of 9/11 and the rise of global terrorism can be interpreted as a reaction to global US economic, political and cultural influence. This resulted in a vicious cycle of global war that creates and secures spheres of Western influence and global terrorism that tries to destroy Western lifestyles and Western dominance. Information today plays certainly an important role in warfare in two distinct senses: (1) psychological warfare with the help of media is conducted in order to intimidate, influence and manipulate enemies and the foreign public; and (2) there are computer-based weapon systems that bring about an informatization of warfare. Both elements have been stressed as important features of warfare in the Iraq war 2003 and the Afghanistan war 2001 (see Anderson, 2006; Artz and Kamalipour, 2005; Bennett, 2008; Berenger, 2004; Brookes et al. , 2005; Conroy, 2007; Dadge, 2006; Fuchs, 2005, 2008: Chapter 8. ; Hoskins, 2004; Katovsky and Carlson, 2003; Kellner, 2005; Miller, 2004; Nikolaev and Hakanen, 2006; Oliver, 2007; Paul, 2005; Rampton and Stauber, 2003; Schechter, 2003; Tumber and Palmer, 2004; Tumber and Web ster, 2006; Thussu and Freedman, 2003; Wheeler, 2007). Information warfare surely is an important feature of warfare in new imperialism. However, the main quality of war is not and has never been that it is informational, but that it aims at destroying and defeating the enemy. Therefore information war is not immaterial, but aims at physical destruction and defeat. Warfare under new imperialism is not immaterial, but very material, as the tens of thousands of casualties in the military conflicts in Afghanistan and Iraq show. 3 Conclusion The task of this paper was to discuss the topicality of Lenin’s notion of imperialism with special consideration of the role of media and information. I tested the role information industries play in the new imperialism. The result was that they are important, but not dominant: (1) Capital concentration and information industries. Information sectors such as publishing, telecommunications and the manufacturing of communication equipment are among the most concentrated economic sectors, although finance is the most concentrated sector. 56 Global Media and Communication 6(1) (2) Finance capital and information capital. Information companies are important in the global capitalist economy, which reflects a trend towards informatization, but they are far less important than finance and the oil and gas industry. Financialization, hyperindustrialization and informatization are three important characteristics of contemporary imperialist capitalism. (3) Capital export and information industries. Finance, mining/quarrying/ petroleum, trade, and information are the most important economic sectors of foreign direct investment. Finance is the dominant sector in both FDI and world trade. Transnational information corporations do not operate entirely globally. They are grounded in national economies, but a certain degree of their operations, assets, employees, sales, profits and affiliates are located beyond their home economies so that a national–transnational nexus is established. Transnationality is an emergent quality, a measure, degree and tendency. The data indicate that capital export and world trade are not dominated by the information sector, but that financialization, hyperindustrialization by continued relevance of fossil fuels and the car, and informatization, are three important economic trends of the new imperialism. Financialization is the dominant factor. (4) The economic division of the world and information corporations. The stratified geography of capital export and world trade repeats itself in the sector that covers the production and diffusion of information goods and services, which is, on the global level, dominated by Western corporations. (5) The role of information in the political division of the world. Information warfare is an important feature of warfare in new imperialism. However, the main quality of war is not and has never been that it is informational, but that it aims at destroying and defeating the enemy. One cannot conclude that the new imperialism is a media imperialism or informational imperialism because this would have to mean that media and information are today the most important features of capital concentration, capital export, world trade and warfare, which clearly is not the case. Media and information do play an important role in new imperialism, but they are subsumed under finance capital and the continued importance of fossil fuel, which is a resource that motivates imperialist warfare. Media are characterized by qualities of imperialism such as concentration and transnationalization, which allows us to speak of the imperialistic character of the media within the new imperialism, but not of the existence of media imperialism. Fuchs New imperialism 57 The most significant change of the spatial structure of the world economy in the past 50 years has been the deterioration of North America in the areas of capital exports and commodity exports and the rise of China as an important location for FDI inflows and as an important trading country, especially in exports. Other new qualities of the new imperialism are the divergence of economic and military hegemony, as well as the new importance and new methods of financialization.