The Emerging Technology Trends In Computer Hardware Information Technology Essay

The Emerging Technology Trends In Computer Hardware Information Technology Essay The future of computer hardware is very fragile due to problems between software and hardware engineers and software now that cannot keep up with the material; the material may be decreasing as the software has priority. One thing to note is that the material cannot be totally eliminated. The market will always be a demand for faster hardware, lighter, more coherent and comprehensive. Arguably, the material can not hire as many jobs as the software does now because of the need and progress in software technology related to technology equipment. The material is and will carry on generating new applications that will make life easier and business more flourishing. Apply a new type of technology used in hardware applications, known as COTS. Commercial and product standards commonly known as COTS are proven and reliable in changing computer world. COTS allow software developers to provide new products, and hardware platform for adding custom hardware; a new device is the latest USB standard is also a past director of external equipment transfers. Cots are devices to help correct answers and progress on new computers, such as the XML protocol and new wireless advances. Another technology is the new hardware unit is microcontroller. The micro-controller unit (MCU) complete final products to the automotive market for smart cards. 16-bit and 32-bit MCU + are the main products of high-end consumer, the automotive and industrial control equipment. MPU Base application and wide variety of entrenched memory and other technologies add to their permanent unit and revenue growth. MCUs will carry on to see their make use of in products outside the home machine, which will allow hardware developers in the right direction for diversified applications. The tension between hardware engineers and software has led to an interesting correlation. Both types of engineers must learn to work together because the software and hardware engineers need each other in an appropriate communication to achieve various objectives. The types of material that is developed must cease and forth between the phase of software development for all types of applications across the board for all the different courses. With the increase in CPU capacity, created the software will always take more than enough room to allow the continued growth of the CPU in the industry. In the research project is completed, the balance between hardware and software engineers stay just as important for the optimal completion. Trends in computer software In an interview with John Bruggeman, Chief Marketing Manager, Wind River, a software design company based in the United Kingdom, which explains how the software has grown much faster than hardware applications. Bruggeman specialized software in Linux, which has seen faster growth than expected. For us the Linux business has grown from zero to 50 million dollars in 24 months. Not only Linux, but Amazon has created a unique opportunity to expand. Amazon Web Services has launched a new enterprise IT management software products, which include the rental of servers, instead of forcing companies to buy directly from a number of expensive servers. Technology recently published an article So far the market has taken the idea of Amazon and Amazon has shown that Web services have already won clients such as The New York Times, Red Hat and SanDisk. Other companies, like IBM and Sun are struggling to move to a new model. Sun already offers online rental system and expects to sell the equipment. We have the infrastructure, says Greg Papadopoulos, chief technology officer of Sun If you do not you can beat them, their hand. Suns final report shows that the Amazon Web Services functions have hit a new market that will continue to be successful. What are the current trends in computer hardware platforms and the evolving mobile platform, grid computing, and cloud computing? Mobile platform: more and more business computing is moving from PCs and desktop machines to mobile devices like cell phones and Smartphones. Data transmissions, Web surfing, e-mail and instant messaging, digital content displays, and data exchanges with internal corporate systems are all available through a mobile digital platform. Net books, small low-cost lightweight subnotebooks that are optimized for wireless communication and Internet access, are included. Grid computing Grid computing combines computer from systems multiple administrative domains to achieve common aims to solve a simple task and can disappear very fast. A grid computing key strategies is to use middleware to divide and distribute pieces of a program between several computers, sometimes up to several thousands. Grid computing is to compute in a distributed manner, which may also involve the aggregation of cluster systems based on large computer companies. The size of a grid can vary from a small restricted to a network of computer workstations in an enterprise, as for large public works across many companies and networks. The idea of a limited network may also be known as an intra-node, while the idea of bigger, wider networks may refer to inter-nodes. The grids are in the form of distributed computing; where the super virtual computer is composed of many networked computers to perform tasks freely collaborate large. This technique has been applied to computationally intensive problems in science, math and academic volunteer computing, and is used by commercial enterprises, such as various applications such as drug development, economic forecasting, seismic analysis and back-office data processing, support for e-commerce and web services. Grid computing gives a safe way to solve Grand Challenge issues, like proteins, financial modeling, earthquake simulation, weather patterns. The grid provides a way to use IT resources optimally inside an organization. They also offer a means of providing information for their technology and commercial business customers, with customers paying only for what they use, such as water and electricity. Grid computing is used by the grid of the National Science Foundation, National Technology, NASAs Information Power Grid, Pratt Whitney, Bristol-Myers Squibb Co. and American Express. The European Union has been a great supporter of grid computing. A lot of studies and projects have been funded by the European Commission Framework Programme. Lots of projects are emphasis here, but 2 of them deserve special point out: Enabling Grids BEinGRID and for e-Science. Business Experiments in GRID is a project, and also have a 1/4th amount of the whole project is funded by the European Commission as an incorporated Project under the 6th Framework Programme Sponsorship Program (FP6). Introduced in June 2006 and the project lasts for 2 years, until November 2009. The research is organized by the Atos Origin. According to the project sheet is their mission to create effective ways to promote the adoption of grid computing across Europe and to stimulate research on innovative business models using Grid technologies. Extracting best practices and common themes of the experimental implementations, two groups of consultants to analyze a number of pilots, technique and business. The results of this cross analysis provided by the TI website called www.tude.com. The project is important not only for its longevity, but also for its financial plan to 24.8 million Euros, is the greatest of all integrated projects in FP6. The grids of the E-science, which is founded the European Union and also sites in USA and the most part of the Asian continent, is a follow-up project of the European DataGrid (EDG), and is probably the largest computer network on the planet. This, together with the LHC Computing Grid (LCG) was developed to support the experiment at the Large Hadron Collider at CERN. LCG Project at CERN is based on the need to handle large amounts of data, where the rates are required to store several gigabytes per second. A list of active sites within LCG can be found online as well as real-time monitoring of the EGEE infrastructure. The software and documentation is also accessible to the public. It is speculated that optical fiber dedicated links, such as those installed by CERN to meet the needs of large volumes of data from the LCG may one day be available for home users and Internet service reach very fast approximately a thousand times faster than the usual broadband internet connection. Until April 27, 2007, United Devices United Devices Cancer Research Project based on its Grid MP product, which cleans the PC cycle of volunteering over the Internet. Grid MP in June 2005 ran about 3000000 machines. Cloud computing Cloud computing is computing on the Internet where shared resources, software and information is provided for computers and other devices on demand, with the grid. Cloud computing is a natural change of the well known to use of virtualization, SOA and utility computing. The details are extracted from consumers who no longer required specialized knowledge or control over the technology infrastructure that supports the tag. Cloud computing describes a new addition, consumption and delivery model for IT services Internet-based and are generally over-the delivery of Internet resources dynamically evolving and often virtualized. This is a result of product and ease of access to computer sites that offer Internet distance. This is mostly takes the form of internet based applications and tools that users can access and get use through an internet website browser as if it were a program installed locally on your own computer system. NIST provides a definition a little more objective and specific here. Tag word as a metaphor for the Internet based on the design previously used tags to represent the telephone network, and then to describe the patterns of Internet computer network as an abstraction that represents the underlying infrastructure. A typical cloud computing provider to provide common business applications online that is accessible from another web service or software as a Web browser, while the software and data stored on servers Most cloud computing infrastructure consists of services offered by the centers joint and integrated servers. Clouds often appear as single point of access to the computing needs of consumers. Commercial facilities are generally required to meet Quality of Service (QoS) of clients, and generally include service level agreements (SLA). The big cloud providers include Amazon, Microsoft and Google. Some large IT companies who are actively involved in cloud computing, Fujitsu, Dell, Hewlett Packard, IBM, VMware, NetApp and Microsoft. There are several doubts and confusions in relation to the phrase called hybrid when applied to the cloud a criterion description of the word hybrid Cloud has not yet risen. Cloud term hybrid has been used to assign 2 clouds. Separate conference ( private, public external or internal ) or a blend of clouds virtualized server instances that are used in combination with the actual physical hardware. The correct definition of the term hybrid Cloud; is probably the use of physical hardware and virtualized server instances tag together to provide a unique and common. Two clouds were collected are more properly a combined cloud. A combined cloud computing environment composed of multiple combined internal or/and external suppliers would be typical for most companies By integrating cloud computing services to multiple users to facilitate the transition to the public cloud services while avoiding problems such as PCI compliance. Another perspective on the implementation of a web application in the cloud using hybrid Web hosting infrastructure is a mix between Cloud hosting and dedicated servers it is usually implemented as part of a Web cluster, where some nodes running real physical hardware and some running on the server where the clouds. How network economics, declining communication costs and technology standards affect IT infrastructure? Network economics: Economics refers to the Business Network, which will benefit from the network. This is where the value is a good or service increases as more people buy the product or service. Examples include websites like eBay, or if the iVillage community together and share ideas to help the website become a better business organization. Metcalfes Law explains the proliferation of computer use by showing that the value of network participants grows exponentially as the network becomes more members. As the number of members in a network increases linearly, the values of the overall system grows exponentially and theoretically continue to grow indefinitely with increasing membership. Declining communication costs: The communication costs are rapidly falling down daily. The costs of communication and the exponential growth in the size of the Internet is a driving force that affects the IT infrastructure. When there is a decline happened in the communication cost will reflect several advantages and disadvantages to the information technology infrastructure. The main advantage of decline of communication costs is when its get fall to a very small and approaches zero, the use of communications and computer exploits. Technology standards: According to the growth of IT industry, the standards of design and communication is getting improved and more competitive day by day. Technology standards and economies of scale release powerful lead to decreases in the prices that manufacturers focus on products manufactured by a single standard. No economies of scale, the information of any kind would be much more expensive than is the case today. Creating and maintaining a coherent IT infrastructure raises multiple challenges including: Making wise infrastructure investments, IT infrastructure is a major investment for the company. If too much is used for infrastructure will not be used to form drag its financial performance. If it is too little used, a major business services cannot be delivered and competitors of the companys better than investing in the company. Coordinating infrastructure components: attempts to create IT infrastructures, select a combination of vendors, people and technology services and fitting them together so they operate in a coherent whole. Dealing with scalability and technology change: as companies grow, they can easily find that their infrastructure. As companies shrink, they can get stuck in too much infrastructure has been purchased in better times. Scalability: the ability of the computer of a product or system expansion to serve more people without breaking down. Leadership and management: refers to who controls and manages the IT infrastructure.

Accounting: Final Exam Essay

For each of the following course objectives, explain in 200-400 words what you learned in this course and how you could apply your learning of this course objective to your personal life or career. Refer to the syllabus to assist you in understanding what material was covered under each objective. 4pts each 1) CHANGING DYNAMICS OF ACCOUNTING The steps of accounting cycles are revenues, expenditures, conversion/ production, financing, fixed assets, and financial reporting. Revenues most often occur as the result of the selling of a service or product. These transactions are recorded in the form of cash receipts and sales orders. Expenditures are a result of the materials and labor need to generate revenues. For example a dry cleaning business would need certain chemicals, bags and hangers for cleaned clothes, and employees to operate the business. Conversion represents the production or the good or service sold by the company. In other terms the time/ cost to produce and market the good or service. Financing is also known as and outstanding debt, such as stocks or any outstanding bonds. The fixed asset details the purchase, disposition, and depreciation of company assets. See more:  Masters of Satire: John Dryden and Jonathan Swift Essay Once all journal entries have been posted and all accounts closed a trial balance is prepared and is used to identify errors and eventually prepare the financial reporting for the company. Accounting systems have become more automated and the need for human intervention is becoming more limited. Automation of these systems does allow for increased efficiency and accuracy and has allowed manual accounting task to be performed more quickly. Human intervention is necessary though to ensure the data being entered is correct. Human intervention can also help to identify errors that may have been made in the initial inputting of information. As technology evolves it is near  impossible to not have some interaction with the internet. Companies often have multiple locations as the internet opens the company to customers they could not otherwise reach. While the internet opens companies for increased commerce, there is also increased risk to the company’s data. We have recently heard in the news how the State of South Carolina’s Department of Revenue’s systems were hacked and thousands of tax payer’s personal information such as social security numbers were stolen. (http://www.postandcourier.com/apps/pbcs.dll/section?Category=pc160442). To ensure company security, many it department limit users ability to access certain websites and download programs, games, and even pictures. 2) INFORMATION SYSTEMS INFRASTRUCTURE (to earn full credit meet word count of at least 200 words) Accounting Information Systems (AIS) is what business use to collect, manage, and report financial information. AIS is a mix of people, procedures, raw data, software, and control. Internal controls are specifically vital as they work to maintain the integrity of data being entered and reported as well as protocol to protect sensitive data. A company’s internal controls must also meet or exceed SOX in order to be in compliance. Companies employee a mix of general and application controls to meet these requirements. Application controls include financial application controls to detect errors such as incorrect keying of raw data. This could also include pre-coding bank transactions so that deposits are accidently recorded as withdrawals and vise versa. General controls include items such as segregation or duties, documenting and processing data, reconciliation of accounts, and even restricting access to certain systems to the employee who needs the system to perform their job. AIS can include not only the internal controls one thinks of (such as segregation of duties) but also systems restrictions and requiring key card access for entry to various sites and departments. These items protect stored data and also allow for tracking of individuals needing this type of access. As accounting systems become increasingly automated, firms are seeking individuals who have not only the understanding of GAAP and SOX, but also solid understanding of IT controls and process. 3) DATA MANAGEMENT AND INTEGRATION (to earn full credit meet word count of  at least 200 words) I found week three to be the most challenging for me. While I regularly use excel, learning correct terminology and how to build a database was especially difficult. While some terms were easy to grasp (such as field, record, and queries) truly understanding how tables and data relate to each other was difficult to grasp. When I realized that a primary key is unique and is defined in one table and that primary key would be the foreign key on another table and is what is used to join the tables, building a database became clearer. Because the internet has changed the face of business, some companies find integrating reports from various divisions challenging. Software often has to be developed or modified so all reporting divisions have access to properly report expenditures and revenue. The data must also be organized and maintained in a logical way. Maintenance of the data is as important as the reporting. Without proper maintenance, future queries will not reflect the true numbers. Good maintenance and relation within a database also allows for companies to easily query the wealth of information within their own records to gain additional insight into buying trends, possible room for more efficient production, and quick review of possible errors. 4) BUSINESS MODELING PROCESSES AND SYSTEM DESIGN (to earn full credit meet word count of at least 200 words) SDLC is the process which should ensure a quality product. SDLC stands for Software Development Life Cycle. The SDLC includes planning, system analysis and design, development, testing, implementation, and maintenance. In planning the company would identify the need, set a timeline for completion and outline the recourses needed for completion. The planning phase would also include what the company hopes to accomplish with new software. After the need is identified, analysis of current procedures and software is performed. This would include documentation of current procedures and identifying gaps in the system and best practices. This is most often accomplished by reviewing requirements of each job, speaking with managers and employees. Once these needs and shortfalls are identified, then the development process begins. The software should then been tailored/ purchased with the identified need and the company’s current shortfalls in mind. Once this is completed companies will often test the new software either in theory or in a small division of the  company. For instance due to system and accounting needs my company recently developed a new ordering system. Rather than deploying the new system nationwide, one smaller district is being used to test and improve. After this is completed my company will move onto the implantation process. Implementation includes not only actually beginning to use new software but also transferring of old data to the new system, training employees on new procedures and how to use the new software. Once a system is implemented it should be maintained. Companies should continually review for issues and correct and adjust the system as needed. AIS should cover all levels of the co mpany’s financial reporting needs 5) INFORMATION SYSTEMS AND AUDITING (to earn full credit meet word count of at least 200 words) The auditing of a company’s information system is vital to ensuring the company’s records are accurate and well protected. Also, it is imperative that the information systems are compliant with GAAP and SOX. SOX was enacted to address possible weakness on company’s internal controls and as a result of the scandal at companies Enron and Worldcom. Upon examination of why these companies failed, it was determined that the internal controls that should have been in place to ensure proper and truthful reporting were lacking. The internal controls govern the integrity of the data collected, processed, and disclosed on financial reports. SOX requires external/ independent auditors to test whether a company’s internal controls and procedures are sufficient and report this on the company’s financial report. To prevent CFOs and CEOs from claiming no knowledge of misreporting, SOX now requires that these individuals identify their knowledge of the company’s finances, how it was reported, documentation of their own involvement and the internal controls used to govern this. SOX also provides providing criminal and financial penalties for individual non-compliance. . In order to complaint with GAAP a company’s policies should include organizational structure outline, descriptions of transaction types, summaries of revenue, as well as a list of unacceptable practices. While SOX was enacted to prevent fraudulent reporting some smaller companies do struggle with ensuring they are compliant with the internal controls outlined.

Cause and effect relationship between government expenditure and revenue collection - Free Essay Example

Sample details Pages: 9 Words: 2582 Downloads: 1 Date added: 2017/06/26 Category Statistics Essay Type Cause and effect essay Level High school Did you like this example? CHAPTER 1: INTRODUCTION 1.1 Overview The relationship between government revenue and expenditure is a very important topic and has been an essential issue for many economists and policy makers as it represents budget deficit, government expenditure Plans and taxation structure of a country. Since the main objective of every government is to improve economic growth with low debt levels, better education system, development of infrastructure and job opportunities better fiscal policy is needed to achieve these goals. From a short term perspective fiscal policy is said to be expansionary when government expenditures exceeds the total revenue and the resulting deficit is then financed by the government, However if these expenditures contributes in economic growth then there is a long term relationship exist between government expenditure and economic growth. Don’t waste time! Our writers will create an original "Cause and effect relationship between government expenditure and revenue collection" essay for you Create order In addition different studies indicate that the determination of Economic growth is depended on tax levels. Whereas many believe that the most significant factor that contributes in economic growth is tax level as the collection for development purposes of most developed and developing countries depend on tax revenue. 1.2 Research Problem In Pakistan the level of budget deficits have consistently increasing from 2005 which is then financed by the government through external and domestic borrowing resulting in a higher debt levels due to high interest cost associated with it and leads to more future tax expectations. Thus the financing by the government for the compensation of deficit is an important variable, several studies have put light on the outcome of fiscal deficit but very few have tried to find the reasons and causes of these deficits which is why the nexus between government revenue and expenditure is still an unsolved issue. Therefore the main purpose of this research is to study the causal relationship between government revenue and expenditure. 1.3 Hypotheses H1: Tax Revenue causes Government Expenditure. H2: Government Expenditure causes Tax Revenue. H3: Tax Revenue and Government Expenditure bidirectionally cause to each other. 1.4 Outline of the Study The research studies the causal relationship between government expenditure and tax revenue to see the reasons for the consistent budget deficits in Pakistan from many years. In addition time series analyses have been done to forecast the trend of government expenditure and revenue based on the leading variable. CHAPTER 2: LITERATURE REVIEW Nanthakumar and Taha (2007) have found a stable relationship between spending and revenue. Furthermore there is a long-term impact exist expenditures that enter as input into the production function and those that enter as inputs in investment technologies. Koch, Schoeman, and Tonder (2005) found that there is an association between burden of taxes and economic growth according to the findings based on the data of 1960-2002 if tax burden decreases economic growth increases significantly. Friedman (1982) explains expenditure of the government depends on total revenue because as taxes increases expenditure increases by which deficit remains at the same level, therefore the level of fiscal deficit cannot be reduced by increasing taxes. Buchanan and Wagner (1977) on the other hand have presented an alternative hypothesis that increase in taxes does not lead towards low expenditures because taxes creates higher price of goods for the public due to high interest cost associated with it Buchanan and Wagner suggest that in order to restore deficit government should limit its financing ability. Sobhee (2004) tested the causality from tax to expenditure and from expenditure to taxes by using the data of public finance and founded that for the utilization of public expenditure in a small economy government first accommodate the necessary funds, therefore to avoid the situation of fiscal deficit the government must carefully monitor and control its spending programs. Fasano and Wang (2002) in a research on GCC countries founded that the primary Source of revenue is oil and due to the economic fluctuations medium-term expenditure strategy should be adopted according to which expenditure should not exceed the non-oil revenue so that in recessions to compensate expenditures oil revenues can be injected by short-term accommodations. Second hypothesis where causality runs from expenditure to revenue the government first spend and then to accommodate the requ ired level of expenditure adjusts tax policy. Peacock and Wiseman (1979) argue that due to economic crises government expenditure increases and remain at the same level even when the crises is over. In other words government expenditure is driven by strong economic crises which is able to change public perception about the size of the government. Gounder, Narayan, and Prasad (2007) find compatibility with the second hypothesis that the increase in taxes for the accommodation of government spending affects on the capital investment by investors due to the fear of paying higher taxes in future. The third hypothesis is fiscal synchronization according to which expenditure and revenue decisions are independent and bilaterally cause to each other. Reflecting the traditional theories for the demand for public goods. Meltzer and Richard (1981), the demand of public expenditures and taxes need to compensate these expenditures are compared with many alternative spending programs for cost benefit analysis, therefore the practical implication of this hypothesis is bidirectional causality. Narayan and Narayan (2006) suggest three reasons regarding the importance of nexus between government revenue and expenditure first if proper implementation on policies is taken into consideration regarding government revenue fiscal deficit can be avoided, second if causality runs from expenditure to revenue outflow increases due to the fear that government spends first and pay for it later by increasing taxes. Third in case of bidirectional causality expenditure can rise faster than revenue which can create huge budget deficits because revenue and expenditure decisions are independent of each other. Baharumshah and Lau (2007) Find two sets of different results where the fiscal policy of Korea, Singapore and Thailand is driven by expenditures where the government finances revenue for the planned expenditures according to the limit of the balanced budget which facilitat e the long term sustainable budget position. However the taxation system should be implemented by taking care of the overall smooth fiscal policy. Whereas in case of Malaysia and Philippines expenditures and revenues are independent of each other and the level of government expenditures and revenues is determined through fiscal policy based on marginal cost and revenue. Furthermore the findings indicate that in order to achieve long-term economic growth fiscal consolidation is necessary to reduce deficits and debt levels which lead a country to fulfill expenditure priorities better and provide funds to more productive sectors. Griffin and McKinley (1992) believes that the expenditure policies of the government should be directed towards long-term future growth and for the well being of the people, Therefore activities that contribute more on socio economic development should be increased instead of using resources and funds to military defense projects. King and Rebelo (1990) taxation has a very important role in the long run growth process of a country where growth is not affected by indirect taxation, however direct taxation is harmful for growth. Nanthakumar and Taha (2008) found in an analysis of Malaysia that the major part of taxes is direct taxes and reducing direct and indirect taxes leads to reduce in government expenditures, In addition non-tax revenue does not contribute much in economys growth. Hondroyiannis and Papapetrou (1996) find unidirectional causality running from government expenditure to revenues in Greece where the reason of fiscal deficit from a long period of time was government spending decisions. The government spending to GDP is very high in Greece which results an operating inefficiency for the economy. Furthermore the results indicated that reducing fiscal deficit without reducing the government expenditure leads to failure. Ahiakpor and Amirkhalkhali (1989) Based on the analysis of Canada found that to show the rel evant results of fiscal policy government increase taxes which is a temporary and incomplete act in order to fully take control over fiscal deficit the government must reduce or limit its expenditures instead of finding ways to increase tax revenue burden on public. Baghestani and McNown (2004) in a study of Egypt and Jordan claim that to promote domestic savings and private investment it is necessary to eliminate budget deficit for both the counties. Baghestani supported the causality from tax revenue to expenditure in case of Egypt and bi-lateral causality in case Jordan. Furthermore promoted the process of privatization because it facilitate high domestic saving and investment and at the same time helps to reduce fiscal deficit. Neyapti (2008) studied the influence of fiscal decentralization on government revenue and expenditure and indicated that decentralization improves quality of governance which leads to decrease in budget deficit and stable economic condition. However the efficiency of fiscal decentralization increases in case of large population. Keho (2010) Study the data fo 1660 to 2005 to analyses the causal relationship between government expenditure and tax revenue to see which expenditure and revenue items plays a part in the reduction of budget deficit and found that GDP has significant effect on government expenditure. Furthermore the findings of granger causality test indicate unidirectional causality from government revenue to expenditure according to the findings the implementation for the elimination of fiscal deficit should not be made by just increasing revenues. Thus for the beneficial results spending cuts are necessary. In other words tax system should be made with proper spending control system. Brennan and Buchanan (1980) suggest that in order to reduce fiscal deficit constitutional limits should be imposed on post-constitutional government to reduce the revenue collection by latter governments so that position of maxim um financing of goods demanded by public and minimum revenue collection can be achieved. Baffes and Anwar (1990) conducted the research for the countries Argentina, Brazil, Chile, Mexico, and Pakistan to determine the behavior of government towards revenue and expenditures for the alignment of fiscal deficit. The results found to be positive for Mexico, Brazil and Pakistan while the similar findings havent been found for Argentina and Chile. For Brazil, Mexico and Pakistan causality runs in both ways in other words bidirectional causality where decisions for the government spending and revenue are taken simultaneously. However in case of Argentina and Chile causality runs from expenditure to revenue. The results indicates that to control budget deficit the government should increase revenue collection and restrain expenditure whereas public expenditures should be reduced in Argentina and Chile. Stoian (2008) founded in case of Romania by applying Johansen cointegration and Err or Correction model that the long run relationship between government revenue and expenditure do not affect major fiscal imbalances. CHAPTER 3: RESEARCH METHODS 3.1 Method of Data Collection Data of the two variables Government Expenditure and Total Revenue is taken from secondary sources with the help of multiple sources which includes (Ministry of Finance), (State bank of Pakistan) and (Hand book of Statistics on Pakistan Economy). 3.2 Sample Size Sample of 31 observations have been used by using the data of public finance from the year 1979-2010. Where the variable (Total Tax Revenue) has been created by adding indirect-tax, direct-tax, Non-tax revenue and surcharges and (Total Expenditure) has been calculated by adding Development and Non-Development Expenditures. 3.3 Research Model Granger model is used to study the causality where TR is the total revenue and TE is total government expenditure. TRt = à ¢Ã‹â€ ?1 + ÃŽÂ ´1 + TEt-1 + TEt-2 + ET1 TEt = à ¢Ã‹â€ ?2 + ÃŽÂ ´2 + TRt-1 + TEt-2 + ET2 The above two equation represents the hypothesis where the causality running from total expenditure to revenue in equation one and from revenue to expenditure in equation two. The rejection of any hypothesis concludes unidirectional causality between government expenditure to revenue. However, rejection of both the hypothesis concludes bidirectional causality in other words fiscal synchronization exists between government revenue and expenditure. 3.4 Statistical Technique In this research granger causality test by Granger (1969) has been applied to study the causal relationship by comparing one time series with another (Government Expenditure with Government revenue) where one variable becomes the cause of the other variable to predict it significantly. In addition cross-correlation has been applied to assess the correlation between both time series variables. CHAPTER 4: RESULTS 4.1 Findings and Interpretation of the results Table 4.1 Pairwise Granger Causality Tests Sample: 1 32 Lags: 2 Null Hypothesis: Obs F-Statistic Prob. TOTAL_EX does not Granger Cause TOTAL_RE 30 0.84135 0.4430 TOTAL_RE does not Granger Cause TOTAL_EX 14.2132 8.E-05 Table 4.2 Pairwise Granger Causality Tests Sample: 1 32 Lags: 1 Null Hypothesis: Obs F-Statistic Prob. TOTAL_EX does not Granger Cause TOTAL_RE 31 0.20627 0.6532 TOTAL_RE does not Granger Cause TOTAL_EX 46.4229 2.E-07 The summary given in the table above shows that there is a unidirectional causality exist between total government expenditure and total revenue, as the value of F-Statistic is 3.5 when the causality runs from expenditure to revenue due to which the null hypothesis (TOTAL_EX does not Granger Cause TOTAL_RE) is accepted. However, the causality is running from revenue to expenditures as F-Statistics 3.5, Furthermore both lag 1 and lag 2 are tested to achieve better results as table 4.2 indicates therefore the null hypothesis (TOTAL_RE does not Granger Cause TOTAL_EX) is rejected. Table 4.3 Cross Correlations Series Pair:Total_Revenue with Total_Expenditure Lag Cross Correlation Std. Errora -16 -.177 .250 -15 -.143 .243 -14 -.099 .236 -13 -.056 .229 -12 -.010 .224 -11 .044 .218 -10 .097 .213 -9 .137 .209 -8 .210 .204 -7 .255 .200 -6 .299 .196 -5 .353 .192 -4 .427 .189 -3 .513 .186 -2 .663 .183 -1 .796 .180 0 .994 .177 1 .810 .180 2 .662 .183 3 .544 .186 4 .431 .189 5 .344 .192 6 .271 .196 7 .208 .200 8 .148 .204 9 .094 .209 10 .053 .213 11 .005 .218 12 -.036 .224 13 -.078 .229 14 -.114 .236 15 -.153 .243 16 -.188 .250 a. Based on the assumption that the series are not cross correlated and that one of the series is white noise. Figure 4.1 Total_Revenue with Total_Expenditure Lag Number The results of cross-correlation indicates total revenue as a leading time series variabler with a strong correlation of .994 with government expenditures at lag 0, furthermore correlation a positive correlation has been found from lag 1 to lag 11, However the correlation is decreasing and from 12 to 16 lags correlation in negative predicting that with the increase in total revenue, total government expenditure will decrease in future. 4.2 Hypotheses Assessment Summary Hypotheses F-Statistic Result Tax Revenue causes Government Expenditure. 46.4229 Accepted Government Expenditure causes Tax Revenue. 0.20627 Rejected Tax Revenue and Government Expenditure bidirectionally cause to each other. Rejected CHAPTER 5: CONCLUSION, DISCUSSION, IMPLICATIONS AND FUTURE RESEARCH 5.1 Conclusion The research studies the causal link between total government expenditure and total revenue in Pakistan using granger causality test and the supportive cross correlation from 1979-2010. The result from granger causality supports the hypothesis that tax revenue causes government expenditure in Pakistan. In addition cross correlation results have indicated long-term results that with the increase in revenue expenditures will increase. Therefore the major conclusion drawn from this research is that in order to eliminate the problem of fiscal deficit and sustainable economic growth government should focus on the policies which facilitate increasing revenue. 5.2 Discussion Various studies have analyzed the causal relationship between government expenditure and revenue. Some supported with unidirectional causality occurring from revenue to spending and from expenditure to revenue whereas some have indicated the result of bidirectional causality. However, both the variables have significant impact on budget deficit and economic growth. Fiscal deficit in Pakistan is a major issue as the findings of cross correlation indicates that the revenue and expenditures are correlated which means that as revenue increase expenditure increases and deficit remains at the same level and to compensate this deficit government increases its debt financing from domestic and foreign sources which leads towards inflation and high interest rates. 5.3 Implications and Recommendations The model and analysis of this study is very useful for economists and policy makers as it helps in enhancing revenue by tax reform programs. In addition for the determination of optimal spending expenditure reform assessment can be done through cost and benefit analysis which will help in setting objectives for tax collections and better utilization of taxes. 5.4 Future Research Future research possibilities could be as follows first variables like national income and debt financing could be included in the research. Second data sets of multiple countries would be interesting to analyze the causal relationship using the same model in comparison with this research.

Analysis Of Oedipus The King - 1127 Words

Sereen Qader Professor Jamie Lail English 1301 25 February 2016 For A Life Of Regrets Oedipus the King is a play written by Sophocles. Oedipus is the main figure and legend of Sophocles play. After Oedipus birth into the world, his father King Laius of Thebes heard from a prophet that his own child was destined to kill him. Sophocles play begins from past to present and starts to unravel the journeys Oedipus goes through. Oedipus isn t an evil character as one would think while reading the story. He never had the intention of harming anyone in any way, shape, or form. It s his actions that make him seem like the person he is when really he s just full of regrets and guilt from what he has done. In addition to years of being left alone, Oedipus visits a prophet after a drunk man told him that he was adopted. The prophet tells him that one day he will kill his dad and marry his mother. Oedipus escapes the city to avoid any danger that he might cause to his parents. Terrified and worried Oedipus goes to Thebes. On the way he passes by King Laius and his servants, they try to move Oedipus out of the way by whipping him. Oedipus builds in anger and he turns around murdering both King Laius and his servant except one man who ran away from the scene. After arriving to the city of Thebes he turns into the new King by solvingShow MoreRelatedAnalysis Of Oedipus Oedipus The King 1152 Words   |  5 Pagesreading Oedipus the King. The number of times the words â€Å"see† or â€Å"blind† are in the play make it make it undeniably obvious that they are significant. The theme is developed throughout the dialogue, through characters such as Tiresias and Oedip us, and also directly in the irony of the play. It is important in a play about the truth because almost every character was â€Å"blind† to the truth. All of the characters, except one, can physically see, but mentally cannot see the truth. Oedipus seems toRead MoreCritical Analysis Of Oedipus The King1025 Words   |  5 PagesCritical Analysis: Oedipus the King Oedipus the King is a tragic play showing a shift from the belief of fate to freedom of choice. Therefore, Oedipus the king is a great example of those who run from fate ends up fulfilling their fate After reading this type of tragic play â€Å"Oedipus the King† written by Sophocles you can see that the author did a very outstanding form of presenting a tragedy that has the characteristics of mimesis and a tragic hero. Specifically, the writer written the playRead MoreOedipus the King Character Analysis1321 Words   |  6 PagesLancaster ENG230 11/25/2010 Oedipus the King Character Analysis Oedipus the King had accomplished many great things during his reign of Thebes and in his life time. Oedipus found out during his reign in Thebes that the Gods who loved him also knew his devastating fate. 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Through Oedipus’ misfortune, Sophocles tries to reveal the cause of their tragedy is ubiquitous and ever-present fate,Read MoreAnalysis Of Oedipus The King1145 Words   |  5 PagesOedipus goes against the Chorus as he strongly defends himself as the people intensify his incrimination of killing the old king. Oedipus could not believe in his wildest dreams that he murdered his own father and was the husband of his mother. As an adopted runaway boy and a newfound king, he had to dig deep in his past to ease his burden. The Chorus’ incrimination of the King has brought the town into a downward spiral due to finding the real truth of the blind prophet. The relevance of Oedipus’Read M oreMovie Analysis : Oedipus The King 1810 Words   |  8 Pagesthemselves to emote and have their negative emotions be lifted. Oedipus The King s main pathway to catharsis is the role of the Chorus; in this particular tragedy, the Chorus s biggest role is to serve as an emotional bridge between the characters and the audience, for they constantly recap what has happened in the plot using graphic language and reflect on Greek Mythology as they suffer along with the other characters. As Oedipus slowly learns that his prophecy has come true, the Chorus attempts

Public Service Loan Forgiveness ( Pslf ) Essay - 1553 Words

As of today Americans are facing a outstanding debt of 1.3 trillion dollars in student loans alone and it s up to 43 billion students to pay all of that back in full. Our most recent graduating Class of 2016 student is coming out of college owing an average of $37, 172 in loans, making an increase of 6% since 2015. Which is significant amount of growth to have within such a short period of time. Many of these students are unable to make their monthly payments whether it be because of the tremendously high interest rates or because they simply don t have the sufficient funds to pay their monthly quotas. But many student are also not aware of different options that are available to them that help eliminate their student loans in full or to repay their loans in a very doable and manageable manner. In this paper I will be discussing and focusing on the three most beneficial and commonly known options which are, public service loan forgiveness (PSLF) , the four different type of income based repayment (IBR), and refinancing your loans. Public Service Loan Forgiveness also known as PSLF is a program designed for federal student loans borrowers who enter a full-time in public-service jobs. The PSLF forgives the remaining balance on the students loans only if the first 120 monthly payments have been made while employed full time by a qualified employer. This means you are working for any non-profit organization, federal government position, or are serving full time for theShow MoreRelatedPublic Service Student Loan Forgiveness805 Words   |  4 PagesArticle Topic: Public Service Student Loan Forgiveness In our September 2016 blog post, we highlighted the various options for funding college education, including student loans. If you have already graduated from college and have outstanding student loan debt, you may be wondering what your options are for reducing what can sometimes be a significant burden. For individuals working in the public service sector, there is a student loan forgiveness program that may help. The Public Service Loan ForgivenessRead MoreEducation Is Crucial If One Were To Be Successful In Life.1309 Words   |  6 Pagesto pay their student loans. Students who try to further their education have had this issue for ongoing years. Not only does a student try to acquire as much knowledge as one can, but it is not a guarantee that once a student graduates from college, that he or she will have an occupation. This all factors into how it has become strenuous for students to pay their student loans when tuition fees are excessive instead of being affordable for each student. 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In addition, the study conducted by Scheresberg, Lusardi, and Yakoboski (2014) show that a surprising amount of students are not aware of the financial burden that they have acquired until they are deep in debt and interest. They summarize that: Overall, there is a notable mismatch among college-educated Millennials between their perceived and demonstrated levels of financial literacyRead More Financial Aid: Old Methods May Not Be the Best Methods Essay1752 Words   |  8 Pagesrepaying student loans. Scrutiny regarding misuse of governmental loan subsidy funds by lending institutions and for-profit colleges was occurring. Student debt loads were at an all-time high. High unemployment meant students could not make payments on the loans and were defaulting at record rates. The Student Aid and Fiscal Responsibility Act (SAFRA) proposed in 2008 and passed in 2009 rewrote student financial aid rules in a positive way and outmoded the ineffective old student loan system. LendingRead MorePursuing A Career As A Speech Language Pathologist1628 Words   |  7 Pagesneeded to even become competitive in the job market, which means young people have to attend college whether or not they have the finances to go. For those that donâ⠂¬â„¢t have the finances to attend college will have to take out some form of student loan. Student loan debt has become one of the worst financial nightmares for many young people, and at the same time, the education they receive is mediocre in comparison to the rest of the world. Unfortunately, this is true of every educational system in theRead MoreStudent Debt Is The Cost Of An Education3402 Words   |  14 Pagesincluding one of the most common, student loans. A student loan is defined as â€Å"a common way to fund education, specifically college and graduate school, and they provide educational opportunities that you otherwise may not be able to afford† (Barr). Student debt is at an all-time high in America. Over half of all lower income students pay for college with loans (Friedline). On top of the federal loans, students also end up using credit cards and payday loans to pay for other basic necessities whileRead MoreThe Career Path Of Forensic Science2368 Words   |   10 Pageshas worked before so I know it will work for me. Loans will be the only way to go in this situation. I may take some of my loans to the grave with me but there is still hope. As stated by Federal Student Aid, â€Å"The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer† (Public). This would be a huge help. Obviously there are

Juvenile Offender’s Right to a Jury Trial Free Essays

This paper intends to answer the following questions: 1) Should juvenile offenders have a constitutional right to a jury trial? and 2) Should each state make that determination? The legal decision (Amendment 6 and 14th) which addressed the issue will be briefly discussed as well as part of the answers to the aforementioned questions. Should juvenile offenders have a constitutional right to a jury trial? Yes, juvenile offenders should be given a right to a jury trial (FindLaw, 2008, n. p. We will write a custom essay sample on Juvenile Offender’s Right to a Jury Trial or any similar topic only for you Order Now ). Doing otherwise will be considered unlawful since this is a violation of â€Å"the Sixth Amendment† which covers the â€Å"Rights of Accused in Criminal Prosecutions† (FindLaw, 2008, n. p. ). The â€Å"Sixth Amendment† holds that an individual who undergoes criminal trial should be given a right to â€Å"an impartial jury of the State and district wherein the crime shall have been committed† (FindLaw, 2008, n. p. ). In addition to that, juvenile offenders should be given a right to a jury trial because anybody who deprives them of this violates the â€Å"Fourteenth Amendment† which involves the â€Å"Rights Guaranteed Privileges and Immunities of Citizenship, Due Process and Equal Protection† (FindLaw, 2008, n. p. ). Explaining further a jury trial is part of what is technically referred to as â€Å"due process† (FindLaw, 2008, n. p. ). Also, â€Å"equal protection† is provided if a â€Å"jury trial† is given to the juvenile offender (FindLaw, 2008, n. . ). Should each state make that determination? There is really no need for each state to make such a decision because this is already covered the â€Å"Fourteenth Amendment† which involves the â€Å"Rights Guaranteed Privileges and Immunities of Citizenship, Due Process and Equal Protection† (FindLaw, 2008, n. p. ). Here, it is clearly stated that â€Å"No state shall make or enforce any law which shall abridge the privilege or immunities of citizens of the US† (FindLaw, 2008, n. . ). This means that people are protected by the constitution and even their States cannot do anything to take this right away from them (FindLaw, 2008, n. p. ). The same is true with â€Å"a right to jury trial†, it is not necessary that each State determines what their law will be about this since whether States make a move or not, citizens are still protected by the constitution (FindLaw, 2008, n. p. ). References FindLaw. (2008). Sixth Amendment. Retrieved November 7, 2008 from  http://caselaw.lp.findlaw.com/data/constitution/amendment06/ FindLaw. (2008). Fourteenth Amendment. Retrieved November 7, 2008 from  http://caselaw.lp.findlaw.com/data/constitution/amendment14/ How to cite Juvenile Offender’s Right to a Jury Trial, Papers

Blockbuster Inc a Strategy and Competitive Analysis free essay sample

Blockbuster Video is facing many challenges in trying to remain competitive in the video rental industry. Besides strong competition from Hollywood Video and Netflix, consumers are migrating to new choices, including video-on-demand and DIVX (Digital Video Express), an alternative rental option that allows consumers to eventually own the movie. This report will describe Blockbuster’s strategy and will compare Blockbuster to its main competitors, Hollywood Video and Netflix (see exhibit 2). The research and analysis will attempt to answer the question of whether Blockbuster can survive in the fast changing video rental industry. A competitive comparison will be done between Blockbuster Video, Hollywood Video and Netflix, with regards to the state of the rental industry, strategy to remain competitive, economic factors, innovation and development strategies, the supply chain strategy and the sales, service and promotion strategy. Blockbuster History The first Blockbuster Video store opened on October 19, 1985 in Dallas, Texas. David P. Cook, the founder, with the help of CEO, Wayne Huizenga, grew the business from a $7 million business with 19 stores to a $4 billion global enterprise with more than 3,700 stores in 11 countries. In 1994, Blockbuster sold to Viacom for $8. 4 billion in stock. Following the deal, Huizenga left the company. Over the next few years, Blockbuster experienced poor business decisions and executive departures, starting with Steven Berrard (CEO after Viacoms 1994 takeover), who resigned in 1996 to head Huizengas used-car operations. Wal-Mart’s Bill Fields replaced him and started promoting the retailer as a neighborhood entertainment center, selling videotapes (in addition to renting them), books, CDs, gift items, and music. In 1997, Fields resigned and current chairman and CEO John Antioco replaced him. By the time Antioco took over, Blockbuster was widely described as a mess. Cash flow was down, and major marketing initiatives such as selling magazines and candy in the stores had flopped. Its performance was dragging down Viacoms stock. Antioco immediately started unraveling many of Fields efforts, especially his focus on non-rental operations. Then in 1997, with the help of Blockbusters large market share he forced the movie studios into a revenue-sharing agreement that replaced the standard practice of buying rental copies for as much as $120 each. It not only saved money, but it allowed Blockbuster to stock more copies for less. By 1999 Viacom spun off a minority stake in Blockbuster and the company split into three new operating units that oversee its retail outlets, e-commerce operations, and database and brand marketing. Viacom later sold off the rest of Blockbuster in 2004. In 2001 Blockbuster announced that it would decrease its VHS and video game inventory by 25% to make room for more DVDs. In 2004, Blockbuster eliminated late fees on all of its in-store rentals at locations in the US and Canada. This was in response to competitor Netflix policy of not charging late fees for returned DVD’s. Later in 2004, Blockbuster launched a $700 million takeover bid for Hollywood Video, a move that the FTC was very concerned about and attempted to block. Hollywood Video refused to consider the offer and eventually agreed to a purchase by its smaller competitor, Movie Gallery, in 2005, creating a strong #2 in the industry. Blockbuster has lost significant amounts of money in recent years: $1. 6 billion in 2002, almost $1. 0 billion in 2003, and $1. 2 billion in 2004. The past few years, Blockbuster has been busy reinventing itself for a future in which video rentals may be on the way out. Competition and the State of the Rental Industry Technological and market evolution is finally catching up with the brick and mortar movie rental business. With all the new sources of competition available, Internet subscription services (Netflix), cheap DVDs at Wal-Mart, online movie download services, cable and satellite movie channels plus video-on-demand, Telco entry into the video business, it’s no wonder that Blockbuster and Hollywood Video are struggling. In 2005, Joe Flint and Kate Kelly reported in the Wall Street Journal that â€Å"Blockbuster Inc. is facing new pressures as signs increase that a sharp decline in the video-rental market is putting a strain on the company’s finances. † The company’s stock prices fell by 9. 7% in late 2005, hitting a low of $4. 60 per share. Then Hollywood Video (Movie Gallery Inc. ) reported that sales at many of its stores dropped 10% the same quarter in 2005. Meanwhile, Netflix was gaining momentum and a customer base of almost six million subscribers (see exhibit 2). Antioco admitted to the Wall Street Journal that the â€Å"rental industry is in the tank† and the firm’s SEC filing in 2005 said that it anticipates a â€Å"faster than expected decline† in the store-based video rental market. According to Adam Thierer , â€Å"This is what makes the FTC’s efforts to stop the Blockbuster-Hollywood Video merger so troubling. Clearly, this is a sector in the midst of rapid decline; perhaps even the beginning of a death spiral. This has been forecast by some industry analysts and techno-pundits for years, but now it is really happening thanks to all the new competition and innovation in the media sector. Without this merger, both these firms are likely dead. Of course, they might have been dead even if they had been allowed to merge. But now we’ll never know. † The Strategy to Remain Competitive As the SWOT analysis shows (see Exhibit 1), Blockbuster faces competitive battles on a number of fronts. It appears as though Blockbuster understands the need to expand into other fast-growing services and technologies. Antioco is determined to â€Å"deliver entertainment to consumers homes almost every way but down the chimney†. He has called his plan the ultimate bricks, clicks and flicks strategy. He cut deals with major studios to share revenue from rentals, which lowered the companys acquisition costs for tapes and ensured it would have more copies available for rental. And he spent heavily on getting the message out to customers that Blockbuster had cleaned up its act. Of the approximately 88 million U. S. households, about 45 million are an active Blockbuster account, which means its rental business still has room for growth. And Antioco said the retail stores and its strong brand, as well as the data that it has gathered about consumer preferences in movies and other entertainment, are assets Blockbuster can leverage as it moves into new areas. Antioco has put the company into the satellite business with DirecTV Inc. Customers can buy satellite TV systems in Blockbuster stores, and the company offers Blockbuster movies on a pay-per-view basis. In 2003 Blockbuster acquired Movie Trading Co. , a used DVD trading retailer with 18 stores, in order to study the used DVD business. In 2004, Blockbuster acquired American Satellite and Video, operator of 40 southeastern Rhino Video Games stores that buy, sell, and trade video games. This was a late effort to combat rival Hollywood Video’s venture into the gaming industry, which started in 1999 with the creation of its successful â€Å"Game Crazy† brand. Blockbuster is also on the Internet. Theres the company Web site, Blockbuster. com, where new movies on video and company promotions are listed. Blockbuster also has an alliance with America Online Inc. Blockbuster promotes AOL products and services in Blockbuster stores. `The new management team has done a great job of taking their current assets and ensuring that they have a role no matter what technology develops in the future, said David Reidel, president of equity research for Salomon Smith Barney. If satellite develops more rapidly than broadband, they have access to that. As the Internet becomes more important, they have exposure through AOL. But they also have a very strong base of retail. Blockbuster entered into Internet subscription service with â€Å"Total Access† to compete with the success Netflix was having. Antioco had initially been skeptical of consumer demand for the mail-order concept, but after Netflix signed up millions of customers, Antioco changed course. Carl Icahn, Blockbusters top shareholder, criticized Antiocos slowness to act. While Blockbusters service, which allows customers to return mail-delivered movies to their local store, has proved popular, it still has fewer than half the number of customers Netflix has . What is surprising is that Hollywood Video didn’t jump into this fast-growing market as well. And that might be because Internet subscription services have their drawbacks. The customer is never assured of getting the exact movie they are interested in. They are sent a movie from a list that they set up online. New movies that are usually attainable at the local video store require the Internet customer to be very patient. But it seems that Blockbuster has a clear advantage over Hollywood Video by entering the Internet subscription market first for rental stores (but after Netflix) and providing the advantage of in-store drop- off. This added convenience to the customer can be looked at as a first to market strategy. Hollywood Video introduced a program called the Movie Value Pass which allows customers to rent unlimited amounts of movies. The pass allows customers to have up to three movies checked out for free at any one time. The major restrictions on the pass are that customers must wait an average of four to eight weeks for new releases to be added to the list of MVP available titles. Customers are also still limited to five day rentals and will pay late fees on their free rentals if they are not returned on time. MVP Premium was started in November 2005 and allows customers to rent any movie in the store for a maximum of fifty days. The difference between the two MVPs is that Premium costs either $24. 99/month or $29. 99/month in order to have either two or three free movies out at a time, respectively. Antioco said he doesnt believe the basic rental business will completely go away. It will continue to grow, but it will be slow growth driven over the next couple of years by DVD. Even if it were to shrink, with sales of $10 billion a year, its a long way from extinction. And he added â€Å"Opening new channels for delivering entertainment just increases the public appetite, home video didnt kill the movies, and pay-per-view hasnt killed rentals. The market for movies viewed at home through rentals and other methods has grown to $20 billion-plus over the past 20 years, and we believe it can grow to $30 billion over the next five years. â€Å" Economic Factors The early 2000’s were a boon for the video rental industry. â€Å"By 2001, VCR’s had become an entertainment staple, with over 96% of U. S. TV households equipped with at least one VCR†, according to Peter Coughlan (Exhibit 3). An unbelievable 74% of these households rented videos each year and 63% purchased videos in any given year. Clearly, Blockbuster was a winner with these statistics and one can understand how their revenue climbed to over $5 billion in 2001. That was then and the situation now is a sharp decline in video rentals throughout the industry. Innovation Development Strategies Blockbuster is striving to innovate to remain competitive. They are trying to get ahead of the curve with video downloads. The proposed system will enable consumers to pick a film and download it onto a memory stick or card, meaning it can then be viewed on a portable mobile device or laptop. Blockbuster is also looking at online downloads and video-on-demand services. Competition is causing a lot of innovation in the DVD rental industry. Netflix has launched a new feature called Watch Now that will enable subscribers, at no additional cost, to watch movies immediately on Netflix. com. The new service does not limit the number of movies a customer can watch, instead it gives users 1 hour of video for every $1 they spend monthly (18 hours of online video is free with the $17. 99 plan). Customers can watch 5 minutes of a movie, decide that they dont like it, and switch to another without penalty (many online movie rental options require atching a movie within a certain time period, such as 24 hours or 14 days, or the movie will have to be re-rented at additional cost). Blockbuster has a history of innovation but not all its ventures have worked out. Former Wal-Mart executive Bill Fields took over the chain in the mid-1990s and was gone soon after when his idea to sell more general merchandise in stores flopped. The chains Blockbuster Music venture du ring that same period suffered an early demise, as did its short-lived video-on-demand venture in 2000 with Enron (yes, that Enron! ). Supply Chain Strategy In the early days of video, the release process was fairly straightforward. A movie would play in theaters for six months or more. Eventually, after a stint on cable or airplanes, it would show up on videotape in stores and rental outlets. The initial purchase price would be too high for most consumers to afford, so the tape would be geared largely toward the rental market. When the demand for rentals subsided, the distributor would drop the price and offer the movie for sale. That gave rental stores like Blockbuster a window of near-exclusive access to customers. With the advent of movies on DVD, everything changed. Today, rental and retail DVDs are released simultaneously, so Blockbuster and Hollywood Video must compete with a growing ownership market. And the retail side has a simpler supply chain. DVDs for sale go through a standard pick, pack and ship process before reaching store shelves. Rentals, however, involve several additional steps, including the printing of a store-specific insert, placement of the insert into the outer sleeve of a separately produced, lockable case, and transfer of the DVD from its original packaging into the new case. The whole process must be tightly scheduled, to make sure that each of Blockbuster’s U. S. stores gets product in time to meet release dates. Demand volatility gives Blockbuster additional challenges. Depending on the number and popularity of new DVD titles in a given month, the company’s labor needs at its distribution center can vary sharply. Up to now, it has solved that problem with temporary workers, who are expensive to train on short notice. Blockbuster is responding to these problems with a new approach to DVD packaging. Beginning in 2006, the company got rid of its familiar blue-and-white rental boxes and replaced them with lockable cases that look just like rental units, complete with factory artwork. A plastic backer card remains on the shelf when all units of a particular DVD are rented. Extra work is still required to place the disks into these new cases, but Blockbuster has turned to technology to cut costs. Five high-speed machines, located at the company’s sole distribution center near Dallas, automate the process of opening an empty case, inserting the disk, printing and applying store-specific labels to the cover, inserting additional coupons or disks, and placing each order into totes on conveyors. As a result, work at the distribution channel can be completed in less than half the time, with 75 percent less labor. That adds up to savings in excess of several million dollars a year for Blockbuster. The project’s success relies upon cooperation with suppliers. Blockbuster convinced its distributors to ship DVDs without cases, on spindles in stacks of 100. That eliminated the need to remove them from retail packaging. Artwork, which must be cured for two days to prevent warping, is shipped separately as well. Tight collaboration with vendors was also required to determine the right kind of plastic mold for the cases, and sticker for the cover. To keep distribution costs down, Blockbuster divided the U. S. and its surrounding territories into 50 regions, or pool points. The distribution center keeps a close watch on pickup schedules, so that it can expedite shipments if a movie is in danger of missing an in-store date. All of these measures have helped the company to stay competitive in an industry that is constantly changing, with an ever-growing number of options for consumers. Sales, Service and Promotion Strategy Rentals are still the key revenue source for Blockbuster, but theyre no longer the only category Blockbuster has to rely on. During the past few years, the chain has been working to reinvent itself as a true retailer instead of a rentailer. That process began in early 2002 when the chain began selling video game consoles and video games in stores for the first time. Later that year, Blockbuster introduced new signs to promote DVD sales, marking its first concerted effort to sell new video releases in stores. The results of that strategy showed in the first quarter of 2004, when Blockbuster posted $119 million in DVD sales, a 74% increase from $69 million the same period the previous year. During a recent conference call with analysts, John Antioco made a point of highlighting those numbers. We sold 5. 2 million DVDs in the first quarter alone and were clearly on our way to becoming a destination for DVD buyers, said Antioco. Video game sales also skyrocketed during the first quarter of 2002 with $62. 5 million in sales compared to just $9. 7 million the first quarter of 2002. Overall, merchandise sales accounted for 19. 7% of the chains total revenue for the quarter compared to just 14. 6% in the same period last year. Antioco said the results were the start of Blockbusters long-range goal to become both a retail and rental destination. The rapid adoption of DVD altered the buying habits of consumers and the industry in general. Analyst Tom Adams said Blockbusters strategy is a sound one given the state of the industry. The rental market has been relatively flat the past 10 or 12 years, so during that time Blockbuster has been growing by adding more stores and gaining market share, said Adams, president of Adams Media Research in Carmel, Calif. But now theres only a limited amount of space left and they have to look for growth elsewhere. Adams said using merchandise sales to spur growth is a great idea that takes Blockbuster back to the halcyon days of video. Back in the early 1980s, most video stores were consumer electronics stores that got into renting videos on the side, so they were the place to go to check out new technology, said Adams. Thats where video started so I think its a great way to go. Blockbuster has floated several new ideas designed to increase its market share. In June 2003, the chain introduced its Freedom Pass program that allows unlimited video game rentals with no late fees for $19. 99 per month. The chain also opened new video game stores-within-in-stores in the United Kingdom and is testing the same concept in some U. S. outlets. Besides Hollywood Video’s Movie Value Pass program, mentioned earlier, they began accepting Trade-Ins to be sold as Previously Viewed in June of 2005. To trade in a movie, a valid membership is required. In addition, only titles and editions carried by Hollywood Video are acceptable for trade-in, therefore most Full-Screen DVDs were not accepted. In June of 2006, Hollywood Video started carrying both full and widescreen copies of major titles to offer customers a choice, so now most DVDs can be traded in regardless of format. In August of 2006 Hollywood Video began a new program called Play Guard which is essentially an insurance policy for your rentals. For a fee of twenty five cents per individual rental (DVD, VHS, Game) guests can purchase Play Guard to protect them from paying charges for a broken or cracked item. In the past if a guest rented an item and they broke it, the guest was responsible for paying for the item at its previously viewed price. Now if they purchase Play Guard any item that is broken while in their possession may be returned without any obligation to pay for it. For its inaugural month all proceeds went directly to the Starlight Starbright Foundation, since then and from now on 10% of the proceeds will go to the foundation. Conclusion Since I began working on this report, Blockbuster CEO John Antioco has announced that he is leaving the company. Apparently he was at odds with the top shareholder of Blockbuster for some time. Appendix Exhibit 1