Summary the artical Essay Example | Topics and Well Written Essays - 500 words

Summary the artical - Essay Example Blue oceans consist of all those industries that create new demand and market or expand the boundaries of the existing demand and market. By doing so, they generate new opportunities for profit and growth. Blue oceans have been a source of growth in the past and will remain so in the future. Emergence of new industries and wide products differentiation in the existing ones in the past demonstrate this phenomenon. As globalization spreads and barriers fall further, red oceans will increasingly become competitive with more products standardized resulting in price wars and reduced profitability. Only blue oceans will ensure growth and profit in the future. However, paradoxically, there is a bias in favor of red oceans. A study found that, out of 108 new ventures, 86 percent pursued red oceans strategy contributing to 62 percent of revenue and 39 percent of profit. Only the remaining 14 percent new ventures followed blue ocean strategy but they contributed 38 percent of revenue and 61 percent of total profit. Blue oceans have four defining features, as identified based on the data of 100 years in auto, computer, and movie and theater sectors. First, firms might create blue oceans through technological innovation in some cases but they tweak the existing technology to new uses in most cases. Second, existing firms often create blue oceans within their core competency areas rather than stepping out to new frontiers. Third, the most appropriate unit of analysis is not a firm or industry but the strategic move involving managerial actions and decisions to tap the blue oceans of demand and market. Fourth, creation of blue oceans builds new brands. Strategic orientation is more important than large R & D budget to create new market space. Red ocean strategy and blue ocean strategy have their own characteristics. In red ocean strategy, firms compete in the existing market space, beat the competition, exploit the existing demand, make a trade-off

Company law has failed to provide a solution to excess pay Essay

Company law has failed to provide a solution to excess pay - Essay Example It can be seen that the remuneration committee has a great role to play in as far as maintenance of the appropriate level of the directors’ remuneration is concerned. The directors’ remuneration is mainly comprised of the following: salary, bonus, stock options, restricted share plans, pension among other benefits. There is a close link between agency problems that shareholders have in managing the directors. Berle and Means in case of the The Modern Corporation and Private Property (1932) have identified some problems that are caused by separation of ownership as well as control in US companies around the 1930s. They realised that big companies had share ownership that is dispersed which entitled the board of directors to exert control over the company instead of the actual shareholders. If the directors run the company for their own benefit, this can cause significant problems since they may end up awarding themselves large pay packages as well as benefits. Thus, in order to resolve this crisis, the role of the remuneration committee has been put under spotlight by the Greenbury Report and The Code. The Greenbury Committee was established after widespread public concerns were raised over the excessive amount of money paid to directors of both quoted newly privatized companies. When this code was published in 1995, it specifically dealt with the question of directors’ pay and the bulk of its recommendations were made from the earlier Cadbury Report. The Greenbury Report has recommended that directors’ pay should be linked to the company’s performance. It also tries to address the problem of rewarding directors who have failed to run the company but at the end of the day get away with handsome benefits. The main aim of the remuneration committee is to prevent the directors from deciding their own levels of remuneration. The Greenbury Report has recommended that the