DELL’s Competitive Advantage

Overview of Dell Computer 

     Michael Dell took the only $1,000 as capital, along with perseverance, hard work and innovation, created what is today a multi-billion dollar information technology empire. Dell started selling personal computers as a freshman at the University of Texas in Austin. Dell sold them by mail order to those customers who did not want to pay the higher prices. Dell used low-cost direct marketing to sell their product. Dell's computers became the top brand name in the direct mail market.

Product Mixing of Reckitt Benckiser

Introduction

Reckitt Benckiser is a global success story: a world leader in the global household, health and personal care sectors. Their offer is simple - bigger, better and more competitive opportunities to develop a rewarding career at the very forefront of FMCG. They are listed on the UK stock exchange and rank 23rd in the FTSE 100. 

Their success is led by their Power brands - big-name brands like Finish, Vanish, Dettol and Veet that aim to achieve global market leadership. Through these they’ve become No.1 in the vast majority of markets and categories in which they compete. Backing up their Power brands is a great portfolio of local hero brands.

Another Introduction To MIS

Management Information System (M.I.S.) is basically concerned with processing data into information. which is then communicated to the various departments in an organization for appropriate
decision-making.

Data --> Information --> Communication --> Decisions

Data collection involves the use of Information Technology (IT) comprising computers and telecommunications networks (E-Mail, Voice Mail, Internet, telephone, etc.)
Computers are important for more quantitative, than qualitative, data collection, storage and retrieval; Special features are speed and accuracy, and storage of large amount of data.
Telecommunications provide the means for oneway or two-way communication and for the transmission of messages. A combination of IT is used: telephone, computer, processor, printer, etc. A lot of time and money are saved and the security of data and messages is ensured.

Fundamental Interactive / Internet Marketing Terms

Affiliate Marketing – Affiliate marketing is a method of promoting web businesses (merchants/advertisers) in which an affiliate (publisher) is rewarded for every visitor, subscriber, customer, and/or sale provided through his/her efforts.

Banner Ad (Display Ads) – A web banner or banner ad is a form of advertising on the internet. This form of internet advertising entails embedding an advertisement into a web page. It is intended to attract traffic to a website by linking them to the web site of the advertiser.
The advertisement is constructed from an image (GIF, JPEG, PNG), JavaScript program or multimedia object employing technologies such as Java, Shockwave or Flash, often employing animation or sound to maximize presence. Images are usually in a high-aspect ratio shape (i.e. either wide and short, or tall and narrow) hence the reference to banners.

Interactive Marketing vs. Internet Marketing

As with all terminology, the descriptive words ‘interactive’ and ‘internet’ mean two, slightly different things when applied in a marketing sense. Before we review the fundamental processes and techniques within interactive marketing, let’s review what these two terms mean.

Interactive Marketing

Interactive Marketing refers to the evolving trend in marketing whereby marketing has moved from a transaction-based effort to a conversation. The definition of interactive marketing comes from John Deighton at Harvard, who says interactive marketing is the ability to address the customer, remember what the customer says and address the customer again in a way that illustrates that we remember what the customer has told us. Interactive marketing is not synonymous with internet marketing, although interactive marketing processes are facilitated by internet technology. The ability to remember what the customer has said is made easier when we can collect customer information online and we can communicate with our customer more easily using the speed of the internet.


Internet Marketing

Internet marketing, also referred to as online marketing or Emarketing, is marketing that uses the Internet. The interactive nature of Internet media, both in terms of instant response, and in eliciting response at all, are both unique qualities of Internet marketing. Internet marketing ties together creative and technical aspects of the internet, including design, development, advertising and sales. Internet marketing methods include search engine marketing, display advertising, email marketing, affiliate marketing, interactive advertising, blog marketing, and viral marketing.

Scope of An Audit

   Scope of an audit means the extent of audit tasks which are determined by an auditor for conducting the audit of a company. The determination of the scope of an audit depends upon the nature of audit.
For example, the internal audit has a different scope than statutory audit of a company. The audit standard No. 1 establishes the criteria for determining the scope of the audit of a company. They are described as……..
 1. Statutory requirements:
 This is one of the most important factors, which governs certain rules and regulations framed by the statute of a company for safeguarding the interest of the shareholders.
2. Proper planning:
 All the audit tasks should be properly planned and organized to cover all aspects of the entity relevant to the financial statements to be audited.
3. Reasonable assurance (self confident):
 To form an expert opinion on the financial statements, the auditor must ensure himself whether information contained in the accounting records and other source data is sufficient for preparation of financial statements. a) Study and evaluation of accounting systems and internal controls to
b) Tests, enquiries and other verification procedure of
4. Proper communication of information:
 The auditor must determine whether the relevant information is properly communicated by
a) Comparing the financial statements with the accounting records and other source data
b) Considering the assertions (claim) that management has made in preparing the financial statement
5. Proper evidence:
 In order to satisfy himself with respect to the correctness and adequacy of accounting records and other source, data contained in the financial statements, auditor must seek proper evidence.
6. Extension of work:
 If the auditor suspects any fraud or error after applying his selected tests, enquiries and other verification procedure, he must extend his audit tasks to confirm or allay his suspicions.

Management Information System

Management Information System (MIS) is a computer based system that provides flexible & speedy access to accurate data.
The term Management Information System can be discussed well with three sub-components- Management, Information & System.
1. Management emphasizing the ultimate use of such information systems for managerial decision making rather than merely stressing on technology.
2. Information highlighting on processed data rather than raw data & in the context in which it is used by managers & other end users.
3. Systems emphasizing a fair degree of integration & a holistic view.
So it can be said that, Management Information System (MIS) is a system of people, equipment, procedures, document & communication that collects, validates, operate on transformers, stores, retrieves and present data for use in planning, budgeting, accounting, controlling and other management process.

GNP, GDP, NNP, National Income

GNP and its properties

The sum of the money values of all final goods and services produced by domestically owned factor production of an economy during twelve month period is called Gross National Product.

Some important properties of GNP are

Inclusion of final goods and services all finally produced goods and services are come to the count of GNP of intermediate goods and services are considered here.

GNP is a monetary term there is no other way of adding up the different sorts of goods and services produced in a year except in terms of their money prices.

GNP is a flow concept it is measurable in terms of time.

Own factors of production goods and services that are produced by own factors of production is included in GNP. Any sorts of factors may work in home or abroad.

GDP and its derivation

The money values of all final goods and services produced by normal residents as well as non residents in the domestic territory of a country , during  a specified time period, usually a year, is called Gross  domestic product (GDP).

GDP at market prices or simply

GDP_mp=GNP_mp-net factor income from abroad

Net National Product or NNP

NNP means the market value of all final goods and services after providing for depreciation .In other word, when charges for depreciation are deducted from ht e gross national product we get net national product.

Sometimes, it is called national income at market prices .Therefore, national income = wages +rent +interest +profits =national product

National income at factor cost

National income at factor cost means the sum of all incomes earned by resource suppliers for their contribution of land, labour, capital and entrepreneurial ability which go into the year’s net production. In other words, it is the market prices of output less the indirect taxes and subsidies.

National income at factor cost, NNP_FC =Net national product at market prices - indirect taxes + subsidies.

Or, national income = net national product - net indirect taxes.

Disposable income

The income available for households to spend, I.e. personal incomes after deducting taxes on incomes.

Disposable income = personal income - personal taxes

GNP verses GDP

GNP is the sum of money values of all final goods and services produced by domestically owned factors of production regardless of where they work.

GDP is the sum of the money values of all final goods and services produced in the domestic territory of a country.

The difference between GDP and GNP arises due to the existence of `net factor income from abroad’.GDP does not include it but GNP does .suppose, x =home factor income from abroad, m =foreign income at home.

                           Thus,

                      When x-m=0; GDP =GNP

                     When x>m; GDP <GNP

                     When x<m; GDP>GNP

Real GNP verses nominal Gnp

On the other hand, the sum of the money values of all final goods and services produced by domestically owned factors of production of an economy during a year at constant prices is called real GNP.

Changes in nominal GNP that result from price changes does not  tell us anything about the performance of the economy, while real GNP as the basic measure for comparing output in different years.

Measurement of National Income

Income method: Under this method, national income is obtained by summing up of the all individuals of a country. In other words, this method measures national income at the phase of distribution and appears as income paid and received by individuals of the country.

Step 1;(FP)_I = W_i +R_i+I_i+∏_i+(MI)_I

Where,

(FP)_{I =}Factor payment of ith enterprise

W_i =compensation of employees of ith enterprise

R_i =rent paid by ith enterprise

I_i =interest paid  by ith enterprise

(MI)_i =mixed income of ith enterprise

_I =profit earned by ith enterprise

Step 2;

Where,

FP_i=factor payment of ith enterprise

FP_j=factor payment of jth industry

Step 3;   =NDP_FC

Where,

FP_j =factor payment of jth industry

NDP­_FC =net domestic production at factor cost

Step 4; NNP_FC = NDP_fc +(x-m)

Where,

NNP_FC =net national product at factor cost

(x-m) =net factor income earned from abroad

Expenditure method: Expenditure method arrives at national income by adding up all expenditure made on goods and services during a year. The different steps in calculating national income are as follows.

Step 1; GDP_mp =C+G+I+(X-M)

Where,

GDP_mp =gross domestic product at market prices

C =final private consumption expenditure

G=govt’s expenditure on goods and services

I =gross domestic investment

(X-M) =net export

Step 2; NDP_mp=GDP_mp-depriciation

Where,

NDP_mp=net domestic product at market prices

Depreciation = consumption of fixed capital

Step 3; NDP_fc=NDP_mp-NIT

Where,

NDP_fc=net domestic product at factor cost

NIT= net indirect taxes I.e. indirect taxes minus

Subsidies.

Step 4; NNP_fc=NDP_fc+(X-M)

Where,

NNP_fc=net national product at factor cost

(X-M)=net factor income from abroad

Value added method /product method: Under this method, the contribution of each enterprise to the generation of flow of goods and services is measured .Then, the net value added at factor cost (NVA_fc) by each productive enterprise as well as by each industry or sector is estimated.

In this method measurement of national income is as follows:

Step:1 (GvA_FC)_i-(IC+dep+NIT) = (NVA_FC)_i

Where,

(GVA_fc)_I = Gross value added at ith enterprise

IC = Intermediate consumption

                 Dep= Consumption of fixed capital or

                            Depreciation

NIT =Net indirect taxes

Step 2 _FC)=NDP_FC

Where, NDP=Net domestic product at factor cost

Step 3 NNP_FC =NDP_FC+(x-m)

Where, NNP_fc=Net national product at factor cost

NDP_FC=Net domestic product at factor cost

(X-m) =Net factor income from abroad

This method of calculating national income can be used where there exists a census of production for the year.

Circular flow of national income:

Briefly circular flow of national income explains how an economy functions. To explain this idea, Let us take an economy where there are only two agents: households and firms. Firms are required to produce goods. To produce them, they require services of factors of production. Factors of production are paid the rewards for their contribution to the production of goods. Thus income of these factors arises in the course production. This income again returns to the firm’s when expenditure is made by the households on the goods produced by the firms. So, according to circular flow of income: NATIONAL INCOME= NATIONAL PRODUCT=NATIONAL EXPENDITURE.

CIRCULAR FLOW OF NATIONAL INCOME IN THE TWO SECTOR ECONOMY:

ASSUMPTION: 

1. Neither the households save from their incomes, nor do the firms save from their profits.

2. Govt does not play any part in the national economy.

3. The economy neither imports goods and services, or exports anything

  It is clear from the figure that, each money flow is in opposite

direction to the real flow. In the upper loop of this figure, the resources such as land, labor, capital, and entrepreneurial ability flow from households to business firms as indicated by the arrow mark. in opposite direction to this ,money flows from  business firms to the households as factor payments such as wages, rent, interest, and profits. In the lower part of the figure, money flows from households to firms as consumption expenditure, while the flow of goods and services is in opposite direction from business firms to households. Thus we see that, money flows from business firms to households as factor payments and it flows from households to firms.

CIRCULAR FLOW OF NATIONAL INCOME IN AN OPEN ECONOMY

Assumptions:

Business Firms and Households:- In the upper loop of the figure, the resources flows from households to business firms and money flows from business firms to the households as factor payments such as wages, rent, interest and profits. In the lower part of the part of the figure, money flows from households to firms as consumption expenditure, while the flow of goods and services is in opposite direction from business firms to households.

      Financial Market:- In free market economies, there exists a set of institutions such as bank, insurance companies, financial houses, stock markets where households deposit their savings. All these institutions together are called financial market. Circular flow of money with saving and investment is illustrated in the above figure where in the lower part a box representing financial market is drawn. Money flow of savings is shown as borrowing by business firms from the financial market.

   Government:-In the figure, it will be seen that government purchases of goods and services from firms and households are shown as flow of money spending on goods and services. Government expenditure may be financed through taxes, out of assets or by borrowing. In the lower part, the money flow includes all the tax payments made by households less transfer payments received from the government. Another method of government financing is borrowing from the financial market to the government.

   Foreign Sector:-In the upper loop of the figure illustrates additional money flows that occur in the open economy when exports and imports exist in the economy. A flow of money spending on imports has been shown to be occurring from the domestic business firms to the foreign countries. On the contrary, a flow of money expenditure on exports of a domestic economy has been shown to be taking place from foreign countries to the business of the domestic economy. Thus,

If X > M then trade surplus occurs

If M > X then trade deficit occurs.

Foreigners interact with the domestic firms and households through borrowing and lending in the financial market. Thus

If X > M, net capital inflow will take place.

If X < M, net capital outflow will take place.

Thus, in the open economy,

       Total Expenditure, E = C+I+G+(x-M) _ _ _ (1)

       Total Income, Y = C+S+T _ _ _ _ _ _ _ _ (2)

For equality,

       C+I+G+(X-M) = C+S+Y _ _ _ _ _ _ _ _ _ _ (3)

Difficulties of measurement of national income in under-developed countries:

In underdeveloped countries like Bangladesh, we face some special difficulties in estimating national income. These difficulties are given below:

1. The first difficulty arises because of the prevalence of non-monetized transactions in under-developed countries like Bangladesh, so that a considerable part of output does not come into the market at all. The national income statistician, therefore, has to face the problem of finding a suitable measure for this part of output.  

2. Because of illiteracy, most producers have no idea of quantity and value of their output and do not keep regular account. This makes the task of getting reliable information from a large number of producer’s difficulty. 

3. Because of under-development, occupational specialization is still incomplete so that obtaining appropriate data becomes difficult.

4. There is a general lack of adequate statistical data and this adds to the difficulties of estimating national income.

Precautions to be taken while measuring national income:

Only final goods included: GNP is the value of final goods and services. The insistence of final goods and services is simply to make sure that we do not double count. For example, the wheat that goes into bread is an intermediate good. We count only the value of the bead as part of GDP; we do not count in the value of the wheat sold to the miller and the value of the flour sold to the baker.

Only current output included: Output not produced in the current period should not be included in GNP. Because such output does not contribute to the current year production therefore we count the construction of new houses as part of GDP, but we do not add trade in existing houses.

Self occupied house and self consumption: Imputed rent values of self occupied house and value of production for self-consumption should be counted while measuring national income.

Housewives services: value of housewives services should not be included because it is not easy to find out correctly the value of these services.

                                                                                                                                 Windfall gains: windfall gains such as prizes, lotteries, should not be included.

Transfer payments not included: transfer payments such as unemployment benefits, old-age pension should not be treated as income no goods or services are produced against these types of payments.

Limitations of GNP in measuring nation’s well-being: there are specifically, four major limitations for which GNP cn not be used as a measure of nation’s economic well-being:

1. Non-market activities such as volunteer work , works done by housewives, and do-it-yourself activities in the home certainly contributes to the nation’s well-being ,but these are not measured in the GNP.

2. It is very difficult to account correctly for improvements in the quality of goods and services. So GNP does not reflect the quality improvement.

3. The GNP does not take environmental pollution and delegation into account.

4. The GNP places no value on leisure even though leisure so important for well-being.

Problem of double counting and its solution:

In order to measure national income, total market value of all finally produced goods and services by domestically owned factors of production during a specified period of time, usually a year is taken. But if we consider the money value of intermediate goods besides final, the problem it creates is called problem of double counting.

                 In this case, the figure of national income is greater than it should be. An example as to explain the problem more closely, we may consider three different products, e.g. wheat, floor and bread.

Stage of production	Sales receipts(1)	Cost of intermediate goods(2)	Value added(3)=(1)-(2)
wheat	24	0	24
Flour	33	24	9
Bread	60	33	27
	117	57	60

Finally, we can get the GNP through summing up value added at each production stage. Hence, the GNP is equal to $60. It is also needed to mention $117 is greater than $60.   

To avoid double counting, two ways can be followed in measuring GNP-                                                                        

 1) VALUE ADDED METHOD: Value added is the price of goods over the cost of factors. The method in which value added in different steps of production of goods to appear at GNP is called value added method. For example summing up value added at different stages in previous table, we have able to get the exact calculation of GNP.

2) FINAL product method: To overcome the double counting problem one can sum up the prices of finally produced goods and services to have GNP. For example-

As a final good, we can get proper calculation of GNP, through monitoring the market price of bread. In this case, the market price of bread is $60 which is equal to sum up of value added.

Keynesian cross 

In the Keynesian cross diagram (or 45-degree line diagram), a desired total spending (or aggregate expenditure, or "aggregate demand") curve (shown in blue) is drawn as a rising line since consumers will have a larger demand with a rise in disposable income, which increases with total national output. This increase is due to the positive relationship between consumption and consumers' disposable income in the consumption function. Aggregate demand may also rise due to increases in investment (due to the accelerator effect), while this rise is reduced if imports and tax revenues rise with income. Equilibrium in this diagram occurs where total demand, AD, equals the total amount of national output, Y, (which corresponds to total national income or production). Here, total demand equals total supply.
In the diagram, the equilibrium level of output and demand is determined where this desired spending curve intersects a line that represents the equality of total income and output (AD=Y). The intersection gives the equilibrium output, Y'.
The movement toward equilibrium is mostly via changes in inventories inducing changes in production and income. If current output exceeds the equilibrium, inventories accumulate, encouraging businesses to cut back on production, moving the economy toward equilibrium. Similarly, if the level of production is below the equilibrium, then inventories run down, encouraging an increase in production and thus a move toward equilibrium. This equilibration process occurs when the equilibrium is stable, i.e., when the AD line is less steep than the AD=Y line.
The equilibrium level of output determines the equilibrium level of employment in the model. (In a dynamic view, these are connected by Okun's Law.) There is no reason within the model why the equilibrium level of employment should correspond to full employment. Bringing in other considerations may imply this correspondence, though.
If any of the components of aggregate demand (C + I_p + G + NX) rises at each level of income, for example because business becomes more optimistic about future profitability, that shifts the entire AD line upward. This raises equilibrium income and output. Similarly, if the elements of AD fall, that shifts the line downward and lowers equilibrium output. (The AD=Y line does not shift under the definition used here).

Assumptions

The Keynesian cross produces an equilibrium under several assumptions. First, the AD (blue) curve is positive. The AD curve is assumed to be positive because an increase in national output should lead to an increase in disposable income and, thus, an increase in consumer consumption, which makes up a portion of aggregate demand.^[1] Second, the AD curve is assumed to have a positive, vertical intercept. The AD curve must have a positive, vertical intercept to cross the AD=Y curve. If the curves do not cross, there is no equilibrium and no equilibrium output can be determined. The AD curve will have a positive, vertical intercept as long as there is some aggregated demand—from consumer spending, investment, net exports, or government spending—even if there is no national output.^[1] Finally, the AD curve must have a slope less than 1. This holds true as long as an increase in output does not lead to an equal or greater increase in aggregate demand. As long as some of the additional output is either spent on exports or saved, this assumption holds true.^[1]