Evaluate the Significance of the Statement Essay

Evaluate the Significance of the Statement - Essay Example The problems related to such cases are analyzed in this paper; reference is made specifically to the transnational divorces in UK and their recognition in the context of British law. Due to the complexity of the relevant processes, two different modes of such divorces have been developed in the British law: the transnational divorces based on proceedings and those that can be developed otherwise than by means of proceedings. The literature published in regard to this subject highlights the following issues: existing British law in regard to transnational divorces is not so clear; there are provisions setting the general terms of the relevant processes but the options available are differentiated, leaving to the court the right to decide on the potential validity of a divorce for the English law and the intervention of the English courts in a dispute related to foreign divorce. This phenomenon is particularly clear in the case law developed in regard to this issue. In any case, transn ational divorces are acceptable in the context of British law, being based mostly on the principle of recognition, but their effects are not standardized, being depended on the conditions of each case, as these conditions reflect the relationship of each of these cases with the English law. The fact that the trends developed in Britain in regard to the acceptance of the transnational divorces as valid are differentiated, do not influence the power of the English courts to decide on the validity of these divorces, no matter if the terms of the foreign law, to which the parties are related, are met. 2. Transnational divorce in UK 2.1 Transnational divorce in UK – characteristics and challenges In order to understand the effects of a transnational divorce in the context of the British law, it would be necessary to refer primarily to the characteristics of the particular type of divorce, as developed not only in UK but also worldwide. A divorce is characterized as transnational w hen the acts involved, meaning the various processes required for the acquisition of the relevant certificate, have taken place in two different countries (O’Brien and Smith 1999, p.487). In accordance with Wray (2011), the transnational divorce is distinguished by the common divorce at the following point: in the transnational divorce part of the processes for the issue of the divorce need to be completed in UK and part of them have to be developed in another country (Wray 2011, p.83). In other words, transnational divorces are necessarily related to the law of different countries. In Britain, the requirements of a transnational divorce are incorporated in three different legislative texts – the Recognition of Divorce and Legal Separations Act 1971, the Domicile and Matrimonial Proceedings Act 1973 and the Family Law Act of 1986. It should be noted that the above texts do not refer directly to the case of ‘transnational divorce’ but they list the terms un der which a divorce of such characteristics can be valid in the context of the British law. In practice, the identification of the terms of validity of a transnational divorce is quite difficult. This problem is particularly common in England where a series of problems has appeared in regard to the successful completion of the relevant processes, a fact that reveals the need for the review of the relevant legislation (O’Brien and Smith 1999, p.487). One of the most important problems related to transnational div

The artistic relationship between Edgar Degas and Mary Cassatt Essay

The artistic relationship between Edgar Degas and Mary Cassatt - Essay Example Conversely, Mary Cassatt emphasized on painting about social as well as the private lives of women in the society. In her works, Mary Cassatt is particular on the intimate bond manifested between the mother and the child2. The two artists that is, Edgar Degas and Mary Cassatt had distinct relationships in arts besides their actual relationships. The relationships are attributed by the themes onto which each of them emphasized in their pieces of art. However, the subject has an element of complexity in its demonstration and a critical analysis of the content of the artistic works would perform a fundamental role of exposing the sense of relationship in this scenario. The two artists base their works on main issues occurring in the society. It is obvious that the works displayed by the two artists are related in various perspectives1. Therefore, this research seeks to establish the relationship between Edgar Degas and Mary Cassatt artistic works. Throughout this exercise there will be analysis of four different artistic pieces from the two artists. There will be a selection of two paintings of Edgar Degas and two pieces from Mary Cassatt pieces of art. The first pair of artistic pieces to be analyzed for relationship in this scenario are Ballerina and Lady with a Fan by Edgar Degas and At the Opera by Mary Cassatt. In the Ballerina and Lady with a Fan, Edgar Degas portrays a woman sitting in front in a balcony watching dancers perform. This painting exhibits an exceptional proficiency possessed by the artist. The painting manifests three levels of viewing3. In the first instance, the viewers of the painting find themselves fixed in the position of the actual audience in the theatre. The second level now directly concerns the image and there is a woman displayed as one of the audience who is also watching the performance by the dancers. The third level depicts the actual performing dancers in the stage and of whom all the attention is geared. Edgar utilizes differ ent artistic styles in ensuring an effective visualization by the appreciators. There is effective harmonization of the light, color and shadows. All these attributes to the observable quality appreciated in the painting2. There is a distinction between the leader of the dance group who is in a light orange dress and is in front of the other dancers who are in green gowns with red stripes4. In Mary Cassatt’s, At the Opera the image also dominate a significant portion of the painting. The piece exhibits a woman seated alone in the balcony to observe performance in a theatre. The woman has a long black dress that covers her body properly from the lower part of her neck till the feet. The proper woman also has gloves on her hands and a black hat. These leaves only the face and few parts of the hands exposed for the public view. The woman has a pair of binoculars with which she uses to capture the performance explicitly in the hall4. According to the prevailing trends of this per iod, the paintings have a close relationship ranging from the way they are exposed to the actual meanings depicted by the pieces. The two paintings relate specifically in dominance, meaning and spectatorship. In the first painting and that is Ballerina and Lady with a Fan, we can consider the spectatorship and we can endeavor querying the exposure of the woman and her capacity to regulate or dispute the situation5. The woman seated at the balcony is viewed by other spectators most of which are men. The woman

Impacts of Tourism Deregulation and National Security

Impacts of Tourism Deregulation and National Security National security has always been an issue dating back to as early as when man started organizing himself in society. Tourism has become a major pillar of modern-day economies and cultures. This research examines the impact of tourism deregulation or the simplification of government rules and requirements on tourism to national security. The study will also cover areas on importation of terrorism through tourism; compare tourism crime and other types of crime and finally investigate the changes in crime rate in countries that deregulate tourism. The resident attitudes towards the impacts of deregulation of tourism on national economy will be explored. Questionnaires and simple random sampling will be used to collect data from the respondents. The data collected will be analyzed using the statistical package for the social sciences. The findings of the study will be presented using pie charts and graphs. CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF THE STUDY Tourism and security are interrelated and inseparable. The security of the tourists is the primary concern of every host government because of it only where they feel safe that they will spend and visit again. The current economic state of most countries has presented a problem because governments have to come up with ways of raising foreign earnings to raise money to service the national debt and keep the economy afloat. One of the solutions has been to simplify government regulations for the tourism industry to attract more traffic. While this has been successful in most countries, recent evidence has raised questions of what effects lower standards for tourists have on the national security of the host country. Tourism is a delicate and dynamic industry. Although tourists have specific countries they want to tour based on experience, recommendation or the spirit of adventure, it is worth noting that some tourists have other agendas. It is impossible to know legitimate tourists from people with hidden agendas such as terrorists without the proper legislation. At the same time tourists are usually free to travel to destinations of their choice avoiding destinations associated with risk. It has been observed that the consequences of disastrous events on tourist destinations are spontaneous and adverse. Some of the insecurity concerns include terrorism of any kind where governments issue travel advisories to their citizens to not visit the affected country. A problem presents itself when the tourism has been imported in the guise of tourism, such that terrorists disguise themselves as normal tourists to enter countries. If stringent laws for immigration were to be put in place as they were befo re, it would be possible to pick the wheat from the chaff. According to (Zurick, 2006) the concept of security has changed through the decades from one of collective security and common defense to embrace notions of common and cooperative security. Despite the damage done to the concept of collective security because of the United States led invasion of Iraq, the development of common security structures through collective as well as multilateral frameworks such as the United Nations is still an important aspect for the expansion of security concerns to cover a nationà ¯Ã‚ ¿Ã‚ ½s environment, health and economic security threats. This research also considers that tourism organizations have little influence on peace and security agendas despite the fact that they are important for tourism. This is particularly at the micro-level whereby appropriate tourism development initiatives may serve as a means to prevent potential future conflict over resource and environmental security challenges. 1.2 Safety, security and destination image The world has become a global village and the global relationships have become turbulent, this has therefore called for destination marketing organizations which focus their attention in demonstrating that there is safety for tourists. A tourist perception about a particular destination which may be caused by negative publicity is mostly a question of security and safety. Often, this negative publicity may be unrelated to the reality on the ground but it has more than significant effects on the tourism sector and the economy as a unit. Tourism deregulation impacts on national security can be categorized into positive and negative category based upon economic, socio-cultural, and environmental impacts. According to (Hall, Dallen Duval 2003), tourism is greatly affected by and affects security. The destination a tourist chooses is determined by how safe he or she knows it be, or has been advised is. Changes in the global security affect tourism greatly. The security concerns affect both tourists and the host country that has to face the fact that not all individuals visiting the country have good intentions. Responsible tourists take time to investigate the security situation in the countries they intend to visit. Such responsible tourists should be aware of security risks and take precautions to mitigate such effects or avoid them completely. The September 11th terrorist attacks on the World Trade Towers in the United States of America are an epitome of events that can affect the tourist traffic of any country. Terrorist attacks have an impact on travel, leisure industries and tourist destinations. As a consequence more focus and attention has been directed towards tourism safety and security issues than ever before. The impact of deregulation on tourism laws on national security is a matter that cannot be ignored. Recent research is being focused further on the analysis of not only how travel safety can be promoted but also how security concerns may be incorporated in terms of tourism marketing. The management is also being enhanced to enable the industry become more responsive to chal lenges of security both internal and imported. Countries with unstable security history tend to be paranoid about security but stable and relatively safe countries have been continuously passing regulation that simplifies the process of obtaining tourist visas. The movement of the tourists is also not restricted or monitored. While this markets the country as place where the privacy of visitors is guaranteed and protected, it also attracts people of questionable character. These individuals might commit crime and abscond, or some might use the stability and anonymity to plan attacks on other countries. The latter situation can create a diplomatic spat which, unchecked, could escalate to war. Tourism activities can be affected by either external or internal forces; such forces may include war, terrorism activities, economic recessions, disaster, and financial crisis among others. Nations and cities which have experienced terrorist attacks for example New York and Washington faced profound impact on global travel (Blackford, 2004). The area of security is broad and sensitive and is affected by many things. The relationship between deregulation of tourism and national security can be explored in different perspectives. For example, in examining this relationship the research will look at whether the deregulation of air transport has influenced national security and the tourist destination countries in different nations. Terrorism will also be examined to investigate whether it can be imported in the guise of tourism. It will further examine the impact of deregulation on capacity as well as fares. The study also attempts to determine the impact deregulation has caused on marketing of tourist destinations and attractions. Finally, the research will investigate the impacts of tourism deregulation on transport at the destination areas. The research will also compare tourism crime and other types of crime (Hall, Dallen Duval 2003). 1.3 Statement of the problem The tourism industry has grown tremendously and thus every country is trying to gain a competitive advantage in order to market tourism adequately. This has lead to deregulation of tourism to assist raise tourist traffic. This research will seek to identify these impacts in a wider perspective with respect to crimes related to tourism and also seek to explore the rate of crime in countries that deregulate tourism. With globalization becoming embraced internationally the need for national security has been an issue of concern not only in tourism but in other areas as well. This concern is fundamental if nations are to enjoy and promote tourism while protecting the national security by preventing tourism crime, terrorism and other threats to a nationà ¯Ã‚ ¿Ã‚ ½s security that could be as a result of tourism deregulation. Research and experience have evidenced that tourism is a crucial factor that can contribute greatly to the development of a nationà ¯Ã‚ ¿Ã‚ ½s economy. It is therefore worth noting that tourism is directly associated and related with the cultural, economic as well as the intellectual potential of any nation. Currently available statistical data indicates that tourism is one of the most profitable and rapidly developing industries in the world and thus the need to protect and uplift it as while not compromising as the national security of a country. The evident threats to national security are not something any country passing legislation to deregulate the market can ignore. The purpose of this research is to identify this threats and the correlation it has with deregulating the tourism sector. 1.4 Research objectives This study will be focus on achieving the following objectives: 1. To investigate whether terrorism can be imported in the guise of tourism. 2. To investigate whether countries that deregulate tourism experience high crime rate. 3. To investigate the relationship and compare tourism crime and other types of crime. 4. To identify the impacts of airlines deregulation in international areas with respect to tourism. CHAPTER TWO LITERATURE REVIEW 2.0 Introduction According to the World Trade Organization (WTO), tourism is currently amongst the leading foreign exchange earner in approximately 83% of countries and the main foreign exchange earner for at least 38% of countries globally.Some tourists are turned away by stringent laws of immigration or stay and it has become the norm for most countries to deregulate the market. Tourism is an exciting and fascinating industry. The industryà ¯Ã‚ ¿Ã‚ ½s contribution to the national economy is significant. The major threats to this lucrative industry are socioà ¯Ã‚ ¿Ã‚ ½economic problems related to increased level of crime rates and the depletion of resources or sites and events that attract tourists. Similarly, due to the current rise in terrorist activity, it has become a major concern for the natives of the countries being toured. According to Williams (1997) crime is a common social issue which threatens the safety of the people, property, their sense of well being, and also causes entropy to the social order. Crime also reduces peopleà ¯Ã‚ ¿Ã‚ ½s quality of life because they are not psychologically at peace and are therefore not able to work as well or as much as they potentially can.(Cracraft, 2000). In all countries of the world associated with popular destinations, crime has been a major threat to the stability of the economy. In a Newsweek research conducted by Zakaria (2002) tourism safety and security matters raised by allowing tourists in is a major headache for any government. It is evident that crime against tourists or associated with tourism is considerably high in tourist destinations. This research therefore investigates the extent to which crime has an impact in a nationà ¯Ã‚ ¿Ã‚ ½s security. It is of importance to analyze the impact of passing legislation that lowers the bar for tourists and whether it has become an avenue for crà ¯Ã‚ ¿Ã‚ ½me and threats to national security. 2.1 Impacts of airline deregulation According to (Fallon, 2002), nations globally have realized that liberal aviation agreements have significant impact tourism amongst signatory parties. Recently, there has been deregulation of airlines leading to the growth of low-cost carriers and overcapacity in airline industry to bolster tourist numbers. Further deregulation of international air travel has seen the tourism industry grow significantly as simplified requirements to visit countries are major attraction for potential tourists. In addition, governments are encouraging movements towards agreements with country blocks or many nations rather than individual nations to create open skies in different geographic regions. The result of this is that people are able to move across borders with minimal or no paperwork. For nations to ensure the sustained growth and success of the international airline industry it has become important to adopt aviation policies which are conducive to open skies agreements. This has liberalized air travel beyond existing restraining bilateral among nations. This has a significant impact on tourism as well as other industries, as this facilitates the movement of people around the world. While this is a way of growing the economy, its potential effects on national security are far-reaching. The wanton and indiscriminate hosting of people without adequate paperwork carries with it the risk of encouraging criminal activates. 2.2 Socio-cultural impacts of tourism deregulation on national security According to (Blackford, 2002) it is a fact that tourism has a big impact on the economy of a nation, its cultures as well as the ecosystems. However, it is one of the least regulated industries in globally. This has opened up destination countries further to the influx of foreign earnings and capital. This trend of deregulation favors major international hotel chains and tour operators while still ensuring that the citizens of the country to earn from the resources, whether man-made or natural. Tourism has long been viewed as the reason for the spread of the global mentality. Cultures and social practices are imported as locals learn from visitors. The lack of adequate background checks on tourists, while offering an ideal protection of the visitorà ¯Ã‚ ¿Ã‚ ½s privacy poses a problem. The host country is exposed to the risk of allowing individuals of questionable character into the country. Interaction of these individuals with the locals might do more harm than good. The possible causes of some of the security situations include crime related incidents, terrorism, war, and political unrest or instability. The crime related security incidents may be in different forms such as theft, robbery, rape, murder, piracy and kidnapping. Local residents may commit crimes against residents, tourists against locals, tourist against other tourists, or may take other forms such as organized crimes against tourism enterprises. A specific environmental issue relates to the increased number of aircrafts that has increased the pollution rate and brought about a green house effect. Airplane contrails generate cirrus clouds, which reflect the sunà ¯Ã‚ ¿Ã‚ ½s rays and warm the atmosphere (Zakaria, 2007). This rise is directly proportional to tourist traffic because airlines will tend to increase flights to popular destinations so as to increase their turnover. 2.3 Deregulation of immigration and tourism laws. It is prudent to note that this research does not in any way imply that attempts to deregulate the market are inn-informed. On the contrary, liberalizing the industry is a crucial step toward achieving the vision of a global village vision and making the world a better place. However, to deregulate without adequately researching on the effects and impacts on national security is ill-advised. It is no secret that every country has enemies or people who would want to cause harm to it. While most of these groups or individuals might not make their intentions known, the methods they use to deliver the punch are criminal at the least. The template is to exploit the weaknesses in the countryà ¯Ã‚ ¿Ã‚ ½s laws and find the opportune moment to strike and send the chilling message. Giving visas to all and sundry without first checking their backgrounds or requiring adequate and authentic proof of identification might be good for trade, but it is not the least conducive for the security of all affected. Tourists are not required to give detailed schedules of their stays in the countryà ¯Ã‚ ¿Ã‚ ½s they visit and this is the perfect recipe for clandestine operations and activates. 2.4 Importation of terrorism through the guise of tourism According to Cracraft (1986) tourism is an activity that is sensitive and a nation will react rapidly to crime. Acts of terrorism are always a drawback to tourist destinations because it is followed by negative publicity and a host of travel advisories. This is because terrorism acts often indicate inadequacy of security and safety controls. Recent happenings have shown a disturbing trend where terrorists sneak into countries disguised as terrorists, leave among the locals as they plan their crimes. This worrying trend has created a situation of suspicion of people from certain places perceived to breed terrorists such as Middle East. This blanket stigmatization and the blanket security regulations that follow are saddening. The security concerns and weaknesses exposed can be pre-empted by having adequate laws that tend to pick the wheat from the chaff, instead of being left behind to sort the debris. 2.5The difference between tourism crime and other types of crime The growth of tourism has always been associated with increases in the level of certain types of crime (Goliath, 2004). The growth of tourism can also be associated with modernization and development which is a source of social instability which leads to criminal behavior. In addition, tourism crimes are often highly publicized, and the subsequent media publicity is a dent on the countryà ¯Ã‚ ¿Ã‚ ½s image. Another consideration is the fact that tourism growth is mostly accompanied by growth in the resident population. It is important to distinguish between criminal acts directed towards the tourists and those committed by the tourists there are many factors that make tourists attractive as targets of crime which include. While crime is primarily an illegal attempt to earn a living, tourism crime is mostly premeditated and about more than just earning a dayà ¯Ã‚ ¿Ã‚ ½s meal. It is about achieving a personal, social, religious or economic obligation either to oneself of to a group. As countries continue to pass laws that simplify the entry and stay of tourists without taking into account the dynamic nature of the human being, it becomes impossible to shield against crimes related to tourists. à ¯Ã‚ ¿Ã‚ ½ Most of the tourists may be usually highly noticeable because of their race, clothing, speech, and even the tendency to carry valuable items such as cameras, backpacks which attract therein criminals. à ¯Ã‚ ¿Ã‚ ½ It is often perceived that tourists are wealthy people and are more likely to be in possession of valuable items. à ¯Ã‚ ¿Ã‚ ½ Tourists are mostly accompanied by tour guides and at times they may be strangers. At times in the destination few people may be aware of their specific activity pattern. For example the murder of Meredith Kerche in Perugia, Italy has had huge media attention in the United Kingdom. It nearly caused a diplomatic spat between the two countries and highlighted how crime is not exclusive to natives. In addition, issues such as drug and tourism, sex tourism as well as other related crime and social disorder among holidaymakers. The high rate of exposure of tourists as targets to criminal activity in some destinations is illustrated by the findings that have seen tourists being stolen of their belongings or property (Schollmeyer, 2003).This social wrongs impact negatively on the national security because negative social behavior such as drug use and sex trade are primary causes of crime. It has also been observed that criminal activities can as well be committed by the tourists themselves, either against the locals or other tourists. Where certain forms of tourism either foster or entail criminal activities, it is the tourist who is usually seen as the lead player in initiating or engaging in some kind of illegal activity-. The most, obvious example invokes forms of tourism, such as those involving certain types of related activity, which are defined as illegal by destination authorities. While tourism activity may be not completely illegal but a strong criminal association may exist. The best example of this indirect relationship is gambling, given the involvement of organized crime cartels in casino businesses. The influx in tourists to these places might raise the economic might of criminals, emboldening them and causing a general rise in the crime rate of the country. Finally, there are those tourist activities that can degenerate into criminal behavior because o f the presence of alcohol, drugs, arguments or stereotypes 2.6 Crime rate in countries that deregulate tourism It is evident that there is high crime rate in countries that deregulate tourism, for example sex tourism industry has increased all over South East of Asia and Burma (Kristiansen Trion, 2005) and the crime rates in South Africa during high tourism seasons is evident. In these regions tourists are highly involved in criminal activities and are often associated with several kinds of human rights abuses, and the spread of HIV/AIDS. For example women and juveniles are often coerced to engage in the sex trade against their will. While these crimes are abetted by locals, it is the presence of tourists with ill-intentions that causes the rise. As observed earlier the impacts of crime on the destination are diverse. Some cases involve crimes related to drug use, whereby the destinationà ¯Ã‚ ¿Ã‚ ½s image becomes blotted resulting in significant decline in tourist demand. On the other hand, theft may occur at tourist destinations where the tourists are at the wrong place at the wrong time. In addition, tourists may contribute to this by engaging in illegal activates or getting involved with criminals. (Magenta, 2009). CHAPTER THREE RESEARCH METHODOLOGY 3.1 Introduction In order to achieve the research objectives a multi-method approach will be adopted, by use of both qualitative and quantitative data collection methods. Quantitative methods will focus on providing a broad statistical measure of the nature, extent and impact of deregulation of tourism on national security using a reasonable sample size. In depth and comprehensive qualitative information will be collected on the impacts of deregulation of security on national security, importation of crime through tourism, comparison between tourism crime and other types of crime. The research will employ questionnaires to collect data from the respondents as one of the data collection tools. Interviews schedules will also be applied to interview the randomly selected sample population. This chapter presents a description of the procedures and methods that the researcher will use in order to obtain the required data needed for the study. It comprises of research design, data collection instruments, the target population, the sampling strategy, and data analysis methods. 3.2 Research design The researcher will employ quantitative research method. The quantitative research design to be used will be a causal comparative design. The causal comparative design will allow the researcher to collect one or more information from one participant. A casual comparative research allows researcher to investigate the possibility of a causal relationship among variables that cannot be manipulated. This research design will be used to establish the factors that influence employee training. 3.3 Target population The target population will involve the immigration departments, tourists and locals of the target country. 3.4 Sampling strategy Simple random sampling techniques will be the methods of data collection from the various departments. The employees will be randomly selected from each department to yield the total sample population. Purposive sampling will be used to select employees who are trained. Purposive sampling is a sampling technique that allows a researcher to use cases that have the required information with respect to the objectives of the study. 3.5 Data collection tools and instruments. The researcher intends to use questionnaires in this study. This is to provide high accuracy and validity of the study. The questionnaire is a convenient tool especially where there are a large number of subjects to be handled. The questionnaire facilitates easy and quick derivation of information within a short time. The information obtained will enable to investigate the impacts of deregulation of tourism on the national security. 3.6.1. T-test T-test will be used to test whether there are significant differences between two mean derived from the samples of groups at a specified probability level. 3.6.2 Chi-square Chi-square is a statistical technique which attempts to establish the relationship between two variables both of which are categorical in nature. The technique compares the proportion observed in each category with what would be expected under the assumptions of independence between the two variables. CHAPTER FOUR DISSECTION 4.1 Data analysis The researcher will establish whether all questionnaires are all completed. Data collected from open ended and closed questions will be coded for analysis purpose. Descriptive and inferential statistics will be used in data analysis. The data will be analyzed using the statistical package for the social sciences (SPSS). The descriptive statistics which will be used in analysis includes means, frequencies, percentages and standard deviation. The inferential statistics that will be used in data analysis will be chi-square and T-test for independent samples. 4.2 Expected results It is expected that this research will yield results that show an upsurge in crime levels in countries that have liberalized tourism industry. In some countries with more stringent practices and therefore less tourism traffic, it is obvious that the crimes related with tourism will be less. This is a wake-up call to all legislators to take necessary precaution when passing laws that deregulate the market and give the players a free-hand to do what they want. National security should take priority over economic gain.

Quen Elizabeth I :: essays research papers

Queen Elizabeth I King Henry VIII was married to Catherine of Aragon when the young girl Anne Boleyn caught his eye. Henry believed himself in love with the young Anne and was determined to end his marriage with the older Catherine. King Henry wanted an annulment from Catherine, yet to obtain one meant having the Pope’s approval. Catherine had a powerful connection to many such as the great emperor Charles V, the Pope would not offend such a man and denied King Henry his annulment to his Queen Catherine. King Henry discreetly engaged n an affair with the young Anne Boleyn.   Ã‚  Ã‚  Ã‚  Ã‚  King Henry and his advisors established their own church breaking away from th Catholic Church and formed the Church of England. King Henry now had full ecclesiastical power over England known as reformation. With king Henry’s new power over the church he would now obtain his anullument from Catherine of Aragon. 1   Ã‚  Ã‚  Ã‚  Ã‚  In Januaray of 1533 King Henry married his pregnant Anne, who was belived to be carrinying the male heir to the throne. â€Å"Both Henry and Anne believed with their whole heart that the child she was expecting was a boy, and had every reason to as the philosophers and astronomers assured the jubilant king   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Scruton 2  Ã‚  Ã‚  Ã‚  Ã‚   that this time he would have a son.† (Thomas, par. 4) To the disappointment of the King, Queen and her supporters Anne gave birth to a girl, Elizabeth Tudor. â€Å"Elizabeth's birth was one of the most exciting political events in 16th century European history; rarely had so much turmoil occurred on behalf of a mere infant.† (Englishhistory) 4 Elizabeth’s birth was greeted with little celebration, however three days later she had a grand Christening a Greenwich Palace. 'Henry, beside himself with disappointment, did not attend the christening.' 2   Ã‚  Ã‚  Ã‚  Ã‚  King Henry’s attitude towards his young wife changed aftr the birth of his Princess and he openly show his tiredness towards his Queen. His only heir was a young girl, and this was considered undesirable to have a woman ruler. France even had laws to prevent such an occurrence. Anne tried to have a son yet failed to do so miscarrying and then giving birth to a premature dead baby boy. Some have said that she lost her savior 1   Ã‚  Ã‚  Ã‚  Ã‚  As Anne had her second mishap Catherine of Aragon died leaving Henry wanted yet another wife in the hope of producing a male heir. Anne was charge with adultery, witchcraft, and incest in which the jury found her guilty and was sentenced to death by beheadment.

Why Did Germany Lose Ww1

WHY DID GERMANY LOSE WW1 Germany lost WW1 due to a variety of military, socio-economic & political, and strategic reasons. The war itself continued for 4 years, inflicting various casualties and economic hardships on Germany. The most important reason why Germany lost WW1 were its incompetence to carry out it’s various strategies – originating from the first strategic failure, the failure of the Schlieffen Plan. The military incompetence of Germany on land and in sea was also an important cause leading to their loss in WW1.Germany’s socio-economic condition and the incompetence of the political system in dealing with it was another important cause resulting in Germany’s loss in WW1. Thus, there were various reasons as to why Germany lost WW1, all of which had the same theme – the incompetence of Germany in various areas – that led them to lose WW1. INCOMPETENCE TO CARRY OUT IT’S VARIOUS STRATEGIES: Schlieffen Plan failure [Schlieffen P lan was supposed to take france by surprise by german attack coming from north instead of the metz area of Germany. Germany was to go through Belgium and then sweep around paris – which would surrender.Vardun = attacked = surrender. After france = beaten, germant would beat estern front] Russia mobilises quicker than expected [eastern front instead of Belgium – troops were sent. Belgium, therefore Britain entered the waron 4 august. No british intervention allowance. Decided to defend mons] british slow germans down [guns; machine guns thought. German advance was delayed. went south instead of north underestimated: amount of time they’d need, Russian military, alliance between france and Britain Battle of the Marne – France wins under Joffre September 1914France not knocked out, not a short war, full scale war on two fronts for Germans War of Movement = over – trenches created; now led to stalemate STALEMATE CREATED MILITARY INCOMPETENCE: Sea Battl e of Falkland islands = Britain wipes out Germany; warships > Pacific Fleet Battle of Jutland 31 May 1916 – High Seas Fleet vs Royal Navy. RN won turned to U-Boat Camapgin; all ships entering the war-zone around Britain were liable to attack USA declared war on Germany in 6 Apr 1917 convoy system, echo-sounders, depth-chargers, Q-ships [merchant ships which was actually powered by the RN] – used to defeat U-Boats Land ble to make advancements in trenches Vardun – Feb 1916 – 280,00 Germans dead, lost heavily Battle of the Somme – July 1 to Nov 1916 [by Brits]. Relieve pressure on France in Verdun. Take over trench line as F weakened. Blow to German morale – caused them to lose finally. Britain was a military power to be reckoned with. 650,000 dead. Spring 1918 Offensive – last desperate attempt to win the war; thros in extra troops from Eastern front; broke through on the Somme in march 1918 and by end of May were 40 miles from Paris à ¢â‚¬â€œ caused the Allied Counter Offensive in 8 AugSOCIO-ECONOMIC CONDITION AND INCOMPETENCE OF POLITIAL SYSTEM IN DEALING WITH IT: beginning of war = Naval blockade from 1915 till 1916 = faced HARDSHIPS KRA War Materials office in 1914 – employed company to act on behalf of govt in buying, storing and manufacturing materials – directed labour force and decided which jobs expempted men from military service social tensions as industrial workers gained a lot, ad they were in charge no national income tax, limited revenue, unequal income distribution could only cover 16% of it’s costs through tax 918 = Brest Litovsk treaty; access to resources but harshness = allies didn’t like – determined to make them lsoe and pay food shortages & inflation recession. Total war ALLIED VICTORY AND UNITY: 1915 = year of allied failure superior command; unity Brest-Litovsk Treaty in 1917 – Eastern Front = won

The Grafton Group Project

Student Names: Stephen Bray B00037534 Johnny GeraghtyB00020240 Alan LennonB00020051 Emmet Toft B00015911 [pic] Module Name:Strategic Management 2 Lecturer:Mr Liam Bolger Submission Date:29th April, 2010 Word Count:10,413 Table of Contents Background of the company:2 History of the company:3 The Environment7 PESTEL analysis7 Political7 Economic7 Sociocultural8 Ireland population by Age 20069 Technology10 Environment10 Legal10 Key drivers for change10 The Industry11 Porters Five Forces analysis11 Substitute products/services12 Bargaining power of buyers12 Bargaining power of suppliers12 Rivalry/Competition13 Opportunities and Threats14 Opportunities identified15 Threats identified16 Financial Information Analysis17 Analysis of Financial Reports18 Liquidity Ratios18 Profitability Ratios20 Net Profit Margin per Segment20 Earnings per share (EPS)21 Analysis:23 Liquidity:23 Profitability:24 Debt:24 Return on Investment:24 Borrowings:25 problems with accessing credit. 25 Share Price26 Source http:investor/graftongroupplc. com27 Liquidity: Excellent27 Financial Strength:Excellent27 Profitability: Fair27 Growth: 027 Source www. corporateinformation. com27 Outlook for the Future28 Rationalisation measures:29 Plans for 2010:29 Opportunities 2010:29 Group Strengths30 Weaknesses31 Strategic Capability31 Critical Success factors for customers (a sample of but not limited to):33 Corporate Governance35 Grafton Group’s Compliance with the Combined Code36 The Board – who reports to whom? 37 Directors’ Independence and Board Balance38 Performance of the Board39 Corporate Social Responsibility – CSR and Ethics39 Shareholder and Stakeholder Expectations and Influences41 Culture of Organisations and Grafton Group43 Strategic Direction and Corporate level strategy44 Corporate Parent44 The corporate parent as a Synergy manager45 Strategic Drift46 International Strategy48 Table Pre-Merger48 Table Post-Merger50 Traditional reasons for Merger failure51 Through a possible merger Grafton may:52 Strategic Directions53 Market Consolidation54 Market Diversity (Related)55 International strategy – Travis Perkins and Grafton merger? 56 Bibliography59 Plagiarism Disclaimer:60 Background of the company: Grafton Group plc is an independent, profit growth oriented company with operations primarily in the UK and also in Ireland. The Group has strong national and regional positions in the merchanting, DIY retailing and mortar markets. The Group aims to achieve above average returns for shareholders. Grafton’s strategy is to build on strong positions in businesses serving the UK and Irish construction sectors, to develop in related markets, and to grow in businesses with which it is familiar. In Great Britain, Grafton is the fourth largest merchanting business trading from 430 locations comprising 219 Builders Merchanting branches trading principally under the Buildbase and Jackson brands and 211 Plumbers Merchanting branches trading mainly under the Plumbase brand. EuroMix is the market leader in the UK dry mortar market where it trades from a network of nine manufacturing plants in England and Scotland. In Northern Ireland, MacNaughton Blair is one of the leading builder’s merchants in the province where it trades from 20 locations. In the Republic of Ireland, the Group is the largest builders and plumber’s merchanting business trading nationally from 62 branches under the Chadwicks and Heiton Buckley brands. The Group is the market leader in DIY retailing in the Republic of Ireland, trading nationally from 41 stores and is also engaged in the manufacture of mortar, plastics and windows in the Republic of Ireland. Today, in Ireland, Grafton is the largest builders and plumbers merchants and the clear market leader in DIY retailing. In the UK the Group’s merchanting operation is the 4th largest in the market. 2005 turnover was â‚ ¬2. 6 billion and Profit after Tax amounted to â‚ ¬166 million. History of the company: Grafton’s origins date back to 1902 and since then the Chadwick family have played a central role in the development of the business. 1909 William Thomas Chadwick establishes his first business called Chadwicks (Dublin) Limited to supply builders merchants and major building contractors with Irish and imported cement and plaster. Today Chadwicks is the 2nd largest builders and plumbers merchanting brand in Ireland, trading from 31 branches nationally. 1930 William Chadwick acquires control of a small firm engaged in the manufacture of concrete blocks and roof tiles, which his company was supplying with cement. In 1931 Concrete Products of Ireland was registered as a private limited company. Today it is called CPI Limited and is a leading manufacturer of dry mortar in the Irish market. William Chadwick, the Group’s founder, dies at the end of the Second World War, leaving the business to his two sons – Terence and Finton Chadwick. 1965 Concrete Products of Ireland becomes a public company and purchases Chadwicks (Dublin) Limited from the Chadwick family. At the same time Marley Limited increases its holding to 51%. Marley’s relationship with Concrete Products of Ireland dates back to the end of the Second World War when Marley acquired a minority shareholding. 985 Mr. Michael Chadwick is appointed Executive Chairman. 1987 Marley plc decides to concentrate on the manufacture of building materials and as a consequence sold its controlling shareholding in the Group. The Marley shareholding was placed with institutional investors and the Group’s management. The Group opens its first DIY retailing store in the Irish market. 1988 The Group changes i ts name to Grafton Group plc and makes its first UK acquisition, a small heating and plumbing business which gives the Group familiarity with the large UK merchanting market. 990 The Group acquires MacNaughton Blair a long-established and well-known Belfast-based builders merchants. Also during the year Grafton acquires Joseph Kelly & Son (1994) Limited in Dublin, a builders merchanting business which was to become very well placed to serve the needs of the building trade in the centre of Dublin. 1994 The Group’s expands significantly in the UK with the acquisition of Bradley’s and Lumley & Hunt plumbing and heating operations. Total sales in Britain and Northern Ireland increase by 53%, representing 21% of Group turnover. 995 Grafton acquires P. P. S. Mortars – a silo mortar plant based in Glasgow. This business adopts the EuroMix silo mortar business model and technology, which has been successfully developed by CPI, the Group’s Irish concrete products business. Today EuroMix is the leading UK mortar manufacturer with eight plants. 1996 The Group continues its strategic development in the UK with its first acquisition of a builder’s merchanting business – R. J. Johnson, based in Oxford. 1997 The Group continues to acquire in the UK adding a further 14 locations through six small but significant acquisitions and achieves critical mass in its UK operations. This is the Group’s tenth year as an independent public company; a decade of considerable achievement in which sales increased 18% annually and earnings per share grew at an annualised rate of 29%. 1998 UK builders’ merchanting operations expand substantially with the acquisition of British Dredging plc, the first time an Irish company acquires a listed UK plc. This business operates a total of 23 locations incorporating 17 builders’ merchants and six plumber’s merchants. The builder’s merchanting operation is integrated under the Buildbase brand, which was established in 1997 as the trading name for the Group’s UK builder’s merchanting operation. During that year the Group makes another six acquisitions adding a further 19 locations, including the London based Deben Builders Merchants business with 10 branches and A R Hendricks Limited, a heavy side builders merchant trading from five branches. 1999 The Group continues its bolt-on acquisition programme adding a 16 more locations, through eight acquisitions in the UK. Throughout the nineties the Group continues with the expansion of its Irish merchanting and DIY retailing operations and consolidates its position as market leader in both sectors. 2000/2001 During these years, the Group continues apace with its bolt-on acquisition strategy. A total of 24 acquisitions were made during the period, many single branch operations that add value through infilling the Group’s overall network of locations in the UK. 002 This is a record year with a total of 15 acquisitions adding a further 39 branches to the UK merchanting network. These acquisitions included five small chains: Lakes in Derby, BMB in Barnsley, and PDM in Edinburgh, Aizlewoods in Rotherham and JKS Heating and Plumbing Supplies in Manchester. 2003 The Group undertakes its largest ever acquisition thus far – Jackson Building Centres in England adding 18 branches – and makes another significant acquisition with Plumbline, Scotland’s largest independent plumbers merchants with 17 locations. Overall it was a busy year with a further seven bolt-on acquisitions completed, giving a total of nine acquisitions for 2003. Grafton now has 137 plumbers’ merchanting branches trading under the Plumbase brand and 139 builders’ merchanting branches trading principally under the Buildbase and Jackson brands. 2004 The Group completes its 100th acquisition since 1998, averaging more than one per month. A total of 19 acquisitions are completed during the year, another record year for development. Grafton reaches agreement to acquire Heiton Group plc, subject to regulatory approval. 005 In January Grafton completes the acquisition of Heiton Group plc. This business includes, inter alia, the No. 1 builder’s merchanting operation and the No. 2 DIY retailing brand in Ireland and is a good strategic fit with Grafton’s existing operations and consolidates its position as the leading player in the Irish market. Overall Heiton has over 50 trading locations (six in the UK), an average of 1,900 employees and a turnover in excess of â‚ ¬500 million. We can see from this chronological list of their history that Grafton Group expanded greatly from the mid 90’s to 2005. Their growth in the UK market was surged on the back of an economic building boom in Ireland. They now have a much greater market and consumer base to compete in but also face a vastly changed environment. The Environment PESTEL analysis Political †¢ Taxation policy – corporation tax remains at 12. 5% in Ireland. Grafton Group is resident in the state and is liable to Corporation Tax on its worldwide profits. The corporation tax rate in the UK is 21% which is a huge source of competitive advantage for Grafton versus its UK competitors. Government stability – the current Irish government is in place till 2012. The UK is in the build up to a general election which could see a change in the current government and policies. †¢ Government policies towards â€Å"green† initiatives – grant towards homeowners to improve insulation, grants for solar panels and etc. Economic †¢ The UK and Irish economies are in recession leading to a sharp fall in dem and. Consumer confidence has fallen and housing related spending has reduced. †¢ The number of house completions in Ireland is 17,000 units in 2009 which is a fifth of the output during its peak in 2006. Ireland’s stock of empty homes surged 30pc to 345,000 houses in the three years through 2009 as the decade-long property boom collapsed. †¢ Sterling exchange rate weaknesses could lead to lower reported Group earnings on translation of the results of the UK business into euro at the average rate of exchange for the year. †¢ Low Interest rates – the cost of loan repayments is low and for the foreseeable future they should remain constant. †¢ The availability of credit and money is very strict and very few banks are willing to give loans to cash strapped businesses. Unemployment rate in Ireland has increased dramatically, Jan 2008 4. 8% versus Jan 2010 13. 4%. Unemployment rate in the UK has increased but not as dramatic, Jan 2008 5% versus Jan 2010 8 %. Sociocultural †¢ Declining employment and incomes for individuals. †¢ Higher personal taxes – introduction of income levy, the doubling of health and PRSI levies. †¢ A nation of savers, People are now saving more than before and consumer spending has decreased as a result. †¢ An increasing age demographic in Ireland who will require a home in the future. Ireland population by Age 2006 | |Age Group | |Males | |Females | |Persons | | | |0-14 | |443,044 | |421,405 | |864,449 | | | |15-24 | |321,007 | |311,725 | |632,732 | | | |25-44 | |681,988 | |663,885 | |1,345,873 | | | |45-64 | |468,037 | |460,831 | |928,868 | | | |65 years and over | |207,095 | 260,831 | |467,926 | | | |Total | |2,121,171 | |2,118,677 | |4,239,848 | | | | | | | | | |UK population grows to 61. million | | | | | |[pic] | | | | | | | |Technology | |Improvements in technology have led to better supply chain and logistics management. | |Bar-coding of products has impro ved inventory management. |Environment | |Organisations need to be socially responsible with their business activities; negative publicity can have a detrimental effect on| |consumer’s perception. | |A growing consumer awareness of greener behaviour and products associated with having a better impact on the environment. | |Legal | |Health and safety regulations have increased the demand for health and safety products and packaging. | | |Key drivers for change | |These are environmental factors that are likely to have a high impact on the success or failure of an organisation. There is a | |huge level of uncertainty in the current environment but an area we have identified as key is the energy efficient sector. The | |government have introduced policies and measures to address climate change. This initiative has arisen from a UN conference on | |energy for development, which is demanding countries to change their ways for the improvement towards a greener global | |environme nt. There will be a greater demand from consumers to meet those measures and therefore Grafton must satisfy this growing| |demand with energy saving products. | | | | | | | | |The Industry | |Porters Five Forces analysis | |Potential competitors | There is the potential for new entrants in the form of small independent hardware suppliers which are strategically located to entice consumers, ex. A small hardware shop beside the local shopping centre. As we can see from the below graphic many of their outlets are strategically located in and around the big cities as there is a much greater consumer base, ex. Dublin, London, Birmingham. [pic] There is a huge capital requirement required to compete with the Grafton group brands within Ireland and their closest competitors are B&Q (20% market share) and Hombase (17% market share). The location of DIY retailing outlets is interesting as during the boom many of our local towns have seen the emergence of industrial retail parks. In Navan 4 years ago Woodies located in a newly developed retail park just off the N3, before that there was Chadwick’s and a number of small independent outlets in the town. Grafton group have 63% of market share in Ireland, as a result the power of competitive response is very strong in Ireland. However in the UK they are fourth with 10% of market share with Travis Perkins (15%), Jewson (18%) and Wolseley (19%) and as a result their competitive position is much more demanding as they have 3 competitors who are in stronger market position. Substitute products/services We believe the only substitute threat is hire companies, they offer equipment and tools to consumers on a rental basis i. e. per hr, day, week and etc. In the current climate price is a key factor in peoples decisions, therefore consumers may opt to hire equipment for tasks rather than spending vast amounts on equipment that might only be used infrequently. Bargaining power of buyers Grafton’s consumers are powerful because, †¢ Buyers can switch suppliers at no cost. †¢ Buyers purchase from multiple sellers at once, they opt for suppliers conveniently located to the project. Buyers are shopping round for the best value. Bargaining power of suppliers The Grafton procurement process has improved f urther with new internal appointments to lead heavy side and light side purchasing. There was an increased focus on reducing the supplier base and developing closer alliances with key suppliers. This has resulted in greater leverage being achieved from the Group's purchasing scale and improved purchasing terms. The volume of products sourced directly through the warehouse facility in Shanghai continued to increase providing a new sourcing option for the Group's businesses to procure quality products at competitive prices. We can see from the above that the power rests with Grafton; suppliers are keen to meet the demands of their customer as they have a strong foothold in both the UK and Irish marketplace. Rivalry/Competition In Ireland their competitive position is very strong and through consolidation and job cuts they will be better placed than most building supply firms especially the many small independents that are under serious financial strain as the economic property boom which they depended on is long gone. Many independents face closure and Grafton group and its brands will be best placed to take advantage when the economy recovers over the coming years. Competitive rivals are organisations with similar products and services aimed at the same customer groups. When we look at one of Grafton’s brands Woodies DIY and their offerings, we see that they are competing with many different retailers. They offer a product range which caters for all your interior and exterior requirements, ex. Bag of cement, paint, timber, kettles, toasters, lighting, TVs, etc. They compete in a very fragmented industry but what many people don’t realise is Grafton is the parent company and all these separate brands from the consumers perspective competing with one another doesn’t matter as all profits go into the one organisation. Grafton is competing with any organisation who offers interior and exterior household products, ex. B&Q, Homebase (part of Home retail group), Argos (part of Home retail group), Power City, Harvey Norman, etc. From our experiences with Woodies they differentiate themselves from the competition as they offer a complete range of products from their store which means you can get all your needs in the one store. However if you look at the UK operating margin history it was roughly 6/7% over the past ten years versus Irish operating margin history of 11-13%. This means that competition is much stronger in the UK and they must price more competitively in the UK. Opportunities and Threats We can see from the below graphic that their decision to expand its operations in the mid 90s to the UK has been extremely successful with 68% of their turnover coming from the UK. Grafton must now look to the UK with a population of 61 million versus Ireland 4. 2 million as their primary source for turnover and opportunity. [pic] Turnover breakdown Ireland Merchanting |370,167 |19% | |DIY Retailing |247,784 |12% | |Manufacturing |19,891 |1% | |Total |637,842 |32% | In the UK their operation consists mainly of b uilders and plumbers merchanting. THE MARKET ATTRACTIVENESS – BUSINESS POSITION MATRIX (GE and McKinsey Company Model) |HIGH MARKET ATTRACTIVENESS |MEDIUM MARKET ATTRACTIVENESS |LOW MARKET ATTRACTIVENESS | |HIGH BUSINESS | | | | |POSITION | | | | |MEDIUM BUSINESS | | | | |POSITION | | | | |LOW BUSINESS POSITION| | | | Invest Grow = Green Selective Investment = Yellow Harvest/Divest = Red The G. E. Matrix is an extremely useful tool to assist an organisation in exploring its Business Position based on its competitive position and the attractiveness of the markets under the organisation’s consideration Opportunities identified †¢ Demographics – In Ireland 1. 5 million are under the age of 24 and in the UK roughly 15 million are under the age of 30. These people will require a home over the next 5 – 10 yrs and therefore there will be a demand for housing and renovations to suit individual tastes. †¢ Worldwide government energy initiatives – consumers are encouraged to buy more energy efficient products. †¢ Cost reduction – with demand in decline it important that Grafton mange their costs, ex. Supplier costs, staffing, acquisitions etc. Competitors – independents are finding the financial strain to difficult and are been forced to close their operations. Economic recovery will see Grafton best placed in the market. †¢ Markets – economists both here and abroad are saying there is a bottoming out of the recession. This should bring about a stable market place. †¢ Debtors – if debtors are managed tightly it can have a significant effect on cash flow and bad debts can be reduced to a minimum. †¢ Credit – if debtors aren’t paying on time then Grafton need to look at extending credit terms with their suppliers. We think this very possible as the power is very much with Grafton and not the suppliers. Threats identified We believe the biggest threat to Grafton Group is the level of spending available for construction related projects. The demand for building materials continues to fall in Ireland and signs of improvement are slowly beginning to show in the UK. â€Å"The construction industry has now declined for the 34th month in a row, but the rate of contraction is slowing, according to the latest Ulster Bank Purchasing Managers' Index. † â€Å"Though it's great to see the UK construction sector turn the corner after two years of relentless contraction, it's still very early days,† said David Noble, chief executive officer at the Chartered Institute of Purchasing and Supply. There is now a reliance on the public sector for new work and if they don’t provide the funding for new projects then construction suppliers could be in for a difficult few years. Private investment is very unlikely in the current environment with consumer confidence very low and economic conditions unstable. Financial Information Analysis 2009 2008 Revenueâ‚ ¬1. 98bn â‚ ¬2. 67bn Adjusted operating profitâ‚ ¬26. 2m â‚ ¬118. 6m Operating profit per income statement â‚ ¬4. 9m â‚ ¬99. 2m Profit before tax â‚ ¬13. 6m â‚ ¬64. 1m Free cash flow 171m â‚ ¬212m EBITDA â‚ ¬74. 1m â‚ ¬172. 9m Adjusted earnings per share5. 4c 32. 2c Basic earnings per share 5. 8c 25. 1c Dividend/share purchase 5. 0c 15. 0c Net debt â‚ ¬322m â‚ ¬435m Gearing 35% 50% Analysis of Financial Reports The following is an analysis of the financial reports of Grafton Group plc. We will try to illustrate the current financial situation the group is in compared to previous years and also attempt to analysis the outlook for the future. Grafton’s presence in the construction and raw materials market means they have been very much affected by the economic downturn, in particular the significant slowdown in the construction market and the housing market in both the UK and Ireland. I will use liquidity, profitability, debt and other ratios deemed appropriate as tools to help analyse and diagnose the financial health of the group. I will use a year on year comparison in order to determine the direction in which the group is going and identify any trends. Liquidity Ratios Current Ratio (current assets : current liabilities) 20082009 920,482: â‚ ¬601,987â‚ ¬891,364 : â‚ ¬550,793 1. 53: 11. 62:1 Acid Test Ratio (Current assets less stock : current liabilities) 20082009 â‚ ¬920482 -â‚ ¬331124 : â‚ ¬601987â‚ ¬891364-â‚ ¬265748 : â‚ ¬550 793 1 : 0. 981. 14 : 1 Cash at Bank and Short term deposits (at end of year) 20082009 â‚ ¬301,984â‚ ¬224,834 Profitability Ratios Net Profit Margin (â‚ ¬000’s) 20082009 â‚ ¬64116 / â‚ ¬2672984â‚ ¬13580 / 1979766 2. 4%0. 68% Net Profit Margin per Segment Merchanting 20082009 â‚ ¬2284,484 / â‚ ¬121,921â‚ ¬1686,933 / â‚ ¬39305 5. 33 %2. 33 % Retailing 20082009 â‚ ¬303,071 / â‚ ¬11,790â‚ ¬247,784 / â‚ ¬3274 3. 89 %1. 3 % Manufacturing 20082009 â‚ ¬95621 / (â‚ ¬3159)â‚ ¬50985 / (â‚ ¬5060) -3. 3%-9. 9% Earnings per share (EPS) 20082009 32. 2c5. 4c Gearing 20082009 50%35% New borrowings v old borrowings 20082009 â‚ ¬91. 944 : â‚ ¬579,333â‚ ¬73679 : â‚ ¬536789 1 : 6. 31 : 7. 29 Short term v Long Term finance 20082009 â‚ ¬119,874 : â‚ ¬579,332 â‚ ¬103174 : â‚ ¬536,789 1 : 4. 831 : 5. 2 Analysis: Liquidity: The group has improved its current ratio year on year from 2008 to 2009, this is mainly due to a decrease in current liabilities. This is an encouraging trend for the group. The acid test ratio also shows improvement from 2008 to 2009, this is both a reflection of the improved current ratio and also the work done to try and reduce inventory holding, and reduce cash flow tied up therein and other associated costs. Cash flow was enhanced greatly by tighter management of inventory, debtors, disposal of assets (sale of freehold land, exhibiting the importance of having a strong portfolio of assets) The cash at bank and on short term deposit has been increased year on year from 2008 to 2009 by approximately 34% this is quite encouraging especially in the current environment (and not due to borrowings), as the adage goes â€Å"profit is food, cash is oxygen†. It is fair to say the group has slightly improved its liquidity situation and is more able to meet its outgoings as they fall due. Against the economic backdrop it is quite a good performance and evidence the group are handling the downturn well in a strategic sense. Profitability: Profitability is the biggest challenge facing Grafton due to the economic downturn and slowdown in the construction and housing markets. Net profit fell dramatically from 2008 to 2009 from â‚ ¬64 million to â‚ ¬13. 5 million, this was quite dramatic. Despite being worrying it was not unexpected, with the focus for the year on debt and cost reduction (and reducing capital expenditure and working capital). Merchanting, Retailing and Manufacturing all dropped considerably in profit terms. Margins were also decreased across all operations. Merchanting still remains the highest source of revenue for Grafton (%85 of group turnover in 2008 and 2009, suggesting strong competencies here). The loss in manufacturing outweighs the profit made in retailing, it is the profit made in the merchanting division that the real profit pool for Grafton. (divesting in manufacturing division may need to be considered, bar where synergies exist with other divisions, i. e. mortar manufacturing) As a result earnings per share have fallen dramatically from 32. 2c to 5. 4c, Debt: Through measures taken during the year to reduce gearing, Grafton were able to reduce an already modest gearing of 41 % in 2008 to 35 % in 2009. This is an excellent achievement in the circumstances (and exhibits a strong leadership in Strategic choices, direction, and fit). The net debt was reduced by â‚ ¬113. 1 from â‚ ¬435. 6 million in 2008 to â‚ ¬322. 5million in 2009. The groups current bank facilities are subject to a minimum net assets requirement (â‚ ¬301,984 cash at bank end2009, up from â‚ ¬224,834 end 2008, leaving the Group in a strong cash position). Return on Investment: Return on investment is down considerably from 2008 to 2009 10. 12% to 2. 19%, as profits dipped quite considerably resulting in the dramatic slump. Again this is worrying but not unexpected as the Group were attempting rationalization and consolidation (strong market share results exhibit some success in this regard) Borrowings: The ratio of new to old finance borrowings and ratio of short term to long term finance borrowing both improve year on year (1:6. 3 to 1:7. 29 and 1:4. 83 to 1:5. 2 respectively). Again this shows strong evidence of reducing debt and decreased borrowing. It is fair to say that Grafton is currently In a very challenging operating environment with the downturn In markets seriously affecting their profitability, dividends, and returns. But the Group finds themselves in an improved liquidity position, as well as considerably reducing their gearing, they also greatly increased their cash at bank negating greatly problems with accessing credit. Share Price Irish Stock Exchange Date: 29/04/2010 | Currency: EUR | Code: GRF_u. I |Current Price |3. 52 |Day High |3. 55 |Bid |3. 50 | |Last Closing Price |3. 50 |Day Low |3. 47 |Ask |3. 4 | |Change |0. 02 |Day Open |3. 47 |Year High |3. 59 | |   |   |Volume |28,045 |Year Low |2. 30 | Source http:investor/graftongroupplc. com The latest share price info as at 29/4/10 is encouraging as it shows strong recovery from a year low of 2. 30 to 3. 52 (a year high of 3. 59 has been achieved. The highest share price achieved was nearly 23 in early 2007 which illustrates the decline in the industry, and p uts the company’s current performance into context. The Corporate information. om Wright quality ratings rates Grafton’s investment quality as BBD0 which translates as: Liquidity:Excellent Financial Strength:Excellent Profitability:Fair Growth:0 Source www. corporateinformation. com Outlook for the Future The UK economy has moved out of recession in late 2009 which is encouraging news for Grafton as 68% of its turnover comes from this source. The amount of new house sales and builds are on the increase from a very low level starting which is very encouraging as the merchanting division is Grafton’s real profit pool. The Merchanting market has remained structurally sound despite the downturn and can expect a growth rate above normal trends that Grafton are well positioned to take advantage of. The Irish economy remains in recession but is expected to return to growth by the middle of the year boosted by global growth and improved export conditions. A weak employment situation, low consumer confidence and tight credit conditions make the market conditions in Ireland even more challenging, coupled with the massive drop in new house builds as housing over supply is still a problem. Further rationalisation measures and/or closures in the Irish operations should be considered. Group turnover stabilised from H1 2009 to H2 2009 which is encouraging. The cost reductions and integration benefits in the Merchanting divisions improved profitability in H2 2009. The rationalisation achieved and the increased activity expected form the UK new Housing market means that Grafton are well placed to take advantage of the recovering markets this year. Rationalisation measures: †¢ Employee base reduced in both Ireland and UK †¢ Cost reduction initiatives progressed with significant results †¢ 18 locations consolidated or closed and 10 new locations added †¢ Credit terms from suppliers renegotiated †¢ Improved inventory management †¢ Debtors managed tightly with significant cash generation †¢ Costs rationalized by â‚ ¬80 million in 2009 Plans for 2010: †¢ Further rationalisation costs will be incurred in 2010 Wider product range yielding margin growth †¢ Emphasis on overhead control and working capital management †¢ Attempt to obtain full benefits of integration Opportunities 2010: †¢ Reduced cost base †¢ Market share gains †¢ Competitors failing †¢ Irish Construction close to b ottoming out †¢ Signs of recovery in markets †¢ Positive Demographics †¢ Government Renewable energy initiatives Group Strengths †¢ Highly cash generative streamlined businesses †¢ Significant cash deposits ensures liquidity †¢ No P Banking Covenants -protection from exchange fluctuations now in banking agreements †¢ Strong balance sheet –modest gearing 35% †¢ No material refinancing required before 2011 68% of turnover in UK (increased mortgage lending, & housing sector activity in UK) †¢ Prominent market positions in the UK and Ireland –market share circa 10% and 20% respectively (satisfactory market share performance) †¢ Motivated management teams †¢ Proven strategic record, past experience of managing down cycles †¢ Spread risk †¢ Economies of scope amongst SBU’s †¢ Synergies across SBU’s †¢ Vertical integration achieving efficiencies in merchanting division †¢ Benefits de rived from lower cost base, integration, scale related and Procurement efficiencies †¢ Trading stabilised in second half of 2009 †¢ Trading outlook beginning to improve following period of significant uncertainty †¢ Tight financial control across group Weaknesses †¢ Poor performance in Ireland operations †¢ General economic downturn †¢ Housing market collapse †¢ Sharp Industry downturn Slowdown in Irish construction & housing industry (brought group turnover down 26% to 1. 98bn †¢ Very slow new housing Market in Ireland †¢ Consumer confidence in Ireland hitting retail sales †¢ Continued contraction expected in Irish economy †¢ Manufacturing operations making a loss †¢ Over reliance on Merchanting operations Strategic Capability â€Å"The ability to perform at the level required to survive and prosper. It is underpinned by the resources and competences of the organisation† Johnson, Scholes & Whittington It is clear that Grafton have the threshold competences to meet customer’s minimum requirements, and also the threshold competences to provide the same as they continue to exist (and are in a decent position to go forward). But what are Grafton’s core competencies, (activities and processes that are difficult for competition to imitate), what are their unique resources (difficult for competition to imitate or obtain). And what are the critical success factors for Grafton’s customers (the product features especially valued by customers and therefore the company must excel at). As 85% of Grafton’s turnover comes from their merchanting division this is where we will focus. Some of Grafton’s Brands, Sbu’s and subsidiaries in Merchanting include: Ireland: Heiton Buckley Chadwicks Cork Builders providers Telfords Heiton steel UK: Buildbase Jackson Building Centres Macnaughton Blair Selco Builders Warehouses Plumbase (plumbing) CPI Euromix (mortar) Critical Success factors for customers (a sample of but not limited to): Quality service and products Reliable products services Speed of service National Distribution Online ordering / catalogue. Product knowledge and advice available Simple pricing Self service capabilities â€Å"One stop shop† capabilities Wide selection / availability of products hire services Prompt & accurate delivery of products/services Strong partnership team working capabilities Trade deals/initiatives (bulk buying, relationship development) Unique resources (a sample of but not limited to): Wide network of branches Vertically integrated operations Very experienced management team Backed by strong corporate parent Financial resources (over 300 million in cash) Experience of managing previous downturns Strong Brand equity, profile and Goodwill Ability to leverage position as largest mortar manufacturer National Distribution Network (Civil & Lintels) Core Competences (a sample of but not limited to): Corporate parenting Synergy managing Proven vertical integration abilities Cross SBU linkages Co-ordination of multiple and diverse activities Excellent Financial management First class customer service Mortar manufacturing (no 1 in market) Strong Management at SBU level Strong Value chain Strong Value network Strategic Marketing Autonomy at SBU level Market Development Product development and category management National and local distribution competences The above are some examples of the critical success factors Grafton Group need to excel at for customers, and some of the unique resources and core competences that help them to meet those CSF’s. By building those resources and capabilities that help Grafton deliver value for its customers and help obtain competitive advantage. Corporate Governance What is Corporate Governance? â€Å"Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society. † (Sir Adrian Cadbury, UK, Commission Report: Corporate Governance 1992) Ireland’s recent history of corporate governance has been highlighted with the governments bank NAMA, National Asset Management Agency. Builders, bankers and the senior public servants who failed to regulate these sectors are perceived to be getting off scot-free from the crisis they caused. â€Å"Sean Barrett – Irish Times 2nd September 2009 / Page 14 Brian Lenihan has taken action that is costing taxpayers billions of euro that would have not have be en required if Corporate Governance and common sense regulation was adhered to. The bank regulators, a supposed independent body, did not adhere to procedures and turned a â€Å"blind eye† to what was practiced over the last 20 years. â€Å"The state ownership policy should fully recognise the state-owned enterprises’ responsibilities towards stakeholders and request that they report on their relations with stakeholders. Guidelines on Corporate Governance of State-Owned Enterprises, Page 37 (2005) Making the right decisions with all the information without compromising the integrity of the organisation. [pic] Corporate Cartoons, Grinning Plannet Grafton Group’s Compliance with the Combined Code The Board is committed to maintaining high standards of Corporate Governance. The Board is accountable to the Company’s shareholders and this statement describes how it applies the principles of good governance set out in the 2006 FRC Combined Code on Corporate Go vernance which is appended to the Listing Rules of the Irish and London Stock Exchanges. The Board – who reports to whom? The Board of Directors is made up of nine members at 31 December 2008 comprising the Executive Chairman, three other executive Directors and five non-executive Directors. Mr. Anthony Collins, Deputy Chairman, is Senior Independent Director. The Board believes that it has the skills, knowledge and experience required by the scale, geographic spread and complexity of the Group’s operations. The Board routinely meets seven times a year and additionally as required by time critical business needs. There is also contact with the Board between meetings as required in order to progress the Group’s business. The Board takes the major decisions while allowing management sufficient scope to run the business within a centralised reporting framework. The Board has a formal schedule of matters specifically reserved for its decision. This covers the key areas of the Group’s business including financial statements, budgets, acquisitions, major items of capital expenditure and the strategic development of the Group. The Board’s responsibilities also include ensuring that appropriate management, development and succession plans are in place; reviewing the environmental and health and safety performance of the Group; approving the appointment of Directors and the Company Secretary; approving policies relating to Directors’ remuneration and severance and ensuring that satisfactory dialogue takes place with shareholders. The Directors have access to the advice and services of the Company Secretary who is responsible for advising the Board through the Chairman on governance matters. The Company’s Articles of Association and Schedule of Matters reserved for the Board for decision provide that the appointment or removal of the Company Secretary is a matter for the full Board. Directors have full and timely access to all relevant information in a form appropriate to enable them to discharge their duties. Reports and papers are circulated to Directors in preparation for Board and committee meetings. The non-executive Directors, together with the executive Directors, also receive monthly management accounts, various reports and other information to enable them to review the performance of the Group on an ongoing basis. The Board continues to hold the view that there are compelling commercial benefits to the Group and its shareholders in combining the roles of Chairman and Chief Executive and the holding of the combined roles by Mr. Michael Chadwick. The combination of the roles is balanced from a governance point of view by the strong input of the five independent non-executive Directors on the Board and the Board’s committee structure. Directors’ Independence and Board Balance It is Board policy that the Board should include a balance of executive and non-executive Directors such that no individual or small group of individuals can dominate the Board’s decision making. Five non-executive Directors, Mr. Anthony E. Collins, Ms. Gillian Bowler, Mr. Richard W. Jewson, Mr. Roderick Ryan and Mr. Peter S. Wood are considered by the Board to be independent of management and free from any relationship which could materially interfere with the exercise of their independent judgement. The Board has therefore determined all five Directors to be independent. Mr. Collins was appointed to the Board in 1988 and both Ms. Bowler and Mr. Jewson were appointed to the Board in 1995. The length of their service on the Board exceeds nine years and the 2006 FRC Combined Code provides that an explanation be made to shareholders concerning their continued independence. The Board considers that the integrity and independence of these Directors is beyond doubt. All three Directors are financially independent of the Company and have other significant commercial and professional commitments. The Company’s Articles of Association provide that one third of the Directors retire by rotation each year and that each Director seek re-election at the Annual General Meeting every three years. New Directors are subject to election by shareholders at the next Annual General Meeting following their appointment. It is Board Policy that non-executive Directors are normally appointed for an initial period of three years, which is then reviewed. It is also Board Policy that a non-executive Director who has served on the Board for more than nine years will retire annually and will offer him/ her for re-election in any case where it is proposed to exceed nine years. The overall composition and balance of the Board is kept under review. To allow corporate governance to drop in standards allows too many possible problems arise. Directors making short term decisions for their own benefit cannot be tolerated and without strong non-Executive Directors organisations have suffered. E. g. Enron, Independent News and Media. Performance of the Board Grafton Group’s long standing non Executive Directors have been re-elected at many AGMs which proves the confidence of their value to shareholders. At the beginning of the year their share price of building up to their financial report for 2010. When we were given Grafton Group as our project the share price was â‚ ¬2. 70, week of April 12 it is trading at â‚ ¬3. 40/share, an increase of 25%. Their board are doing a good job and have processes in place that do not allow any maverick activities. They tick all the boxes of operating independently of management. Insider dealing is not evident, â€Å"interlocking† does not exist similar to Jim Flavin, member of both Fyffes and DCC. The CEO of Woodies and Atlantic Homecare is Ray Coleman. Some would argue the same CEO of both could lead to conflict but as both have different strategies it make business sense for this to be the case. Corporate Social Responsibility – CSR and Ethics â€Å"The Grafton Group recognises the importance of conducting its business in a socially responsible manner. This is demonstrated in the way we deal with our employees, customers, suppliers and the communities in which we do business. The Group considers that corporate social responsibility is an integral element of good business management. Grafton Group Website â€Å"Business only contributes fully to a society if it is efficient, profitable and socially responsible† – Cannon (1992, p. 33) â€Å"Few trends would so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their shareholders as they possibly can†- Milton Friedman (1962) Grafton Group’s CSR is centred on the following areas. ? The Environment – Reduction of waste that impacts on environment, affiliation to Irish and UK environmental specialists. e. g. Biffpack in UK ? Health and Safety – Adherence to best practice for employees, customers and visitors to their stores Human Resources – Acknowledge the importance of employees to achieve success, reward them accordingly and become number one choice of employment in their field ? Community – Recognise the responsibility to the communities in which they are located, support local charities e. g. donated tools and equipment to Goal following Haiti earthquake in 2009 Grafton Group, we feel, is what all corporations do – tick the box of CSR! Very few Financial Reports had any reference to CSR until l ast 10-20 years. To make them stand out on CSR issues as Ben and Jerry’s Ice Cream or The Body Shop do, they would have to incorporate it into their overall business strategy. Would this give them a competitive advantage over their business rival? Would CSR promotion become part of their strategy? Our view is that a company in the industry it serves will be dictated by their consumers as to how important CSR really is. In Grafton Group’s case this will not happen. Their stance on CSR is Laissez Faire to Enlightened Self-Interest. The emphasis is mainly on their shareholder short term orientation i. e. highest profit as possible and adhere to the law at all time. They may worry about how they are perceived such as pension fund investors. They are definitely not a Shaper of Society where they influence society in a better light and not always driven by super profit making e. g. Paul Newman food investment and Niall Mellon Trust. Shareholder and Stakeholder Expectations and Influences The difference in both shareholder and stakeholder expectations is determined largely on the performance of The Grafton Group, history of performance, market in which it trades, promises made and promises previously delivered on. Since they began trading Grafton Group has consistently made profit and grown which has given shareholders a return on their investment. The collapse of the building trade in Ireland and UK has meant a large fall in share price but due to the market’s performance no shareholder could have expected anything else. Bob de Wit and Ron Meyer, 1998 describes the value perspective of shareholders and stakeholders and how, if any, interlink. In summary the difference is that shareholder’s perspectives have an ends, i. e. make a profit and value of company increases. Stakeholder’s perspectives have and ends and a means where profit is a want but not at the cost of something that would be considered unethical. The power that a board such as Grafton Group must withstand can determine whether shareholders or stakeholders have more of an influence on decisions than is healthy. â€Å"Power is the ability of individuals or groups to persuade, induce, or coerce others into following certain course of action. † Johnson, Scholes and Whittington, P160 If an organisation succumbs to the power of an outside influence their control is diluted. Some people within organisations, by right, have more power than other, e. g. the formal power a CEO enjoys. ? Legitimate Power: Power of the position, CEO ? Reward Power: e. g. Manager deciding who gets overtime Coercive Power: who decides on who gets the bad jobs to perform e. g. â€Å" if you do not do this you will not get the other†, bullying style ? Expert Power: This is more a personal power that a knowledge based professional may exercise ? Referent Power: This explains the influential power someone can exhort through charisma or personality traits e. g. Richard Branson of Virgin Group Johnson, Scholes and Whittington, P161 It is interesting that the brand power Woodies and Atlantic Homecare enjoy in the home DIY market sector is a symbol of power for both shareholders and stakeholders. Stakeholder mapping is an interesting way to determine the power and level of interest certain groups have in organisations. | |LEVEL of INTEREST | |LOW HIGH | | |A |B | |LOW |Minimal Effort |Keep Informed | |POWER | | | |HIGH | | | | |C |D | | |Keep Satisfied |Key Players | The level of interest within Grafton group lies mainly with employees, shareholders and Board of Directors. The Key Players are the Board of Directors and Shareholders as they have a vote as to who by and how the company is run. Stakeholders such as government are low in power and would have a low level of interest. Some of the manufacturing Grafton Group are involved in may require them to be socially responsible to the community in which they are located and must keep them informed of any changes that may affect them. They would have a high level of interest but a low form of power. Culture of Organisations and Grafton Group The culture of organisations is largely shaped by the founding fathers. For example Lever Bros. Ltd has a long tradition with social responsibility before it was known as CSR. William Heskeath Lever first established Port Sunlight village to improve the living conditions and well-being of employees of the Port Sunlight Soap factory. This created a culture of CSR which is maintained today. Similarly with the Grafton Group, CEO Michael Chadwick, has been with Grafton Group since he was 23 years of age. The culture of the company is largely a result of his business philosophies and strategies. We asked for an interview but we were declined, we asked for a list of questions to be answered if we sent them to his secretary and this too was declined so it is difficult to get an insight into his business philosophy. The Grafton Group do not apologise for being shareholder oriented in terms of profits in the form of dividends or company value increase. They have not allowed themselves be affected by the current economic climate and do not show any forms of strategic drift. Strategic drift is where organisational strategies develop incrementally on the basis of cultural influences and do not keep up pace with the changing environment in which they trade. Grafton have reacted to the downturn of their business and do not wait for changes to be made as reactionary. Henry Mintzberg has noted that â€Å"strategy is a pattern in a stream of decisions†. If decisions are made as a reaction to their environment it can be too late. Grafton Group’s Board of Directors is long serving and successful, due to this fact they have created a culture of expectancy for shareholders and for themselves to delivery. This behaviour filters through to line managers and front of customer staff (boundary spanners) to achieve success. The success of the past and alignment to environmental change has created a winning culture. They have created a theme around their strategy and have not deviated from it. They operate in Ireland and the UK in markets they understand and do not expand outside these industries. This helps succession planning for managers moving from business units to gain more experience keeping within the core competencies of the Grafton Group. Strategic Direction and Corporate level strategy Strategic Vision is a detailed future oriented vision of the strategic direction that a company is planning to take going forward, that takes into account the competences and capabilities that it both has and needs to achieve to achieve its vision. â€Å" A strategic vision is a road-map of a company’s future, providing specifics about technology and customer focus, the geographic and product markets to be pursued, the capabilities it plans to develop, and the kind of company that management is trying to create† (Thompson & Strickland 2001, P6). According to Johnson, Scholes and Whittington 2008, the â€Å"Exploring Corporate strategy model is made up of the corporate culture, business ethics, CSR, the strategic position, the strategy in action and strategic choices. Strategic choices encompasses some of the following areas of an organisation †¢ Business Level Choices †¢ International Choices †¢ Evaluation †¢ Innovation †¢ Corporate Level Choices Corporate Parent As we know the Grafton group encompasses many different brands, which is their cash generating and highly profitable business units. Throughout Grafton’s history they have managed to acquire many related business all in an effort to strengthen the group as a whole. Through this vertical integration Grafton have offered themselves many advantages and increased their competitive strength. Grafton’s strategic development has continued to grow with major acquisitions made both in Ireland and the UK such as 1990 – Macnaughton Blair, a Belfast based builders merchant †¢ 1994 – Bradleys and Lumley & Hunt plumbing and heating †¢ 1995 – P. P. S Mortars, silo plant based in Glasgow †¢ 1998 – British Dredging. Grafton were the first ever Irish company to acquire a British plc †¢ 2000-2002 – A total of 39 acquisitions were made, building the groups strength further in Ireland and the UK †¢ 2003 – Jackson Building Centres in England adding 18 branches and plumbline, Scotland’s largest independent plumber merchants. †¢ 2004 – The Grafton group officially makes its 100th acquisition †¢ 2005 – Grafton acquires Heiton Buckley. (www. graftonplc. com) As we can see here, Grafton has had a very strong acquisition based strategy to vertically integrate with all the suppliers and related business in an effort to grow in strength and position and to make themselves a real presence in the Irish and UK markets. However it’s all well and good to acquire all these other business, but what is the point in having them unless you can use them to your advantage. This is Grafton’s role and responsibility as the now corporate parent to all these acquisitions, to turn them from simply business units into strategic business units that will benefit the group as a whole and strategically fit. The corporate parent as a Synergy manager A corporate Parent identifying factors are a large corporate office with a main emphasis on facilitating cooperation across its SBU’s with a continued focus on cost reduction, scale related benefits, closer integration, branch consolidation and brand synergies. As a corporate parent to its SBU’s, Grafton group seeks to enhance value across its business units by managing and instilling synergies across its business units. The backward, forward and horizontal integration of its suppliers of raw materials and competitors has afforded Grafton a strategic advantage. In order to promote synergy management across its strategic business units, Grafton group tries to create the synergies by thinking holistically and viewing the SBU’s as interlinked with a common purpose between such as; ? DIY retailing – Woodies and Atlantic Homecare ? Manufacturing – CPI Euromix, MFP and Wright windows Merchanting – Heiton Buckley, Chadwicks, Cork builders providers and Telford The main point to remember is that the business units should benefit from the corporate parent by the co-operation between them that’s afforded by the corporate centre Grafton Group. A more streamlined UK merchanting business incorporating the Buildbase, Plumbase and Jacksons brands and specialist merchanting businesses is enabling a deeper integration of the overall business. The new structure will result in significant synergies beyond the rationalisation measures already implemented. These arise particularly in procurement, accounting and other central services. A single management team is now in place for all brands operating from a single head office location. Costs continue to be more aligned with sales and the management team works closely with the Group Chief Operating Officer in driving cost reduction, branch consolidation and brand synergies while leveraging scale-related benefits. With regard to synergy management the following questions should be answered: ? Is there common purpose between business units – YES ? Does parent try to achieve co-operation between business units – YES ? Provide central services and resources – YES In 2009 one of Grafton’s management priorities was â€Å"To unlock latent synergies in downturn†. (Grafton Financial results 2009 PP) Strategic Drift This is the tendency for strategies to develop incrementally on the basis of historical and cultural influences but fail to keep pace with a changing environment. (Liam Bolger, lecture notes 2009). Strategic drift is certainly not something that Grafton can be accused of as they react quickly to the economical downturn to keep themselves competitive, especially within the domestic market of Ireland where there core strength lies. Grafton Group has reduced their overall debt from â‚ ¬584 million (2005) down to â‚ ¬322 million (2009). The majority of this occurred in the last 2 years with a reduction of â‚ ¬228 million or 41% (Grafton Group plc final results 2009) Employee base reduced in both Ireland and UK Cost reduction initiatives progressed with significant results †¢ 18 locations consolidated /closed and 10 new locations added †¢ Credit terms from suppliers renegotiated †¢ Debtors managed tightly with significant cash generation †¢ Costs rationalised in 2009 by â‚ ¬80 million Further plans to manage through 2010: †¢ Further rationalisation costs to be incur