The Global Expansion Of Toyota Marketing Essay

The Global Expansion Of Toyota Marketing Essay Using one specific company with which you are familiar, examine the actual and potential impacts of globalization on that company. Explain the reasoning behind the points you make. Evaluate possible strategies going forward which the company might use to respond to impacts of globalization you have identified. Globalization can be described as a historical transformation in political, social, economy and cultural diversity (J.H. Mittelman, 2001). The United Nations on the other hand to describe globalization as a concept that refers both to an increasing flow of goods and resources across national borders and to the emergence of completely set of organizational structures to manage the expanding network of international economic activities and transactions (UNCTAD, 1997a, p. 70). In simple terms it is a process of interaction and integration among peoples, companies and different countries. Which includes the corporate strategies, consumption patterns, regulatory capabilities and governance, technology, the globalization of financial markets, and socio-cultural processes. The globalization can be detected from the increase of manufacturing Foreign Direct Investment (FDI), and financial capital flows. In todays business environment, most of companys activities are naturally become globally. Gradually, organizations have recognized that globalization creates unlimited opportunities of worldwide market. However at the mean time, its also brings negative parts such as: highly competitive environment and threats. On this paper, the Toyota Motor corporation being chosen as reference company, where based on China market to identify what is exist and potential effect of globalization on business, and provide possible solutions for Toyota sustainable development. While, the PEST analysis tool will apply for Toyotas business situation analysing to explain how Toyota influence by political, social, economic, and technological. The multinational enterprise (MNE). A multinational corporation (MNC), sometimes called a transnational corporation(TNC). Is a company that has headquarters in home country but manages production in other counties. In the past two decade, the multi-national corperation (MNCs) plays a role of monopoly, they were able to get business advantages from host country by using the colonial power. In other word, they can get concessions from host countries by using home governments influence (Ohmae, 1995). Whereas, since the rapid growth in world trade and investment, this colonial power no longer existed. Instead, the world market becomes to more competitive. Most importantly, the rising of global practice and thinking between companies and countries has made business interests and orientations more necessary than ever (Abbas, J. 2000). Background on Toyota Since the rapid development of global integration the automobile industry becomes one of the worlds most important economic sectors by revenue. Toyota is one of representative multinational enterprise in the world. Its established in 1937 by Sakichi Toyoda, till present day Toyota was conducts both domestic and global marketing with 52 oversea manufacturing companies in 27 countries. Toyota market and sold the vehicles approximate 7 million in more than 170 countries every year, worldwide employees is 320.808 (Annual report, 2009). As a market leader Toyota holding 15 per cent market share among all the other automobile brands (Business week, 2009).The key success element of Toyota is commitment to designing, engineering and build cars to every target market area. Due to this reason Toyota faced great impact from globalization; the impact can be both negative and positive and differs by context such as new markets, cheaper location for investment, multi-choice of suppliers for raw ma terial and services, and cheaper labor cost. However it can also carry the negative parts. First, the world automobile market is change in economic conditions affecting, and highly competitive environments in which Toyota operates. Second the market highly volatile. Last the global auto crisis was seriously hit down Toyotas market profit. The Global Expansion of Toyota In 2008, Toyota to officially become world largest automaker, the rapid expansion is the main reason Toyota able to overtake GM as worlds top car firm. Toyota operated business across the entire world, which including: Sales vehicle in Africa and Russia and sales leader in Australia. Toyota were Launched Lexus and SCION in United States and norther American market. Figure Toyota sales by region. (Source: Toyota annual report, 2009) In recent years, Toyota has focus on global market expansion, especially, China market. Because the tendency of Chinese consumption pattern is change. Toyota FDI in China. China overtake United States become to new fdi destination by 2004. This is due to the China adoption reform and opening up policy in the late 1970. Toyota believes that Chinas market is potentially as large as the U.S. Market. Toyota aims consistently increase investment in China to grow production capacity and add to product lineup along with begin to produce Camry at Guangzhou Toyota Motor Co., Ltd on May 2006. According to XinHua News report that Toyota intend to invest about $700 million in its first fully-fledged research and Development base (RD) in China. Because, Toyota wants to increase the production in China. Since 2005, Toyota through the form of join-venture with Chinese company (FAW Group Corporation) to build first plant in SiChuan province until now, Toyota was invested to build seven plants in China, and another six plants of Toyota also joint-ventures with FAW. Toyota establish oversea plant in response to incentives such as tariffs, reduction of labour cost, and Toyota production system The PEST analysis on Toyota Political The auto industry is subject to various governmental rules and policies. The political environment of China does favor enterprises with foreign investment. According to Government policy 2009, the Chinese government levies low tax on enterprise with foreign investment, and preferential tax policies are offered to the sectors and regions where investment is encourage by the state. And the low tax policy reflected in three aspects: income tax, circulation tax, and import-stage value-added tax. At the same time, the China government announced several preferential policies to encourage auto consumption, which include the people who living countryside can enjoy 10% subsidy of the original vehicle price for their buy it. Second, the tax of purchase small-displacement vehicles was cut from 10% to 5% (Chinavestor, 2010). These preferential policies stimulated auto consumption significantly, and attract more foreign automobile company invest in China. On the other hand, government play the role of savior. For example, the government bailout policy: in 2009, Toyota was require for emergency loan from the Japan Bank, with the amount of more than 3 billion US dollars. The purpose of the emergency loan is to dealing with cash flow problem or some other cases. Economic The Peoples Republic of China is the second biggest economy in the world (first is United States), and it is worlds fastest-growing economy as well with annual economic growth averaging nearly 9% over the last three decade. The role of China in the world are the factory of the world, because China provides a cheap labour cost, and low cost base for export-oriented production. The major advantage of Toyota is the strong cash position. However, if compare with GM, Toyota still existed weak credit ratings, rising health-care and pension costs, and losses in its automotive division. Toyota expects through use its strong cash position to expanding all over the world increase its commitment to RD. Social The population of China is beyond one billion, it is a largest country in the world by population. The households size: 3.1, total households in China were 351,233,698, as we know the Toyota segmenting group is Households, usually, this group of people in China have middle or upper of income level with good education background age around 25 to 65. Technological The Toyota product line consist of: Electric technology, Plug-in hybrids, All-electric vehicles, Cars, Pickup trucks, Luxury-type vehicles. Toyota is one of largest automobile companies to promote hybrid vehicles in the market. Beside the production lineup, there are have one more important factor able to shapes technology adoption at Toyota plants, which are governments foreign investments control power. The business in China, Chinese government controls type of technological standards on firms operating in the country. The impact of globalization on Toyota. Operating in global market is a challenge for Toyota. Even though the globalization created unlimited opportunities for Toyota, but the adverse affect should not be ignored. The impact of exchange rates on Toyota. The currency exchange rates are very powerful can affect trade investment, finance, tourism, oversea economic transactions, import and export prices of goods and services. Toyota attaches great importance to the fluctuation in foreign currency exchange rates and this is particularly evident in fluctuation between the value of the Japanese yen, the U.S. dollar, Chinese Yuan, and the euro. The negative impact resulting from fluctuation in foreign currency exchange rates may affect Toyotas global performance. The following table illustrates Japanese yen per $1.00 during the periods display Fiscal Year Ended or Ending March 31. At End of Period Average (of month-end rates) (Â ¥ per $ 1.00) High Low 2005 107.22 107.28 114.30 102.26 2006 117.48 113.67 120.93 104.41 2007 117.56 116.55 121.81 110.07 2008 99.85 113.61 124.09 96.88 2009 99.15 100.85 110.48 87.80 2010 (through June 19,2009) 96.15 96.82 100.71 94.45 (Source: Toyota annual report 2009) This table shows that, the yen has been strong when translation with US dollars. According to Toyotas annual financial statement, which clearly present a financial situation of Japanese yen are affected by translation risk and foreign currency transaction risk. The fluctuation of foreign currency change rates may affect the price of Toyotas products in worldwide market and use foreign currencies to purchases materials. Since 2009, Japan central bank to show sign of Japanese yen will further appreciates against U.S. dollars. It can cause adverse effect to Toyotas reported operating results and financial condition. Because Japanese yen is rapidly, consistently appreciates against other foreign currencies that will force Toyota to markup the price of all the export products. But the rapid increase value of Japanese yen can have favorable effect on material purchased, but it only inside of Japan. For Toyota oversea operations still suffered with high raw materials, and gasoline, due to the profit margins was fallen, when translated from dollars back to yen. The impact of consumer preferences on Toyota (Source: Annual Repot, 2006) This table illustrate that, Toyota has build different product line across the China to fulfill local market demand. The consumer preferences are one of the most important factors shaping international production for Toyota. The trend of distinct national preferences is spread every corner of the world. The homogeneity of preferences lead to Toyotas product reduces the benefits of manufactory in China, because of complicated relationship between car design and differences in consumer preferences as a typical example, the Ford promote new car Mondeo to the worldwide but the sales was not good as they expected, because Ford neglected focus localizing production. In particular, after the second oil crisis, Toyota was enhance the production aims to provide an effective and creative production design to gain more market share in China (i.e., Toyotas Corolla produce by global platform and modified for different region to match consumers needs). But Toyota has ignored the preferences are not yet homogeneous across all of China, even in the target region, there are have several differences local tastes of demand. In contrast, the Hondas Accord is also use the global platform but modified the cars exterior body to different specific market area, thus, Honda has completely different automobile production line for each target market, i.e., the difference platforms between Japan, Thailand and China. Due to this reason Toyota fall into extremely passive position compare to other competitors. The Impact of United States Financial Crisis on Toyota . The United States financial crisis of 2007 has considered being the worst economic crisis since the 1930s great depression. The main factor trigger of the financial crisis was the United States real estate bubble was busted, caused property price tied by the value of securities, then the price of house was decline straightly, not only America this financial tsunami has wave to the entire world. Which contributed consumer lost approximate hundreds of billions of U.S. Dollar, several key businesses have failed, and the stock markets have fallen significantly. Obviously, the financial crisis has been hit down United States economy heavily; even the bailout of banks by national government has measured. But the financial markets havent showed the sign of recovery. As biggest auto-maker in north America Toyota was faced an unprecedented situation by the financial recession. The adverse results are largely, the vehicle sale hardest hit in northern America and Europe market with drop in sales of 673 thousand vehicles() especially, the sales of Toyotas luxury division Lexus was drop significantly. Moreover, increase price of crude oil and iron and steel raw material impact Toyotas operation, this fiscal year was drop 68 percent of benefits compare with previous fiscal year and according to Toyota annual report, the net profit loss of 4.2 billion U.S dollars (Toyota Annual Report, 2009). Last the financial market recession resulted negative impacts to Toyotas accumulation of capital. Due to the financial downturn, the organizations or financial institutions may unable to provide capital to the market. The impact from competitive environment to Toyota. Figure:share of U.S. Auto market. (Source) According to this pie chart, GM, which is 18.2%, is the biggest automaker in U.S. among all the motor corporations, then is Toyota with 15.8%, followed by Ford, making up 14.3%: and the next coming is Chrysler at 12.1%. From the pie chart is obviously shows that the big three automaker are still the largest domestic producers which making up 44.6% market share. The United States market always has been a prime concern for Toyota.. Due to its trade liberalization, highly developed, market demand(U.S. Auto market is about ten times bigger than the Canadian market). Especially, the demanding of Toyota luxury division Lexus was increased in recent years. However the U.S. automotive market is highly competitive at least fifteen auto company was market their product in U.S. market. Toyota as a foreign brand faces intense competition from other competitors. The highly competitive business environment lead to cause lower vehicle units sales and inventory backlog. This caused Toyota downward price pressure. The factors influence competition including: quality of product, post-purchase services, and reliability. However, Toyota faced unexpectedly quality problem with sudden unintended acceleration, which caused Toyota economic damages nearly $7 billion, the 94,000 vehicles has been recalled. Sustainability development of Toyota Establishment of Global Special Committee for Global Quality control Implemented approaches to address a deterioration in information gathering and information sharing practices between headquarters and the regional offices. These problem are seen to be the harmful side effects of the rapid globalization. The function of this committee are restructure the quality management system Strategies of interest rate swaps and localized in respond to fluctuation of Money exchange rate. In order to reduce the adverse affect of fluctuation foreign currency exchange rates, Toyota use some certain derivative financial tool such as interest rate swaps and increase the target market production of localized. Likewise, increase the investment in target market to increase production capacity and build local raw material supply chain, that can as possible as minizing losses on currency translation. Nonetheless, the adverse affect still existed, Toyota have to maintain a high level of vigilance the dynamics of international exchange market. Product diversification in respond to highly competitive auto market. In the highly competitive global business environment, Conclusion In todays global business environment multinational enterprise become more important, because countries adoption of opening oriented to promote the economic growth by attract Foreign Direct Investment (FDI). The multinational enterprise plays the role of investor between countries. Whereas, the business environment will become more competitive follow with the increased FDI. As the world forth largest multinational enterprise, Toyota faced several affect from globalization, which can be classified as political, government regulations, economic environment, social lifestyle, and technological factors. Due to those of factor Toyota will continue to seek the way of sustainable development that use some strategy or approach to solve problems, such as, open a new market with innovative product. But there are not ensure Toyota will have a bright future. Car sales around the world in 2009: mostly down . The Truth About Cars. Retrieved 2010-09-09. Automobile Industry Introduction. Plunkett Research. 2008. Retrieved 2010-09-09. World Factbook; Japan-Economy. CIA. 2010.09.05 Retrieved 2010.09.05 Byars, L., 1991. Strategic Management, Formulation and implementation-Concepts and Cases. New York: HarperCollins Johnson, G., Scholes, K., 1993. Exploring Corporate Strategy-Text and Cases. Hemel Hempstead: Prentice-Hall Toyota, 2006. Geared toward Continuing Growth, Annual report 2005-2006. Japan: Tyouta Toyota., 2009. The Right Way Forward, Annual Report 2009. Japan: Toyota Toyota, 2010. Sustainability Report 2009-2010. Japan: Toyota EcPulse., 2010. Toyota to Invest $700 Million for RD in China. General Forex News.[online] 22 November. Available at: [Accessed 11 November 2010] BEST CARS., 2010. Internal Toyota Documents Show Political Influence Lobbying.[online](updated 22 February 2010) Available at: [Accessed 12 November 2010] Ganz, A., 2010. TOYOTA BUILDING 7TH CHINA PLANT. [onlibne] LEFT LANE NEWS.[online] 21 June. Available at: [Accessed 12 November 2010] Kulkarni, A., 2009. Positive Effects of Globalization. [online] Buzzle. Available at: [Accessed 16 November 2010] The Development Principles Group., 2009. Economic Environment in China.[online](updated 2009) Available at: [Accessed 16 November 2010] Elizabeth, C. 2003. Chinas Environmental Challenge: Political Social and Economic Implications.[online] New York:Council on Foreign Relations(published 2003) Available at: [Accessed 17 November 2010] Judy, Z., 2010. Chinas Auto Companies: Will the Legend of 2009 Continue?[online](updated 05 May 2010) Available at: [Accessed 17 November 2010] China Through A lens., 2009. What are the preferential policies offered to enterprises with foreign investment?[online] Available at: [Accessed 18 November] http://www.philforhumanity.com/Globalization_of_the_U.S.A..html http://ideas.repec.org/p/kie/kieliw/1093.html http://www.allbusiness.com/management/benchmarking-key-business-process-benchmarking/219142-1.html www.wikinvest.com/industry/Auto_Makers http://www.robroad.com/light-industry/index.php/financial-crisis-industry-japan/ http://www.wikinvest.com/stock/Toyota_Motor_(TM)/Toyotas%20Operations%20Subject%20Currency%20Interest%20Rate%20Fluctuations http://www.moneycontrol.com/news/world-news/japan-auto-sales-fallsept-india-strong_488274.html http://factsanddetails.com/japan.php?itemid=930catid=24subcatid=157 http://news.frbiz.com/financial_crisis_in_the_automobile-173677.html http://www.monstersandcritics.com/news/business/news/article_1448578.php/Toyota_cutting_costs_to_withstand_financial_crisis_sales_drop http://www.themotorreport.com.au/11817/financial-crisis-prompts-toyota-to-cut-earnings-forecast

There is nothing like “Diminishing returns” in the real world

The Law of Diminishing Returns states that increasing one variable input, while keeping the rest of the variables constant, will eventually yield a result opposite the intended purpose of the variable change. The change will rise at first, reach peak and will eventually skew downwards sooner or later (Tutor2u Website). In economics, when marginal physical product (MPP) starts to decline, diminishing returns to labor occurs. This means that total output will increase at a decreasing rate when more workers are employed. Eventually a decline in marginal product leads to a fall in average product. What accounts for this decline in MPP?The answer lies in the ratio of labor to other factors of production. For instance, a third worker begins to crowd the facilities available. We still have only the one sewing machine. Two people cannot sew at the same time. As a result, some time is wasted, as the operators wait for their turns at the machine. Even if they split up the various jobs, there w ill still be some downtime, since measuring and cutting are not as time-consuming as sewing. In this sense, we cannot make full use of a third worker. The relative scarcity of other inputs (capital and land) constrains the marginal physical product of labor (Schiller 2005, 90-91).Eventually, if we add more workers, this will cause so much congestion that marginal product would become negative and total product would decline. At the extreme, the addition of more and more labor would exhaust all the standing room available and total product would fall to zero. Another example of this is when applying higher amounts of fertilizer in a tract of land, a farmer expects higher yields during harvest time. But, there is just one point that even though you will apply more fertilizer in your soil, the total number of yield will just be the same, if not decreasing slowly.In the real world, the concept of diminishing returns is practically applicable in all aspects of life, not only in economics , where resources are available. For example, if you like pizza, I’ll give you two slices of pizza. That would taste great at first. However, when I require you to eat three whole boxes of pizza, there is this nth number of slice where you would give up eating pizza because you already have enough. If you do not stop eating, chances are: you are going to throw up.Diminishing returns, is supposedly the economic equivalent of negative feedback, which argue that market demand decreases at a point where the need becomes saturated. The initial sales of a new car model stir up considerable market interest; subsequent sales generate increasingly less interest. At some point, the market for that car stabilizes. A glass of lemonade after a round of tennis on a hot day would be quite important to you, and you would probably be glad to pay a child at a lemonade stand, say, a dollar for it. However, the next glass is of less value to you and the third glass, even lesser.The Law of Dimini shing Returns favor no time, person, or place as they allow no particular advantage except the advantage that assure the â€Å"free market† principle. Diminishing returns impede unnatural growth and prevent any given system from monopolizing environmental resources. Thus, there is plenty of opportunity to go around. This means there are chance for everybody: with hard work and intelligence, any child who is born a citizen of the United States can become president; any mom and dad could do business to own huge corporation, and any town can become a Silicon Valley.

The Top Secret Truth on Freshman High School Essay Samples Uncovered

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Investigating Rocks And Sand Addressing Multiple...

Page Break Journal Article Review #2 In Investigating Rocks and Sand: Addressing Multiple Learning Styles through an Inquiry-Based Approach, Oga and Schmidt, 2009, describe the way kindergarten teachers implemented inquiry based learning into their classrooms by integrating their students interest of rocks and sand into the curriculum. By nature humans are curious creatures, and this is seen from the time to when we are infants to the time when we are adults. Inquiry is an intrinsic learning strategy that we use to gather information from the day that we are born. (Ogu, U. Schmidt, S. 2009). For this reason, †¦ it makes sense for teachers to use an inquiry-based approach in their curriculum. (Ogu, U. Schmidt, S. 2009, p.2). To begin the inquiry based learning process these teachers asked their students during their morning circle what they knew about rocks and sand. These questions were open-ended and invited constructive input while also validating prior knowledge. (Ogu, U. 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The And Drug Abuse Treatment At The Summer Of 2007

Famous celebrity Lindsay Lohan was admitted to Malibu’s Promises Alcohol and Drug Abuse Treatment Facility in the summer of 2007. When people hear about celebrities and their admittance to alcohol treatment facilities, people often wonder how the celebrity ended up in this position. Well in Lindsay Lohan’s case, her father was incarcerated for driving under the influence of alcohol. With this knowledge, it is easy to see how Lindsay would follow in the alcoholic footsteps of her father. To further demonstrate this inference, Lindsay wrote a song to her father, â€Å"Confessions of a Broken Heart†. This song addresses the troubled relationship she had with her father (Lindsay, 2007, pg.1). After the given examples, it is easy to see how an unstable home life could lead to alcoholism. There are a number of circumstances that can lead to an unstable home life. 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Detection Step Free Essays

string(95) " new edges representing parent’s relationships to children according to class diagrams3\." Detection step:gh4h This step speaks about the detection design pattern in structural method or approach.Speake about the roles that important to define a pattern The specific relationship that used to detect the pattern. The high tolerance in detection to archive the high recall because the high precision will archive using ML step How extract and calculate the metrices for roles detected for that two patterns have similar structure. We will write a custom essay sample on Detection Step or any similar topic only for you Order Now How decide the feature have appear in dataset depends of feature selection stepGive this dataset as input for classifier model created by learning step. The output will be classified roles for which pattern belongs.Specific things that recall less than 70% accuracy will taken as FP. Detection step (speak about detection the DP and their roles using highly tolerance design pattern detection approaches based in structure of design pattern and enhancing DPD tool to get all possible result might be DP. Extract selected metrics for this roles and give it to trained model to apply classification.Make comparing and performance and validation for models (FS vs notFS) (OP vs Not OP) (ensemble vs not for SVM, Ann, deep)? The comparative measure accuracy †¦. · Experiment and the result (I will use two pattern adapter and command to classification similar roles between those patterns , the accuracy will be model result accuracy and comparing the result with benchmark and previous studiesDetection step. The detection phase is divided into two steps: the structural detection design pattern roles step and roles distinguish step. The input in the first step will be the source code that we want to detect design pattern from, and the output is design pattern candidate roles, while the aim of our study distinguishes between patterns have a similarity of structural aspect the similar roles between two patterns will come out with the same name, the second step input is the candidate roles that are out of the first step and will be entered as input into learned classifier to classify roles according to which design pattern belongs. First step: structural detection Design pattern candidate is a group of classes, each class represents a role in design pattern and these classes connected together with a relationship according to the particular structure of design pattern. The similarities in design patterns occur due to the similarity of the structure of the corresponding patterns (the object-oriented relationship between these classes is same). This similarity leads to the problem of distinguishing between roles in similar structure design pattern that mean every role are corresponding to a role in another design pattern. Though identical in structure, the patterns are completely different in purpose In this step, the input will be the source code, and the output is a data-set that contains design pattern candidate roles associated with class metrics, as shown in figure?. To detect design pattern, we adjusted Tsantalis et al. work to produce similar roles in similar structural design patterns.for example, in state and strategy design patterns, there are two roles that influence the confusion of patterns (Strategy and State, Strategy_Context and State_Context ), the identical roles detected in this step will be under the same label(Strategy /State, Context). We have adapted a Tsantalis et al. approach to detect candidate by extending the definition of a design pattern roles to identify a set of design pattern roles with more tolerance regardless of the false positive and false negative results are permissible in this step that will be covered in next step using learned classifier model. next, software metrics for each design pattern roles produced are calculated and based on the feature selection step in learning phase meticas were selected to present them as features in a dataset, then the dataset normalized to prepare for next step. Second step: distinguishes between patterns have a similarity of structural.In this step, each design pattern role produced in the previous step is given to each design pattern classifier learned in the learning phase in order to determine which design pattern the design pattern role belong to, that the classifier is expert on. each similar structural design pattern roles are classified by a separate classifier with different subsets of features selected by feature selection method to best represent each one of them. Then, each classifier states its opinion with a confidence value. Finally, if the confidence value of the candidate combination of classes is located in the con- fidence range of that design pattern, then, the combination is a design pattern, otherwise it is not.4.——————————A. Chihada et al.Design pattern detection phase The input of this phase is a given source code and the output is design pattern instances existing in the given source code. To per-form this phase, the proposed method uses the classifiers learned in the previous phase to detect what groups of classes of the given source code are design pattern instances. This phase is divided into two steps, preprocessing and detection.3.2.1. Preprocessing In this section, we try to partition a given system source code into suitable chunks as candidate design pattern instances. Tsanalis et al. [7] presented a method for partitioning a given source code based on inheritance hierarchies, so each partition has at most one or two inheritance hierarchy. This method has a problem when some design pattern instances involving characteristics that extend beyond the subsystem boundaries (such as chains of delegations) cannot be detected. Furthermore, in a number of design patterns, some roles might be taken by classes that do not belong to any inheritance hierarchy (e.g., Context role in the State/Strategy design patterns [1]). In order to improve the limitations of the method presented in[7], we propose a new procedure that candidates each combination of b classes as a design pattern instance, where b is the number of roles of the desired design pattern. Algorithm 1 gives the pseudocode for the proposed preprocessing procedure. Algorithm 1.   The proposed preprocessing procedureInput: Source code class diagrams Output: Candidate design pattern instances1. Transform given source code class diagrams to a graph G2. Enrich G by adding new edges representing parent’s relationships to children according to class diagrams3. You read "Detection Step" in category "Papers" Search all connected subgraphs with b number of vertices from G as candidate design pattern instances4. Filter candidate design pattern instances that haven’t any abstract classes or interfaces 3.2.2. Design pattern detectionIn this step, each candidate combination of classes produced in the preprocessing step is given to each design pattern classifier learned in Phase I of the proposed method in order to identify whether the candidate combination of classes is related to the design pattern that the classifier is expert on. Then, each classifier states its opinion with a confidence value. Finally, if the confidence value of the candidate combination of classes is located in the confidence range of that design pattern, then, the combination is a design pattern, otherwise it is not.Phase One (Intra-Class Level)The primary goal of phase one is to reduce the searchspace by identifying a set of candidate classes for every rolein each DP, or in other words, removing all classes that aredefinitely not playing a particular role. By doing so, phase oneshould also improve the accuracy of the overall recognitionsystem. However, these goals or benefits are highly dependenton how effective and accurate it is. Although some falsepositives are permissible in this phase, its benefits can becompromised if too many candidate classes are passed to phasetwo (e.g. _ 50% of the number of classes in the softwareunder analysis). On the other hand, if some true candidateclasses are misclassified (they become false negatives), thefinal recall of the overall recognition system will be affected.So, a reasonable compromise should be struck in phase oneand it should favour a high recall at the cost of a low precision.Phase Two (Inter-Class Level)In this phase, the core task of DP recognition is performedby examining all possible combinations of related roles’ candidates. Each DP is recognized by a separate classifier, whichtakes as input a feature vector representing the relationshipsbetween a pair of related candidate classes. Similarly, to rolesin phase one, different DPs have different subsets of featuresselected to best represent each one of them. Input featurevectors and model training are discussed in section V. The work that we present in this paper is built on the ideas of [11] where the author presents design pattern detection method based on similarity scoring algorithm.In the context of design pattern detection, the similarity scoring algorithm is used for calculating similarity score between a concrete design pattern and analyzed system. Let GA(system) and GB(pattern) be two directed graphs with NA and NB vertices. The similarity matrix Z isdefined as an NBÃâ€"NA matrix whose entry SIJ expresses how similar vertex J (in GA) is to vertex I (in GB) and is called similarity score between two vertices (I and J). Similarity matrix Z is computed in iterative way: 0In [11] authors define a set of matrices for describing specific (pattern and software system) features (for example associations, generalizations, abstract classes). For each feature, a concrete matrix is created for pattern and for software system, too (for example association matrix, generalization matrix, abstract classes matrix). This processleads to a number of similarity matrices of size NBÃâ€"NA (one for each described feature). To obtain overall picture for the similarity between the pattern and the system, similarity information is exploited from all matrices.In the process of creating final similarity matrix, different features are equivalent. To preserve the validity of the results, any similarity score must be bounded within therange ?0, 1?. Higher similarity score means higher possibility of design pattern instance. Therefore, individual matrices are initially summed and the resulting matrix is normalized by dividing the elements of column i (corresponding to similarity scores between all system classes and pattern role i) by the number of matrices (ki) in which the given role is involved. Tsantalis et al. in [6] introduced an approach to design pattern identification based on algorithm for calculating similarity between vertices in two graphs. System model and patterns are represented as the matrices reflecting model attributes like generalizations, associations, abstract classes, abstract method invocations, object creations etc. Similarity algorithm is not matrix type dependant, thus other matrices could be added as needed. Mentioned advantagesof matrix representation are 1) easy manipulation with the data and 2) higher readability by computer researchers. Every matrix type is created for model and pattern and similarity of this pair of matrices is calculated. This process repeats for every matrix type and all similarity scores are summed and normalized. For calculating similarity between matrices authors used equation proposed in [8]. Authors minimized the number of the matrix types because some attributes are quite common in system models, which leads to increased number of false positives. Our main concern is the adaptation of selected methods by extending their searching capabilities for design smell detection. Most anti-patterns haveadditional structural features, thus more model attributes need to be compared. We have chosen several smells attributes different from design patterns features which cannot be detected by original methods. Smell characteristics (e.g., what is many methods and attributes) need to be defined. On the other hand, some design patterns characteristics are also usable for flaw detection. Structural features included in both extended methods are: associations (with cardinality) generalizations class abstraction (whether a class is concrete, abstract or interface). 5.2 Pattern Definition Process rasoolPattern definitions are created from selection of appropriate feature types which are used by the recognition process to detect pattern instances from the source code. Precision and recall of pattern recognition approach is dependent on the accuracy and the completeness of pattern definitions, which are used to recognize the variants of different design patterns. The approach follows the list of activites to create pattern definitions. The definition process takes pattern structure or specification and identifies the majorelement playing key role in a pattern structure. A major element in each pattern is any class/interface that play central role in pattern structure and it is easy to access other elements through major element due to its connections. For example, in case of Adapter pattern, adapter class plays the role of major element. With identification of major element, the process defines feature in a pattern definition. The process iteratively identifies relevant feature types for each pattern definition. We illustrate the process of creating pattern definitions by activity diagram shown in Figure 5.3. The activity ?define feature for pattern definition? further follows the criteria for defining feature type for pattern definition. It searches the feature type in the feature type list and if the desired feature is available in the list, it selects the feature type and specifies its parameters. If the catalogue do not have desired feature in the list, the process defines new feature types for the pattern definition. The process is iterated until the pattern definition is created which can match different variants of a design pattern. The definition of feature type checks the existence of a certain feature and returns the elements that play role in the searched feature. The pattern definitions are composed from organized set of feature types by identifyingcentral roles using structural elements. The pattern definition process reduces recognition queries starting definition with the object playing pivotal role in the pattern structure. The definition process filters the matching instances when any single feature type does not match desired role. The definition of Singlton used for pattern recogniton is given below in Figure 5.2. Pattern Definition The pattern definition creation process is repeatable that user can select a single featuretype in different pattern definitions. It is customizable in the sense that user can add/remove and modify pattern definitions, which are based on SQL queries, regular expressions, source code parsers to match structural and implementation variants of different patterns. The approach used more than 40 feature types to define all the GoF patterns with different alternatives. The catalogue of pattern definitions can be extended by adding new feature types to match patterns beyond the GoF definitions.Examples of Pattern DefinitionsWe used pattern creation process to define static, dynamic and semantic features of patterns. It is clarified with examples that how features of a pattern are reused for other patterns. We selected one pattern from each category of creational, structural and behavioral patterns and complete list of all GoF pattern definitions is given in Appendix B. We describe features of Adapter, Abstract factory method and Observer in the following subsections. 5.3.1To be able to work on design pattern instances we need a way to represent them in some kindof data structure. The model used by the Joiner specifies that a design pattern can be defined from the structural point of view using the roles it contains and the cardinality relationship between couple of roles. -We describe a design motif as a CSP: each role is represented as a variable and relationsamong roles are represented as constraints among the variables. Additional variables andconstraints may be added to improve the precision and recall of the identification process.Variables have identical domains: all the classes in the program in which to identify thedesign motif. For example, the identification of micro-architectures similar to the Compositedesign motif, shown in Fig. 3, translates into the constraint system: Variables:clientcomponentcompositeleafConstraints:association(client, component)inheritance(component, composite)inheritance(component, leaf)composition(composite, component)where the four constraints represent the association, inheritance, and composition relationssuggested by the Composite design motif. When applying this CSP to identifyoccurrences of Composite in JHOTDRAW (Gamma and Eggenschwiler 1998), the fourvariables client, component, composite, and leaf have identical domainsWe seek to improve the performance and the precision of the structural identificationprocess using quantitative values by associating numerical signatures with roles in designmotifs. With numerical signatures, we can reduce the search space in two ways:– We can assign to each variable a domain containing only those classes for which thenumerical signatures match the expected numerical signatures for the role.– We can add unary constraints to each variable to match the numerical signatures of theclasses in its domain with the numerical signature of the corresponding role. These two ways achieve the same result: they remove classes for which the numericalsignatures do not match the expected numerical signature from the domain of a variable,reducing the search space by reducing the domains of the variables.Numerical signatures characterise classes that play roles in design motifs. We identifyclasses playing roles in motifs using their internal attributes. We measure these internalattributes using the following families of metrics: How to cite Detection Step, Papers

Effects of Barings Collapse free essay sample

Effects of Barings Collapse on the Banking Industry The uncovered loss of GBP 830 million led to a liquidity crisis for the Barings Bank , the collapse of the bank, which shocked all people, not only the financial world. Over the weekend of February 25 and 26, the management of Barings tried to arrange for a bailout by the Bank of England. Several investment banks gathered to discuss the possibility of raising enough private money to recapitalize Barings before the Tokyo market reopened on Monday morning. This attempt failed because of the size of Barings’s positions in Japenese derivatives contracts, many of them still open and liable to incur still bigger losses. None of the banks wanted to take on these contracts without a large fee or a guarantee from the Bank of England that it would cover these losses. The Bank of England decided that it was not prepared to put the British taxpayers’ money at risk. We will write a custom essay sample on Effects of Barings Collapse or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page On March 3, the Dutch financial group ING offered to purchase the majority of its assets and liabilities for one single pound sterling. As there were no other options available, Barings’ directors accepted the offer of ING. This action allowed for the protection of the bank’s depositors and creditors. However, shareholders suffered the majority of the loss. Immediately following the collapse, for instance, there was no sense of crisis in Singapore even though the ill-fated bets had been made there. SIMEX, which traded the futures and options that made up Leeson’s positions, limited the effects of the crisis by taking over Barings’s contracts and managing their liquidation, thereby keeping losses at a minimum. Other effects of the collapse such as the damage done to London’s reputation for safe financial dealing and personal losses incurred by a number of Barings’s investors, is considered as a price paid for taking part in risky financial games. Moreover, February 26, 1995 was not the first time when Barings had ’gone bust’. The first ’Barings Crisis’ happened in London in 1890, however Barings managed to recover from that loss as it had other financial institutions in similar situations. Regarding the global financial system, inititally there were worries that the revelations about Barings might lead to a loss of confidence in the global financial system as well as in the financial position of many banks engaged in derivatives trading. However, there was no sign of a negative effect from the Barings collapse. On the contrary, the failure of Barings was seen as having little to do with derivatives trading and much more to do with the lack of internal management controls at Barings. Though, Barings’s collapse had some serious impacts on the international financial markets. For instance, in Tokyo nervousness caused by the Barings collapse sent stock prices downward very quickly. The Nikkei index closed down 660. 33 points, or 3. 8 percent, the largest one-day fall since the financial shock of the Kobe earthquake itself. The Barings failure pushed stock prices down in more than a dozen of countries in Asia and Europe because investors intended to recover their assets without getting caught at the time of the collapse. In addition, the British pound fell a lot against the German mark. These results show that a single financial institution located in one country (in this case in England) was able to establish trading practices in a second nation thousands of miles away (in Singapore), and thereby affect financial markets worldwide (in Hong Kong, Japan, England) through its mismanaged operations. So far, the United States has not been mentioned as being very much affected by the Barings collapse. Though, American inverstors should be concerned by international market disruptions such as those created by the Barings collapse. For instance, not long ago U. S. investors used to purchase mutual funds and closed-end funds which invest in foreign securities markets as well as acquiring the debt and equity securities of foreign issuers. As one of the further consequences of the collapse of Barings Bank, a syndicate at the Lloyd’s of London insurance market announced on 2 February 1998 that it had sold its first insurance policy covering banks for the risk of ’rouge trader’. During the mid-90s the financial world observed several significant collapses of various companies which were quite active in the field of derivatives and securities. The most well-know ones are the followings: Metallgesellschaft (1993), Kidder Peabody (April 1994), Bankers Trust (September-October 1994), Orange County (December 1994), Daiwa (September 1995). The primary concern for bank regulators to address in the aftermath of Barings is systematic risk. Systematic risk means the risk that illiquidity or failure of one institution, and its inabilty to meet its obligations when due, will lead to the illiquidity or failure of other financial institutions. Banks that engage in derivative activities without careful thinking are exposed to great risk and, as a result of this, face significant potential losses that could mean a dangeour for major firms or even for the financial system as a whole. The inability of one bank to meet its obligations has the likelihood to lead to a domino effect, toppling one financial institution after another. Another possibility is that investors lose confidence in the financial market, that is in case of a market disturbance, an otherwise containable market downturn can be made into an illiquidity-driven crash. Barings did not cause a domino effect, nor did the effects of Barings rise to the level of an illiquidity-driven crash. Though, the ever-increasing development and the use of derivatives and other innovative financial instruments suggest that any lessons from past failures should be taken into consideration. Any type of financial debacle carrries with it a risk that threatens the stability of financial markets and investors’ confidence in those markets. Conclusion: The Barings collapse did not result in worldwide financial crisis, nor did it topple institution after institution when it failed to meet its own obligations on SIMEX future contracts. However, it is the interplay of these observations that makes the Barings story not only interesting but important in the context of global financial institutions. The collapse may have alerted the world to the fact that derivatives are risky, that losses can spiral out of control virtually overnight, and that the effects of a failed financial institution are not only local but international. This case became a quite typical lesson, and the bankers, economists, financial experts, and the government regulators through out the world began to concentrate on not only restrictions and regulations externally through egislation and policies, but also supervisions of internal individual activities. If, as a result of the Barings collapse, financial institutions evaluate and improve internal contols on risk management and regulators undertake a more cooperative global approach, probably Barings-style collapses can be prevented in the future. At least, increasing the level of confidence investors have in the long-term stability of financial markets can only serve to benefit all those associated with them. http://vivian. seo-blog. org/ http://djcil.law.duke.edu/ http://www.mheducation.com/highered/home-guest.html