MULTILITERAL TRADE AGREEMENTS:
Since the establishment of the GATT after World War II, very significant progress towards trade liberalization has been made in successive rounds of multilateral negotiations. During the same time period, the world has witnessed two waves of bilateral or regional trading arrangements, which depending on whose analysis one reads, have been thought to either complement and speed up the multilateral process or to hinder it greatly. The first wave of regionalism came during the early 1960’s, after the agreement among the original six members of the European Common Market (1957), and spread quickly to most part of the world. Proposals such as NAFTA (at the time the North Atlantic Free Trade Area), LAFTA (Latin American Free Trade Area) and PAFTA (Pacific Free Trade Area were discussed but by the end of the decade regionalism appeared dead, with only the EC and EFTA, the European Free Trade Area, surviving. The second wave of regionalism, which began in the mid 1980’s, is still in progress and appears far more successful. The United States has negotiated and ratified the CUSFTA and subsequently the NAFTA.
Multilateral trade agreements are the kind of agreements between many countries at one time. As a matter of fact, such agreements are highly intricate to negotiate, and once signed by all the parties, become very powerful. The most important benefit of multilateral agreement is that all countries are equally treated, and it gives a unique opportunity to the countries especially poorer nations who are less competitive by nature to play in the field at equal level (Bell & McChullo, 1993).
The most commonly known example of multilateral trade agreement is Doha round. It is an agreement between 149 countries which are member countries of the World Trade Organization. Another common example of Multilateral Trade Agreement is NAFTA- North American Free Trade agreement. It is an agreement between Canada, Mexico and US and was signed in 1994.
BILITERAL TRADE AGREEMENTS:
Bilateral trade agreement is an agreement between two nations at the same time. Normally, in the non appearance of flourishing multilateral trade agreement, a succession of bilateral agreements takes place. Such types of agreements are easy to settle and give favoured status to two nations to give favours to each others. Bilateral trade agreements are also known as “trade pacts”.
Bilateral trade agreements provide a unique opportunity to the members to join them in the agreement. This helps most of the countries to grow and sustain economic prosperity through joint ventures (Bell et al., 2001). For instance, the common example of bilateral trade agreement is agreement between US and Jordan signed in 2001. It is commonly known as UJFTA (United States & Jordan Free Trade Agreement).
Q: 2 As previously mentioned, NAFTA is regional trade agreement. The agreement contains nine key provisions. One of these deals with market access. What do the remaining eight deals with?
NAFTA is basically a trade agreement to improve the business of all the economy aspects of North America. NAFTA is signed to abolish all kinds of tariffs and eliminates other non tariff hindrances such as licence for imports to assist US goods manufactures to reach two new markets particularly Mexico. NAFTA was signed to secure the investors point of view, as the investment does not restrictive to government laws and policies and US investors receive equal rights in comparison to Mexico and Canada domestic investors (Farah, 1994).
North American Free Trade Agreement is a regional agreement. It has various provisions. Apart from the market access the other eight provisions of NAFTA are:
- Under the agreement, NAFTA will certify inevitability, regularity and lucidity in customs enforcement. It will curtailed drawbacks of duty for trade of goods of non North American among the three countries and will make sure a preference margin for North American cog and raw materials manufactures in comparison to foreign producers.
- NAFTA will offer entry for US petrochemical suppliers and energy to Mexico’s petrochemical, energy, gas, electricity and equipment markets. With the elimination of non tariff and tariff barriers, NAFTA will offer US industries unique market opportunities in all sectors of economy for instance electronics is an area where high tariff rate is immediately abolished or within next 5 years.
- NAFTA’s new provision is linked with trade in services. NAFTA will unlock new marketplace for deliverance of services of US to Mexico and Canada. As the service industry of US is growing tremendously, this agreement provides opportunity to US Service Companies to offer their services on a non discriminatory basis from US. NAFTA allows the Mexican market to financial service providers, insurance, enhancement of telecommunication firms and bus and trucking firms to US.
- From investment protection point of view, NAFTA has another provision. It will remove trade barriers of Mexico to export its goods to US. NAFTA will trim down the inducements to move manufacturing to Mexico by US firms to serve that essential market. Moreover, it will ensure that US firms doing business in Mexico are no loner compelled to buy Mexican home made products instead of importing them from US. Nor they will be compelled to export their goods to US.
- Moreover, NAFTA will also offer effective and timely assistance to American firms and workers in need of time to adjust themselves to harmful imports from Mexico.
- NAFTA support growth of export of US most aggressive economy sectors for instance entertainment and technology products by ensuring refined standards of intellectual property rights. NAFTA covers all intellectual property rights including copyrights, patents, trademarks and linked rights for instance plant breeder rights, mask works, trade secrets and industrial designs.
- As a result of growth in trade and economic alliances development in business in Mexico due to NAFTA, it allows more business persons to enter in Mexico. NAFTA ensures that Mexican and US governments develop a translucent and standardized set of procedures and laws to smooth the progress of momentary entrance of business person to execute their trading and investing activities in Mexico.
- NAFTA benefits most of the US industries for instance suppliers of oil and gas services and equipments, computer systems, pharmaceutical goods and medical apparatus, services of construction from provisions of government procurements.
Q: 3 List four trade agreements involving the United States.
The list of trade agreements of United States are as follows:
- NAFTA: North American Free Trade Agreement. Member countries are Canada, US and Mexico. Signed in 1994.
- USFTA: United State and Israel Free Trade Agreement. Member countries are US, Israel and Palestinian Authority. It was signed in 1985.
- DR-CAFTA: Dominican Republic Central America Free Trade Agreement. Member countries are El Salvador, Nicaragua, Honduras, Costa Rica, Guatemala and Dominican Republic. It was signed in 2005.
- UJFTA: US and Jordan Free Trade Agreement. Member countries are US & Jordan. It was signed in 2001.
Q: 4. List five trade agreements involving Latin America.
The trade agreements of Latin America are:
- NAFTA: NAFTA: North American Free Trade Agreement. Member countries are Canada, US and Mexico. Signed in 1994
- CAFTA DR: Dominican Republic Central America United States Free Trade Agreement.
- FTA: It was signed by US, Latin America, Chile and Peru.
- In 2000, European Union signed its first Trade Agreement with Mexico. It is commonly known as EUMFTA. Later, Chile with Caricom joined the agreement as now it comprises of 15 nations of Caribbean
- In 2007, The Minister of International Trade and Tourism signed a Free trade agreement with Peru.
JABIL CIRCUIT INC’S
GUADALAJARA
FACTORY AT MEXICO GOING UPSCALE TO SURVIVE IN
THE MARKET AGAINST COMPETITORS OF CHINA
Jabil Circuit Inc is Florida based company engaged in manufacturing electronic goods and services. The company started in 1996, and now having more than 55,000 employees worldwide, has 40 facilities offices and serves in more than 20 countries. In 2005, the company earned more than $7.5 billion of its revenue.
The main factory of the Jabil Circuit Inc is situated at Guadalajara in Mexico. The main purpose of the Jabil Circuit Inc was to supply electronic goods for various companies in US. The motive of the company was to compete successfully in the global market with competitive prices.
After NAFTA, the company grew rapidly, and the export of the company rose up from $2 billion to $10 billion within few years. Later, the plant was expanded to meet the rising demands of the new and existing markets. The company was expanding its production area and planning to capture new markets when suddenly the company faced the drastic problem and the production of the company declined within 5 months by 40%.
PROBLEM:
Jabil Circuit Inc, one of the leading electronic manufacturers and service providers of US, suddenly faced a real problem as a result of globalization. China by taking advantage of the lower labour cost tried to capture the US market. Within three years from 2001 to 2004, almost 400,000 jobs were shifted to China due to the lower cost of production. Hence, China became second largest exporter to US market after Canada.
Jabil Circuit Inc has to face high cost problems as the labour cost of China is four times less than that of Mexico. The sales of the company are declining and company fails to compete successfully in the US and other markets due to its high price in comparison to Chinese electronic products. Like other most of the companies in US, this is the biggest problem Jabil faced due to the globalization and increasing trends of offshore outsourcing of production and manufacturing services.
SOLUTION:
In order to come to a solution with effective results, it was essential to analyze the pros and cons of all available options to the company. It is essential first to come to different alternative solutions and analyze their pros and cons and then choose the best possible solution for it.
There are two obvious solutions: The first solution is to shift its manufacturing plant to other Asian countries like China as other companies are already doing. Offshore outsourcing of production units brings drastic effects to the company as there are many advantages attached with it.
The Jibal Circuit Inc can become a low cost producer making a fine quality product at reasonable price to compete in the market. Moreover, the management has concluded that the product costs in China will benefit the company from the much low wages in China equivalent to $4.00 per hour as compared to $ 16.00 per hour paid in Mexico.
The company analyzed from its report that the lower wage rate will helps the management to reduce its production costs per unit by 30%. The Second advantage the Jibal Company can have from shift from Mexico to China is to invest more in technology, design and performance of the company with less cost in comparison to Mexico. The second approach for the company makes it follow its strategy to off shore outsourcing successfully to bring long lasting benefits for the company. Moreover, the company can capture new markets of South East Asia, Japan, Australia, and Far East. Moreover, it helps company not only strengthen its markets in Europe & U.S but capture new markets as well.
However, there are other disadvantages attached with the solutions. The biggest drawback of offshore outsourcing is that the shippment time and cost are high as compared to setting up the factory office in Mexico. Estimates suggest that the shippment cost will increase 14 cents per piece if shipped by sea, and in case shipped by air then the shippment cost will increase to 71 cents per piece. On the other hand the shippment cost from Mexico to US market is 5 cents per piece. Moreover, the delievery time varies, as from Mexico, shippments can reach US markets within few hours as compared to shippment from China to US which normally takes 23 days to reach. Moreover, there are additional costs attached with the shippment like custom duties etc. Another threat the company may face through shippment from China or off shore is terrorism that can also bring additional costs to the company.
Another possible solution available to the company is to take advantage of geographical factor. The company retains its factory in Mexico, and take advantage of its proximity to US. There are various advantages attached with the retaining its plant to Mexico. First and the foremost advantage the company enjoys is its proximity to US market, and the NAFTA free trade agreements that allows no tarrif for transportation from US to Mexico and vice versa. The company can take advantage of this and can aggressively compete in the US market. However, the disadvantages attached to the given situation are numerous. First the cost of production rises up all of sudden as the Mexicon labour class wont compromise on the lower labor rate from the existing offered to them. Apart from the high production costs, the company has to adopt aggressive marketing strategies plus cost to compete successfully in the US market. The company has to bear additional cost on research and development. In this way the total cost of the company rises up leaving little margin for the owners. In this way, the company cannot have chance to excel in the market.
RECOMMENDATIONS:
We have analyzed all the pros and corns of the two available possible solutions and analyzed the geographically and upcoming challenges can face by the company.
In my opinion off shore outsourcing of the production plant is the best possible solution to the company. There are various advantages attached with it these are:
- The Jibal Circuit Inc can become a low cost producer making a fine quality product at reasonable price to compete in the market. Moreover, the management came to the point that the product costs in China will benefit the company from the much low wages in China equivalent to $4.00 per hour as compared to $ 16.00 per hour paid in Mexico. Despite the intention of the company which plan to pay twice the China national average rate to its employees. The company analyzed from its report that the lower wage rate will helps the management to reduce its production costs per unit by 30%.
- The Second advantage the Jibal Company can have from shift from Mexico to China is to invest more in technology, design and performance of the company with less cost in comparison to Mexico. The second approach for the company makes it follow its strategy to off shore outsourcing successfully to bring long lasting benefits for the company. Moreover, the company can capture new markets of South East Asia, Japan, Australia, and Far East. Moreover, it helps company not only strengthen its markets in Europe & U.S but capture new markets as well. As presently the company is only focusing the narrow markets of US. With low production costs, and advance techonology, there are huge opprotunities attached with the off shore outsourcing to capture new markets.
- The company can reduce its shippment cost by creating a Virtual model of supply chain management with single architecture like many other companies are following it. This architecture links customers directly with the manufacturing unit and in this way the logistics cost of the company curtailed upto 15%.
- In case of delievery of goods on time, the company can schedule up its delievery tasks and can retain margin of at least 14 days to reach the consignment. Restocking and other economic order quanitity techniques can help the management alot to give delievery to the products on time and with in the given specifications.
- The company once start on having lower production costs, can spend its income on purchase of high technology from the nearest market in Japan, Malaysia and Hong Kong. The company can purchase high technology with professionals at less cost in comparison to the purchase of these from the Mexico. This will help company to reduce its costs of research and design, purchase of high technology upto 7%.
- The company has also chance to excel in new markets like Middle East, Far East, Asia, as well as the African markets apart from gaining a competitive edge in the US and European markets.
- Moreover, the Jabil Circuit Inc company claims that the stability and growth of the company lies in the fact of researching and designing new products for the company and to be a two steps ahead from its competitors. Most of the competitors or rivals compete by manufacture its products in Far East.
- Moreover, unlike other Mexico manufacturing companies, the company invests almost 20% of its turnover in Research and Development. On the other hand, other firms are investing only 2% of their turnover and not in technology inheritance rather on other areas including Electronic appliances and other related repairing services.. Moreover, the company can targets to beat every manufacturer of electronic goods globally. As most of the competitors can follow Jabil Circuit Inc company, the management has a strict policy to invest more in Research & development to retain its competitive edgeMoreover, the strategy of offshore outsourcing by the company helps it to enter into new market to grow extensively. Jabil Circuit Inc, Company can start competing in Japan, with its advance and new technology. The company gains huge benefits by entering in new markets, and faced a tough competition as well as Japanese market is well developed and it’s a home to bring world’s most reliable and best products in electronic industry. The tough competition faced by the company in Japanese market brings huge potential for the company to improve its existing products.
- Moreover, the company also enter into new markets of Middle East, and gained a huge returns as the market is vast, but only few branded and reliable products exists in Middle East markets. The company also set up its business in Australia, to increase its yield and to improve its overall performance. Fortunately, Jibal Circuit Inc Company becomes the best seller of electronic goods and related services not only in US but in Canada as well.
- Furthermore the company sees huge benefits and potential as they have a lot to discover new markets. It helps the company to contract new suppliers who offer reasonable rates to the company in comparison to the high rates offered by local suppliers in Mexico. It decreases further the logistics costs of the company, as the company also hires suppliers from China.
- The company can set up its plant in China, but the company can also analyze its other available options to outsource like Malaysia, India, or Pakistan.
CONCLUSION:
No doubt, the strategy of Jabil Circuit Inc Company to set up its production unit to China can bring a bundle of benefits and reward for the company. It not only helps the company to capture the local and international market with its new and advance technology, but helps the company to reduce its overall operating costs. The reduction in total costs boost up its profitability margin and brings financial stability in the company. Moreover, it helps the company to enter and capture new markets like Australia, New Zealand, Japan, and Middle East. The company can not only prove that its decision to outsource to China is the best decision the company ever made, but also become world’s best seller of electronic goods.
PROJECT 3
Q: a. what strategic moves does Sir Dominic Cadbury mention in his letter? What about Roger Enrico?
Q: b. what financial goals does Sr. Dominic Cadbury mention in his letter? What about
Roger Enrico?
Q:c. Which of the two letters provides you with better insight into where the company is headed in the future?
1. STRATEGIC MOVES HIGHLIGHTENED IN BOTH LETTERS:
PEPSI:
Pepsi is one of the leading Beverage and Food Company around the globe. The Chairman of Pepsi in year 2001 highlighted various strategic moves of the company in the given year. Mr. Roger.M. Enrico, Chairman of Pepsi Co, first highlighted the key strengths of the company in his letter. The strength of the Pepsi Co is a combination of Unbeatable high quality on which the company never compromised, Matchless Service level which cannot be matched anywhere else in the world, Creative innovation of the company, brand superiority and Professional team a part of the Pepsi Co Group. These all factors bring high yields for the company in long run. To sustain the position in the world, the company has to take various strategic decisions to move on with financial strength and having a competitive edge in the market.
The strategic policies and objectives of the company in the given year are to maintain the superior brand quality, Refined Distribution Service, Innovation capabilities that are matchless and Exceptional value for the company in the long run.
The key of success of Pepsi co is its refined strategies in any year. Pepsi Co strives hard to maintain an outstanding quality of brand over the years. The management focus on instead of managing small brands in great quantity, its better to focus more on portfolio that offers world’s leading brands to endure an appeal among the masses at large. The company is focusing to create a brand appeal by capturing different rooms around the clock. The company also focus on consumer needs from nutrition to health.
Moreover, the management of Pepsi Co also focus aggressively on having a reasonable price strategy for its consumer which ensures highest quality at affordable prices. Company focus on providing reasonable priced products to appeal a large consumer growth, as well as to measure efficiencies that ultimately lead to success. Management also plan aggressively to design and produce goods of perfect quality with each passing day. Apart of superior brand services company manages to focus aggressively on excellent distribution service. The basic aim is to provide products that can easy to access by the consumer. Different distribution service includes direct delivery to stores, warehouse broker distribution, retailers and to create a good supply chain management.
Management also focus on its innovation abilities and every day striving hard to create and bring new for its consumer to retain their interest. The beauty of Pepsi Co innovation is that it differentiates its products and packages remarkably in the market. It results in sustaining the competitive edge in the market. Company also concentrate on retaining the high professionals and most capable person in the company as the management believe good employees are the biggest assets for any company and key to success. The company motto is “ s we grow, you should grow”
These were the strategic issues high lightened by the Chairman of Pepsi Co in his letter of annual report of 2001. In my opinion it reflects the passion and dedication of the management of the PepsiCo to bring high yields for its shareholders as well as to bring financial stability for the company in long run.
CADBURY SCHWEPPES:
Cadbury Schweppes is one of the leading confectionery and Beverages Company in the globe. Cadbury is highly popular in more than 200 countries around the globe and retains successfully 38,000 employees. Cadbury soft drinks are ranked among world top three in the world. Sir Dominic Cadbury, the Chairman of Cadbury Schweppes high lightened the key of their success in their letter in the annual report of 2001 (Cadbury Schweppes reports good first half earnings growth, 2002). The Chairman revealed the secret of his company’s success and the growth of its shareholders value. The basic strategy of the company comprises of three areas. Firstly the company had focused on its core business of confectionery and beverages and grow aggressively. Second the management focus on retaining their robust position in the regional markets and thirdly to expand and grow with acquisitions and capturing new markets.
The Chairman of the company highlights the strategic growth and prospects for the company in long run. The company has strengthened its business in European market and earning a major portion of its profit from European market. The management deeply focused on various strategic policies of the company to excel in the market successfully. The management focus aggressively on increasing its returns by curtailing the overall cost of sales and increasing efficiencies in production. However, there seem four major areas where company mainly focus in a given year (Confectionery Market Research Reports, 2009).
The first and the foremost basic strategy of the company were to expand through acquisitions. The company has gained a significant increase in its growth through investment. Company has made huge investment to serve the purpose of acquisition and expand rapidly. Moreover, the company focuses on maintaining its global position in soft drink and confectionery industry. The company concentrate on sustaining its portfolio of brands and expand its business through making investments in consumer franchises. The management also focus on retaining the quality of its products through excellent production. The company also achieve lowest cost in supply chain management including procurement, production, logistics and distribution. The management is constantly focusing on various areas to lower its cost and in search of an opportunity to excel and have more cooperative and refined terms with its suppliers. The management also focus on its procurement activities and thriving for improved opportunities in this context. The management also focus on standardisation of its IT system with a single architecture worldwide. The management is having a strategy to enable a faultless virtual transaction model from factory to consumer which brings huge opportunities for the company to improve its service level while curtailing its cost.
In my opinion the letter highlighted most of the issues related to the financial performance and growth of the company and very little area covered the strategic issues and prospects of the company in a given year. The management and the board of directors strived hard in the given year to bring financial strength of the company through investments and acquisitions and focus less on other areas that are considered important for the balanced growth of the company.
FINANCIAL GOALS OF THE COMPANIES HIGHLIGHTED IN LETTERS:
CADBURY SCHWEPPES:
As per the financial highlights given in the letter of Chairman of Cadbury Schweppes, the company has gained excellent financial results. The letter of Sir Dominic Cadbury depicts the clear financial position of the company that is remarkably strong. The company has retained no one position in 16 markets around the globe and had a drastic opportunity to excel in emerging markets. The company financial position is strengthened due to the identification and mergers or acquisition n new businesses after crafting integration in the family of Cadbury Schweppes. The company had disposals of almost 1.3. Billion pounds and had acquisitions of almost 2.6 billion pounds in a given year. According to the letter of the chairman, the company generates more than 300 million pounds of its cash flow from various activities in given year. The earnings per share in a given year rose by 14% and generation of free cash flow was almost 397 million pounds.
Moreover, the third target in terms of financial stability is growth in the shareholder return in total. Though that was not under direct control of the management however, though the stock exchange and market of UK declined by 16%, the company total shareholder return performance was almost 11% in the given year. One of the prime factors supporting the financial performance of the company is its well-built balance sheet and good business performance in the key business areas and regions by the company’s management. Another aspect that contributed drastically is the excellent operating performance in European and Mott’s beverage markets by the management.
The company had an acquisition of Snapple Beverage group, brings huge opportunities for the company to excel in the beverage industry around the globe. The Cadbury Schweppes expands its business and grow in volume. Management successfully gained key results from its increase in business volume by 6% in China, Russia, France and Poland. Moreover, the market and integration of business in UK and Canada particularly in sugar confectionery and chocolate in addition with intricate trading atmosphere brings low returns for the company. But still the company manages to be a country’s leading confectionery in both the markets. This bought strong financial position, brand commitment and channel of expansion for the company in long run. In the final quarter of the fiscal year, Schweppes managed to successfully expand its volume by 2% in UK market.
Moreover the company successfully increased its annual turnover by 21%, and trading profit by 20% in contrast to last year financial statements. Earning per share also rose up by 9% in the given year, and Earning per share rose up by 16% in total. The balance sheets over all performance raised by 20%. Hence, the financial position of the company is sound and strengthened contributed by various factors by the management of the Cadbury Scheweppes.
PEPSI CO:
As per the financial highlights given in the letter of Chairman of Pepsi Co, the company has gained excellent financial results. The letter of Roger Enrico depicts the clear financial position of the company that is remarkably strong. Company is successfully managing 140,000 employees around the globe and with 150 executives having more than 15 years of tenure with the company.
Since last year, there had been drastic improvement in the financial position of the company. The merger of Pepsi Co with the Quaker Oats company in August, accelerate the growth of the company. In the given year the management has outstanding performed despite the hindrances created by big mergers. In contrast to the last year, the company has remarkably produced and earn higher revenue and operating profit in every division. The segmentation profit and the earnings per share grew almost at double rate in every quarter of the fiscal year. Moreover, the management has successfully accomplished increased of 26% on return on invested capital on the basis of almost 100.
The operating cash flow of the company robust to 2.9 billion pounds after contribution to capital expenditure and investments of 421 billions. However, the balance sheet of the company depicts a strong position with decline in net debt by 1.4 billion that comprises of 21%. The company successfully announced and distributed dividends and share repurchases of almost 2.7 billion in a given year. The company successfully retained its market position in the global industry of almost 40%. Though the management was disappointed by the unchanged close in the industrial stocks declined by 7%, and declined in S& P 500 by 13% declined in S& P beverage Index by 15%.
However, in contrast to the previously given year, the net sales of the company stood by 6%, operating profit of the company rose by 10%, net income increased by 5% and the net income per common share rose by 4%. There is substantial increase in the dividend payment by the company of 5%, and long term debt payment showed drastic improvement of 12%. However, the capital spending of the company decreased by 2% during the given fiscal year. The net sales of the company during the given year were 26,935 million dollars and 4776 million dollars of operating profit segment wise. However, the overall performance of the company was satisfactorily and company primilarly focus on capturing new markets, improves its supply chain management, and decreases its cost of sales. These factors bring high financial position with strength and sound in its outlook. Overall the company focus on main strategies to bring remarkable financial performance for its shareholders and employees.
In my opinion the letter highlighted most of the issues related to the strategies, goals and issues for the growth of the company and very little area covered the financial highlights and future prospects of the company in a given year. The management and the board of directors strived hard in the given year to bring financial strength of the company by implementing, and executing the best possible strategies in the various areas which includes unbeatable high quality on which the company never compromised, Matchless Service level which cannot be matched anywhere else in the world, Creative innovation of the company, brand superiority and Professional team a part of the Pepsi Co Group. These all factors bring high yields for the company in long run. To sustain the position in the world, the company has to take various strategic decisions to move on with financial strength and having a competitive edge in the market as mentioned in the letter of the Chairman in the given annual report of 2001.
BEST INSIGHTS OF THE FUTURE OF THE COMPANY
In my opinion, the best insights of the company future are given by Pepsi Co company chairman’s letter. Mr. Roger Enrico has highlighted not only the financial aspects of the company with complete, precise and transparent way, but also highlights various aspects of their business and their achievement in these areas in the given years. It gives a clear picture of the company’s performance in the given year and the future plans of the company so far. Moreover, the letter also reflects the actual undertakings and events incurred in the company with detail of every facts and figures with the tables, graphs and the key areas are highlights in bold letters at different pages of the letter. This is to symbolize the real performance with true spirit of depiction. In my opinion Roger Enrico focused and covered all the areas in equal word length and do not concentrate much on single area.
It clearly mentioned the strategies, performance, goals and future plans plus current financial and other areas performance.
On the other hand, the letter of Sir Dominic Cadbury chairman of Cadbury Schweppes highlighted much on the financial performance of the company and concentrate little on other areas for instance supply chain management, marketing and other related strategies, policies, and the set of future planning and goals. The letter does not clearly depict the overall performance of the company in terms of its various areas like logistics, marketing, manufacturing. The letter mostly covers acquisitions and disposals, investments. Though depiction of financial strategies is important but in my opinion, it is more important to cover all areas of business in detail with proper diagrams, tables so that reader or investor or any common person interested in future of the company gets the idea what is the company’s real picture is and how fruitful it is to invest in it.
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