Starbucks International Expansion

Starbucks International Expansion International Business Management I. Introduction In General, when international companies consider going into overseas markets, they adapt some strategies of entry modes such as licensing, franchising, joint venture and MA. For example, ‘Pierre Cardin extended their foreign business through a pure licensing and Mcdonalds was able to become the largest fast-food retailer on earth by taking advantage of its unique franchising strategy. Hence, the wise mix of entry modes can be regarded as a core factor for multinational enterprises to advance into new outer markets. As you know, Starbucks Corporation (hereafter, Starbucks) is the largest coffee retailer in the world. It has succeeded in globally by carrying out wise collaborative strategies. Therefore, in this study, Starbucks international performance would be covered at first and it would be followed by further discussions; market issues aboutIndian entry and strategic comparison with the competitors ‘The Coffee Bean and Tea Leaf and ‘Hollys Coffee. II. Starbucks International Expansion Since Starbucks established its subsidiaries, â€Å"Starbucks Coffee international† in 1995[i], it has applied to flexible entry strategies; licensing and joint venture and whole ownership. While it is operating its US stores directly, Starbucks is largely running its cafà ©s outside US through joint venture and licensing with local retailers. In fiscal year of 2009, it has opened 3,439 licensed cafà ©s on earth representing 62 percents of entire stores. The main target of international business is Asia and Starbucks has operated 2,062 cafà ©s.[ii](Refer to Table.1) Besides, Starbucks is managing some overseas stores directly by acquiring local coffee retailers. In UK, Canada and some Asian market such as Thailand and Singapore, Starbucks owns 2,068 wholly-owned cafà ©s which account for 38 percents of entire overseas stores.[iii] A. Why Starbucks prefers direct investment to franchising and licensing? When Starbucks expanded its business outbound, â€Å"Coffee culture† has not existed in various countries including Asian nations. Therefore, it was imperative for Starbucks to spread coffee culture and Starbucks has implemented a marketing strategy called â€Å"Cult-duct†[1]. Hence, Starbucks thought that it was more appropriate for Starbucks to have taken advantage of direct investments; joint venture and wholly-owned companies rather than licensing and franchising so as not only to offer tangible products; coffee and cookies but also to deliver a fine coffee culture represented by urban and elegant image. Through this strategy, Starbucks effectively has managed to control its core competencies such as the high quality coffee, the quarterly employee training concerning customer service and store management know-how. B. Motivation of Joint Venture As mentioned above, the main target of Starbucks international is Asia and Starbucks has adapted joint venture as a main method for Asian market, although it has entered with licensing in several Asian regions including Middle East and Philippines. (Refer to table. 2) Above all, Starbucks could minimize risk of Asian operation by running businesses through joint venture with local retailers. At the beginning, since Starbucks did not hold both experience and expertise for Asian market, it is required for Starbucks to share local companies know-how and wide domestic networks to stably perform its Asian operation. Moreover, Starbucks has properly overcome the cultural gap with Asian nations and carried out the splendid market research. To demonstrate, local companies were involved in local staffing and analysis of regional customers taste and preference whereas Starbucks took responsibilities for employee training, coffee roasting and quality control. Besides, Starbucks could release localized products. For example, it is selling Korean traditional beverages such as ‘Sik-hye and ‘Sujungghwa in Insa-dong cafà © and offering sorts of Chinese traditional teas like â€Å"Oriental Beauty Tea† and â€Å"Fancy Black tea† in Taiwan. C. Motivation of Direct Operation Starbucks is also doing its international business with company-owned operation. . In UK, Canada and Australia, Starbucks did not have to worry about the huge gap of culture when it entered into these markets because they all belong to English language culture and there is no remarkable difference of organization culture. Whereas, Starbucks has finally acquired the entire equity of local manufacturers, Coffee Partners in Thailand and Bonstar in Singapore respectively, even if it initially entered those markets with the form of joint venture.[iv] These countries legitimately allowed the foreign capital to hold 100% equity of a company and Starbucks could not trust the marketing capabilities of these local retailers. D. A Key Growth Drive: Indian Entry In 2006, Starbucks decided to initiate its business in India and made a joint venture contract with the Indian local retailer, RPG Enterprises[v]. However, its offer was rejected by Indian government due to issues related to technique transition and strict regulation on ‘foreign retail companies'[vi]. To illustrate, Indian government did not allow direct control of foreign companies in Indian retail industry, even though foreign companies can possess up to 51% of equity. This is a big obstacle to Starbucks because strong control of business is the main principle of Starbucks overseas operation. In February 2009, Indian government made a decision to boost foreign investment owing to late contraction of FDI and then it has finally permitted outer retailers to own its business in case of holding 51% shares of a joint venture company.[vii] As a result, Starbucks reconsidered Indian entry and has begun a talk with ‘Jubiliant Group about the alliance.[viii] However, while Starbucks adheres to joint venture in the entry of India, competitors like Mcdonalds have already launched in India throug franchising and local brands â€Å"Barista† and â€Å"Coffee day† have been rapidly growing. In March 2010, the world largest PEF â€Å"KKR† also determined to invest 200 million US dollar in â€Å"Coffee Day† to compete with Starbucks.[ix] III. Comparison with the competitors A. The Coffee Bean Tea Leaf Some competitors of Starbucks have taken the different way in terms of international business. The representative example is â€Å"The Coffee Bean Tea Leaf† (hereafter, The Coffee Bean). The Coffee Bean has adapted franchising strategy for overseas expansion. As of 2008, The Coffee Bean has opened approximately 750 cafà ©s in 22 nations. Specifically, it has 288 cafà ©s under direct control while 444 cafà ©s are being operated by franchisees[x]. (Refer to Table. 3) When a company makes a licensing contract with licensor, it is able to use licensors patent, know-how, trade mark and technology. By comparison, franchising enables franchisee to get support from franchisor concerning operation and management, working principle and marketing. In other words, franchisor could be strongly involved in franchisees operation. 1. Motivation of Franchising The first reason that The Coffee Bean chose franchising is to expand its business into the outer market quickly. Since it began expanding far later than its competitors, it strived to take faster entry mode than FDI. By doing its international operation with franchising, The Coffee Bean could enter more than 20 countries including India without big trouble. In the meanwhile, Starbucks has struggled to enter India market by governmental and political intervention as we discussed above. Second, as mention above, while Starbucks wanted to provide customers with not only just coffee but also coffee culture at its foreign market entry, The Coffee Bean has more focused on the quality of coffee. As its strategy is to serve tasteful coffee to as many customers as it can, it is essential to motivate franchisee to serve more people. Franchising can provide high motivation to franchisees as they just need to pay fixed royalty. It means that more customers they serve customers, the more profit they can expect. The last reason is cost saving. If it had entered the overseas market as FDI, it would have born more cost such as rent and operating cost. By franchising, extra cost could be avoidable. 2. Disadvantage of franchising One remarkable problem which franchisor could face is that it can lose control of operation. As franchisor doesnt have authority on operating, it might be difficult to keep high quality of service and exerts a bad influence on its brand and image. For example, the coffee bean was uncovered by Korea Food and Drug Administration because it had used unsuitable ingredient. In addition to this, it did not implement a regular staff heath inspection program. The incident damaged the companys image and it can be referred to as a typical example of the disadvantage. B. Hollys Coffee Hollys Coffee is a well-known Korean coffee retailer founded in 1998 and it has developed into one of the domestic competitors of foreign coffee retailers such as Starbucks and The Coffee Bean Tea Leaf in Korea. Since 1998, Hollys Coffee has steadily increased its stores and the number of them has amounted to more than 200 recently. Not satisfied with the huge success in Korean domestic market, Hollys Coffee decided to go abroad and opened stores in Malaysia and Los Angeles in US in 2007. A few months ago, in December 2009, Hollys Coffee launched the third international store in Peru, one of the coffee bean-producing nations. Hollys Coffee announced it would achieve two goals in Peru; operating eight stores and sales up to 7 billion Korean won within a year. In order to realize these goals, Hollys Coffee entered into the Peru through ‘master franchising method that allows individuals or corporations to buy the rights to sub-franchise within some specific countries.[xi] The company usually adapts master franchising method so as to minimize risk when it enters the country where its brand is seldom familiar to the local community as well as it is difficult to attract investments. In Peru, There are a lot of its own domestic coffee retailers and Hollys Coffee is rarely well-known to local people. Thus, it is very important to make Peruvians aware of its brand and Hollys Coffee might be exposed to the financial risk linked with heavy marketing expenditure such as bra nd promotion and advertisement in the course of spreading its brand. There are two entry strategies of Hollys Coffee in Peru one is to introduce products that have Korean own characteristic, another is to differentiate with other coffee brands by focusing on side menus like waffle or patisserie. The Point is that it is hard to make certain whether these strategies are effective enough in Peruvian coffee market or not. Since it is tough to control operation when a company takes franchising, it appears to be difficult to introduce Korean traditional teas and foods properly. IV. Conclusion We have discussed about several entry modes regarding international business. We have looked into Starbucks choice, The Coffee beans strategy as well as Hollys Coffees one. Before completing our study, we would like to discuss two points of contention. Firstly, should Starbucks stick to FDI for India? As discussed above, it has struggled from red tapes. In the end, they still cannot enter Indian market whereas its competitors have expanded their business in India. Secondly, was it a good idea for Hollys Coffee to take franchising entry mode along with a strategy of providing Korean traditional beverages? Since it is not well known and not familiar with local environment, it is understandable not to take FDI entry mode. However, doesnt it seem to go well with two ill-assorted strategies? All entry modes have advantages and disadvantages. Hence, it is absolutely important to apply an entry mode appropriately according to each business format. However, it could be dangerous to enter every region with the single entry mode even though it is the same industry. Both the problem that Starbucks faced in India and the pitfall Hollys Coffee is likely to face can explain how risky it is. Therefore, even though a company wants to expand its identical business abroad, it is recommended to take different entry modes in accordance with each nations regulations, culture, politics, economic and social environment. V. Appendix The composition of retailers of Starbucks (2009.9) Entry mode Total U.S % in US Overseas % in overseas Company Owned 8,832 6,764 61% 2,068 38% Licensed Stores (Joint Venture) 7,803 4,364 39% 3,439 62% Total 16,635 11,128 100% 5,507 100% The Major Overseas Performance of Starbucks (Non- North America) Strategy Region Year Nation Local Partner # of stores Joint Venture Asia 1996 Japan Sazaby Inc. 875 1998 Taiwan President Chain Store 222 2000 S.Korea Shinsegae Department store 288 2000 China Cayman Holdings 283 2002 Mei-xin International 2005 Coffee Concepts 2004 Malaysia Berjaya Group 118 Europe 2002 Spain Sigla, S.A 76 2002 Greece Marinopoulos Bros. 69 2003 Switzerland Marinopoulos Bros. 47 2003 Austria Marinopoulos Bros. N/A 2003 Cyprus Marinopoulos Bros. N/A 2004 France Sigla, S.A 52 2007 Romania Marinopoulos Bros. N/A 2008 Czech AmRest N/A 2008 Portugal Grupo VIPS N/A Direct Operation Asia 2000 Thailand Coffee Partners 131 2002 Australia Local Entrepreneur 23 2004 Singapore Bonstar 64 2005 China Qingdao American Starbucks 191 2006 Mei Da Coffee Europe 1996 UK Seattle Coffee 666 2004 Germany KarlstadtQulle 144 Licensing Asia 1997 Philippines Rustan 160 1998 New Zealand Restaurant Brand 42 2002 Indonesia PT Mitra Adiperkasa 74 Middle East 1999 Kuwait M.H. Alshaya 62 1999 Lebanon M.H. Alshaya N/A 2000 U.A.E M.H. Alshaya 91 2000 Qatar M.H. Alshaya N/A 2000 Saudi Arabia M.H. Alshaya 68 2000 Bahrain M.H. Alshaya N/A 2002 Oman M.H. Alshaya N/A 2005 Jordan M.H. Alshaya N/A Europe 2003 Turkey M.H. Alshaya 123 2006 UK N/A 46 2007 Russia M.H. Alshaya N/A The Coffee Bean and Tea Leafs International Expansion (2008) Year 2002 2003 2004 2005 2006 2007 2008 Company-Owned 177 191 217 241 270 288 278 Franchise 46 68 87 137 230 347 444 Total 223 259 304 378 500 625 722 VI. Reference n Starbucks timeline-Asia, Starbucks Corporation, 2009. n Starbucks timeline-EMEA, Starbucks Corporation, 2009. n Starbucks timeline-China, Starbucks Corporation, 2009. n Annual Report of 2009 (Form 10-K), Starbucks Corporation, 2009 n Starbucks India Strategy Looks Promising, Seeking alpha, Oct 2, 2006. n Starbucks Delays Entry of India, Vccircle, Jul 21, 2007 n ì  ¸Ã« â€ž, ì™ ¸Ãª µ ­Ã¬  ¸ ì § Ã¬  â€˜Ã­Ë† ¬Ã¬Å¾  ê ·Å"ì  Å"완화, Yonhap news, Feb 12, 2009 n Starbucks brews a fresh strategy for India entry, The Economic Times, Jan 29, 2010 n KKR in $200m Indian Coffee shop deal, Financial Times, Mar 17, 2010 n Company Growth, The Coffee Bean and Tea Leaf (http://coffeebean.com/franchise/company.html) n What is a master franchising? (http://www.allbusiness.com/buying-exiting-businesses/franchising-franchises/2975165-1.html) [1] Cult-duct : A compound is formed from â€Å"culture† and â€Å"product†. It stands for selling a product with the companies culture and social values. Starbucks is a typical example of this. [i] Starbucks timeline-Asia, Starbucks Corporation, 2009 [ii] Annual Report of 2009 (Form 10-K) pp.4, Starbucks Corporation, 2009 [iii] Annual Report of 2009 (Form 10-K) pp.3, Starbucks Corporation, 2009 [iv] Starbucks timeline-Asia, Starbucks Corporation, 2009 [v] Starbucks India Strategy Looks Promising, Seeking alpha, Oct 2, 2006. [vi] Starbucks Delays Entry of India, Vccircle, Jul 21, 2007 [vii] ì  ¸Ã« â€ž, ì™ ¸Ãª µ ­Ã¬  ¸ ì § Ã¬  â€˜Ã­Ë† ¬Ã¬Å¾  ê ·Å"ì  Å"완화, Yonhap news, Feb 12, 2009 [viii] Starbucks brews a fresh strategy for India entry, The Economic Times, Jan 29, 2010 [ix] KKR in $200m Indian Coffee shop deal, Financial Times, Mar 17, 2010 [x] Company Growth, The Coffee Bean and Tea Leaf (http://coffeebean.com/franchise/company.html) [xi] What is a master franchising? (http://www.allbusiness.com/buying-exiting-businesses/franchising-franchises/2975165-1.html)

Human Resources department in William Hill Essay

Human Resources department in William Hill are important because they have a connection with the quality of employees and market success. William Hill will not be able to work effectively if workers are not committed to meeting corporate objectives so it is the HR management job to ensure this quality by recruiting, developing and retaining these staff. In order to do the above it is essential for HR department to look at various information internally and externally to plan for human resource. Internal and external information is important for William Hill as they need it to determine what they are doing, what they should have done, and what they are about to do. For this company to be the best and to strive to the highest levels they should make sure that they know all legislations that they need to follow in order to stay on the same side of the law. Internal in formation consist of what is happening in the business such as below: Labour Turnover This means the number of employees that leave over a period of time, are replaced and the average length of time workers stay and reason for staff wastage. This can either be advantage or become a disadvantage to William Hill. This is because it can either bring in new employees with new ideas and skills, or it can be expensive to recruit new staff. Due to high costs that it will produce, this can also become time consuming. Employees may leave because of poor career prospects, allowing little chance of promotion or simply better opportunities elsewhere. The way to measure labour turnover is: Wastage rate: No. of leavers in a period * 100 Average number of employees in the period Average No. Employees at start of period + Employees at end of period of employees: 2 Companies including William Hill can use this calculation on a yearly basis for the whole organisation or just the department. This is highly useful when used as a comparison with previous years. One disadvantage is that the equation (wastage rate) doesn’t measure the length of service of the employees that leave. Stability Index means that means how long an employee has been with the firm. It can be measure by using this formula: No. of employees with one or more years or service * 100 No. of employees at the start of the year This equation shows the stability of more loyal and settled workers. It ignores short-term workers or those most likely to leave. William Hill Labour turnover for Evelyn Street Branch is: Labour turnover = 3 * 100 = 20% 15 This result includes the amount of part time and full time workers employed in my branch. This is a really good indication that numerous workers love their job and want to stay employed in William Hill. As there is high retention levels it makes planning for human resource easier because it seems that more workers are staying. The amount of people leaving one branch would require the attention of the HR department, this is because the company can observe what is wrong and try to find ways to fix it. This would help the department as it can grow from the results of the turnover. Being able to put back into working order the things that became a problem in the past would make the company more successful from within. Age, Skills and Qualifications According to studies the older you are the more experience you would have. Analysing the age of the workers at William Hill it would show that mostly young and middle age groups are being employed. William Hill tend to take staff during night racing and hiring people around these times would be essential for the company but not for the employee, this is because in that short space of time the workers will not gain the qualifications that they need. William Hill’s most reliable staff would be the middle age groups. This is because they would be more experienced and have been in that trade for such longer period. In addition to this they will gain maximum experience and qualifications to match. Where this is rewarded by annual pay they will be more expensive to employ, their length of service may make them more expensive to make redundant. Younger staff may lack experience but they may be more receptive to change and new ideas, also they may inexpensive to recruit. When looking at the gender of William Hill you will find that most of the employees are female: FEMALE – 60% MALE – 40% There are more women on the shop floors than in the Head Office of William. Also the male population tend to be the betters and it means that the female will tend to serve them especially when it comes to individual betting shops. William Hill is a company that employ regardless of qualification or skills in providing their services to customers however it would aid employment if you had rather good maths skills, good communication skills and working with other workers as a team. But William Hill do offer training where it is needed to new or previous staff because it essential time is not wasted in not knowing what to do but being productive and offering good Customer Service. Staff Absences or sickness Staff absences cost industries in terms of money and time due to less productivity. Staff absences is not only included in absences but also bad time keeping such as arriving late and leaving early but also due to industrial accidents. Accidents at work can be avoided by the use of common sense and consideration. Hazards caused by leaving paper on the floor, having the ladder obstructing the way, blocked entrances and exits with boxes and trailing leads. So it is part of the Human Resource to keep sure that safety is kept by each shop and that appropriate planning is made for training in First Aid in case of accidents caused by other individuals. Apart from accidents the workplace can cause illness to workers in a variety of ways especially those that are doing night shift also due to constant smoking by workers and customers it may lead to further health problems in the future so this may cause absences. The staff absences in the Evelyn Branch of William Hill yearly are: Part time employees 18% Full time employees 32% Full time workers have the highest Training This can be done within the business or outside, according to the training needs of the employee. There are different types of training: Induction, Mentoring, Coaching, Apprenticeships, and Off and On the job training. Staff training is required if William Hill are to continue and to be successful to be the best in their market. The process of training is to help employees reach their maximum efficiency. William Hill will need to meet their annual targets therefore employees would need to develop their skills. At the beginning of your employment at William Hill or any other workplace you will have to have an induction. This is an introduction to the business for new employees. This can be used to familiarise the new recruits with the organisation. Based on a good induction the employee will feel at ease with the organisation and some of the employees. Your skills and qualifications may be based on your training. Your ability to gain as much knowledge as you can will be reflected in your skills to do certain jobs. Employees of William Hill will be trained to suit any area no mater what the task in question is. This will then help the company to strive to be the finest it can be. Succession and Promotion of Staff Succession is the process of staff that has left being trained and promoted although it has become common for William Hill to recruit experienced staff from outside the business it would be advantageous to start promoting those within the organisation. So in order for employees to stay and require less human resource planning it helps to encourage staff to remain loyal by giving them good career prospects. Promoting within William Hill will ensure continuity of style and culture of the organisation so that everyone watching out for each other style will still exists to continue increasing productivity. The human resource department do not always approach staff for promotion but teletexting is placed on Managers betting screen to tell staff or posters are placed out side individual LBO if they need certain staff. Nevertheless there is always that problem that internal staffs are not suitable so advertising the need for staff will have to be done for William HR department for planning for the future. External information relates to the information outside of the business and these tend to be things which are beyond William Hill’s control. So in order to overcome these problems it helps to use the PESTEL (Political, Economic, Social, Technological, Environmental, and Legal) analysis which looks at all aspects of the external influences which will prove crucial to the outcome of William Hill in coming years. Political With there being a stable political environment it enables William Hill to make predictions about their future because they have that degree of certainty due to knowing that the Labour government will be in power for another four years and hopefully they will stick to the same economic policies. If there was an increase in company taxation levels, this could mean that William Hill will have more cost to pay and may not be able to recruit as many staff as they previously would. For the Human Resource department it means that they may have to recruit staffs that are less ‘expensive’ such as those that don’t have as much experience as someone that may have been in the industry for 10 years. Changes to taxation levels in general would have an affect on William Hill as certain things such as concessions and incentives given to workers could increase or decrease. However some of the company expenses are tax deductible meaning that William Hill can set these off against tax burdens and may make them more willing to recruit workers if costs can be cut through not giving away company cars. The level of protectionism that the government have could affect trade and could affect demand for William Hill services hence demand for labour to supply services could fall or ascend depending on their restrictions. Economic Economic forces affect both the organisation and its customers. Depending on the sector that the business lies on the economic influences will be different. The economic environment may change, William Hill will need to understand how their suppliers and customers will be affected if they are to successfully adjust to change. Unemployment has a relationship with the demand of product or products in general. With a high unemployment level the demand for products will go down as people have less disposable income. If William Hill were to set up in an area that has low employment levels then they could make the percentage level increase thus giving the company more sales as unemployment is low. If interest rates are high then it becomes a lot more expensive for companies like William Hill to borrow money from banks, meaning that William Hill will refrain from expanding and less staff will be needed. The Human Resources Planning department may have to delayer the hierarchy of the company leaving some without a job. With high interest rates people in general will become hostile to purchasing luxury or high priced products or services therefore the demand for them will decrease. The Human Resources department would need to invent ways for this to change in their favour. Social People’s spending habits may vary during different seasons because of various races during the course of the year such as Cheltenham, The Grand National and many more. William Hill will realise this and take advantage for it. When recruiting staff WH Smith would need to think carefully on whom to take on. Taking in the knowledge that younger employees would be more responsive to change. However someone of the senior generation may offer more years of service. This will effect the HR department of WH Smith because they will need to consider a lot. Since younger people may have new skills and new ideas they may be beneficial to the company, and older employees would stay with the company longer. Technological As technology is advancing WH Smith need to move with the times by using technology They may want to make sure that their products are of the highest standards so WH Smith would use technical equipment thereby reducing the amount of staff required. If WH Smith engages in Internet sales it may also cut down the staffs that is needed. The Human Resources department will take into consideration the affect that this would have on WH Smith and they will use this to interpret the outcome for their future. Environmental Environmental issues are a very big part of all industries as everyone wants to be environmentally friendly. Some of WH Smith’s customers would like to buy recyclable products to be kind to the environment. If WH Smith were to be concerned with the environment they could buy more recyclable stationery enabling this to be part of their policy concerning the environment. There may be some customers (like me) that don’t really mind whether their goods are recyclable. To them they may think that just because they can be recycled they are not good quality, therefore they would not buy it. The HR department would need to analyse this area and make sure they know and understand the ramifications that may occur from their decisions. This could have an effect on staff as they may need to employ more people to assist with sales or not employ anyone at all. Legal All companies follow an equal opportunity policy as it is part of a legislation that all businesses should follow. For legal reasons William Hill may have to pay one employee more money than another, this would not be because one’s a man and the other is a woman, but, because one is a minor (under 16) and the other is above 18. With this policy people under 18 yrs would be paid à ¯Ã‚ ¿Ã‚ ½3.60 and anyone older would get à ¯Ã‚ ¿Ã‚ ½4.20. Within this company they do not discriminate against people, this could be from sex discrimination to racial. This could effect the HR department as it could higher the cost of labour that they recruit, meaning that they would reduce the amount of staff.

Historical Development of Continental Philosophy’s Existentialism Essay

Absolute Idealism left distinct marks on many facets of Western culture. True, science was indifferent to it, and common sense was perhaps stupefied by it, but the greatest political movement of the nineteenth and twentieth centuries— Marxism—was to a significant degree an outgrowth of Absolute Idealism. (Bertrand Russell remarked someplace that Marx was nothing more than Hegel mixed with British economic theory. ) Nineteenth- and twentieth-century literature, theology, and even art felt an influence. The Romantic composers of the nineteenth century, for example, with their fondness for expanded form, vast orchestras, complex scores and soaring melodies, searched for the all-encompassing musical statement. In doing so, they mirrored the efforts of the metaphysicians; whose vast and imposing systems were sources of inspiration to many artists and composers. As we have said, much of what happened in philosophy after Hegel was in response to Hegel. This response took different forms in English-speaking countries and on the European continent—so different that philosophy in the twentieth century was split into two traditions or, as we might say nowadays, two â€Å"conversations. † So-called analytic philosophy and its offshoots became the predominant tradition of philosophy in England and eventually in the United States. The response to Hegelian idealism on the European continent was quite different however; and is known (at least in English-speaking countries) as Continental philosophy. Mean while, the United States developed its own brand of philosophy—called pragmatism—but ultimately analytic philosophy became firmly entrenched in the United States as well. Within Continental philosophy may be found various identifiable schools of philosophical thought: existentialism, phenomenology, hermeneutics, deconstruction, and critical theory. Two influential schools were existentialism and phenomenology, and we will begin this chapter with them. Both existentialism and phenomenology have their roots in the nineteenth century, and many of their themes can be traced back to Socrates and even to the pre- Socratics. Each school of thought has influenced the other to such an extent that two of the most famous and influential Continental philosophers of this century, Martin Heidegger (1889–1976) and Jean-Paul Sartre (1905 –1980), are important figures in both movements, although Heidegger is primarily a phenomenologist and Sartre primarily an existentialist. Some of the main themes of existentialism are traditional and academic philosophy is sterile and remote from the concerns of real life. Philosophy must focus on the individual in her or his confrontation with the world. The world is irrational (or, in any event, beyond total comprehending or accurate conceptualizing through philosophy). The world is absurd, in the sense that no ultimate explanation can be given for why it is the way it is. Senselessness, emptiness, triviality, separation, and inability to communicate pervade human existence. Giving birth to anxiety, dread, self-doubt, and despair as well as the individual confronts as the most important fact of human existence, the necessity to choose how he or she is to live within this absurd and irrational world. Now, many of these themes had already been introduced by those brooding thinkers of the nineteenth century, Arthur Schopenhauer (see previous chapter), Soren Kierkegaard, and Friedrich Nietzsche. All three had a strong distaste for the optimistic idealism of Hegel—and for metaphysical systems in general. Such philosophy, they thought, ignored the human predicament. For all three the universe, including its human inhabitants, is seldom rational, and philosophical systems that seek to make everything seem rational are just futile attempts to overcome pessimism and despair. This impressive-sounding word denotes the philosophy that grew out of the work of Edmund Husserl (1859–1938). In brief, phenomenology interests itself in the essential structures found within the stream of conscious experience—the stream of phenomena—as these structures manifest themselves independently of the assumptions and presuppositions of science. Phenomenology, much more than existentialism, has been a product of philosophers rather than of artists and writers. But like existentialism, phenomenology has had enormous impact outside philosophical circles. It has been especially influential in theology, the social and political sciences, and psychology and psychoanalysis. Phenomenology is a movement of thinkers who have a variety of interests and points of view; phenomenology itself finds its antecedents in Kant and Hegel (though the movement regarded itself as anything but Hegelian). Kant, in the Critique of Pure Reason, argued that all objective knowledge is based on phenomena, the data received in sensory experience. In Hegel’s Phenomenology of Mind, beings are treated as phenomena or objects for a consciousness. The world beyond experience, the â€Å"real† world assumed by natural science, is a world concerning which much is unknown and doubtful. But the world-in-experience, the world of pure phenomena, can be explored without the same limitations or uncertainties.

Financial Crises And Its Effects On Global Economic Crisis

The 2007-2008 Financial Crisis- Its Causes and the Involvement of the FED The financial crises that occurred in 2007-2008 had such a big impact on the world that it is now considered a global financial crisis (GFC) or global economic crisis. It is commonly believed that it began in July 2007 with the credit crunch; U.S. investors lost trust in the value of subprime mortgages which caused a liquidity crisis. This had the effect that the U.S. Federal Bank injected a large amount of capital into the financial markets. By September 2008, the crises had worsened as stock markets around the world became highly volatile. This paper will examine the causes of the financial crises in 2007-2008, as well as the involvement of the FED in†¦show more content†¦Even though, they could not provide any assets, they wanted to realize their dream to buy their own home. Bankers who were willing to give them loans caused an increase in the number of home loans, and more people were able to buy their own house. As a result, an appreciation in home prices occurred. Easy credit and the upward spiral of home prices made investments in higher yielding subprime mortgage look like a new rush for gold (Thomas, 2011). The Fed interacted by reducing interest rates in June 2003 to 1%, which was, at the same time, the lowest interest rate in the last 45 years. The concerns began when interest rates started to rise and home ownership on the other hand, reached a point of saturation. After June 30, 2004, the Fed started to increase rates at such a high level that two years later, the Federal funds rate had reached a much higher rate of 5.25%. Also by 2004, homeownership had peaked at 70%, and as a logical consequence, the majority of people were not interested in buying homes anymore. In the last quarter of 2005, home prices started to decline, which also led to a 40% decrease in the U.S. Home Construction Index during 2006. Not only were new homes being affected, but many subprime borrowers now could not withstand the higher interest rates and they started defaulting on their loans (Chan, 2011). This had the consequence that two years later, in 2007, every month, several subprime lenders were filing for bankruptcy which