Guinness Market Entry to Peru

Guinness Market Entry to Peru MASTER IN BUSINESS ADMINISTRATION The following assignment is aimed at evaluating the attractiveness of Peru market as a potential entry market for the Irish Company, Guinness Breweries. Using the method of International Market Selection market will asses under the Systematic Approach and the model called Analytic Hierarchy Process (AHP), we will weigh the three main criteria: Economic, Politics and Cultural. Based on the result from the analysis we will recommend the company either the market is attractiveness or not for the company to entry. Guinness was founded in Dublin in 1759. It was first brewed by Arthur Guinness. This was a fairly new beer, characterised by its dark colour acquired through the roasted barley used in its brewing process. Within 10 years, Guinness Extra Strong Porter was being exported to England. It became known as Guinness Stout as a strong porter was known as a stout porter. By the nineteenth century, Guinness focused its brewing activities on stout alone Expansion into foreign markets was spearheaded under the guidance of Arthurs three sons who succeeded him in the family business. From the end of the 1920s onwards, Guinness moved into advertising, with the placing of adverts in the press and the roll-out of a poster campaign. In accordance with an increase in demand for the Guinness product, a new brewery was established at Park Royal, London in 1936, which became Arthur Guinness Sons Co (Park Royal) in 1952. The pinnacle of Guinness extensive research came in the form of Draught Guinness in cans, launched in the UK in 1989 which, with the inclusion of the award-winning Guinness widget, typified the companys pioneering approach to improving technology and replicating the taste of Draught Guinness in a can Guinness Limited now has breweries in 51 countries worldwide and Guinness stout is drunk in 150 countries Over 10 million glasses of Guinness stout are drunk every day worldwide. Starting business operations abroad is a complex and complicated process. It requires decisions about many related but separate issues. The consequences of these decisions may have a significant influence on the success and performance of a firm. The recognition of right International market is one of the most important decisions that organizations face today when interesting in international trade. Regardless of its importance, the tactics pondered by many organizations in ascertaining profitable and servable markets in the international context are often based on the ad hoc decisions and view, rather than a formalized endeavor to match the organizations competences to that of the relevant foreign target markets. After a company have determined to go international, it will stand before the choice of Selecting a target market (European Commission, 2014). According to Marchi et  al. (2014) the international market selection (IMS) is an important determinant for a firms success on international markets. The International Markets Selection is a vital issue in the classification of foreign entry strategy (Papadopoulos et al., 2002). IMS is defined the development of competent and effective methods for selecting a foreign target market(s.) Denis and Papadopoulos (1988). Two diverse, traditional, approaches to the international markets selection have been presented (Papadopoulos and Denis, 1988): (1) A systematic approach, using a formalized decision process including a variety of statistical methods to analyze the potential of target markets; (2) an unsystematic approach suggesting the use of rules of thum such as selection of those foreign markets that reduce the received psychic distance. Company go global for a variety of reason, but the typical objective is company expansion. Bradley (2005:2) has many reasons for internationalization and some examples of those are; better opportunities abroad, shortening product and technology lifecycles, excess capacity and desire to fallow consumers and competitors abroad. Guinness Brewery, want to continue its global expansion in Peru (South America). Guinness Company has been successes in 51 countries worldwide. For example in Nigeria Guinness Nigeria has been success 1963, that first came to Nigeria When a company seeks to expand its business to foreign markets, a number of tactical decisions must be evaluated (Gà ³recka and Szalucka, 2013) Also, the company has to decide the timing of entry (when) as well as entry mode (how) (Gà ³recka and Szalucka, 2013) Evaluation Criteria Inflation Peru has been one of the regions fastest-growing economies in the last decade, with an average growth rate 5.9 percent in a context of low inflation (averaging 2.9 percent). A positive external environment, prudent macroeconomic policies and structural reforms in different areas combined to create a scenario of high growth and low inflation. After reaching a maximum of 4.6 percent at the beginning of the year, headline inflation has declined and stood at 2.9 percent in August 2016, just lower the upper limit of its target range. GDP growth Slightly improved to 3.3 percent in 2015, with a 6-year minimum of 2.4 percent in 2014. In 2016, economic growth is expected to be similar to 2015 levels, increasingly recovering to an average rate of 3.8 percent by 2017-2018. Over the next two or three years, large-scale mining projects are expected to begin fabrication and increased private and public investment in infrastructure projects will support aggregate demand. Additionally, the country will continue to implement structural reforms to ensure confidence of private investors. Exchange rate: Peru has a free-floating exchange rate regime, with the government irregularly intervening for purposes of stabilization. As of the end of 2013, the Nuevo Sol is one of the least volatile currencies in the world, exhibiting firmness in the face of international market and currency fluctuations. The Central Reserve Bank of Peru (BCRP) implements fiscal stimulus and liquidity control measures. Political Stability The economys overall stable and strong performance has allowed the government to increase its revenues and, hence, to balance the budget. President Pedro Pablo Kuczynski, who took office in July 2016, intends to increase public investment in infrastructure and has announced that Peru is expected to raise funds on worldwide financial markets to finance these projects. Since 1998 when the country hardly avoided bankruptcy by signing an agreement with the IMF, Peru has followed a safe path of fiscal consolidation. The fiscal balance has registered only four years of deficit in the last decade and those deficits have never been larger than 1.3% of GDP. Additionally, public debt was cut about in half, from the 44.3% of GDP tallied in 2004 to just 23.3% of GDP in 2015. Market Economy A market economy is based on the values of offer and demand, and lets business carry on or fail devoid of much interaction from the government. A pure market economy is not viable to implement, most market economies in the region of the world have a component of government influence Existing reforms dismantled some barriers to running private enterprises. With no minimum capital necessary, it now takes less than seven procedures to start a business. Labour regulations are evolving. The state controls domestic food and fuel prices and partly subsidizes electricity, but in late 2014, it ruled out cutting taxes or introducing subsidies to support investment and cushion export sectors from the ongoing recession in product prices. Culture Peruvians preserve a strong sense of nationality identity supported by a series of general characteristics such as language. Hofstede model is used to assess the attractiveness of the market. Of the six dimension between Ireland and Peru compare. Both country have similarity only in Long term orientation and the score is very low, at Ireland 24 and Peru 25, meaning that this dimension measures the long term official planning does not exist. They differ culturally in the others five dimensions, such as Distance Power, Individualism, masculinity, uncertainty avoidance, indulgence. Evaluating the three main criteria: economic, political and cultural; and based on the information provided for each of them, we rank them as fallow the political as the most important. Fallow by economic as a less important, Since, Economic and political are extremely interrelated. On the one hand, the indecision connected with an unstable political environment may decrease investment and the pace of economic advance. On the other hand, poor economic performance may lead to government collapse and political unrest. When analyzing the Incentives parameter for the Peru market, we found out several macro greenfield factors that could act as enablers for Guinnes beer approval. These include both political (such as government ) as well economic factors (GDP increasing year by year) Based on the analysis using our constructed IMS model, we believe that the Peru market has several favorable conditions for Analyzing Sub Criterias According to the above information about each sub criteria of Economy criteria, we could rank the most important sub crateria is Inflation. This It is more important compare to exchange rate. If inflation increases, it means the value of the money loose power, therefore, the exchange rate increase. Moreover, countries with lower inflation have a tendency to see an appreciation in the value of their currency. GDP growth is not a very important sub-criteria, even though it not an important sub criteria it is increasing year by year. Exchange rate is more important than GDP growth, the latter of which is adjusted for inflation. If the inflation is lower, then the country will be more competitive. In the potential entry market which is Peru Market, inflation is very low, (averaging 2.9 percent), then the country is more attractive as a prospective market to entry. In the Political criteria; the most important sub-criteria is Stability, fallows by Regulation and, last one Market Economic. Political stability is a pillar of a democracy. For an investor it is important to have a minimum of security regarding the political stability of the country where to invest, a climate of political instability may affect the ability of a region or country to attract investment. Peru, is a very stable politically country, The constitution of Peru states that presidents cannot be re-elected. The constitution decrees a traditionally elected president and vice president serve five-year term. The president selects the prime minister who presides over the rest of the ministers, who comprise the cabinet. If a country is stable politically, hence, its regulation continues implementing structural reforms to guarantee confidence of private investors. Regarding to Culture similarity, both Ireland and Peru are different culturally. But it does not mean that Peru market could not be a potential entry market for an Irish company. Culture similarity is not an important sub criterion in this case that will interfere in the decision of in a international market. Furthermore, Ireland is doing business with South American country, such as Chile. Evaluating the Hofstede for Ireland and Chile culture similarity, the result is that they both are totally different respect to this sub criteria, however, their business are well performing. Between January and August of this year, the volume of Peruvian beer imports grew by 35% over the same period last year, according to the Foreign Trade Center (CCEX) of the Chamber of Commerce of Lima. Between 2012-2016 imports of this product have registered a decrease in volume of 1.4 million liters, but with this growth is generating a great expectation regarding the recovery of consumption of this product, said Carlos Garcia, manager of CCEX-CCL. In the first eight months of the year, the value added totaled more than US $ 5 million, entering our country 5.6 million liters of beer. Among the main suppliers we find Mexico, which covers 58% of the share, being the main supplier of Corona beer; Followed by Colombia (18%) that provides us with all Miller beer. Below these countries we find the Netherlands with a 9% share, a country that supplies us with Heineken and Grolsch beers. Meanwhile, Germany provides us with the Erdinger Weissbier, Bear Beer, Oettinger, Bitburger, Classe Royale and Phoenix brands; While Argentina supplies us with Stella Artois and Quilmes and Japan beers from the Sapporo and Kirin Ichiban beers As a result of the Analysis for a potential entry market based on the method of International Markets Selection at Evaluating the attractiveness of Peru market as a potential entry market for the Irish Company  ¨Guinness breweries  ¨. Under the Systematic Approach and the model called Analytic Hierarchy Process (AHP), we will weigh the three main criteria: Economic, Politics and Cultural. Peru, is one of the countries in Latino America that the economy is growing faster year by year. The inflation is at very low el The main Criteria and the most important por a decision maker about neither entre or not is POLITICAL, The Government of Peru has encouraged integration with the global economy by signing 17 free trade agreements with 52 economies, including the United States-Peru Trade Promotion Agreement (while U.S. exports to Peru jumped from USD 4.9 billion to USD 8.8 billion (a 79 % increase). In 2015, exports grew 23.5% while imports declined 10.9%. Peru registered a USD 13 million trade surplus in April 2016, the first of the year. Perus preferentiaPTPA), which entered into force in February 2009. Trade agreements are with Argentina, Brazil, Bolivia, Chile, China, Colombia, Ecuador, the European Union, Iceland, Japan, South Korea, Lichtenstein, Mexico, Norway, Panama, Paraguay, Singapore, Switzerland, Thailand, the United States, and Uruguay. From result Pairwise comparisons we got them from the weight the Main and Sub criteria 77%, what mean that Peru Market is attractiveness to entry (70 -79 not so favourable, but still an advanced economy) References http://www.burkedist.com/all-products/imported-beers/guiness#, Burke Distributione (accessed 08-01-17 ) http://blogs.worldbank.org/endpovertyinsouthasia/can-political-stability-hurt- conomic-growth. 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Rosson (Eds), Managing export entry and expansion. New York: Praeger Sethy S. S. (2008) Distance education in the age of globalization: An Overwhelming Desire towards Blended Learning Turkish Online Journal of Distance Education Vol. 9, No. 3 Terpstra, V. (1987) The Evolution of International Marketing, International Marketing Review, p 47-59 Terpstra V., Sarathy R. (2001). International Marketing, 8ht edn., Chicago II, Dryden Press. European Commission (2014), What is an SME? ec.europa.eu/enterprise/policies/sme/facts figures analysis/sme definition/index_en.htm (2015 05 11) Marchi, G. Vignola, M. Facchinetti, G. Mastroleo, G.(2014) International market selection for small firms: a fuzzy based decision process, European Journal of Marketing, Vol. 48 Iss: 11/12, pp.2198-2212 https://www.reference.com/world-view/market-economy References, accessed 08-01-17 Appendix Peru Inflation .. Pairwise comparisons for sub-criteria with respect to Economics GDP growth Inflation Exchange Rates GDP growth 1.00 6.00 5.00 0.73170732 0.5 0.789473684 0.673727 0.447386678 45% Inflation 0.17 1.00 0.33 0.12195122 0.083333333 0.052631579 0.085972044 0.057089514 6% Exchange Rates 0.20 5.00 1.00 0.14634146 0.416666667 0.157894737 0.240300956 0.15957123 16% 1.37 12.00 6.33 Pairwise comparisons for sub-criteria with respect to Politics Stability Market Economy Regulation Stability 1.00 0.17 6.00 0.13953488 0.12195122 0.5 0.253828701 0.067823621 7% Market Economy 6.00 1.00 5.00 0.8372093 0.731707317 0.416666667 0.661861095 0.176850828 18% Regulation 0.17 0.20 1.00 0.02325581 0.146341463 0.083333333 0.084310204 0.022527883 2% 7.17 1.37 12.00 1 Global Very Very IMS Priorities Unfavourable Unfavourable Favourable Favourable Favourability Score GDP growth 45% 0 0.333 0.666 1 30% Inflation 6% 0 0.333 0.666 1 6% Exchange Rates 16% 0 0.333 0.666 1 16% Stability 7% 0 0.333 0.666 1 7% Market Economy 18% 0 0.333 0.666 1 12% Regulation 2% 0 0.333 0.666 1 2% Cultural Similarity 7% 0 0.333 0.666 1 5% Total 77% Pairwise comparisons among objectives/alternatives Normalized matrix Weights/ Priorities Global Priorities Economic Political Cultural Economic 1.00 4.00 7.00 0.717948718 0.774193548 0.5 0.664047422

Interruption Interception Modification And Fabrication Attacks Computer Science Essay

Interruption Interception Modification And Fabrication Attacks Computer Science Essay The communication has been playing an important role since the dawn of civilization. It has become an integral part of existence in the societies which are highly networked where we live in. A few types of communication types have been developed during the earlier stage of civilization which resulted in evolving many types of communications till today. The communication through the internet is the best examples of the latest communication types.There are different types of communications prevailing in our day to day life such as Radio communication, Mobile communication, Telephonic communication and Network communication. Each communication type has its own importance but the communication over a network has been mostly implemented in our life and has been evolved as the most powerful and highly developed communication methods. The network communication method has created a great impact on lives of humans. So as this method is gradually developing and being used by many individuals a nd organizations, such advance in the technology has resulted in the security issues such as threats or malicious attacks to the individuals and organizations. So there is a need to encounter these threats and attacks which resulted in the introduction and development of different mechanisms for providing different services and CRYPTOGRAPHY is one of the mechanisms which is mostly used in the network communication. TYPES OF SECURITY ATTACKS: There are different types of security attacks which affect the communication process in the network and they are as follows Interruption: This type of attack is due to the obstruction of any kind during the communication process between one or more systems. So the systems which are used become unusable after this attack by the unauthorized users which results in the wastage of systems. Interception: The phenomenon of confidentiality plays an important role in this type of attack. The data or message which is sent by the sender is intercepted by an unauthorized individual where the message will be changed to the different form or it will be used by the individual for his malicious process. So the confidentiality of the message is lost in this type of attack. Modification: As the name indicates the message which is sent by the sender is modified and sent to the destination by an unauthorized user. The integrity of the message is lost by this type of attack. The receiver cannot receive the exact message which is sent by the source which results in the poor performance of the network. Fabrication: In this type of attack a fake message is inserted into the network by an unauthorized user as if it is a valid user. This results in the loss of confidentiality, authenticity and integrity of the message. CRYPTOGRAPHY: DEFINITION: The word cryptography is the science of securing information by different techniques such as encryption and decryption. The word cryptography is derived from the Greek word Kryptos which means hidden and graphia means writing, so totally it means hidden writing. Cryptology and Cryptanalysis are closely related to Cryptography. Cryptanalysis is the process of breaking the ciphers and coded without using a key and whereas the cryptology is the combination of both cryptanalysis and cryptography. In the process of cryptography the data which is to be transmitted and received is enciphered by different keys so that it cannot be understand by the unauthorized users. But only the sender and receiver can be able to understand this data. HISTORY: The concept of cryptography was originated in 2000 B.C. in Egypt where the Egyptians practiced hieroglyphics where it is used to reveal the story of the dead people by decorating their tombs and this process was practiced in order to make them to see more ceremonial, majestic and noble but not to hide the message themselves. But later many encryption techniques have evolved for show into practical applications in order to hide the information from others. The history of cryptography was very interesting and many changes have been undergone through many centuries. During the ages of civilization the important issue was the maintenance of secrecy due to the different reasons by individuals or groups and this secrecy maintenance helps the individuals or groups to gain a competitive edge, the true intentions of each individual can be hidden and also the weakness can be reduced. The innovations or advance in the technology has resulted in the changes in cryptographic history. The process of cryptography has begun by sculpturing the message on wood or stone and then it is sent to the person who has to be received and it is deciphered to the original text by different process. But the development of cryptography has undergone many changes from carving the message on wood to the stream of binary codes. These streams of binary codes are transmitted over network wires, airwaves etc in the past but now these binary codes are sent in the form of 0s and 1s through internet cables or open airwaves. These packets are encrypted so that they are not disturbed by the unauthorized users. The Egyptians have started the process of cryptography by replacing the original message with the different message with the help of cipher and this process is known as substitution cipher where each letter in the message to be sent is replaces with the different letter so that unauthorized cannot understand. This message is again retransformed to the original form by the receiver. For e xample the sentence or message STAFFORDSHIRE UNIVERSITY (Plain text) is changed to TUBGGPSETIKSF VOJWFSTJUZ (Encrypted text or cipher text) where each letter is replaces with the preceding letter so that no one can understand. ANCIENT METHODS OF CRYPTOGRAPHY: During the ancient times there were different cryptographic methods which have been implemented for securing the data safely so that it cannot be accessed by an unauthorized user. So the different methods are as follows Hebrew cryptographic method: This is one of the ancient methods of cryptography where flipping of the alphabets takes place in such a way that the mapping of the each letter in the original alphabet and the flipped alphabet should not match each other that means the corresponding letter in the original alphabet should be different in the flipped alphabet and this method of encryption is known as atbash. ABCDEFGHIJKLMNOPQRSTUVWXYZ ZYXWVUTSRQPONMLKJIHGFEDCBA For example the encrypted form of the word Staffordshire University is hgzuuliwhsriv fmrevihrgb. Spartans method: This method of cryptography was implemented around 400 B.C. by the Spartans where they used to encrypt the message or information by using a sheet of papyrus and a wooden stick or rod. The message which is to be sent is written on the papyrus and it is wounded around the stick or rod and this information can be known by the receiver only when the message was wounded around the correct staff so that the letters would properly match. This process is known as scytale cipher and when the paper is removed from the stick or rod the message which was written on the paper was just found as the group of the random characters and this different pieces papyrus are sent to group of soldiers by Greek government with the help of carriers. After receiving the papyrus the soldiers then wound this papyrus around the stick or rod which is of equal diameter and length so that the letters which are random match with the letters with the second rod and the message which is sent can be kn own. The soldiers make use of this method for the information about the strategic moves and military directives. Julius Caesar method: This is also one of the ancient methods of cryptography where Caesar developed a method where the letters of the word are shifted by some number which is set. He developed this method because of his non trustiness on his messengers. So he used to shift the letters by the number 3 such as the letter A is replaced by letter D. So the one who knows the shift by 3 rule can only decipher the message. STUDENT (Plain message) VWXGHQW (encrypted message) CONCEPT: The main concept of cryptography is the process of securing the information by changing the original form of the text or message to the form which cannot be read by the unauthorized user. The message which is sent originally by the sender is known as plaintext which can be read by everyone and the encryption technique is applied to this plain text which results in the formation of cipher text or encrypted text which cannot be read by an unauthorized user. An encryption algorithm is used to convert the plain text into cipher text and again this cipher text is retransformed into plain text by decryption algorithm. This means that cryptography is the science which is used for protecting the message or information by providing different ways and process in order to convert the message or information which cannot be read by anyone. The data or message is converted in such a way that the No access of data for an unauthorized person Information present in the data frames is hidden Data authentication is formed The altering of the data is avoided The message originator cannot disown the data So the information which is transmitted on information and communication systems can be protected or secured by the technology known as cryptography. This technology is applied in many fields such as finance, personal data, military etc.This technology provides a means of authentication verification of the data so that the real culprit can be caught who interrupts the confidentiality and integrity of the data. DIFFERENT TERMS IN CRYPTOGRAPHY: Cryptography: The science of protecting the message or data by using different techniques is known as cryptography. Cryptosystem: The process of encryption and decryption comes under cryptosystem. Cryptanalysis: The process of converting the plaintext from the ciphertext without use of a key. Cryptology: It is the combined study of cryptography and cryptanalysis. Encipher: The act of converting the data which is cannot be readable by an unauthorized user. Decipher: The act of converting the data into readable format. Plain text: This is the original message or the initial message which is sent by the sender to the recipient. This also known as clear text or original text. Encryption: This is the process of converting the plaintext or original text into the text in order to cover the message which cannot be understood by any unauthorized users. Ciphertext: The text which is sent for encryption results in the form of text known as cipher text or encrypted text which cannot be read by unauthorized users. Decryption: This is the opposite of encryption where the encrypted text or cipher text is retained to its original form by using this technique. The conversion of cipher text to plain text takes place in this process. Hash algorithm: This is the algorithm which is used in the encryption technique for the conversion of large string to the fixed length string. This increases the speed of the process. Key: Key is the specified value which is used for encrypting the plaintext to produce the ciphertext.The value of the key will be very high. It is the series of bits and instructions which governs encryption and decryption Cipher: This is the algorithm which is used for the translation of the plaintext to the ciphertext which is the intermediate form GOALS OF CRYPTOGRAPHY: The main objective of the cryptography is to secure the information which is sent from the sender to the receiver so that it cannot be accessed by any unauthorized user and in order to maintain the security of this information cryptography has need to take care of some characteristics which are as follows Confidentiality: The phenomenon of confidentiality plays an important role in cryptography. Confidentiality is the method of securing the information or message such that it can only be accessed only by an authorized user who is proposed to read it. The confidentiality of the information loses its importance when it can be accessed by an unauthorized user. So when a message is sent from A to B, only B should be able to understand the message. Authentication: The phenomenon of authentication also plays a major role in cryptography. The identity of the sender who is sending the message is very important for the receiver. So this is the process of sending the identity proof of the sender to the receiver such that the receiver can be able to know the person who is sending the message. The main concept here is the assurance. Integrity: The integrity of the message has very much importance in cryptography. The message which is sent by the sender should be the same when it is received by the receiver. The message should not be altered or changed during the transmission process by any unauthorized users. So this is the method of making sure that the message which is sent is not altered or tampered during the transit. The contents which are present at the sender should reach the receiver with the same contents without any change. Non-repudiation: This is the method to make sure that the message which is sent is nor disowned. The s ender after sending the message should not declare that it has not sent the message .Once the message is sent by the sender then he is the originator of the data. He has no authority of denying of sending the data. So these are the characteristics of cryptography where all these elements are maintained and implemented during the process of transmission of data from sender to the receiver. CRYPTOGRAPHIC or ENCRYPTION TECHNIQUES: A key plays an importance role in the classification of the cryptographic techniques. The number of keys used decides the type of cryptographic techniques used. So the two important cryptographic techniques area s follows SINGLE OR SECRET KEY CRYPTOGRAPHY OR SYMMETRIC ENCRYPTION: The single key cryptography is one of the main cryptographic techniques where only a single key is used for encryption and decryption of the data or message. So only a single key is responsible for the process of encryption and decryption. This is also known as symmetric key or secret key or private key encryption. So the process of encrypting and decrypting the message or information or data with the help of a single key is known as single key cryptography. The same key which is used for encryption is also used for decryption. The important point of this type of cryptography is that the both transmitter and the receiver should accept on the same key. Symmetric cryptography or encryption between A and B: The process of single cryptography takes place between A and B by sending the message between them. The message which is to be sent by A should not be accessed by an unauthorized user and it should be able to read by only B. In order to make sure that only B has to read the message then a secret key is generated by A. So the secret key which is generated is used for the encryption of the message and this encrypted message is sent to B in the form of ciphertext.This process is known as encryption.Inorder to read the encrypted message by B there is a need of the secret key which is generated by A. So the secret key is transmitted by A to B by different means. The key can be sent to B directly in person by A but it depends on the distance between A and B which effects time. If the distance is more it takes more time and vice versa. The availability of B also plays an important role in sending the key. So as soon as the key is received by B then the decryption of the data takes place wit h the same key in order to retain its original form which is the plain text. So the secure transmission of data takes place between A and B. PROBLEMS IN SYMMETRIC CRYPTOGRAPHY: The main problem in symmetric cryptography is with the key which are used to encrypt and decrypt the data or message. The key which is used here is not more secure.Inorder to transfer the message in the symmetric cryptography the sender should send the key along with the message through internet in the form of e-mail or through IRC services. So this type of transmission of keys is more insecure so that the data can be altered or tampered. The key can be transmitted physically but the distance between the sender and the receiver plays an important role and which is insecure. The process of transferring the key verbally through a phone line results in the leakage of the conversation to others. The sharing of the keys is also one of the problems in this type of cryptography. The other problems in this type of cryptography are key distribution and key management. This type of cryptography lacks in providing data integrity, non-repudiation and data authentication. Digital signatures canno t be created by symmetric cryptography. PUBLIC KEY CRYPTOGRAPHY OR ASYMMETRIC ENCRYPTION: The public key cryptography is also one of the main cryptographic techniques which is used for the secure transmission of data. Based on the security issues which are limited in secret key cryptography the public key cryptography has been evolved. This concept was introduced by Whitfield Diffie and Martin Hellman in 1975. The process where the encryption and decryption of the data or message takes place by two keys instead of a single key is the public key cryptography and this technique is known as asymmetric key encryption. As the name indicates asymmetric key encryption, one key is used for encrypting the data and the other key is used for decrypting the data. These two keys form a pair of keys and the combination of these two keys is known as key pair. The two keys which are used here are public key and secret key or private key. The public key can be liberally distributed to any one which is used for encryption and thus this is named as public key encryption. The other key which is the private key or secret key cannot be distributable to any one and is used for decryption. The secret key is private to any communicating part participating in the process. In this type of cryptography the message or data can be encrypted with only one key and decrypted with the other key where the key which is used for the encryption cannot be used for decryption. So the data or message which is encrypted by the public key should only be decrypted by the private key and vice versa that means the data which is encrypted by the private key should only be decrypted by the public key which results in asymmetric cryptography. Asymmetric cryptography or encryption between A and B: The asymmetric key encryption takes place between A and B by sending message or data between them. The message which is to be sent to b should not be accessed by any unauthorized user. So the decryption of the message should take place with the help of the private key by B. So B contains both the private key and the public key. The public key which is distributable is distributed to A and then A encrypts the message or data with the help of the public key which is sent by B. So the file which is encrypted by A is sent to B where the decryption of file takes place with the help of the private key. So the message or data cannot be accessed by any one because the private key is used for decryption which results in the secure transmission of data. SO the security of the data is more in the public key or asymmetric cryptography or encryption. The above process reveals that the only the public key is used for encryption and only the private key is used for the decryption of the data which reduces the unwanted access of data by an unauthorized users. The loss of data will be very low in this type of cryptography. The possibility of tampering or alteration of the data or message is very low in this type of encryption. The exchange of information or message is very secure in this process. As in the symmetric encryption the sharing of key is not necessary for the encryption or decryption because it uses different keys for different process. The public key is responsible for all the communications but the private key remains silent without any sharing. So each recipient has its key which is unique and this key is used to decrypt the data which is encrypted by its opposite part. PROBLEMS IN ASYMMETRIC CRYPTOGRAPHY: The major problem in this type of encryption is key lengths. The lengths of the keys which are used in public key encryption are very large of 1024 bits to 4094 bits. This results in the low speed of transmission of the data. The key lengths in symmetric cryptography are less from 40 bits to 256 bits which helps in the fast transmission of the data when compared to public key cryptography. So when compared to symmetric key cryptography the public key cryptography is most secure. The messages can be easily transmitted and can be secured in public key cryptography. The key distribution in the public key cryptography is the main asset for this type of encryption. The key management problem can be avoided in this encryption .the strong cryptography can be provided by the public key encryption which is the revolution in the technology. So public key cryptography has more benefits than private key encryption. CRYPTOGRAPHIC OR ENCRYPTION ALGORITHMS: The algorithm is the step to step procedure or the group of mathematical rules which are used for enciphering and deciphering the message or information or data. There are many algorithms which are used in the cryptography and they are known to everyone. So the different types of encryption algorithms are as follows SECRET KEY OR SYMMETRIC KEY ENCRYPTION ALGORITHMS: As the name indicates that in this type of encryption only a single key or a dedicated key is used for both encryption and decryption. The secret key algorithms which are used widely are as follows Data Encryption Standard (DES): Data Encryption algorithm is one of the secret key encryption algorithms which is the most widely used. The Data Encryption Standard specifies a FIPS approved cryptographic algorithms as required by FIPS140-1.The Data Encryption Standard (DES) algorithm has been developed by IBM in the year 1970s and the adaptation was made by National Institute of Standards and Technology (NIST).This is also specified in the ANSI X3.92 and X3.106 standards and also in the Federal FIPS 46 and 81 standards. The exportation of this algorithm is strictly restricted by the US government such that it could be used by the unauthorized people or government. Data Encryption Standard (DES) algorithm provides basic building block for the data protection. The DES is a block cipher which is of 64-bit block size which converts the 64-bit input into the 64-bit output by applying the 56-bit key to each 64-bit data. There are 72 quadrillion or more keys which are used for encryption. So for each message or the information a suitable key is selected from these possible keys and then the process of encryption and decryption takes place with the same key which is the private key or secret key. But due to the innovation in the technology this type of algorithm has proved insecure which resulted in the introduction of Triple-DES (3DES) ALGORITHM where the name itself indicates that the encryption is done three times which is more secure and uses a different key for each encryption. Controversies around DES: The Data Encryption Standard (DES) has been bounded by different controversies such as the key length which s used is used in this type of algorithm has been reduced from 128 bits to 64 bits which resulted in the compromise on security and the other one is the exportation of the algorithm to many countries. DES APPLICATIONS: The Data Encryption Standard (DES) Algorithm has many applications apart from encryption and authentication of data. So the different applications are as follows Data Storage and Mail Systems: The data which is stored in the computers can be protected by the process of encryption and authentication. The passwords which are created by the users in the computers are encrypted by the systems and are stored in the computer memory. The user when enters the password again for signing then the encryption of this password also takes place and this is compared with the other encrypted password and the access to the computer takes place when they both match otherwise the access is denied. The encryption of the password is done by Data Encryption Standard (DES) algorithm with the key which is equal to the password and the plaintext which is equal to the users identity. The files which are present in the computer can also be encrypted by Data Encryption Standard (DES) algorithm for the storage. The computers have a key notarization system which are integrated into them and are used to secure the files from unauthorized access, modifications etc.This Key notarization also helps in providing digital signature capability by using DES.DES gives the users the ability of exercising a group of commands for the purpose of key management, data encryption and authentication functions. The facilities execute notarization which on encryption seals a key or a password. The sealing of key or password takes place with the transmitter and receiver identities. So the receiver must provide the correct identity of the transmitter in order to decrypt the message. This technique of notarization is applied in ANSI standardX9.17 in order to protect against key substitutions which may lead to the compromise of the sensitive data. The secure mail can also be provided by DES .The conjunction of the mail system and the key notarization system helps in providing the secure mail. The header which contains the information which is necessary to decrypt and authenticate the mail file is appended automatically to the file which is transmitted to the receiver. So the decryption and authentication of the file takes place by the receiver in a near transparent manner. `Electronic Funds Transfer (Wholesale and Retail): This is one of the main applications of the Data Encryption Standard (DES) algorithm. The DES plays an important role in protecting the wholesale and retail electronic funds transfer messages. Different standards such as ANSI X9.9 and ANSI X9.19 have been developed Electronic Funds Transfer (EFT) messages. The efforts made by these communities have led to the formation of encryption standards (ANSI X9.23 Draft) and Key management (ANSI X9.17 ANSI X9.24 Draft) standards. The DES is applied in workstations, point of sale terminals, automated teller machines and host computers. The range of data which is protected by DES is of the range from 50$ to a multi-million-dollar transfer. The main criterion which helps the DES algorithm of its usage in the wide variety of EFT applications is the Flexibility. The standards which are developed for EFT application are being developed globally and so the process of encryption, authentication and k ey management have become global. The daily transfer of billions of dollars is done by the US government and the security of this transfer is taken by the Department of Treasury by initiating its policy on the authentication of EFT messages. The support of the Federal Reserve Bank is given to the Treasury in order to make the policy successful. The system which the treasury is considering uses hand-held tokens which contains DES key which are generated for the purpose of a particular individual. The authentication of the EFT message which contains the individuals identity is done by the key which is supplied by the token. The message which is authenticated is the electronic substitute for a signed paper document. Electronic Business Data Interchange: The very big companies have large part of the business transactions and these transactions should be automatic so that cost can be reduced and increases efficiency. So in order to achieve all these large companies are developing the process of automating business. The traditional method of business transactions which is paper based is replaced with the electronic means of transmission. The ANSI Accredited Standards Committee X12 is responsible for these communications by developing different formats. The transaction between the seller and buyer can be accessed by any unauthorized users. So there is a need for protecting the data from the modification and eavesdropping which is done by the process of cryptography or encryption technique. This technique is very effective in protecting the data from unwanted users. The data which is sent by the sender cannot be readable by anyone unless the receiver. Many DES standards have been developed for the pu rpose of the Electronic business data interchange. The standard ANSI X9.9 helps in protecting the data from the unnecessary modifications by the unauthorized user, the unauthorized disclosure can be prevented by the draft ANSI Standard X9.23.The techniques of ANSI Standard X9.17 used for the secure generation, distribution and the storage of DES keys. The above explained methods are implemented by General Motors and seven associated banks in order to protect their business transactions. ATTACKS ON DES: In addition to these different applications of DES it has some weaknesses which are as follows Brute Force Attack: The brute force attack is the simplest attack to decipher. The attack of brute force on the DES is due to the length of the key which is relatively small that is 56 bit and also computational power of the computers which is increasing daily. In the 19th century this type of attacks are not done by the hackers because the cost of the computers are relatively high and the hackers couldnt afford to buy it. But the innovation in the field of computing and technology made the hackers to easily buy the computers and try to hack. Now a days every computer is used for hacking. The powerful, Faster and cheaper techniques which are used by the hackers are Field Programmable Gate Array (FPGA) and Application -Specific Integrated Circuits (ASIC).The time taken to break the cipher is directly proportional to the key length in the brute force attack. In this type of attack the random generation of the keys takes place and these keys are applied on the ciphertext till the origin al key is generated. So the fake key decrypts the message in to its original form. So the main factor which is to be considered here is the key length. The longer the key length the higher is the security. In a n bit long key 2 to the power of n steps are required to break the cipher. So as long as the key length is going to increase then the secure data transmission takes place in the network communication. So in order to get the safe encryption the key lengthy should be long such as the 128 bits which results in the reliable means of encrypting the message. Differential Cryptanalysis Attack: This type of attack is found near the pairs of ciphertexts where the plaintext has some particular differences and these differences are analysed by this attack when the plaintext is propagating through several DES rounds when they are encrypted with the help of the same key. TRIPLE DATA ENCRYPTION STANDARD (3DES): Triple Data Encryption Standard (3DES) is also one of the encryption algorithms and it is the minor variation of Data Encryption Standard (DES).Triple-DES is adopted by ANSI as the X9.52 standard and also been proposed as a revision of FIPS 46, known as draft FIPS 46-3.This algorithm makes use of a 64-bit key which consists of 56 effective key bits and 8 parity bits. The block size for Triple-DES is 8 bytes and the encryption of the data is done in

Odysseus: Heroes Essay -- essays research papers

Odysseus: Heroes A hero is a brave and strong person, who is also very human. A hero feels fear and every other emotion that we do. A true hero is a person who does something great and does not expect to be given any thing in return. A hero does something that effects a large number of people. A hero thinks more of others than he or she thinks of him or her self. The characters in the poem, "Women", and The Odyssey are both epic heroes. Odysseus is a strong and brave man, but I think he lacks one of the major characteristics of a hero. I think he thinks of himself more than of others. I think the characters in the poem, "Women," are better heroes because they can be related to easier. I don't think the poem characters are like an epic hero because they are less into them selves than an epic hero. They also seem to have done lesser things, I mean epic heroes always do something so great, like take twenty men on, or lead an army to victory. Everyday heroes seem to be more realistic and do something that's great, but its not written up in every news paper in the country. Odysseus is a brave man that did great things. In The Odyssey he conquers a monster using smarts and strength. He also looks out for his crew mates. He is faithful to his wife, well, in his mind he is. He kills many men on his own in a battle at his home. He cries a coupl...

The Rising Cost of Health Care Essay -- essays research papers

Rising medical costs are a worldwide problem, but nowhere are they higher than in the U.S. Although Americans with good health insurance coverage may get the best medical treatment in the world, the health of the average American, as measured by life expectancy and infant mortality, is below the average of other major industrial countries. Inefficiency, fraud and the expense of malpractice suits are often blamed for high U.S. costs, but the major reason is overinvestment in technology and personnel. There are three issues when it comes to the health care cost rising. The first is the rising cost in prescription drugs. The second area of rising cost is the increased technologies when it comes to the medical industry. The third problem is the aging population. Prescription drugs are the area of the fastest growing health care expense, and it is projected to grow at 20 to 30 percent each year over the next several years. There are many newer, more expensive drugs on the market, and the use of these prescriptions is exploding. In addition, with so much television advertising, many consumers ask their doctors for expensive, brand name drugs when there may actually be a generic drug that works just as well. Over the past decade, scientists have made significant advancements in the treatment of certain diseases. Unfortunately, just like any new product, the cost of developing these new technologies and treatments is extremely high. Plus, unlike other technology, heath technolo...

In Contempt By Christopher Darden: A Review :: essays research papers

In Contempt by Christopher Darden: A Review   Ã‚  Ã‚  Ã‚  Ã‚  This report is based upon the book In Contempt, written by Christopher A. Darden with Jess Walter. This book is published by Regan Books an imprint of Harper Collins Publishers and is copyrighted 1996 by Christopher A. Darden. Introduction of the Author   Ã‚  Ã‚  Ã‚  Ã‚  The book In Contempt was written by Christopher A. Darden. Chris Darden is famous for being one of the prosecuting attorneys in the court case, The People vs. Simpson. He has worked hard his whole life to reach the status he has now achieved. He proved to America that even though he wasn't a high-priced private lawyer that he could present a well-thought out and planned case under tremendous pressure he and the other prosecutors had to endure during the Simpson case. Summary   Ã‚  Ã‚  Ã‚  Ã‚  I found this book to be very well thought out and well written. Most people would assume that this book was written with the intentions of making a quick-buck off the misfortune of Nicole Brown Simpson and Ronald Goldman. I, however, do not believe this to be true. The way that he speaks of the victims in the book, and the way he spoke of them before and after the trial shows that he really cared about the lives of these people that he didn't even know. He even went as far as to say in the book that this was the first case that affected him personally and emotionally. As one may expect the majority of this book is taken up with the Simpson case but, chapters two through six detail his life from birth, his childhood in a working class district of Richmond, California, and becoming a district attorney of Los Angeles in 1981. Chapters two and three mostly consist of stories of him and his brother, Michael, stealing from local stores or his brothers drug deals. When Michael hit his mid-teens hestarted selling marijuana off the front porch of the house and Chris was his lookout. In return, he was told that he would be cut in on the action (but never was). No matter what, Michael always told Chris never to use drugs. Throughout the book Chris Darden refers to his brother as a good role model for him no matter what he did.   Ã‚  Ã‚  Ã‚  Ã‚  I feel the purpose of Chris Darden writing this book is to try to show the hardships he had to go through as a black man trying to become a lawyer. Also I feel that he is trying to reveal the truth behind what was happening in the Simpson case. Body of the Review In Contempt By Christopher Darden: A Review :: essays research papers In Contempt by Christopher Darden: A Review   Ã‚  Ã‚  Ã‚  Ã‚  This report is based upon the book In Contempt, written by Christopher A. Darden with Jess Walter. This book is published by Regan Books an imprint of Harper Collins Publishers and is copyrighted 1996 by Christopher A. Darden. Introduction of the Author   Ã‚  Ã‚  Ã‚  Ã‚  The book In Contempt was written by Christopher A. Darden. Chris Darden is famous for being one of the prosecuting attorneys in the court case, The People vs. Simpson. He has worked hard his whole life to reach the status he has now achieved. He proved to America that even though he wasn't a high-priced private lawyer that he could present a well-thought out and planned case under tremendous pressure he and the other prosecutors had to endure during the Simpson case. Summary   Ã‚  Ã‚  Ã‚  Ã‚  I found this book to be very well thought out and well written. Most people would assume that this book was written with the intentions of making a quick-buck off the misfortune of Nicole Brown Simpson and Ronald Goldman. I, however, do not believe this to be true. The way that he speaks of the victims in the book, and the way he spoke of them before and after the trial shows that he really cared about the lives of these people that he didn't even know. He even went as far as to say in the book that this was the first case that affected him personally and emotionally. As one may expect the majority of this book is taken up with the Simpson case but, chapters two through six detail his life from birth, his childhood in a working class district of Richmond, California, and becoming a district attorney of Los Angeles in 1981. Chapters two and three mostly consist of stories of him and his brother, Michael, stealing from local stores or his brothers drug deals. When Michael hit his mid-teens hestarted selling marijuana off the front porch of the house and Chris was his lookout. In return, he was told that he would be cut in on the action (but never was). No matter what, Michael always told Chris never to use drugs. Throughout the book Chris Darden refers to his brother as a good role model for him no matter what he did.   Ã‚  Ã‚  Ã‚  Ã‚  I feel the purpose of Chris Darden writing this book is to try to show the hardships he had to go through as a black man trying to become a lawyer. Also I feel that he is trying to reveal the truth behind what was happening in the Simpson case. Body of the Review

International organizations Essay

Introduction. The World Bank has been at the forefront in eradicating poverty among nations as well as supporting or maintaining sustainable development. It has carried out numerous projects to this regard. Establishment of the projects effectiveness is however an important steps to monitor if the objectives of the plan are actually met. Monitoring the projects should start right after the project commences. Background. The World Bank was formally established in December 27 1945 after the ratification of the Breton words agreement. The main aim of its establishment was to prevent any re-emergence of the economic depression as had occurred in the 1930’s. It is a bank that offers loans to developing countries to fund development projects or programs in trying to attain the goal of reducing poverty. It also offers loans to developed countries who it has prior scrutinized for creditworthiness. The World Bank was to ensure that the markets forces were let to operate without government interferences. It would assist in the reconstruction and development of nations. The interests gained are used to assist the developing countries. Its headquarters are in Washington D. C and its activities are aimed to reducing global poverty, implementing sustainable development and focusing on the achievement of millennium development goals and goals calling for the elimination of poverty. The constituent parts of the World Bank are IBRD and the IDA (International Development Association) which achieve their aims through provision of low or no interest grants to countries with little or no access to international credit markets as a way of empowering them. (McGee et al, 109) The bank operates as a market based non profit organization whereby it uses its high credit rating to make up for low interest rates of loans. The bank’s mission is to aid or assist developing countries and their inhabitants to achieve the MDG’s (Millennium Development Goals) by alleviating poverty, developing an environment for investment, job creation and sustaining growth. Promoting economical growth as well as investing in empowerment to enable them to participate in development. IDA grants are given for environmental concerns . The World Bank works to solve pollution issues, infrastructures, education, health, governance agriculture and rural development. The World Bank follows certain philosophies which are known as the comprehensive development strategies that are comprehensive and long term. Long term strategies will ensure sustainable development compared to short term ones. Development goals and strategies should be ‘owned’ by the country or based on local stakeholder participation in shaping them. (Robb, 2). Plans should aim at the local peoples’ needs and it should incorporate them in it. Failure to incorporate the locals results to negative impact of programs on the people as they feel neglected and do not understand the aim of the programs. The development performance should be evaluated through measurable results on the ground so that adjustments can be made. Strategies ought to be timely, specific, and measurable. (Woods, 3) Case studies. The Cape Action Plan for the Environment (CAPE) is a 20 year national program to ensure that by 2024 the natural environment of Cape Florist Region (CFR) and the adjacent marine environment will be effectively conserved and restored. When appropriately implemented, it is aimed at delivering significant benefits to the people in a way that will be embraced by the locals, endorsed by the government and recognized internationally. The two main objectives were to ensure that institutions relevant cooperated to develop a foundation for mainstream Cape Florist Region and the conservation of CFR enhancement through piloting and adaptation of sustainable models as well as effective management. For the successful implementation of this program, it must involve the local people right from formulation through implementation of the project. The government ought to support it too and foundation for biodiversity economy ought to be put in place. Priority sites include the unleashed protected areas. The program is delicate and it entails a great concentration of threatened plant species in the world. The protected area does not adequately protect biodiversity and this is the reason behind some environmentalist arguing that the progress or methodologies used by the World Bank program are not satisfactory. Approximately 95% of protected land is in the mountain habitats with only 4. 5% of the original extent on lowland. The reserves do not adequately sustain the ecological and evolutionary processes that are essential for the long term persistence of the CFR’s diverse plant population. Functional riparian ecosystems migration corridors and natural fire cycles are some examples of such processes. The government also decreased its funding thus affecting the programs success. Institutional support which entails the government’s support of the program both materially and legally is crucial in the success of such a program. Proper management will call for more funding it its going to be successful. With reduced government funding the staff training, environmental education and program control of alien vegetation are negatively affected. Fewer funds affect the implementation of the conservation measures and the positive effects that would have resulted are not attained. Limited financial resources made it hard to meet the costs of new and protected areas. Lack of commitment by the key agencies to the project worked for the failure of the project. The program causes threat on land transformation where urban population will increase as more people leave the lands for cultivation. It is always argued that change of land use from traditional agricultural use to conservation of land use can be regarded as a retrogressive approach for agriculture development. Trees could be cut in the process and this could lead to destructive effects on the climate causing concerns by the environmentalist. Tree form a very important in carbon control in the atmosphere. They work to reducing the effects of global warming, an international concern that affects global climate. In fact the urban growth in Cape Town is 2% per year. The ecosystem risks facing degradation due to invasive alien species. Approximately 43% of the Cape peninsula is covered in alien vegetation and thus poses a great risk of the estimated 750 species of plants facing extinction. The institution failed in disseminating coordinated information on the CFR biodiversity. Not sharing relevant information by agencies led to ineffective conservation planning. The fragmented legal institutional frameworks saw the natural habitat protection jeopardized. Again with a few qualified human resources the conservation was negatively inclined. Increased funding will see a great improvement in the training exercise. Lack of public involvement in the conservation will result to outright reduction in the conservation procedures. Lack of private involvement in the conservation process worsens the situation. Environmental education program reduce and representation of people in the conservation activities will be reduced and this will lead to ineffective in conservation. (Covey, 87)

Georgia Atlantic Company Essay

During the depression of the 1930s, Ben Jenkins, Sr., a wealthy, expansion-oriented lumberman whose family had been in the lumber business in the southeastern United States for several generations, began to acquire small, depressed sawmills and wholesale lumber companies. These businesses prospered during World War II. After the war, Jenkins anticipated that the demand for lumber would surge, so he aggressively sought new timberlands to supply his sawmills. In 1954, all of Jenkins’s companies were consolidated, along with some other independent lumber and milling companies, into a single corporation, the Georgia Atlantic Company. By the end of 1992, Georgia Atlantic was a major force in the lumber industry, though not one of the giants. Still, it possessed more timber and timberlands in relation to its use of timber than any other lumber company. Worldwide demand for lumber was strong in spite of a soft world economy, and its timber supply should have put Georgia Atlantic in a good position. With its assured supply of pulpwood, the company could run its mills at a steady rate and, thus, at a low per-unit production cost. However, the company does not have sufficient manufacturing capacity to fully utilize its timber supplies; so it has been forced to sell raw timber to other lumber companies to generate cash flow, losing potential profits in the process. Georgia Atlantic has enjoyed rapid growth in both sales and assets. This rapid growth has, however, caused some financial problems as indicated in Table 1. The condensed balance sheets shown in the table reveal that Georgia Atlantic’s financial leverage has increased substantially in the last 10 years, while the firm’s liquidity position markedly deteriorated over the same period. Remember, though, that the balance sheet figures reflect historical costs, and that the market values of the assets could be much higher than the values shown on the balance sheet. For example, Georgia Atlantic purchased 10,000 acres of cut timberland in southern Georgia in 1961 for $10 per acre, then planted trees which are now mature. The value of this acreage and its timber is estimated at $2,750 per acre, even though it is shown on the firm’s balance sheet at $230 per acre, the original $10 plus capitalized planting costs. Note also that this particular asset and others like it have produced zero accounting income; indeed, expenses associated with this acreage have produced accounting losses. When Georgia Atlantic was originally organized, most of the outstanding stock was owned by the senior Jenkins and members of his family. Over time, however, the family’s ownership position has gradually declined due to the sale of new common stock to fund expansion. In 1987, Ben Jenkins, Sr. died; the presidency of the firm was passed to his son, Ben Jenkins, Jr., who was 61 at the time. By the end of 1992, the Jenkins family held only about 35 percent of Georgia Atlantic’s common stock, and this represented essentially their entire net worth. The family has sought to finance the firm’s growth with internally generated funds to the greatest extent possible. Hence, Georgia Atlantic has never declared a cash dividend, nor has it had a stock dividend or a stock split. Due to the plowback of earnings, the stock currently sells for almost $2,000 per share. The family has stated a strong belief that investors prefer low-payout stocks because of their tax advantages, and they also think that stock dividends and stock splits serve no useful purpose—they merely create more pieces of paper but no incremental value for shareholders. Finally, the family feels that higher-priced stocks are more attractive to investors because the percentage brokerage commissions on small purchases of higher-priced stocks are lower than on large purchases of lower-priced shares. They cite the example of Berkshire-Hathaway, whose stock price has risen phenomenally even though it now sells for over $15,000 per share and pays no dividends. (The family does acknowledge, though, that Warren Buffett, Berkshire’s chairman, has done a superb job of managing the company’s assets, and that the rise of its stock price reflects that factor as well as Buffett’s financial policies.) As the date for Georgia Atlantic’s annual stockholders’ meeting approached, Mary Goalshen, the corporate secretary, informed Ben Jenkins, Jr., who is commonly called â€Å"Junior† at the company, that an unusually low number of shareholders had sent in their proxies. Goalshen felt that this might be due to rising discontent over the firm’s dividend policy. During the last two years, the average payout for firms in the paper and forest products industry has been about 35 percent; yet for the 58th straight year, Georgia Atlantic’s board, under the Jenkins family’s dominance, chose not to pay a dividend in 1992. The Jenkins family was also aware that several reports in the financial press in recent months indicated that Georgia Atlantic was a possible target of a takeover attempt. Since the family did not want to lose control of the company, they were anxious to keep the firm’s stockholders as happy as possible. Accordingly, Junior announced that the directors would hold a special meeting immediately after the annual meeting to consider whether the firm’s dividend policy should be changed. Junior instructed Abe Markowitz, Georgia Atlantic’s financial vice president, to identify and then evaluate alternative dividend policies in preparation for the special board meeting. He asked Markowitz to consider cash dividends, stock dividends, and stock splits. Markowitz then identified six proposals that he thought deserved further consideration: (1) No Cash Dividends, No Stock Dividend or Split. This was the position Markowitz was certain that Junior and the family would support, both for the reasons given above and also because he thought the company, as evidenced by the balance sheet, was in no position to pay cash dividends. (2) Immediate Cash Dividend, but No Stock Dividend or Split. This was simply the opposite of the no dividend policy. If a cash dividend policy were instituted, its size would still be an issue. (3) Immediate Cash Dividend plus a Large Stock Split. The stock split would be designed to lower the price of the firm’s stock from its current price of almost $2,000 per share to somewhere in the average price range of other large forest products stocks, or from $20 to $40 per share. (4) Immediate Cash Dividend plus a Large Stock Dividend. The reasoning underlying this policy would be essentially the same as that of Alternative 3. (5) Cash Dividend, Stock Split, and Periodic Stock Dividends. This policy would require the company to declare an immediate cash dividend and, simultaneously, to announce a sizable stock split. This policy would go further than Alternatives 3 and 4 in that, after the cash dividend and stock split or large stock dividend, the company would periodically declare smaller stock dividends equal in value to the earnings retained during the period. In effect, if the firm earned $3 per share in any given period-quarter, semi-annual period, and so on—and retained $1.50 per share, the company would also declare a stock dividend of a percentage amount equal to $1.50 divided by the market price of the stock. Thus, if the firm’s shares were selling for $30 when the cash dividend was paid, a 5 percent stock dividend would be declared. (6) Share Repurchase Plan. This plan is based on the premise that investors in the aggregate would like to see the company distribute some cash, but that some stockholders would not want to receive cash dividends because they want to minimize their taxes. Under the repurchase plan, individual stockholders could decide for themselves whether or not to sell some or all of their hares and thus to realize some cash and some capital gains, depending on their own situations. To begin his evaluation, Markowitz collected the data shown in Tables 2 and 3. As he was looking over these figures, Markowitz wondered what effect, if any, Georgia Atlantic’s dividend policy had on the company’s stock price as compared to the prices of other stocks. Markowitz is also aware of one other issue, but it is one that neither he nor anyone else has had the nerve to bring up. Junior is now 66 years old, which is hardly ancient; but he is in poor health, and in recent years he has been almost obsessed with the idea of avoiding taxes. Further, the federal estate tax rate is currently 60 percent, and additional state estate taxes would be due; so well over half of Junior’s net worth as of the date of his death will have to be paid out in estate taxes. Since estate taxes are based on the value of the estate on the date of death, to minimize his estate’s taxes, Junior might not want the value of the company to be maximized until after his death. Markowitz does not know Junior’s view of this, but he does know that his tax advisors have thought it through and have explained it to him. Finally, Markowitz knows that several Wall Street firms have been analyzing Georgia Atlantic’s â€Å"breakup value,† or the value of the company if it were broken up and sold in pieces. He has heard breakup value estimates as high as $3,500 per share, primarily because other lumber companies, including Japanese and European companies, are eager to buy prime properties such as those owned by Georgia Atlantic. Of course, Georgia Atlantic could sell assets on its own, but Markowitz does not expect that to happen as long as Junior is in control. Now assume that you are an outside consultant and have been hired by Abe Markowitz to help him with the analysis and make a presentation to the executive committee. First, Abe is not sure whether an announced dividend policy is a good idea. He believes an announced policy could cause the firm to feel forced to take actions that otherwise would be undesirable. He has also expressed concern about signaling and clientele effects. As old man Jenkins used to say, â€Å"If it ain’t broke, don’t fix it.† Thus, analyze the firm’s present dividend policy to determine how well the company has performed compared to other firms in the industry before discussing the implications of the alternative dividend policies and making a recommendation. Markowitz also wants you to discuss whether the firm’s historical rate of return on investment has been affected by its dividend policy, the estate tax issue, and the takeover issue. Junior is famous for asking tough questions and then crucifying the person being questioned if he or she has trouble responding. That is probably why Markowitz wants you to make the presentation. So be sure that you thoroughly understand the issues and your answers so that you can handle any follow-up questions that you might receive.