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ABEKA VOCABULARY, SPELLING, POETRY IV QUIZ 12A Essay Example

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Analysis for Teslas Expansion into Russia

Analysis for Teslas Expansion into Russia List of abbreviations: MEDCs More Economically Developed CountriesNIC Newly Industrialized Country RUB RublePPP* Public-Private Partnership GDP Gross Domestic Product PPP Purchasing Power ParityFDI Foreign Direct InvestmentOECD Organisation for Economic Co-operation and DevelopmentEV Electric VehicleWTO World Trade OrganizationIMF International Monetary FundBRICS emerging national economies: Brazil, Russia, India, China and South Africa. Letter of Recomendation to the CEO To: Elon Musk CEO of Tesla, Inc Report on Russian Federation as a potential new market for Tesla, Inc. There is no doubt that eco-friendly vehicles will dominate a global car market in the future. Telsa already officially presented in most MEDC countries and now is a time to think about Transition economies (including NICs). The electric car market in Russia is still quite small but thanks to stabilising economy and sensible government policies there is a good potential to expand it. The ability to set up our dealership chain relatively quickly must be a consideration. Lack of charging facilities could be seen as a potential to insert and expand original Tesla Supercharger chain across the country and could lead to PPP* agreement between the government and business where Tesla could take part not only in the creation of those facilities but also in the further operations of it. As our research shows, Russia has a huge domestic market which has a potential to expand and get more wealthy, what means potentially a big client base. There are many state support programs such as: (First Car, Family Car, Private Business, and public city electric transport) with financing of 17.4bn RUB, subsidies given to Russian credit organisations for the reimbursement of a shortfall in income from credits granted by Russian credit organisations in 2015–2016 to individuals for the purchase of cars (7.0bn RUB) and other similar programs. (PwC, 2017) Conditions for investment right now are perfect if Tesla wants to have a dominant position in that market in upcoming years. However, its important to consider all the risks and to understand that factors such as movements in the exchange rate of the ruble, access to auto loans, interest rates, amount and effectiveness of government support and expansion of transport infrastructure will predetermine demand more than anything else. Introduction This report will advise CEO of Tesla Inc on whether to expand their official stores into the Russian market. Currently, Tesla has its official stores in 28 countries including most of a western Europe, UAE, China, Taiwan, Australia and other and some other   MEDC countries. (Tesla, 2017) The aim of this report is to understand and conclude how perspective Russian market can be for the expansion of Tesla. By using PEST, Porters 5 Forces model analysis and SWOT we were able to outline advantages and disadvantages of investing in the Russian market with a more in-depth analysis on the relevance of bargaining power of buyers, rivalry among existing companies, political and economic factors. PEST Analysis Russia is the biggest country in the world in terms of area (CIA, 2017a) and 9th in terms of population with over 142 million people living there. (CIA, 2017b) Despite all of its huge economic potential, in recent years Russia has suffered an economic recession due to sanctions which were implemented by the US government on March 6, 2014 after an annexation of Crimea by Russian military forces. (U.S. Department of state, 2017) However recently situation in Russian started to improve and now there is a positive trend in its economic growth which is expected to be at the level of 1.8% in 2019. (The World Bank, 2017) (P)olitical Factors: Russian was the largest country to emerge from collapsed Soviet Union in December 1991 (CIA, 2017c) and went through the 90s with two Chechen Wars from 11th of September 1994 to May of 2000 but even so, the active phase of the war was over there still was a high level of tension in the region and Russian counter-terrorism operation officially finished only in April 2009. (Al Jazeera media network, 2014) However, since then there were no major conflicts within a country and regions such a Chechnya seen much of an economic growth and government stability mainly due to massive cash injections from Russia’s federal government which were aimed at stabilizing   recently unstable territory. (Financial Times, 2015) The Russian Federation today stands as one of the most powerful and influential   states in the world and   and it keeps diplomatic relations with 191 countries and has 144 embassies around the world.(ICD academy for cultural diplomacy, 2014) Government type is known as Semi-presidential federation which is also called a managed democracy due to a high level of Government intervention. (CIA, 2017d) Corruption Perceptions Index research from 2016 suggests that there is still a very high level of corruption in Russia with the score of 29/100 what ranks it 131st out of 176 countries studied.(Transparency International, 2016) (E)conomic factors: Russia is 6th country in the world in terms of GDP and PPP which is an indicator of a strong economy and prospective market. (World Bank, 2017). Its economy mainly dependent on natural resources such as oil and gas as they make up a huge part of Russian federal budget revenue. For example, in 2016 this figure was equivalent to 36% which were made up of mineral extraction taxes and export customs duties on crude oil and gas. (The U.S. Energy Information Administration, 2017) There is a positive trend in Russian economy today after a couple of years of recession which was caused by western sanctions and drop of oil prices. (World Bank 2017) Inflation significantly went down from 15.5% in 2015 to 7.1% in 2016 and is projected to reach the target level of 4% in 2018 and monetary policy is fairly balanced with the current inflation rate. These improvements lead to a better economic environment in general which caused a positive chain effect in a banking sector and improved terms of trade. (World Bank, 2017) An illustrative example of improving Economic environment in Russia is the fact that in 2015 the number of FDI project grew by 61% in comparison with a previous two years. (Invest in Russia – Russian investment agency, 2016) (S)ocial factors: Russian society went through a huge transformation after a collapse of a Soviet regime and has turned from autocratic structure society to more democratic one. There are nearly 200 national ethnic groups represented in Russias 2010 census which makes it one of the most multicultural societies in the world. (Cia, 2017e) Income inequality remains one of the big problems in Russian society. Gini index of Russia in 2015 was   37.7 which is much better than 46.1 back in 1996, however it is still very high in comparison with most western MEDC countries. (The World Bank, 2017). Russian society has some strengths and weaknesses against OECD countries, however, in recent years there was a significant progress in bringing up a quality of live standards. The table below represents a comparison of average scores of OECDs and partner countries in some key social aspects. (T)echnological Factors: Russia is a country with a rich history of scientific and technological traditions. The 1990s crisis caused by the collapse of the Soviet regime led to the significant reduction of the government support for science and technology.   Many Russian scientists went to the United States or Europe in the so-called â€Å"brain-drain† migration. In the 2000s, on the wave of a new economic boom, the situation has started to improve, and the government launched a campaign which was aimed at innovation and modernisation. Current priorities for the Russias technological/scientific development include things such as energy efficiency, IT, nuclear energy and pharmaceuticals. (Sputnik, 2009) (Time, 2011) Also, due to western sanctions, Russia started to focus on replacement of foreign technologies and raw materials by domestic ones. This has worked as a push factor towards more develompment and reserch in some key sectors such as IT and energy. In September 2017 Russian President Vladimir Putin reminded of that strategy in meeting with Russian technology producers where he said that, in some spheres, state institutions could not work with companies running foreign software because that represented a risk for national cyber-security. (CNBC, 2017) Porters Five Forces Analysis Market defenition: Our analysis focuses on the new passenger cars market in Russia, particularly on electric/hybrid segment. Passenger cars are defined as vehicles with at least four wheels, used for the transportation of passengers from point A to point B, and consisting maximum of eight seats not including drivers seat. The Russian car market in 2016 decreased by 11% but it is expected to come back to moderate growth from the end of 2017 due to a positive trend in the Russian economy. (Automotive statistics ltd,  2017a) Competition in the industry:   The electric car market in Russia is relatively small in comparison with many MEDC countries, however, it is predicted to grow. There are 1,100 electric cars in Russia but most of them presented only by a few dominant models: Nissan Leaf 508 units, Mitsubishi i-MiEV 271 units and Tesla Model-S 181 units. (Automotive statistics ltd,  2017b) As we can see there is a high concentration ratio in the Electric car market in Russia as 89% of the cars are from top three firms in the market and Tesla already one of this three companies with a market share of 19% which is still quite a high number considering the fact that they dont have their official dealership in Russia yet. Potential of new entrants: The decree which allows standard petrol stations to operate charges for electric cars was signed in autumn 2015 and took force on November 1, 2016. Russian charging infrastructure is expanding. PJSC Russian Grids already operates 130 charging stations across Russia and by the end of December 2017 this number expected to rise up to 2017 and up to 1000 by the end of 2018.(Eurasia network, 2017) As there is a constant growth in a number of charging stations in Russia it could stimulate demand for electric cars and make them even more attractive therefore attract new entrants into the market. There are not many potential companies who could offer an electric car of a similar quality as Tesla right now, however, there are many hybrid options out there which are potential rivals and could easily enter the market as entry barriers are getting lower and lower with more Government incentives being introduced and new charging stations being built. Also, there are some big companies who are already looking into expanding into Russian market as well, such as Renault-Nissan coalition which is now the leader of the global EV market. (Eurasia network, 2017) (Bertel Schmitt, 2017)   Power of suppliers: In our report, we are looking for a potential expansion of Tesla dealership centres and not manufacturing sites. Therefore the power of suppliers is not important as cars and all needed materials for its maintenance will be imported by existing supply routes like in many other cases where Tesla operates. Power of customers: When considering an expansion into a Russian market, Tesla should have a clear understanding of what are the trends in consumer incomes, availability of car loans and perspectives of consumer confidence. Within nine months of 2017, there were 66 Telsa cars sold in Russia which represents a 92% rise in comparison to previous year. (Russian automotive news, 2017a)   Demand is likely to rise further and Teslas potential client base could increase enormously due to an amendment to the tax code which is discussed in State Duma right now. The idea proposed is to exempt transport tax for electric vehicles from 2018 onwards. (Russian automotive news, 2017b) Bargaining power of buyers would be low, as Tesla in Russia would be considered as high-end product particularly due to a low average income in Russia (37500RUB=650USD) comparing to most western countries. (Trading economics,  2017) Also, Tesla is one of the most advanced electro cars in the global market, therefore there are not many potential substitutions to it in that market segment what makes it quite a unique product and allows Telsa to have some power over its existing and potential client base in nearest future. Threat of substitutes: The main substitutes for electric cars, of course, would be considered standard petrol vehicles or a market of used cars. Especially used car segment seems to be the most promising one in upcoming years due to the average length of car ownership declining thanks to the recovery from the recent economic crisis. (Invest in Russia, 2017a) Some may consider public transport such as trains, buses, public bicycles or even planes as an alternative to electric/petrol cars. However Michael E. Porter‟s definition of a substitute is: â€Å"A substitute performs the same or a similar function as an industry‟s product by a different means†. (Porter, 2008)   Therefore we can say that most of those wont be considered as substitutes because they are unable to fulfil such key passenger car features such as representing social status, providing comfort, immediate availability, independence of destination choice and flexible route change, what makes their substituting force pretty low. Nevertheless, a used car segment is more or less capable of performing most of the functions listed above. SWOT Analysis To conclude PEST and Porter’s Five Forces research we will use a SWOT analysis: (Invest in Russia , 2017b) Content: Al jazeera media network.  2014.  Chechnya, Russia and 20 years of conflict.  [Online].  Ã‚  Available from: http://www.aljazeera.com/indepth/features/2014/12/chechnya-russia-20-years-conflict-2014121161310580523.html [10 November 2017]. Automotive statistics ltd.  2017a.  The Russian car market in 2016 decreased by 11%.  [Online].  Available from: https://eng.autostat.ru/news/view/13836/ [21 November 2017]. Automotive statistics ltd.  2017b .  The number of electric vehicles has exceeded 1000 units in Russia.  [Online].Available from: http://eng.autostat.ru/news/view/14483/  [21 November 2017]. Bertel schmitt.  2017.  Who Is The Worlds Leading EV Maker? Its Not Tesla.  01 MAY 2017.  Forbes.  [Online].  Available from: https://www.forbes.com/sites/bertelschmitt/2017/05/01/who-is-the-worlds-leading-ev-marker-no-its-not-tesla/ [23 November 2017].   CIA. 2017a.  The World Factbook (geography). [ONLINE] Available from:  https://www.cia.gov/library/publications/the-world-factbook/fields/2113.html#rs. [Accessed 9 November 2017]. CIA. 2017b.  The World Factbook (population). [ONLINE] Available from:  https://www.cia.gov/library/publications/the-world-factbook/fields/2119.html#rs. [Accessed 9 November 2017]. CIA.  2017c.  The World Bank in Russia (Background).  [Online].  Ã‚  Available from: https://www.cia.gov/library/publications/the-world-factbook/fields/2028.html#rs [10 November 2017]. CIA .  2017d.  The World Bank in Russia (Government Type).  [Online].  Ã‚  Available from: https://www.cia.gov/library/publications/the-world-factbook/fields/2128.html#rs [10 November 2017]. CIA.  2017e.  The World Bank in Russia (Ethnic groups).  [Online].  Available from: https://www.cia.gov/library/publications/the-world-factbook/fields/2075.html#rs [11 November 2017]. CNBC. 2017.Putin tells Russias tech sector: Ditch foreign software or lose out [Online]. Available from: https://www.cnbc.com/2017/09/09/putin-tells-russias-tech-sector-ditch-foreign-software-or-lose-out.html [17 November 2017]. Eurasia network.  2017 .  7 things to know about electric cars in Russia.  [Online].  Available from: https://eurasianetwork.eu/2017/08/19/7-things-to-know-about-electric-cars-in-russia/  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   [21 November 2017].   Financial times.  2015.  Chechnya’s economic recovery tested by slowdown.  [Online].  Available from: https://www.ft.com/content/8233d33c-ecd0-11e4-a81a-00144feab7de [10 November 2017]. ICD academy for cultural diplomacy.  2014 .  Summit Overview.  [Online].  Ã‚  Available from: http://www.culturaldiplomacy.org/academy/index.php?cccs-20131-moscow [10 November 2017]. Invest in Russia .  2017a.  Overview of the Russian and CIS automotive industry.  [Online].  Available from: http://investinrussia.com/data/files/sectors/Overview-of-the-Russian-and-CIS.pdf [27 November 2017]. Invest in Russia .  2017b.  Key Facts.  [Online].  Available from: http://investinrussia.com/key-facts   [28 November 2017]. Invest In Russia – Russian investment agency.  2016.  EUROPEAN ATTRACTIVENESS SURVEY 2016 RUSSIA FINDINGS.  [Online].  .  Available from: https://www.investment-in-russia.com/uploads/European_attractiveness_survey_Eng.pdf [11 November 2017] Organisation for economic co-operation and development (oecd).  2017.  How’s Life in the Russian Federation?.  [Online].  Ã‚  Available from: https://www.oecd.org/statistics/Better-Life-Initiative-country-note-Russian-Federation.pdf [17 November 2017]. Porter M. (2008). The Five Competitive Forces That Shape Strategy. HarvardBusinessReview, January 2008, pp. 2-18. PwC.  2017.  In 2017, the extention of the traditional state support programmes and introduction of new more target-oriented measures is planned.  [Online].  Available from: https://www.pwc.ru/en/automotive/publications/assets/auto-report-eng.pdf  [28 November 2017]. Russian automotive news.  2017a.  Tesla electric cars sales have grown by 92% in Russia . [Online]. Available from: http://rusautonews.com/2017/10/31/tesla-electric-cars-sales-have-grown-by-92-in-russia/  [23 November 2017].   Russian automotive news.  2017b.  Russian government has proposed transport tax exemption for electric vehicles.  [Online]. Available from: http://rusautonews.com/2017/11/15/russian-government-has-proposed-transport-tax-exemption-for-electric-vehicles/  [23 November 2017].   Sputnik. 2009.  Medvedev outlines priorities for Russian economys modernization. [Online] Available from:  https://sputniknews.com/russia/20091011156428675/   [17 November 2017]. Tesla. 2017.  Find us. [ONLINE] Available from:  https://www.tesla.com/en_EU/findus/list. [Accessed 9 November 2017]. The U.S. Energy Information Administration.  2017.  Russia.  [Online].  Ã‚  Available from: https://www.eia.gov/beta/international/analysis.cfm?iso=RUS&src=home-b2 [11 November 2017]. The World Bank.  2017.  Country Context.  [Online].  Ã‚  Available from: http://www.worldbank.org/en/country/russia/overview#1 [11 November 2017]. The World bank.  2017.  GDP, PPP (current international $) .  [Online].  Available from: https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locations=RU   [11 November 2017]. The World Bank .  2017.  Poverty & Equity Data Portal (Russia).  [Online].  Available from: http://povertydata.worldbank.org/poverty/country/RUS [11 November 2017]. The World Bank.  2017.  Recent Economic Developments.  [Online].  Ã‚  Available from: http://www.worldbank.org/en/country/russia/overview#3 [11 November 2017]. The World Bank.  2017.  The World Bank in Russia (Overview).  [Online].  Ã‚  Available from: http://www.worldbank.org/en/country/russia/overview#1   [10 November 2017]. Time. 2011.  Russia Looking to Reverse Brain Drain of Young Scientists. 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Conflict between Hindus and Muslims :: essays research papers

  Ã‚  Ã‚  Ã‚  Ã‚  India is the center of a very serious problem in the world today. It’s a very diverse place with people from many different religious backgrounds, who speak many different languages and come from many different regions. They are also separated economically. Two of the country’s religious sects, Muslims and Hindus, have been in conflict for hundreds of years. Their feelings of mistrust and hatred for each other are embedded in all those years and will not leave easily. What’s most disturbing is that there seems to be no plan for reconciliation available. There are numerous reasons for this conflict.   Ã‚  Ã‚  Ã‚  Ã‚  Power struggles amongst the two groups are ever present and each group thinks the other is out to get them. Hindus comprise the majority of the population of India at eighty percent while Muslims are a minority, making up only fourteen percent, which is a problem in itself. The feeling of being dominated by the majority comes from being a part of the minority. To complicate things even more is the controversy that surrounds Ayodhya, a holy place in Gujarat claimed by both groups. The Babri Masjid, a Muslim temple in Ayodhya was burned to the ground by Hindu extremists in 1992 and caused a wave of violence that resulted in the loss of over two thousand lives. These Hindu extremists believe the temple rests on the birthplace of Ram, one of the Hinduism’s most revered deities. They want a temple built on the site to commemorate Ram’s birth. Muslims in turn want the Babri Masjid rebuilt in the same spot. Neither side wants to give in and are currently fi ghting on.   Ã‚  Ã‚  Ã‚  Ã‚  The most threatening conflict between Hindus and Muslims is the province of Kashmir. This is where the decision to divide India into India and Pakistan seems to have been a terrible mistake. Kashmir, which is the only Muslim majority city in India, lies between the divided India and Pakistan. After India’s independence in the 1940’s, Kashmir had to choose to either unite with India or Pakistan. The Prince of Kashmir chose India but Pakistan invaded the province soon after and have occupied part of Kashmir since then. Controversy still surrounds the province today because naturally, Muslims want to control it. While many Muslims relocated to Pakistan and the Hindus to India, half of the Muslim population was left in India and their relations did not improve after being partially separated.

Bae Assignment

BAE Business Case Study Submitted by: Susan Pacheco April 17, 2013 Table of Contents Part 1: Executive Summary3 Part 2: Main Issue4 Part 3: Systemic Issues4 Leadership & Project Management issues4 Political Pressure to Fast-Track Project5 Design Issues5 Communication Breakdowns6 City Involvement (Delays)6 BAE Conditions on Contract Signing (April 1992)6 Part 4: Environmental & Root cause Analysis7 Qualitative Analysis:7 Project Management7 People (Unqualified):8 Build-Design8 Economic & Political Considerations8 Success with United Airlines9 Part 5: Alternatives and/or Options:9 Alternative A9Alternative B11 Part 6: Recommendations and Implementation11 Recommendation:11 Recommendations Implementation Plan:12 Part 7: Monitor and Control:13 Part 8: Conclusion:13 Part 9: References, Exhibits and Appendixes13 Part 1: Executive Summary In order to address the immediate issue of the letter received by the City Mayor holding us responsible for the delay of the new baggage system by charging BAE a penalty of $12k/day backdated to October 29, 1993 and also requesting a charge back for the $50M tug-and-cart baggage backup system, immediate action and priority needs to be given to address this accusation.A prompt analysis of our project plan and missed milestones with reasons and factual data is critical in defending our position. We need to prove where certain milestones outside our control were missed and the domino effect it created and where dependencies to our commitments were broken and by whom. There were many points at which we voiced our concerns on the project delays and access issues that further hindered our ability to perform but no one took responsibility or acknowledged the delay.In addition, the Build-Design approach has in itself created many hurdles and time delays outside our control as well as created unfavourable working conditions that were unsustainable for our teams. Our current situation is a mere symptom of a lack of a proper project management s tructure and qualified personnel at DIA. Also lack of sponsorship by the city Mayor has created silos and a negative effect on the project flow. The build-design approach is one of the biggest issues but with proper management it can be overcome.Based on BAE’s experience and successful past projects, we can confidently recommend a new structure that has worked in past projects. Given that history I feel we need to propose a drastic change to DIA’s Project Management team and propose a new structure which includes a new Project Manager to oversee the entire project team, appointment of additional team members (see Appendix 1) and new hires with the right skill sets. See Appendix 2 to see RACI Matrix proposal.The proposal is to continue with the new airport wide baggage system implementation only under the condition that DIA restructure their project management team and obtains sponsorship from the City Mayor and Aviation Director. A team approach must be understood by a ll parties involved as there are too many moving parts and it is impossible to expect BAE to independently manage all moving parts for what is out of our control especially with a Build-Design plan.This new platform will allow BAE and DIA’s members to educate, make timely critical decisions, identify risks and critical milestones and hold members accountable for their respective roles. Assuming our proposal is accepted, the overall expected timing from initial contact to identifying risks under the new team structure is 9 weeks. With this plan, a backup system would not be required, thereby avoiding this $50M additional cost. The seriousness of this accusation would put BAE at permanent financial risk if not bankruptcy.Promptness and priority in handling this situation is critical. Beyond the financial impact, there is also the reputation BAE has always enjoyed as being a leader in the marketplace worldwide can also have a negative effect on current and future projects with o ther institutions. Part 2: Main Issue City of Denver issued a penalty request of $12k/day backdated to original start-up completion date of October 29, 1993 including a $50 M charge back for a tug-and-cart baggage backup system. This main issue is a result of the systemic issues which are listed below. Part 3: Systemic IssuesLeadership & Project Management issues Shared leadership between city of Denver & Consultant team created many inefficiencies, duplicate work and lack of real ownership. Additionally no organizational structure change at DIA was ever made to accommodate this new baggage system project. Further complicating the matter was the communication channels and roles between city, PMT and consultants were not defined or controlled. All were working in silos. Engineers are inefficiently creating piles of change documentation that are not really managed or communicated.Waste of time just to cover their tracks. There is NO real qualified Project Manager to oversee the entire project and bridge the gap between DIA and their top Carriers United & Continental, City Council and BAE. We have been expected to manage the project with everyone working in their silos with no real support or team goal or management as a whole. In order to keep things moving along, we need a DIA counterpart to produce engineering alternatives and make quick decisions on cost, alternatives, scheduling etc.Currently there are too many chefs in the kitchen with no real one person in charge. They had to balance project administration political and social responsibilities. The Working Area 4 Managers that was assigned to us have no experience in airport construction, baggage system technologies or new technologies, their main experience is in construction project control management. As such they don’t know how to properly support our requests and needs to keep the project going forward.In addition to this since there is no project manager in charge and lack of proper structure we have to liaise with and to obtain feedback from each Concourse Senior manager and Main terminal manager. It is apparent that they each operate independently making any agreement difficult as we need to transcend the decisions and get agreement across all four managers. It is apparent that they each are making independant decisions and trying to tie them all together is very difficult. This creates further bottlenecks for us.Lack of a designated project manager to oversee and manage inputs/outputs from the City, DIA and BAE created a painful process, hurt relationships and lack of accountability and control. Head of DIA project resigned and death of Chief Airport Engineer Walter Slinger (Oct. 1992), a strong proponent of the baggage system and closely involved in negotiations with us had a significant impact on the project. He was a decisive, empowered decision maker who knew how to address problems and get them resolved promptly. His successor Gail Edmond was not successful in ca rrying ut the same duties as she was much less experienced and lacked the autonomy, experience and guts to make much needed quick decisions. Her hands were tied with red tape and took much longer to make any decisions. Overall we had a poor relationship with the management team who had no prior baggage handling competence or experience. The project was mainly treated as a major public works project resulting in a lack of support when we needed it for any of our complaints on timing, access etc†¦ Political Pressure to Fast-Track ProjectThere were many factors that influenced and pressured this project to a fast-track pace which had some resulting serious consequences both in delays and cost. This pushed the project into a Build-Design project which had created some major delays and cost increases. Some of the other influencing factors are as follows: * DBO Date of Beneficial Occupancy payback date of January 1, 1994 * Project Management Team pressured to push project ahead at al l cost due to long periods of assessment, negotiation and final approvals. Political pressure from Mayor to force project through a fast-track for their own political stature gain and public optics Design Issues The decision to install a new large scale airport-wide baggage system came after the building design was already determined and we were faced with fully defined project specs which underplayed the importance and significance of some important requirements of a baggage system (space, electrical power needs, building structure requirements, ventilation and air conditioning to dissipate) These issues created further bottlenecks and delays in our implementation.Further delays and changes resulted from DIA’s lack of consulting with and conducting a needs assessment with their two top carriers United & Continental which accounted for more than 70% of passenger traffic prior to project start. Their needs were never incorporated into the initial design and program, as a resul t further changes were requested to design and software just 6 months prior to the needed opening date. We had to deal with this even though the mechanical and software designs were supposed to be frozen. Communication BreakdownsWe communicated to United we would need 1 more year to get system up and running but no one listened nor was the message passed along to DIA or the City. We also at many points tried to engage DIA about the delays, access issues and construction bottlenecks that was causing direct delays in our work and we were not given precedent or access when needed. Infact the attitude was that these construction workers were not reporting to BAE to have to listen. City Involvement (Delays) Law restrictions forcing 30% of minority-owned firms and 6% women.This law forced us to forgo our original proposal of using our own qualified employees in lieu of external outside contractors which estimated an increased cost of approximately 60%. Some of our expertise was lost due t o this fact in addition to causing further delays to our project. In Sept. 1993 we went into maintenance negotiations which lead to a 2 day strike of 300 millwrights that was joined by 200 electricians over a $8/hr delta pay dispute. We lost the maintenance contract as well as a 2 day delay. BAE Conditions on Contract Signing (April 1992)The conditions and milestones we placed upon accepting the job was not respected by the city or adhered to, nor was there any provisions made to address issues along the way. ( i. e. freeze dates for mechanical design, software design, power requirements and the like, all around access, timely completion of certain areas, provision of permanent power, computer rooms†¦ these were all set as milestones in our project plan. The city had agreed to these conditions with unrestricted access with priority for BAE equipment yet we didn’t even have reasonable access.For example: * Electricians had to leave work where concrete grinders were creati ng clouds of dust, * Fumes from chemical sealants forced others to flea * Trucks blocking and restricting * Design Freeze dates not adhered to: Airlines requested changes to system designing even though mechanical/software designs were frozen. (6 months prior to opening airport, still moving equipment around, changing controls and software design! * Energy issues – City unable to supply â€Å"clean† electricity to the baggage system. Motors and circuitry used in system extremely sensitive to power surges and fluctuations.Filters were purchased to correct the problem and a City Worker cancelled a contract without realising that the filters were part of it. Filters arrived several months later in March 1994. 1. Construction already begun on terminal and concourses with substantial changes needed on construction to accommodate expanded system. We wrote a letter to city (Jan, 29, 1995) to request prompt action advising of inability to complete project under these condition s with no response or support. Part 4: Environmental & Root cause Analysis Qualitative Analysis:BAE is a highly qualified with a revered reputation, experienced in projects across the US, Europe and Australia in the development, design, manufacture and install and support of every project it undertook from start to finish. We established a strong position in the US accounting for about 90% of U. S. baggage sorting equipment sales. Since 1972 – 1994 we had successfully designed, manufactured and installed nearly 70 automated baggage handling systems worth almost $50M at major airports in the US, New York, Dallas-Fort Worth, Chicago, San Francisco, Miami, Newark and Pittsburgh.We also consulted in the installation of a $550M terminal for the New Seoul Metropolitan Airport in South Korea. Given our successful history and past accomplishments, it is without a doubt that our management capabilities and expertise in handling various types of projects, with various types of people a nd countries, proves our commitment, capabilities and expertise in handling complex variables and situations for every project we undertake. Knowing the strategic importance and complexity of this particular project, we had agreed to take on the project only upon acceptance of certain conditions which was accepted by the City.Many of these conditions were not honored throughout the process causing unnecessary delays, additional costs, strained relationships both with the City and DIA management and hurt our reputation Project Management Lack of communication, ownership and project management both at DIA & the City of Denver was the source of this pivotal problem. Since the contract was awarded by the City, they were responsible to enforce the compliance of the agreed upon conditions and communicate and enforce these conditions to DIA and their employees.In turn DIA did not have a specific Project manager to oversee the entire project as a whole and to act as a liaison between us, th e City and their Carriers. Instead we were forced to deal with their respective â€Å"Area† managers one on one which was counterproductive, time consuming and ineffective. We also had to deal with direct changes from the Carriers themselves which further haulted our project. We were setup for failure given the lack of direction and control at DIA’s side and the City’s dogmatic approach to making decisions.For a project of this magnitude, there was no consideration made to employ either Key Managers or Project Manager to oversee, manage and liaise between the three concourse areas. This created some major gaps and no one was there to keep the pulse on the project itself. This was not implemented thus creating a gap in communication, a silo-type attitude amongst decision makers creating no support-system for the major role we played in this implementation. It was apparent that roles between the City, PMT at DIA and Consultants were not defined or controlled.Every one was working in silos. People (Unqualified): In addition to the management issues, our Assigned Area 4 Managers, lacked the experience in airport construction and baggage system technologies, therefore could not understand the importance and properly support our needs nonetheless handle our requests in a prompt manor. In order to keep things moving along, we needed a DIA counterpart who would be able to produce engineering alternatives and have the autonomy to make decisions. The death of DIA’s Chief Airport Engineer, Walter Slinger created significant impact to our operations as he was decisive and addressed problems promptly. This was an important critical role required for the success of this project. His successor, Gail Edmond lacked the experience, know-how, decision making capabilities and autonomy that further haulted the process. Build-Design The Political pressure to fast-track this project lead to a Build-Design approach to this airport construction which caused many unknown risks and design issues that we had to deal with upon commencement.We were unaware of the construction scope and details to be able to fully understand the scope of the project before undertaking. This also lead to a reactive vs. proactive planning. This posed many unknown risks, changes and modifications to our plans along the way. The instability of this process created many points of change, delays and cost additions and we did our best to manage what was in our control. The point is that many of these delays were NOT within our control, nor did we have any support from the city to enforce DIA’s construction project to meet our agreed upon milestones to meet our own obligations.Economic & Political Considerations The economy in mid 1980’s was plummeting with a 37% job loss average across Stapeltons Employment Industries. The Pena administration aggressively promoted the airport relocation, marketing the new airport as a technologically advanced, state-o f-the – art structure to draw businesses, import federal capital and fund the creation of new jobs with bonded debts to overcome the short-term decline in the economy. It was to become a grand project that would be the main showcase for the Public Works Department.The relationship between BAE and the City was strained primarily because their focus was on airport project speed and bond re-payment and not on the project itself. They were motivated by their own public perception in the political realm. Their â€Å"hands-off† approach was detrimental in the success of this project and served more as a crutch and hinderance. When it came to asking for support it felt like they were working against us and not with us. Their strength was not in project management but they had the power to make key decisions which influenced and affected our overall success.The added pressure of paying the DBO by Jan 1, 1994 forced quick management decisions, early construction without a full scope analysis and risk mitigation not just with BAE but also with DIA. Forced the Build-Design approach which inherently greatly affected our ability to succeed given the lack of adherence to the agreed conditions. Success with United Airlines Once the contract was signed with United exclusively things went smoothly. The successful implementation of the baggage system with United highlighted what was lacking in dealing with DIA and City directly.The success highlighted and confirmed our ability to manage the project with a partner who understood the technical and project management needs. Part 5: Alternatives and/or Options: Alternative A Continue with the contract for installing the baggage handling system conditional upon the following restructuring & requirements: Hiring of new qualified members at DIA. 1. DIA to hire a dedicated qualified Project Manager for the baggage handling system overall project with prior project management experience.One whom understands the key tasks, key players has a strong construction and technological background with project management skills to document, track, address and facilitate the communications between all DIA parties and that of BAE and City Administration. A clear definition of this person’s role, decision-making authority and sponsorship by Senior Management is critical. 2. DIA to hire a new Chief Airport Engineer with strong decision making and leadership skills with the autonomy to make decisions and propose Gail Edmond work under him/her as Chief Associate Engineer. . The new Project Manager’s goal is to gather all appropriate key stakeholders as proposed in Appendix 1 to conduct 3 main initial sessions with all key stakeholders (*see Appendix 1) to: I. Conduct a full risk assessment whereby identifying all risks, prioritise them, have an action plan to mitigate some of them, formulate contingency plans and assign responsible persons to manage the risks. II. Establish a Project Objective Statemen t, and Create a new project master plan, III.Team member establishment: Establish who key players are, their strengths, weaknesses, outlining roles and create a RACI matrix *See Appendix 2 for DIA, BAE, and City for roles and responsibilities for all planning and execution tasks of the project 4. City to hire or appoint a qualified Liaison with construction, engineering and or technical background experience who is solely assigned to this project with no other conflicting priorities with the autonomy to make decisions.This person’s role is to ensure that legislation doesn’t interfere or adversely cause timing risks to the project plan and expedite issues/roadblocks when they arise between DIA, BAE and the city. This proposal is supported by the fact that our design has proven it will work given the proper management setup framework as demonstrated by our successful implemention of the new baggage handling system with United Airlines. The current lack of the â€Å"righ t† project team members will be addressed by this new proposed structure. With the right sponsorship and roject management setup, this will encourage all to be on the same page and working towards the same goal. The added benefit of this is that timelines will be clear and visible and will hold those truly responsible for delays in their respective areas and help them and all team members understand the domino affect and impact it can have on the entire project as a whole. This will discourage the current work â€Å"silo† mentality and will promote an integrated meeting of the minds where risks and opportunities for improvement can be quickly identified, communicated and cascaded to the right people.This will also ensure that the right decision makers are present to make judgement calls on plan changes as they come along and not further hold up the process. This should put the plan back on target and give us a working plan going forward where all key players are informe d, consulted and responsible for outcomes. The cost of setting up this new structure is by far a more economical way to get the task done without the added financial burden of creating a new â€Å"backup† system. Pros: * Renewed Focus on project with key roles and responsibilities outlined set’s clear goals, accountability and ownership. Address risks and enable the team to mitigate them * Clear direction and leadership by all stakeholders and their inputs * Expedite critical milestones and ensure we are on the path * Maintain reputation * No further $ investment for backup system Cons: * New hires required Alternative B Cancel the contract with Denver. Discontinue involvement in any further development unless directly contracted by Carriers. Pros: * Focus on core business Cons * Damaged reputation for BAE * Litigation costs * $12k / day penalty Law suit risk – Pay back of $50M Baggage system backup plan Part 6: Recommendations and Implementation Recommendation: Based on my analysis the strategic impact of cancelling the project at this point would further create a bad reputation for BAE, especially considering the current damage already made to BAE by the unsolicited test plan executed by the mayor and the bad press that has already caused. The decision to continue with the project conditional upon a new team structure is a reasonable request given our past successful history and project management expertise.I feel that we have a strong argument for our position backed up by facts that are undeniable and can thus prove our innocence and lack of responsibility for the delay. This will prove to be a sensitive topic as it appears that it is easier to blame us for the delays. With a mutual understanding about the current situation, I believe it will be easier to convince the Mayor and Aviation director the value the new structure would bring and that a new backup system is not the answer and would cause unnecessary further financial burden, h urt relationships and bad press which no one wants.The success of BAE in installing United’s baggage system will be highlighted as an example of the right team structure and how we can achieve the same if we are united in the goal and agree to this plan. Recommendations Implementation Plan: Some of the short term elements of the recommendations are already completed or in progress such as building our case / position with regards to reasons for the delays. The following outlines the steps required to make this happen. Task| Responsible| Timing| Build case.Engage with Project Manager BAE to identify original plan & milestones and detailed reasons for incomplete tasks. Prepare PPT presentation with key dataWrite back to City Mayor, acknowledging letter and request for a formal meeting to present response with a set date. | BAE Project MgrBAE AdminGene DiFonso| 3 days2 days1 day| Invite to meet with DIA Director of Aviation to present challenges/issues faced throughout the proje ct and the delay outcome. Explain the current position we are in with regards to the city’s demands with the objective to gain support for the new proposed structure. Gene DiFonso| 1 day fixed| Invite DIA Director of Aviation & City Mayor to formal meeting to present project delay reasons/issues & recommendation for continuation of project with recommended structure| Gene DiFonso| 1 day (fixed)| Prepare & Present the proposed structure and Project Team Method Matrix and explain it’s criticality and past effectiveness in other successful projects and why this is necessary even if a backup baggage system is implemented | Gene DiFonso| 3 days| Assume DIA’s buy – in and that it takes DIA 1 month to hire Project Manager and restructure the Project Management Team| Director of Aviation| 30 days| Work with new Project Management Team to identify construction risks that interfere with our design/implementation plans & come up with alternate solutions. | Gene DiFo nso & PMT| 1 week| Develop new Strategy with new key Milestones | Gene DiFonso, | 2 weeks| Obtain Buy-In & Committment from key stakeholders| City Mayor, Director of Aviation| 1 day (fixed| | Total| 9 weeks| 1st Meeting with new Project Team Members| | | | | | Any critical changes to the original plans will be reported promptly to DIA Project Manager and voiced in Team Meetings. Any critical plan changes will equire Sponsor sign offs (acknowledgment and approval of change to plan for reasons outside BAE’s control) before BAE continues with implementation. Part 7: Monitor and Control: * Weekly internal meetings with BAE’s project management team will be conducted to keep pulse on project timelines and areas of risk. * Attend weekly Project Meeting Team meetings to identify risks, action items, schedule changes and react to them. * Submit bi-weekly reports on status to key sponsors & stakeholders. * Hold monthly review meetings with Sponsors Part 8: Conclusion: In conclu sion, the current difficulties we are experiencing with DIA and City Administration has served as a costly example of lack of poor management structure for a project of this magnitude.Our past successes can speak for itself in approaching DIA and City Mayor for their support to the new proposal based on our experience. If this new approach is accepted, this will save BAE millions of dollars in lawsuits and cost of new baggage system as charged by the City Mayor. The optics of getting back on track, having a strong management team and continuing with the original plan will serve in favour of all, the Mayor, our shareholders, as well as redeem our own reputation as leaders in the market. We will then be positioned without a tarnished brand and enjoy further growth opportunities. Part 9: References, Exhibits and Appendixes Appendix 1 – New Project Management Team Structure Appendix 2 – RACI Matrix example (for initial phase) of new structure

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