Tuesday, January 28, 2020
Did Marx Condemn Capitalism As Unjust Sociology Essay
Did Marx Condemn Capitalism As Unjust Sociology Essay Marxs 1848 discussion of theoretical Communism is widely held by historians as one of the most influential political texts ever written. Its principles formed the basis of the Communist movement and offered an alternative to the growing capitalism within various societies around the world. However, many of the principles that Marx offered have been debated by political commentators and historians through the ages. For example, Cohen argues the following: Now, there exists a debate about whether or not Marx regarded capitalist exploitation as unjust. Some think it obvious that he did believe it to be unjust, and others think that he patently did not. (1995, p. 195). This premise will be examined in this essay, drawing on various academic works in order to provide credibility to the argument that Marx did indeed condemn capitalism as unjust. Before analysing Marxs argument against capitalism, it is necessary to examine it and draw conclusions as to what the implications within the text actually are. The Communist Manifesto and German Ideology both deal with social dynamics and the interactions between capitalism, production, the proletariat and Communism. Marx actually identifies capitalism as the following: To be a capitalist is to have not only a purely personal but a social status in production. Capital is a collective product, and only by the united action of many members, nay, in the last resort, only by the united action of all members of society, can it be set in motion. (2002, p. 236). As such, he actively asserts that capitalism is a manufactured state that is borne out of selfishness and the personal need to be materialistically rich. This implies that capitalism does not benefit the collective, instead being of benefit to the individual looking to climb the social ladder. Despite this, as capital is a collective notion and so this gives the impression that it can be used to benefit everyone if it is utilised in the correct manner. This would create an equality that would ensure that nobody need ever suffer within society again. In German Ideology, Marx explains why this has not yet occurred: the patriarchal relationship between journeyman and master continued to exist; in manufacture its place was taken by the monetary relation between worker and capitalist a relationship which in the countryside and in small towns retained a patriarchal tinge, but in the larger, the real manufacturing towns, quite early lost almost all patriarchal complexion. (1970, p. 74) Patriarchal societies had existed for centuries and implied that there was some sort of responsibility being taken for those less fortunate than the business owners, even if there was a major disparity in terms of wealth. The fact that Marx asserts that the patriarchal element of society has been removed speaks volumes about the level of social responsibility that he thought existed following the development of capitalism. The social responsibility that every individual had for his fellow man had disappeared and so it became every individual for himself, which not only led to social climbing but also led to a greater gulf between the classes than previously existed (Jacoby, 1976, p. 206). This is just one of the reasons why it can be argued that Marx believed capitalism to be unfair and unjust. The fact that every individual became concerned with what he could get and forgot about his fellow man was just the start of Marxs damning social commentary. The impact that this had upon the proletariat was far more profound in retrospect than anybody imagined beforehand. However, Marx predicted the unjust treatment of the waged people that Hampsher-Monk highlights: There was a battle to establish against the remnants of political and economic feudalism the institutions of a liberal and commercial state, and there was, for some others at least, the battle to establish a socialist answer to the veils of developing capitalism, the poisoning and maiming of workers and children in regulated factories, the discharge of untreated poisons, the destruction of familial stability and resulting poverty (1992, p. 487) Reports of the events outlined above had begun to filter through when The Communist Manifesto and German Ideology were published but got worse after the spectre of capitalism began to grow. Those events within the quote represent just a sample of the treatment that the waged people had to experience and they aptly highlight the problems that capitalism provided them with. Unable to escape industry because they needed to feed their families, the proletariat were subjected to awful conditions for their bosses to make a profit and the latter did not care providing their own wealth grew. This is yet another example of how and why capitalism was indeed unjust. By highlighting these events and the lack of care from the higher social classes, Marx actively and effectively argues that capitalism is unjust and uses the very principles of capitalism to do so: It is important to remember that the assumptions Marx begins from are assumptions about capitalism taken from capitalisms own ideologues. His is a picture of a buoyant and innovative capitalism, competitive, and with plenty of capital accumulation through profits. (McClelland, 1996, p. 558). By using the ideology of capitalism to frame his argument, Marx is able to highlight the social injustice that capitalism can bring within its own framework, thus highlighting the negatives that lie behind the presented positives. Tucker also introduced the idea of capitalism actually being legalized robbery (1969, p. 43) because it deprives the individual worker of what he or she is actually entitled to: the wage worker under capitalism was being robbed of something that rightfully belonged to him, or that profit was theft (1969, p. 39). In short, the individual worker is only paid a fraction of what his or her labour is worth under capitalism with the remainder going to the employer. As such, it is not the labour offered by the worker that proves fruitful but rather the exploitation of that labour by an individual from a higher class who never has to get his hands dirty in order to reap the rewards. This exploitation and lack of appropriate reward is repeatedly highlighted by Marx, especially in relation to wages: The average price of wage labour is the minimum wage, i.e., that quantum of the means of subsistence which is absolutely requisite to keep the labourer in bare existence as a labourer (2002, p. 236 ). This particular quote highlights how unjust capitalism actually is in relation to the present and the future. It also provides evidence that there are no just rewards available for the proletariat. Designed to maintain the status quo, much as feudalism was, it actually provides a worse situation for the working class because they become further entrenched in capitalism. There is no hope of relief because of the lack of patriarchal values and opportunity to advance in the workplace or life in general. When placed alongside Marxs ideological system of equality, capitalism is proven to be unjust. Husami asserts that no social system has ever been condemned more radically, indicted more severely, and damned more comprehensively than capitalism was by Marx. It is a system of domination of men by men, of men by things, and of men by impersonal forces. (1978, p. 27). In doing so, he effectively makes the case for Marx arguing that man is subordinate to the machine under capitalism. In fact, this is evident within all of Marxs political texts. The proletariat is considered to be the commodity in that it is effectively the machine. If the proletariat did not work then the machine would not work, but a machine does not have needs. A person and indeed a society does. This is another reason why capitalism is so unjust. The needs of the individual wage worker are ignored and so are in no way fulfilled. In becoming a cog in the capitalist machine, the wage worker is forced to forego all rights and individual wants and needs he may have. As Husami argues, everything becomes impersonal a nd nobody is treated with the respect and individualisation they deserve. In stripping every wage worker of his humanity and rendering him a faceless machine part, it is easy to ignore the individual without focusing too much on what he is being deprived of. Capitalism makes that possible and ensures that the threat of unemployment [is] hanging permanently over their heads (McClelland, 1996, p. 537). This, in turn, ensures that wage workers remain in their social place and do not have a voice to use unless they come together as a collective. As such, this is the basis of the argument for the onset of Communism that Marx presents within his ideological texts. The workers have to come together in order to create a movement strong enough to overthrow the unjust capitalism. However, not all academics agree that Marx argues that capitalism is unjust, citing that there are explicit denunciations and sustained criticisms of social thinkers (such as Pierre Proudhon and Ferdinand Lassalle) who did not condemn capitalism for its injustices or advocated some form of socialism as a means of securing justice, equality, or the rights of man. (Wood, 1972, p. 244). Whilst it is true that the views of the social thinkers did stand opposed to Marxs views, this argument can be perceived in a number of ways. For example, Marx himself denounced Proudhon because his petty bourgeois leanings had a tendency to wish to resort to authoritarian solutions (Thomas, 1990, p. 237). As such, it could be argued that the way in which social thinkers viewed capitalism did not match up with the way Marx himself perceived it, meaning that he neither thought it completely unjust or worthy of total eradication. In fact, it is possible to read The Communist Manifesto in a way that agrees with this perspective. For example, if Capital is a collective product (Marx, 2002, p. 236) then the lower classes control it as much as the upper classes do. However, even with all of the above in mind, there is too much evidence available to prove that Marx did consider capitalism as unjust. Marxs use of language and words like robbery, embezzlement, booty, theft, plunder and usurpation betray his feelings towards the concept of capitalism for all to see (Husami, 1978, p.43). This dichotomy just serves to prove that capitalism can be both just or unjust, depending on ones class interests and the conditions which determine them. (Kain, 1991, p. 160). Marxs perspective definitely belonged to the latter category and not the former. In conclusion, whilst an alternative reading is possible as a result of the nature of the debate itself and Marxs condemnation of social thinkers that followed in his footsteps, it is quite clear from in depth analysis that he believes that capitalism was unjust. His argument against capitalism characterises it as dehumanizing, disenfranchising and downright unfair based on the contribution of workers to society. Although there is no direct argument against the modernisation, there is an argument against the social condition that it imposes on the workers. In terms of the rewards that the individual gets, capitalism most certainly is unjust and the Marx argument can still be applied to society today.
Monday, January 20, 2020
Books for Africa Essay example -- Non-Charitable Organization
Books for Africa has kept over 28 million books out of landfills.(â€Å"Got books†page 1) Books for Africa is a organization that sends books to less fortunate children in Africa. Books for Africa is working hard to improve literacy rates in Africa. Books for Africa is a non-charitable organization that sends books to less fortunate kids in Africa. The organization is 100 percent volunteers dedicated to raising money to buy books. I'm sure you are wondering about sending books to Africa. The African literacy rate is very low and sending books to Africa helps the children in Africa learn how to read and write. (â€Å"Why Books?†Page 1) So, the organization is trying to fill the library shelves with books. United States Congressman of Minnesota said Keith Ellison â€Å"In Kenya, we were in a small village and the students had a wonderful school. They were eager to learn. They had motivated teachers, but they didn’t have any books in the school. They had no library. And so, imagine how proud I was to open up this box of shiny new encyclopedias and dictionaries from Books For Africa. They want more of your books. They can’t wait. They can’t get enough of these books.†(â€Å"Why Books?†page 1) Last year, Books for Africa sent 10 sea containers to Africa. (â€Å"Got books†page 1) Each container can hold up to 22,000 books and each costs $9,800. (â€Å"Books from America†page 1) Books are like video games in Africa, kids love them. So, that is why this organization sends books. They don’t only send books to kids in Africa they send E books, which are electronic devices that allow you to download books to them and you read them off of there. (â€Å"E-books for Africa†page 1†) Which is great since they don't have many books and the books they have are usually... ... bridge from misery to hope.†(â€Å"Books for Africa†page 1) Charity navigator the magazine said, â€Å"Books For Africa has earned its third consecutive 4-star rating for its ability to efficiently manage and grow its finances. Only 11% of the charities we rate have received this 'exceptional' designation, indicating that Books For Africa consistently executes its mission in a fiscally responsible way and outperforms most other charities in America.†(â€Å"Books for Africa†page 1) This just shows how this organization is growing. Its growing fast to! Books for Africa is doing everything in there power to increase the literacy rate in Africa. It is shown that in the communities that have received books more people are becoming more literate. This proves that Books for Africa is doing a lot to improve literacy rates. Books for Africa is going to do great things in the future.
Saturday, January 11, 2020
Andy Warhol Essay
Andy Warhol is one of the significant famous personalities of the twentieth century. He is an artist, a film maker, a celebrity and even a businessman. Warhol advanced the Popular art movement in America. He made compelling and controversial art works that yielded praises and even criticisms. Warhol had once said, â€Å"I’d prefer to remain a mystery. I never like to give my background and, anyway, I make it all up different every time I’m asked. It’s not just that it’s part of my image not to tell everything, it’s just that I forget what I said the day before, and I have to make it all up over again†(Wrenn Andy Warhol: in his own words).            Andy Warhol was born in 1928 in Pittsburgh, Pennsylvania as the son of Slovakian immigrants. His father was Andrej who was a construction worker who died when he was 13 and his mother was Julia. According to his mother, Warhol suffered three nervous breakdowns in his childhood (Andy Warhol). By 1945, he entered the Carnegie Institute of Technology (now Carnegie Mellon University) where he majored in pictorial design . After college, Warhol went to New York and started his career in illustration and advertising for several magazines including Vogue, Harper’s Bazaar and The New Yorker (Cribbs Andy Warhol: Biography). It was film director Emile de Antonio who encouraged Warhol to start as an independent artist because he considered commercial art as a real form of real art. His fondness for art and commerce gained him several recognitions from established organizations (Andy Warhol).            During the 1960’s, many of Andy Warhol’s most famous and iconic images were generated. By adapting various images from popular culture, Warhol created many paintings that remained icons of 20th-century art, such as the Campbell’s Soup Cans, Disasters and Marilyns. In addition to painting, Warhol made several 16mm films which have become underground classics such as Chelsea Girls, Empire and Blow Job (Cribbs Andy Warhol: Biography). Most of Warhol’s films were deemed plotless, complex and somewhat pornographic. Though there were scripts, most of the dialogues in his films were improvised by the actors who were usually transvestites, homosexuals and his acquaintances. According to Warhol, he never particularly wanted to make simply sex movies, but attempted to show how people can meet other people and what they can do and what they can say each other. Warhol’s gradual withdrawal from films production coincided with his near fatal shooting in 1968 by a female ‘factory’ reject connected with an anti-male hate group (Andy Warhol). More so, in this period, Warhol moved to the â€Å"Factory.†It was his place at Union Square in New York City where he and his team of hired workers massly produced screen prints of popular culture. This immediately became the hangout venue for artist, musicians, and actors where they expressed their individuality. The Factory also served as a working place where he produced most his masterpieces in art and film (Andy Warhol Biography).            In the 70’s amd 80’s, Warhol had expanded his empire beyond mere art making. He was in the center of a corporation that produced films, books, plays, and was involved with television (Andy Warhol). He founded inter/VIEW magazine. He also created two cable television shows, â€Å"Andy Warhol’s TV†and â€Å"Andy Warhol’s Fifteen Minutes†for MTV . More so, Warhol had several collaborations with younger artists such as Jean-Michel Basquiat, Francesco Clemente and Keith Haring (Cribbs Andy Warhol: Biography). In his book The Philosophy of Andy Warhol he wrote: â€Å"Business art is the step that comes after Art. I started as a commercial artist, and I want to finish as a business artist. After I did the thing called ‘art’ or whatever it’s called, I went into business art. I wanted to be an Art Businessman or a Business Artist. Being good in business in the most fascinating kind of art†(Andy Warhol).            Andy Warhol died after a gall bladder surgery on February 22, 1987. His funeral was attended by his friends, colleagues and more than 2, 000 fans at St. Patrick’s Cathedral in New York (Cribbs Andy Warhol: Biography) .            Warhol made a huge contribution in art history. His eccentric personality brought him to beyond levels of stardom. He constantly shook the art industry with his controversial art works that were considered avant-garde during that era. Warhol’s personality have been subjected to several suspicions. His concepts and interpretations gave an impression that he was a homosexual. According to Wayne Koestenbaum’s psychoanalytical interpretation, everything was sexual for Warhol, who was †as gay as you can get†and he also said that â€Å"Warhol’s major artistic contribution was reinterpreting the worth of cultural waste products†(Andy Warhol). Many would think that Warhol is not a true blooded artist because mainly for the fact that he was driven by monetary ambition and even came to the point where he became obsessed in being rich and famous. But he proved that business can be mixed with art making. He utilized the best of both worlds, which are the corporate world and the art world. In a but shell, he merged art, wealth and fame producing the Pop Artist Andy Warhol (Andy Warhol Biography). Works Cited â€Å" Andy Warhol Biography.†ArtQuotes.net. 28 February 2008       . â€Å"Andy Warhol.†2000. Books and Writers. 28 February 2008        . Cribss, Martin. â€Å" Andy Warhol: Biography.†2002. The Andy Warhol Foundation for the            Visual Arts. 28 February 2008 . Wrenn, Mike. Andy Warhol: In His Own Words. Omnibus Press, 1992.
Friday, January 3, 2020
The financial management policies of Sainsburys - Free Essay Example
Sample details Pages: 13 Words: 3924 Downloads: 6 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Level High school Did you like this example? Report to critically evaluate the Financial Management policies and practices of J Sainsbury plc over the last five years. including gearing dividend decisions, investment performance appraisal and cost of capital subjects. J. Sainsbury plc was established in 1869 by John James and Mary Ann Sainsbury. Don’t waste time! Our writers will create an original "The financial management policies of Sainsburys" essay for you Create order It is established as Britainà ¢Ã¢â€š ¬Ã¢â€ž ¢s oldest food retailer. It comprises two divisions à ¢Ã¢â€š ¬Ã¢â‚¬Å" Retailing, by way of its supermarkets and smaller convenience stores, together with its financial services, Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Bank. It aims to provide high quality products, at good value with an excellent standard of service. It is the third largest grocery chain in the UK behind Tesco and Asda/Wal-Mart. [1] The J. Sainsburys food retail area serves over 16 million customers a week by way of a total 788 stores and an internet-based home delivery service. The financial services area of Sainsburys Bank, offers a variety of packages including life insurance, saver accounts, credit cards and travel insurance to name a few. In October 2004 the supermarket giant was suffering the consequences of the increasing success of its competitors and it responded by announcing a dramatic recovery plan which would serve to lead it out of the spiraling losses the company was experiencing. Still reeling from the impact of late 1990à ¢Ã¢â€š ¬Ã¢â€ž ¢s BSE financial implications where the stores lost out over two million on fresh beef alone.[2] The Making Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Great Again strategy served to increase their overall profits by over 200 million before tax in just over one year.[3] Before floundering again two years later under speculation of an impending takeover. A fiscal breakdown of the procedures between 2003 and 2008 demonstrates the financial narrative of a company experiencing highs and lows in a competitive environment, maintaining its significant profile and diversifying its options. 2003-2005 Following on from 2002 and a year in which sales growth increased profits and encouraged the operational gearing, Sainsbury Shareholdersà ¢Ã¢â€š ¬Ã¢â€ž ¢ funds increased by  £155 million to  £5,003 million, with net debt increasing by  £248million. Public confidence had been gained but severe losses were still being documented. The company also found themselves having to increase their borrowing and extended their loans by an additional three and a half years. The overall Group gearing, or Net debt divided by total equity, rose to 28% with group capital rising from 11.1 % to 11.5%. This will no doubt be a reflection of the number of investments that the Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s group made during this year.[4] The company Directors recommended the payment of a final dividend of 11.36 pence per share, at an increase of 0.54 pence from 2002 and a total dividend for the year ending 2003 of 15.58 pence per share, complimenting the increase in the number of shareholders that year. This total also reflected the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s aim to encourage profit growth in 2004. In terms of the groups investments during these two years the one million pound investment it had made in the Homebase stores was sold. The final disposal of this investment made the company a total profit of around  £61 million, after taking into account any liabilities following the sale of the partner business in 2001which boosted the profits for the group noticeably in 2003.[5] The figures below illustrate the differences in terms of the increased investments and total debt that the company experienced over one year.[6] 2003 2002 Cash and current asset investments 659 386 Debt (2,063) (1,542) Fixed asset investments Group Company 2003 2002 2003 2002 Shares in group undertakings (note 16) à ¢Ã¢â€š ¬Ã¢â‚¬Å" à ¢Ã¢â€š ¬Ã¢â‚¬Å" 7,661 6,227 Joint ventures (note 17) 9 44 6 33 Own shares at cost1 86 88 à ¢Ã¢â€š ¬Ã¢â‚¬Å" à ¢Ã¢â€š ¬Ã¢â‚¬Å" Other unlisted investments at cost 17 42 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 25 By the end of 2003 Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s were in trouble and fighting to maintain their positioning amongst the other major chains. In July 2003 Asda gained 17% of the market share. Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s slipped from a position of 17.1% of the market share to just 16.2%. Following the merger with Wal-Mart, Asda proceeded to overtake Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s as the second largest supermarket in the UK. [7] In 2004 it was determined that an increase in profits was needed urgently through sales and it was agreed that in order to meet these targets group managers would be provided with financial incentives. Consequently a share incentive scheme was initiated for all senior managers within Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s plc. Performance of these managers would be assessed over a period of four years and only when all targets had been met would the scheme be awarded.[8] Although the scheme encouraged increased and improved working practice it did look to the media like the Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s group were floundering, with a public announcement that acknowledged the weaknesses that existed within the company. What followed was a continued drive to invest and increase performance. Their 2 005 annual report stresses the importance attached to investment with the creation of a specialist web site designed to provide information on current investors in addition to attracting new ones.[9] This 2005 report also outlines the Performance indicators for 2004 and 2005 for Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s initiatives nationwide. In terms of offering new provision to its customers as part of the ongoing attempts to raise their profile the group launched its Wheel of Health campaign to encourage shoppers to think about the healthier options where eating is concerned and an astonishing 250,000 children took part in their Taste of Success initiative. This programme had the aim of assisting young people in a bid to encourage learning about food and nutrition. Running in partnership with the British Nutrition Foundation and the Design Technology Association, curriculum courses around food technology were built into the scheme which hosted food awards and awareness training for teach ers across the UK. Efforts were made to engage more with the community and align the company to the needs of assisting with regeneration across the country. It was an excellent attempt at active inclusivity and would have served to improve their image at the time significantly. Local Heroes awards were given to colleagues who demonstrated acts of courage, assistance or excellence within their communities, participating once again in the Investors in People scheme and reaching out to their own staff for their knowledge input and consultation around the way in which the business operates overall. Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s also became heavily involved with Comic Relief activities, raising seven million pounds throughout its stores for the charity and developing a vouchers for school campaign to support schools buying sports equipment. It seems that Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s had a stake in everything in 2005 and was actively playing its part for the environment by reducin g packaging significantly, reducing its CO2 emissions and introducing biodegradable methods for its waste produce. During this year the company headed up the Dow Jones Sustainability Indices and proved themselves to be the only retailer in the UK to appear in the Global 100 list of sustainable corporations. In 2005 they also took the award for Organic Supermarket of the Year.[10] Looking at the overall Capital between 2003 and 2005 the company argued that capital was in decline in 2003 due to the fact that the Easter holidays were much earlier than usual and a significant amount of new lines were being introduced. [11] Group capital expenditure for the year amounted to 1,197 million, compared to 1,159 million the previous year. This increase can also be attributed to the variety of new business transformation concepts. Essentially higher levels of spending had been necessary to adopt innovative activities for all stores to participate in across the UK. During this year Sain sburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s bought up a number of additional retail units acquired from the newly liquidated Ames Department stores. These needed financial support over the next couple of years in terms of refurbishment and conversion into new Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s supermarket stores. By 2004 capital expenditure was reducing and the company was seeing the signs of improved cash flow, additionally supported by lower dividend payments.[12]. In 2004/05 Capital expenditure dropped to around  £500 million. Throughout 2004/05 Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s integrated an energy savings programme across all of its stores and offices with a spend of over  £14million working in partnership with npower[13] 2006 to 2008 By 2006 Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s recovery plan was beginning to demonstrate a real difference. In 2005 it had set itself a target of  £2.5 billion in sales over a three year period. There were vast improvements in the retail operating profit m argins, demonstrable by a 14.3% operating profit growth recorded for 2005/06. By 2006 they were over half way to achieving their  £2.5 billion sales target. Their operational gearing had improved and risen considerably. During November 2006 Citigroup were predicting an increase of 64% in their overall profits before tax to reach  £193 million. Shares in Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s also rose to all time high in eight years, to a staggering 420p.[14] This overwhelming continued improvement in operational gearing can be attributed to greater sales and a reduction in costs. For example the group managed to make significant savings in labour and IT during this period.[15] This resulted in their ability to demonstrate higher investment in the overall quality of price and product. Between 2005 and 2006 a final dividend of 5.85p per share was announced. By 2007 a final dividend of 7.35 pence per share was proposed. [16]Once again illustrating the continued economic stre ngth of the company over a comparative short space of time. The table below illustrates the comparative performance indicators for Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s between 2005 and 2006[17] Continuing operations 2006 2005 Sales (inc VAT)  £17,317m  £16,364m Sales (ex VAT)  £16,061m  £15,202m Underlying operating profit  £342m  £325m Underlying profit before tax  £267m  £238m Profit/(loss) before tax  £104m  £(238)m Profit/(loss) after tax  £58m  £(187)m Underlying earnings per share 10.50p 8.30p Basic earnings/(losses) per share 3.80p (17.40p) Proposed dividend per share 8.00p 7.80p What is immediately obvious here are the increased levels of profit and the tremendous rise in value against Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s shares. As mentioned previously the new stores made a tremendous contribution to the noticeable growth in sales, including the introduction of 14 new supermarkets and 20 new metro convenience stores. In 2006 The Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Group made other investments by way of completing nine extensions, 28 refurbishments, with a total 94 refurbishments and conversions of its convenience stores overall[18]. By 2005/06 the effects of their Making Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Great strategy were becoming very apparent. Around this time the retail industry were however experiencing the negative effects of financial increases across the UK placed upon rent, rates and wages. In addition many energy supply companies were gradually introducing their higher costs and Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s estimated their energy expenses to total around Ã⠀šÃ‚ £55 million by the end of 2007.[19] In 2005 Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s owned 455 supermarkets. In 2006 they had targeted and additional 131 stores to invest in and refurbished 37 of these by March. They extended ten stores and acquired nine disbanded Safeway stores from Morrisonà ¢Ã¢â€š ¬Ã¢â€ž ¢s in this same year. These ex-Morrisonà ¢Ã¢â€š ¬Ã¢â€ž ¢s stores provided Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s with around a 20% increase in overall sales. This demonstrates their ability to penetrate new locations successfully. During 2006 the group also embarked on an enhancement programme for their online home delivery service. As a consequence they received a sales increase of over 25% from this market.[20] 2005 witnessed another significant move by Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s to assist with their recovery programme, when they decided to terminate their IT outsourced contract with company Accenture. In 2000 Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s had signed a contract worth over  £1 .7 billion, scheduled to continue for seven years. In 2003 this was reviewed and extended to 2010. In the meantime Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s decided to invest in its own IT systems and made the move towards developing their own in-house systems. This decision also followed in the wake of the Accenture infrastructures failing to adequately support the needs of the company and costing Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s at one point  £500 million in supply chain and IT assets. At the time Chief Executive Justin King responded publically that à ¢Ã¢â€š ¬Ã‹Å"The IT cost is a greater proportion of sales than they were three years agoà ¢Ã¢â€š ¬Ã¢â€ž ¢. [21] Dropping the contract and focusing on an in-house infrastructure in 2005 enabled Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s to recoup some of ità ¢Ã¢â€š ¬Ã¢â€ž ¢s losses and the drain in spend that Accenture were taking from the company each year Capital expenditure reduced in 2006 to  £525 million, a sharp decrease from the pre vious financial year where capital expenditure had reached a staggering  £901 million. This can however largely be accounted for as the increase had included Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s new investments in the ex-Morrisonà ¢Ã¢â€š ¬Ã¢â€ž ¢s stores and the balance of this was significantly outweighed by the resulting increase in sales.[22] 2007 witnessed another sharp increase in capital by  £212 million on the previous year and can mostly be attributed to the cost of refurbishment and extensions to existing stores.[23] Throughout 2006 and 2007 Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s had begun talks with the Qatari based investment fund, Delta Two, with regard to a possible takeover and a proposed bid amounting to  £10.6 billion. The bid was quashed finally at the end of 2007; as a result of the effects of the global credit crunch, but not without its consequences. The public and investors had panicked and lost confidence in the Sainsbury group and share prices plumme ted by 20%, impacting on the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s overall market value which reduced by  £1.8 billion.[24] Delta Two remain in possession of 25% ownership of the group (the Sainsbury family hold 18%) and would be at liberty to present a new offer in light of the fact that six months have elapsed since their last bid failed. It is unlikely to consider a new takeover bid, in terms of the Sainsbury group refusing to back down against their offer and the Qatarià ¢Ã¢â€š ¬Ã¢â€ž ¢s inability to negotiate, but the likelihood of some future takeover is not completely improbable, considering this particular deal became so near to closure and received such immense media attention. Brian Revell of Unite, which is Britains largest union consisting of 20,000 members at Sainsburys declared the failed takeover bid to be a positive move for the supermarket and looks forward to a period of stability and business as usual. In contrast Revell has stated that there remain issues across the group which are still not resolved. We are aware that significant Sainsburys shareholders have designs on splitting the companys retail and property interests. Such a split would not be good news in our judgment and we would urge the board to resist the temptation. And other investors such as Robert Tchenguiz whose property empire owns a 10% stake in Sainsburys is continually lobbying the board to release the  £8 billion value of Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s, in order to re-invest in a significant property enterprise. [25]The companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s most recent announcements to begin moving more resources into non-food initiatives, may see a more gradual shift into different, more varied opportunistic markets such as this. Similarly only six months ago Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s announced their new investments of  £273 million into the joint venture property enterprise British Land. 2008 has marked the end of the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Making Sainsbu ryà ¢Ã¢â€š ¬Ã¢â€ž ¢s Great Again strategy, launched in 2004 at the height of their financial difficulties and struggle to maintain their profile. This recovery plan had revolved around improving customer incentives and operational efficiency in order to increase sales and profit enhancement. The original sales target set by the group in 2004 had been an agreed  £2.5 billion. With sales of  £2.7 billion announced in March of this year the supermarket giant has managed to exceed their target, with profits also significantly increasing by 28.4% before tax. A final dividend of 9.00 pence per share agreed in 2008 raises the year end dividend to 12.00 pence. This demonstrates an increase of 23.1 per cent compared to 2007.[26] However the Financial Times income statement for Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s confirms that Year on year since 2004 little progress has been made in their total net income which has risen from 325.00m to just 329.00m. What is apparent is the grow th in revenue by 4.00% during this period which can be attributed to the increase in the cost of goods sold as a percentage of their sales. Cash flow margins from these figures also illustrate considerable losses in cash reserves for 2008. This is probably accountable by way of the 791million the company spent on investments.[27] It was announced at a Food and Grocery conference earlier this year that Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s will now take forward a new strategy, following on from the success of Making Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Great Again. The new From Recovery to Growth plan heralds s the start of another three year initiative that will anticipate a sales growth of  £3.5 billion. Around  £15 million will be invested in the project.This latest strategy will see Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s focusing on new business opportunities, improving their online home delivery service and diversifying its products to expand further into the non-foods market.[28] Conc lusion Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s has responded to a variety of financial challenges over the past five years, dealing with the threat of stronger competition, a fluctuating economy which has influenced UK shopping trends and beaten back the threat of takeover and possible insolvency. In 2005 the sales figures, profit losses and ever decreasing share prices were presenting a bleak picture for the company. A massive recovery plan, expansion of its stores and nationwide initiatives and new partnerships enabled the company to recuperate its losses and generate a huge increase in sales. Early measures taken to dramatically cut the costs of ità ¢Ã¢â€š ¬Ã¢â€ž ¢s IT outsourcing in 2005 also contributed to the decrease in unnecessary investments. Together with their shrewd publicity campaigns led by the popular celebrity chef Jamie Oliver, Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s used a number of combined profile raising and financial initiatives in order to deliver a complete economic turnaround . In 2008 Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s total retail sales including VAT currently stand at 19,287 million, an increase on their previous year from 18,227 million. And a considerable improvement on their sales figures recorded for 2005 at 16,354 million. Since 2005 a steady year on year rise has amounted to a total increase in sales of just under  £300 million. Similarly their profits have soared. Profit before tax in 2008 confirms a 28.4% rise at  £488 million. Precisely  £108 million compared to 2007. Profits in 2006 were recorded at  £108 million. This illustrates an overwhelming profit increase of  £380 million for Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s over just two years. Like-for-like sales, excluding fuel, has risen 3.9 per cent. The group has recorded 13 consecutive quarters of like-for-like growth. Sales, cost cutting and profit targets under this programme have all been exceeded in accordance with the Making Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Great Again strategy. In the face of continued speculation regarding the global economy and less disposable income, Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Chief Executive, Justin King has acknowledged the ongoing worries regarding consumer spend across all economies, declaring Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s to be à ¢Ã¢â€š ¬Ã‹Å"clearly under pressureà ¢Ã¢â€š ¬Ã¢â€ž ¢, expecting the market to continue to be à ¢Ã¢â€š ¬Ã‹Å"intensely competitiveà ¢Ã¢â€š ¬Ã¢â€ž ¢. He has also positively indicated that à ¢Ã¢â€š ¬Ã‹Å"people eat at home more rather than spending money on visiting restaurants.à ¢Ã¢â€š ¬Ã¢â€ž ¢ [29] Which will obviously falls in favour of the retail food market. Sainsburys has lost some of its share in the market recently and customers have been turning to cheaper supermarkets. In response the company launched their à ¢Ã¢â€š ¬Ã‹Å"Feed your family for a fiver campaign earlier in the year, championed once again by Jamie Oliver. The scheme seeks to provide customers with a range of h ealthy, fresh and tasty meal options for four people at a budget of  £5 or under. Another interesting point to note is that Justin King as declared food price inflation to exist at 2% with regard to Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s supermarkets, whereas the Office for National Statistics quotes the figure to be 6.6%. Time will only tell how Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s fair the recent storm involving the impact of the credit crunch. Sainsbury shares have also dramatically recovered after decreasing to 320p in March this year. But overall the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s high volume of sales and their cost efficiencies will help to ease any impact of investment in price and new salary increases. Primarily Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s has fought to focus on providing for the specific needs of the customer over the past few years and has succeeded in benefiting from those objectives. Bibliography Boyer, K.K, Frohlich, M.T, Hult,T.M (2004) à ¢Ã¢â€š ¬Ã‹Å"Extending the Suppl y Chain: How Cutting-edge Companies Bridge the Critical Last Mile Into Customers Homesà ¢Ã¢â€š ¬Ã¢â€ž ¢, AMACOM Div Mgmt Assn Financial Times (2008) https://markets.ft.com/tearsheets/performance.asp?s=uk%3ASBRY, Date accessed 12/09/08 Food and Grocery conference (2008) https://www.igd.com/cir.asp?menuid=22cirid=2563, Date accessed 12/09/08 Investment Advisory site article à ¢Ã¢â€š ¬Ã‹Å"Donà ¢Ã¢â€š ¬Ã¢â€ž ¢t Sell Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢sà ¢Ã¢â€š ¬Ã¢â€ž ¢, Rodney Hobson (2008) https://www.fool.co.uk/news/investing/company-comment/2008/05/14/dont-sell-sainsbury.aspx, Date accessed 12/09/08 Jivkov, M (2006) à ¢Ã¢â€š ¬Ã‹Å"The Week Ahead: Huge profits leap in store for J Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢ Independent Newspaper Knights, M (2005) à ¢Ã¢â€š ¬Ã‹Å"Sainsburys calls time on IT outsourcing contractà ¢Ã¢â€š ¬Ã¢â€ž ¢, Computing magazine MacArthur Foundation (1999) J Sainsbury Plc and the Home Depot: J. Sainsbury PLC and the Home Depot U. K. /U. S.: Island Press Walsh, F (2007), à ¢Ã¢â€š ¬Ã‹Å"Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s: a history in Picturesà ¢Ã¢â€š ¬Ã¢â€ž ¢, The Guardian newspaper Ibaraki, T, Nonobe, K, Yagiura, M (2005) Metaheuristics: Progress as Real Problem Solvers: Springer Wildman, M (1998) The BSE Inquiry / Statement No 166, J Sainsbury plc (2008), Flex News J Sainsbury plc: Three-Year Targets Exceeded https://www.flex-news-food.com/pages/16427/Sainsbury/j-sainsbury-plc-three-year-targets-exceeded.html J.Sainsbury plc (2003), Annual Report and Financial Statements https://www.jsainsburys.co.uk/files/reports/ar2003/pdf/annual_report.pdf, Date accessed, 11/09/08 J.Sainsbury plc: Investors Report: Company News (2004) https://www.jsainsburys.co.uk/index.asp?PageID=418news_filter=allYear=2004NewsID=489, Date accessed 11, 09, 08 J.Sainsbury plc, Company news (2005), https://www.jsainsbury.com/index.asp?PageID=322subsection=news_releasesYear=2005NewsID=531, Date accessed 10/09/08 J.Sainsbury plc, Corpo rate Responsibility Report (2005) https://www.j-sainsbury.com/files/reports/cr2005/index.asp?pageid=22, Date accessed 10/09/08 J.Sainsbury plc: Annual Report (2005) https://www.jsainsburys.co.uk/files/reports/cr2005/files/pdf/report.pdf Date accessed 08/09/08 J.Sainsbury plc: Annual Report (2006) https://www.j-sainsbury.com/ar06/overview/groupperformance.shtml, Date accessed 09/09/08 J.Sainsbury plc: Chief Executiveà ¢Ã¢â€š ¬Ã¢â€ž ¢s Operating Review, Annual Report (2006) https://www.j-sainsbury.com/ar06/ceor/ceor10.shtml, Date accessed 09/09/08 J.Sainsbury plc: Full Financials, Annual Report (2006) https://www.j-sainsbury.com/ar06/fullfinancials/summary9.shtml, Date accessed 10/09/08 J.Sainsbury plc-Financial Review Annual Report (2007) https://www.j-sainsbury.com/ar07/businessreview/financialreview4.shtml Date accessed 08/09/08 J.Sainsbury plc Governance Directorà ¢Ã¢â€š ¬Ã¢â€ž ¢s Report, Annual Report (2007) https://www.j-sainsbury.com/ar07/governance/ Date ac cessed 09/09/08 J.Sainsbury plc: Chairmanà ¢Ã¢â€š ¬Ã¢â€ž ¢s statement (2008) https://www.j-sainsbury.com/ar08/chairman/index.shtml, Date accessed 10/09/08 1 Footnotes [1] Boyer et al (2004) à ¢Ã¢â€š ¬Ã‹Å"Extending the Supply Chain: How Cutting-edge Companies Bridge the Critical Last Mile Into Customers Homesà ¢Ã¢â€š ¬Ã¢â€ž ¢, AMACOM Div Mgmt Assn [2] Wildman,M (1998) The BSE Inquiry / Statement No 166, J Sainsbury plc [3] (2008), Flex News J Sainsbury plc: Three-Year Targets Exceeded [4] https://www.jsainsburys.co.uk/files/reports/ar2003/pdf/annual_report.pdf [5] https://www.jsainsburys.co.uk/files/reports/ar2003/pdf/annual_report.pdf [6] https://www.jsainsburys.co.uk/files/reports/ar2003/pdf/annual_report.pdf [7] Ibaraki,T, Nonobe,K, Yagiura,M (2005) Metaheuristics: Progress as Real Problem Solvers: Springer [8] https://www.j-sainsbury.com/index.asp?PageID=322subsection=news_releasesYear=2005NewsID=531 [9] https://www.j-sainsbury.com/files/reports/cr2005/index.asp?pageid=22 [10] https://www.j-sainsbury.co.uk/files/reports/cr2005/index.asp?pageid=90 [11] https://www.jsainsburys.co.uk/files/reports/ar2003/pdf/an nual_report.pdf [12] https://www.jsainsburys.co.uk/index.asp?PageID=418news_filter=allYear=2004NewsID=489 [13] https://www.jsainsburys.co.uk/files/reports/cr2005/files/pdf/report.pdf [14] Jivkov,M (2006) à ¢Ã¢â€š ¬Ã‹Å"The Week Ahead: Huge profits leap in store for J Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢ Independent Newspaper [15] https://www.j-sainsbury.com/ar07/businessreview/financialreview4.shtml [16] https://www.j-sainsbury.com/ar07/governance/ [17] https://www.j-sainsbury.com/ar06/overview/groupperformance.shtml [18] https://www.j-sainsbury.com/ar06/fullfinancials/retailing.shtm [19] https://www.j-sainsbury.com/ar06/fullfinancials/retailing.shtm [20] https://www.j-sainsbury.com/ar06/ceor/ceor10.shtml [21] Miya Knights (2005) à ¢Ã¢â€š ¬Ã‹Å"Sainsburys calls time on IT outsourcing contractà ¢Ã¢â€š ¬Ã¢â€ž ¢, Computing magazine [22] https://www.j-sainsbury.com/ar06/fullfinancials/summary9.shtml [23] https://www.j-sainsbury.com/ar07/businessreview/financi alreview7.shtml [24] Fiona Walsh (2007), à ¢Ã¢â€š ¬Ã‹Å"Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s: a history in Picturesà ¢Ã¢â€š ¬Ã¢â€ž ¢ , The Guardian newspaper [25] Fiona Walsh (2007), à ¢Ã¢â€š ¬Ã‹Å"Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s: a history in Picturesà ¢Ã¢â€š ¬Ã¢â€ž ¢ , The Guardian newspaper [26] Chairmanà ¢Ã¢â€š ¬Ã¢â€ž ¢s statement (2008) https://www.j-sainsbury.com/ar08/chairman/index.shtml, Date accessed 10/09/08 [27] https://markets.ft.com/tearsheets/performance.asp?s=uk:SBRY [28] Food and Grocery conference (2008) https://www.igd.com/cir.asp?menuid=22cirid=2563 [29] https://www.fool.co.uk/news/investing/company-comment/2008/05/14/dont-sell-sainsbury.aspx
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