Environmental Problems

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Environmental Problems

Over population is the root cause of all environmental deterioration. Global warming, the ozone hole, rain forest destruction, desertification, the "greenhouse effect", and all kinds of pollution, weather breakdown, and natural disasters are only symptoms of this already deadly monster. In recent years, some prominent economists have argued that there is no upper limit to human population growth, that finiteness in resources is meaningless, and that prosperity can be had by all. Biologists have predicted for decades that a population crash is inevitable a few generations after the ecosystem's carrying capacity is exceeded. Some believe that we may have already exceeded it. Although this carrying capacity is unknown, it is undeniable that non-renewable resources will eventually be used up; that renewable resources have been and will continue to be plundered until they no longer exist; that pollution will take its toll.

The human population will double and even triple very rapidly unless the uncontrolled procreation of children is limited. Undeniably, all social, political, economic, natural, environmental, climatic and ecological problems on Earth can be traced back to the population explosion, respectively human overpopulation.

The environmental quality of the future depends mostly on the behavior of companies. The environment is our main source for almost all our needs. This steadily escalating demand for greater production results in increasingly greater, endless, insurmountable disasters. Insurmountable, since remedial efforts to resolve each problem are usually only very half-hearted in order to enable politicians, the industrial leaders to preserve their positions.

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Man treats his native land, its entire environment and all life forms on this Earth as objects, which he may simply utilize, destroy and then discard when he is through with them. Man's greedy appetite for everything the Earth has to offer, and his excessive urge to procreate will ultimately devour and destroy the planet and all life on it, where he will leave nothing behind except for a dead, barren wastland.

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The Trial of Socrates

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Socrates often refers to the "good" at his trial, he says "a man who is good for anything ought not to calculate the chance of living or dying' he ought only to consider whether in doing anything he is doing right or wrong". Throughout the trial, Socrates refers to virtue, "For I do nothing but go about persuading you all, old and young alike, not to take thought for your persons or your properties, but first and chiefly to care about the greatest improvement of the soul. I tell you that virtue is not given by money, but that from virtue comes money and every other good of man, public as well as private. This is my teaching, and if this is the doctrine which corrupts the youth, I am a mischievous person. But if any one says that this is not my teaching, he is speaking an untruth.()" Socrates was a firm believer that materialistic things such as money wouldn't bring you happiness and wouldn't make you a good person, but that a person needed to gain virtue through himself first. Once a person was able to gain this virtue he could have anything he wanted. Socrates believed that in order to have everything, you needed to lose it all first, and this is what differentiates a good person from a bad person.

Socrates wasn't a man who did good for people to benefit himself, he did good for people to help everyone. At one point he says "What return shall be made to the man who has never had the wit to be idle during whole life; but has been careless of what the many care for-wealth, and family interests, and military offices, and speaking in the assembly, and magistrates, and plots, and parties. Reflecting that I was really too honest a man to be a politician and live, I did not go where I could do no good to you or to myself; but where I could do the greatest good privately to ever one of you, thither I went, and sought to persuade every man among you that he must look to himself, and seek virtue and wisdom before he looks to his private interests, and look to the state before he looks to the interests of the state' and that this should be the order which he observes in all his actions(4)". Socrates believed that these characteristics defined a good quality man verse a poor quality man. A good quality man was one who was willing to give up everything in order to gain virtue. Once a person has this virtue he/she can accomplish anything in life, at least this is what Socrates believed

The main purpose of the trial of Socrates was to punish him for his teachings which he tried to spread throughout the youth. Due to the corruptness of his teachings, Socrates was going to be put to death. Socrates speaks about how death may not be an evil, perhaps it is a reward. "I will not say of myself that I deserve any evil, or propose any penalty. Why should I? Because I am afraid of the penalty of death which Meletus proposes? When I do not know whether death is a good or an evil(4)". Mid-way through the trial Socrates speaks about how the oracle "has constantly been in the habit of opposing me even about trifles, if I was going to make a slip or error in any matter; and now you see there has come upon me that which may be though, and is generally believed to be, the last and worst evil. But the oracle made no sign of opposition, either when I as leaving my house in the morning, or when I was on my way to the court, or while I was speaking, at anything which I was going to say' and yet I have often been stopped in the middle of a speech, but now in nothing I either said or did touching the matter in hand has the oracle opposed me. What do I take to be the explanation of this silence? I will tell you. It is an intimation that what has happened to me is a good, and that those of us who think that death is an evil are in error(5-6)". Due to the fact that the Oracle did not oppose what Socrates had to say, he feels as though death may be his place. Socrates seems to have a positive outlook on death throughout his trial, perhaps it is the fact that he knows he is going die. Whatever the reason may be, Socrates speaks about life after death positively, after all how can you explain the unexplainable.

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Socrates sticks to his beliefs throughout the whole trial, and this shows the true meaning of being himself. This act of being himself is was makes Socrates a "good" person. "Some one will say Yes, Socrates, but cannot you hold your tongue, and then may go into a foreign city, and no one will interfere with you? Now I have great difficulty in making you understand my answer to this. For if I tell you that to do as you say would be a disobedience to the God, and therefore that I cannot hold my tongue, you will not believe that I am serious; and if I say again that daily to discourse about virtue, and of those other things about which you hear me examining myself and others, is the greatest good of man, and that the unexamined life is not worth living, you are still less likely to believe me(5)". Socrates has the chance to move away to a foreign place and never speak of his teachings again in order to avoid death, but why would such a man want to forget about everything that has made him who he is. Socrates would be hypocritical to his teachings if he was to just drop everything to save his own life. What makes Socrates such a strong person is that he would rather die than to stop spreading his knowledge, after all death may be a wonderful thing.

Socrates analyzes death two ways, "Let us reflect in another way, and we shall see that there is a great reason to hope that death is a good; for one of two things-either death is a state of nothingness and utter unconsciousness, or, as men say, there is a change and migration of the soul from this world to another. Now if you suppose that there is no consciousness, but a sleep like the sleep of him who is undisturbed even by dreams, death will be an unspeakable gain.(6)". In the end of the trial Socrates speaks about how death is going to be a wonderful experience for him because he will be able to talk to "Palamedes, and Ajax the son of Telamon, and any other ancient here who has suffered death through an unjust judgment(6)". Before Socrates is put to death he declares "In another world they do not put a man to death for asking questions assuredly not. For besides being happier than we are, they will be immortal, if what is said is true(6)". Socrates always stays with his values throughout the trial, even when he knows he is going to die. The idea of losing everything to gain virtue is displayed when Socrates knows that he is going to die, and he excepts death and looks at the positive outlooks of being dead.

In the eyes of Socrates, any man that is able to speak about what he believes is true, is a greater being. Socrates was willing to die if it meant going against his teachings, or to stop spreading those beliefs. A wise man once said "A man who is good for anything ought not to calculate the change of living or dying; he ought only to consider whether in doing anything he is doing right or wrong-acting the part of a good man or of a bad." What Socrates meant by this is simply that a good man will not think about death or life, a good man will only think about being a good or bad person. The definition of a good person is one who is open-minded, and then we are brought to the virtue aspect once again. Being a good person comes from yourself, and in order to become this good person you need to forget about everything else. Socrates lastly requests "When my sons are grown up, I would as you, O my friends, to punish them; and I would have you trouble them, as I have troubled you, if they seem to care about riches, or anything, more than about virtue; or if they pretend to be something when they are really nothing,-then reprove them, as I have reproved you, for not caring about that for which they ought to care, and thinking that they are something when they are really nothing. And if you do this, both I and my sons will have received justice at your hands(7)". Socrates doesn't want his sons to be just like everyone else, he wants them to appreciate who they are. In order for his sons to be considered part of the "good" in society they must have virtue. This virtue is something that can only come from within a person, and as Socrates stated before in order to gain this virtue you need to forget about everything else. If a person spends his/her whole life thinking about death and this prevents him/her from expanding their minds than they are purely a waste. Death is something that nobody alive has experienced, so whose to say that death is such a negative thing.

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Crevecoer

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(Letter III) According to Crevecoeur, what does America look like? What language is used to describe the landscape, how does that language operate in the text to make patterns, and why is that significant?

In Letters from an American Farmer, a gorgeous picture of early American life is painted for the reader, which portrays America as an almost perfect society. From the description of the wonderfully simplistic life of a farmer to joyous effects of a melting pot society one might be reminded of a sales ad. "Welcome to my shores, distressed European; bless the hour in which thou didst see my verdant fields, my navigable rivers, and my green mountains!"(650) That sounds very inviting. Farmer James says so many things that make America seem like the ideal land. There is an equal opportunity for everyone. As soon as an immigrant steps off the boat he hears his native language spoken and doesnt feel so lonely. There is a place for him and his family where they will feel at home, as long as he is sober and industrious. There are also many things that can be easily acquired in this fresh new land that could only be dreamt of in his old country. If a man desires land he can acquire it cheaply, and pursue the new American dream of self-sufficiency. This new immigrant will hopefully achieve the status of Crvecoeurs narrator James someday. James has reached the American promised land.

Crvecoeur gives his readers numerous examples of the superiority of America to all other countries of that time. He admires the equality and the freedom of the American people. He believes that one reason for superiority is that America is with out the aristocracy so dominant in Europe at the time, which led to a hard working and socially equal society. He sees life without the harsh rule of kings and bishops as much more easy going and pleasing to the general public. Another reason Crvecoeur sees America as a superior society is the accepting, and assimilating into one new race, the poor peoples from all European countries. This led to an extraordinarily diverse population, much more diverse than any one of the European countries in the eighteenth century. It was for these reasons, as well as many others that Crvecoeur saw America as the greatest nation of the 1700's.

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Why study media? discussing the european verses american traditions

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There are various reasons why it is important to study the media. This maybe for those who will pursue a career in the media, for some it may be acting, production, behind the camera, web page designing to litterally countless other career options. Other people may be interested in studying the media because they want to be informed users. It would be considered virtually impossible to go through a day, in the developed world, and not be in contact with the media. People are constantly surrounded by television, radio, messages on paper and online. Through the study of media it is hoped the user will become more informed and able to make decisions on how much they will allow the media to influence them.

The relationship between the media and the world is a complicated one. Media texts do not simply reflect reality. Because of this we need to be able to interpret media texts to determine what information we allow to shape our sense of the world and place in it. The media can change our way of looking at the world by presenting us with information we would not normally have access too. Media is considered powerful because of the strong influence it can exert on society, study of the media gives an introspective on the nature of the influence. Media literacy is about giving a deeper perspective on the manufactured media.

Thompson (15) argues that our sense of identity in part comes through interaction with media text. An individual meets with ideas he/she would not normally experience. Our consumption of media text takes place in a pre-existing framework of social and cultural relations. Our understanding of media text is therefor already mediated by those other

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social relationships.

Media studies are a relatively new discipline, and as such have had to respond quickly to the development of the mass media. Media its self is also constantly changing and changing at a fast pace. There have been large changes just in the last few years with the accessibility of the Internet.

Media messages can be presented from many different angles and have many layers of meanings. Political power or the ownership of a large media company may determine the perspective of its messages. Although the majority of a company may be owned by many shareholders generally the control of the company is in the hands of the Chef Executive Officer. It may be a concern that too much power is placed in too fewer hands. Rodman (001) notes after years of expressing concern about newspaper monopolies, the U.S. Congress passed the Newspaper Prevention Act in 170. This law allowed local papers to set up joint operating agreements, in which two competing papers could share printing facilities and business staff, without violating federal antitrust laws. The idea was to encourage both papers to stay alive by allowing them to enjoy some of the same economies of scale that a single chain owner would have.

Economical power can have an influence on the perspective with which media present their messages. Almost all mass media are moneymaking businesses, and as such they try to make as large a profit as possible. Individuals in the media are undoubtedly influenced by commercial pressure. Only after sorting through the economic complexity in the media can we determine the media's perspective.

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There are a number of techniques to textual analysis. When studying media it is important to look at the significance of different approaches. Keeping in mind that as McKee (001) states "when we perform textual analysis on a text, we make an educated guess at some of the most likely interpretations that might be made of that text".

There is no specific, true or correct interpretation of text; it is however, critical to study media and its effects on society. That is why it is important to consider different approaches to studying media.

Two traditions have shaped media studies. Theoretical traditions in media and communication contrasted research methods of 'European' or 'American'. Both traditions have developed specific analytic principals. The European method developed out of literary and linguistic foundations, while the American developed from social science disciplines. The principals do not belong to one geographic region; they are merely grouped under these banners. With a mingling of theories, a hybrid method allows different aspects to of both approaches when studying media.

Both try to determine what is the role of mass media and why it is so important in our society. They have different understandings of the way society works and different understandings of what communication is. Therefore approaching the study of media in different ways and come up with very different results.

The European tradition is macro in scope, with the perspective of studying media as a whole, looking not just at the message but the production and ownership of media. Strongly influenced by the Marxist view of society the European tradition sees economy as fundamental to the structure of society. With the understanding that society is

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structured by the need to produce to function, then those who have means of production have the power. In Marxism the media are owned by the upper class and work to the benefit and profit of the owner, and the media are seen to reflect the inequality in society. Media is considered a major form through which ideology is circulated. This is the ideological critique of the media - the idea that the media, taken together, form a institution within capitalism which serves to reconcile the exploited class to its fate. Sinclar (00).

European theory provides a way of thinking about media and power, media and ownership, and the structural organisation of media. There is a focus on how media is produced and distributed, which assists in explaining and analysing raw material.

The European tradition does not focus strongly on message content and its effect. It is not concerned with the consumption of media text by the audience, or analysing statistics on media content.

The American empirical tradition has a micro perspective, focusing on content analysis. With the theory based on a scientific model the principals of the theory were legitimated. based on the then emergent behavioural sciences such as psychology. Like positivism, such sciences were based on forming knowledge through direct observation, including laboratory experiments Sinclar (00).

Functionalism (Consensus theory) underpins the American tradition, with the view that society operates in uniform understandings and similar moral codes. The world is seen as highly structured which allows society to function with the belief that laws are just

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because of consensus. The role of mass media is seen as an institution for reproducing societies norms, values and attitudes. Assumptions are made that the audience is largely passive and does not have to work hard to understand media messages.

American tradition attempts to predict audience reaction, with the theory that messages illicite a particular kind of reaction. Demonstrating a direct relation between media and audience; the principal of stimulus and response.

As a stand-alone tradition there are a number of limitations to consider. It does not explain how or why society continually changes. The aspect of power is not deeply explored in relation to why one group can have control over another in society. It sees conflict only as deviate because society is based on consensus.

Being able to criticise and analyse media messages allows us to understand how the media affects our lives. Briefly, the origins of two main techniques European and American have been examined. These may not be the only theories of study, however, they form a sound approach by varying the way of analysing information thus greater depth may be gained on the subject. Regardless of the reasons for studying the media, by not simply taking all media messages at face value, a greater breadth of knowledge can be gained. This can lead to more empowered decisions being made as to what effect we will allow the media to have on our lives.

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References

McKee,A. A beginners Guide to Textual Analysis Metro Magazine. No.17/18, 001

Rodman,G. Making Sense of Media. An introduction to mass communication. New York, Allyn & Bacon, 001

Sinclar,J. Media and Communications Theoretical Traditions in S. Cunningham and G. Turner(eds), The Media & Communications in Australia, Allen & Unwin, Sydney, 00.

Thompson,J.B. Self and Experience in a Mediated World. The Media and Modernity A Social Theory of the Media, Stanford University Press, Stanford, 15, pp.0-1.

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Spanish paper

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I am proud to say that in both sides of my family writing in Spanish is a gift. Several of my relatives were able to excel in the field. What is important to know about these people is that in one form or another they made a difference in the world. Alfonso Iberri wrote a couple of books of poetry. He also wrote a very famous saga on the port city of Guaymas called El Viejo Guaymas.

Writing in a time of difficulty and destitution Alfonso Iberri was able to write poems about love and romance while also writing about nature and life. One of his books was published in 11. In most recent account, my grand aunt wrote three books also on poetry. One of the books received a couple of prizes through out Mexico. Some of the poems in the book have symbolic meanings in my home. In the book Amapa by Carmen Maldonado some of the poems are told in my relatives' weddings before the bride goes in to the chapel.

Other writers in my family include the historian Alfonso Taracena. Even though I do not know much about this man I can tell he was good at his job. He wrote one of the most recognized books in Mexican history called La Verdadera Revolucion Mexicana. The well-known Mexican journalist wrote an article when my great granduncle passed away. In addition to the authors that I have mentioned several other of my great grandparents have been newspaper editors. To conclude I can proudly say that good writers flourish in my families' heritage.

There are great writers in my family but also hard workers. My father's side of the family carries with them a great legacy of hard workers. Through hard work several of my relatives have been able to succeed in life. Many of my great grandparents and relatives have been hard workers. But in this specific journal I want to elaborate on the Ochoa lineage. I realized that my great-grandfather, Manuel Ochoa, my grandfather, Adrian Ochoa, My dad, Gilberto Ochoa have several things in common. As far back as I could go I realized that most of the men in the family succeeded in their work.

Manuel Ochoa, a man that cared dearly for his family made a living by working as an accountant. His business started slow, but sure enough he started making his fortune. After he passed away, my grandfather was left with very little and basically on his own. After some hard work he decided that he could begin a trucking company in the city. It grew more and more as the city grew with it as well. The business grew a lot and that is where my dad comes in. My dad helped my grandfather and together they made the business grow immensely. Today, all my aunt's and uncle's live off the business. My sister is now my dad's right hand. Even though she just finished college he is working very hard to make sure that his life is headed for success. I am very proud of my dad because he not only runs my grandfather's business but is a successful doctor.

In the midst of a hard life in Spain three of my great grandparents Joselino, Wenceslao, and Luis Maldonado left the country in search for a better life in the new world. Nobody knows the exact dates but in the first half of the nineteenth century they arrived and landed on a Mexican beach. Not much is known about them but several of their adventures are told in my home. It turns out that these three brave young kids that

were no more than seventeen years of age started an unforgettable journey that would take them around Mexico. With out any food, money or a home they managed to survive.

In Magdalena Sonora one of my great granduncles was killed by a group of Apache Indians. The other two brothers escaped and settled in a small port city called Guaymas. It was there where they started their family. Some of these men have great stories behind them. Four generations ago, one of the three brothers had the opportunity to prove his courage. In 185 a French aristocrat wanted to conquer that part of the country. At the time Mexico did not have many port cities. My great granduncle fought with courage to protect his land and family but was killed in action. Today he is considered a hero and a defender of his country. Every year on the thirteenth of July the heroes of the battle are remembered in a small ceremony.

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Thesis proposal

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INTRODUCTION

The way we live tells us who we are, so our homes are dead giveaways. We Filipinos are known around the world for our unconditional caring for our elders. This thesis, "REINVENTING EARLY FILIPINO TRADITIONAL HOUSES INTO A CONTEMPORARY FILIPINO RESIDENCE", is a tribute to our forefathers to somehow show them that their heritage is still alive and as well appreciated. And what better way to show them appreciation than to relive their work in the past and incorporate it in the future.

What people in other countries call vernacular architecture we call folk architecture here, but mostly we identify the rural bahay kubo as a native house. The bahay kubo is by far the Filipino majority's prime idea of a traditional Filipino house. Vernacular architecture goes beyond the bahay kubo. From its origins as a rural bamboo and nipa house, it evolved into the urban bahay na bato (house of stone) during the Spanish colonial era. From there, certain features evolved into the houses built in the early part of the 0th century during the American regime. On the other hand, the early inhabitants of the Philippines were of many different peoples and of these peoples spawned the rich cultural diversity that we have now. Some ethnic communities scattered across the country, even to this day, still live governed by their ancestor's culture. Unblemished, these people's culture stands strong that even through the test of time, they still live in their ethnic traditional homes. These traditional houses are the architectural heritage left to us by our early Filipino ancestors.

However, in this day and age, these traditional houses have become an anachronism. The more fortunate of their residents have, over time and generations, built new houses of cement roofed with galvanized iron roofing. It matters little that the new house is not safe from floods, oven-hot in the summer and that typhoon rains deafen the residents as it drums on the thin roof. The concrete house is the supreme status symbol. People have forgotten the significance of these culture-rich homes. It is by this thesis that we look back at the past and commemorate the beauty that we have long overlooked and about to neglect.

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Experience in Company

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The experience curve has important strategic implications. If a firm is able to gain market share over its competitors, it can develop a cost advantage. Penetration pricing strategies and a significant investment in advertising, sales personnel, production capacity, etc. can be justified to increase market share and gain a competitive advantage.

When evaluating strategies based on the experience curve, a firm must consider the reaction of competitors who also understand the concept. Some potential pitfalls include

•The fallacy of composition holds if all other firms equally pursue the strategy, then none will increase market share and will suffer losses from over-capacity and low prices. The more competitors that pursue the strategy, the higher the cost of gaining a given market share and the lower the return on investment.

•Competing firms may be able to discover the leading firms proprietary methods and replicate the cost reductions without having made the large investment to gain experience.

•New technologies may create a new experience curve. Entrants building new plants may be able to take advantage of the latest technologies that offer a cost advantage over the older plants of the leading firm.

In the 160s, management consultants at The Boston Consulting Group observed a consistent relationship between the cost of production and the cumulative production quantity (total quantity produced from the first unit to the last). Data revealed that the real value-added production cost declined by 0 to 0 percent for each doubling of cumulative production quantity

The Experience Curve

The vertical axis of this logarithmic graph is the real unit cost of adding value, adjusted for inflation. It includes the cost that the firm incurs to add value to the starting materials, but excludes the cost of those materials themselves, which are subject the experience curves of their suppliers.

Note that the experience curve differs from the learning curve. The learning curve describes the observed reduction in the number of required direct labor hours as workers learn their jobs. The experience curve by contrast applies not only to labor intensive situations, but also to process oriented ones.

The experience curve relationship holds over a wide range industries. In fact, its absence would be considered by some to be a sign of possible mismanagement. Cases in which the experience curve is not observed sometimes involve the withholding of capital investment, for example, to increase short-term ROI. The experience curve can be explained by a combination of learning (the learning curve), specialization, scale, and investment.

Implications for Strategy

The experience curve has important strategic implications. If a firm is able to gain market share over its competitors, it can develop a cost advantage. Penetration pricing strategies and a significant investment in advertising, sales personnel, production capacity, etc. can be justified to increase market share and gain a competitive advantage.

When evaluating strategies based on the experience curve, a firm must consider the reaction of competitors who also understand the concept. Some potential pitfalls include

•The fallacy of composition holds if all other firms equally pursue the strategy, then none will increase market share and will suffer losses from over-capacity and low prices. The more competitors that pursue the strategy, the higher the cost of gaining a given market share and the lower the return on investment.

•Competing firms may be able to discover the leading firms proprietary methods and replicate the cost reductions without having made the large investment to gain experience.

•New technologies may create a new experience curve. Entrants building new plants may be able to take advantage of the latest technologies that offer a cost advantage over the older plants of the leading firm.

In the 160s, management consultants at The Boston Consulting Group observed a consistent relationship between the cost of production and the cumulative production quantity (total quantity produced from the first unit to the last). Data revealed that the real value-added production cost declined by 0 to 0 percent for each doubling of cumulative production quantity

The Experience Curve

The vertical axis of this logarithmic graph is the real unit cost of adding value, adjusted for inflation. It includes the cost that the firm incurs to add value to the starting materials, but excludes the cost of those materials themselves, which are subject the experience curves of their suppliers.

Note that the experience curve differs from the learning curve. The learning curve describes the observed reduction in the number of required direct labor hours as workers learn their jobs. The experience curve by contrast applies not only to labor intensive situations, but also to process oriented ones.

The experience curve relationship holds over a wide range industries. In fact, its absence would be considered by some to be a sign of possible mismanagement. Cases in which the experience curve is not observed sometimes involve the withholding of capital investment, for example, to increase short-term ROI. The experience curve can be explained by a combination of learning (the learning curve), specialization, scale, and investment.

Implications for Strategy

The experience curve has important strategic implications. If a firm is able to gain market share over its competitors, it can develop a cost advantage. Penetration pricing strategies and a significant investment in advertising, sales personnel, production capacity, etc. can be justified to increase market share and gain a competitive advantage.

When evaluating strategies based on the experience curve, a firm must consider the reaction of competitors who also understand the concept. Some potential pitfalls include

•The fallacy of composition holds if all other firms equally pursue the strategy, then none will increase market share and will suffer losses from over-capacity and low prices. The more competitors that pursue the strategy, the higher the cost of gaining a given market share and the lower the return on investment.

•Competing firms may be able to discover the leading firms proprietary methods and replicate the cost reductions without having made the large investment to gain experience.

•New technologies may create a new experience curve. Entrants building new plants may be able to take advantage of the latest technologies that offer a cost advantage over the older plants of the leading firm.

In the 160s, management consultants at The Boston Consulting Group observed a consistent relationship between the cost of production and the cumulative production quantity (total quantity produced from the first unit to the last). Data revealed that the real value-added production cost declined by 0 to 0 percent for each doubling of cumulative production quantity

The Experience Curve

The vertical axis of this logarithmic graph is the real unit cost of adding value, adjusted for inflation. It includes the cost that the firm incurs to add value to the starting materials, but excludes the cost of those materials themselves, which are subject the experience curves of their suppliers.

Note that the experience curve differs from the learning curve. The learning curve describes the observed reduction in the number of required direct labor hours as workers learn their jobs. The experience curve by contrast applies not only to labor intensive situations, but also to process oriented ones.

The experience curve relationship holds over a wide range industries. In fact, its absence would be considered by some to be a sign of possible mismanagement. Cases in which the experience curve is not observed sometimes involve the withholding of capital investment, for example, to increase short-term ROI. The experience curve can be explained by a combination of learning (the learning curve), specialization, scale, and investment.

Implications for Strategy

The experience curve has important strategic implications. If a firm is able to gain market share over its competitors, it can develop a cost advantage. Penetration pricing strategies and a significant investment in advertising, sales personnel, production capacity, etc. can be justified to increase market share and gain a competitive advantage.

When evaluating strategies based on the experience curve, a firm must consider the reaction of competitors who also understand the concept. Some potential pitfalls include

•The fallacy of composition holds if all other firms equally pursue the strategy, then none will increase market share and will suffer losses from over-capacity and low prices. The more competitors that pursue the strategy, the higher the cost of gaining a given market share and the lower the return on investment.

•Competing firms may be able to discover the leading firms proprietary methods and replicate the cost reductions without having made the large investment to gain experience.

•New technologies may create a new experience curve. Entrants building new plants may be able to take advantage of the latest technologies that offer a cost advantage over the older plants of the leading firm.

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