Zimbardo Prison Experiment. The Dynamics of Attitude and Behaviour Essay

Zimbardo Prison Experiment. The Dynamics of Attitude and Behaviour - Essay Example (Rothman-Marshall, 6 Jan 99) However, when a person performs an action contradictary to a strongly held belief or opinion, there is a jarring feeling that distresses, which psychologist Leon Festinger describes as that uncomfortable feeling one gets when one "finds oneself doing something that doesn't fit with what one knows." This chafing sensation, known as cognitive dissonance, is glaringly visible in the Zimbardo Prison Experiment. For the two-week experiment, a group of students were paid to participate in a simulated situation where half the randomly chosen students were 'prisoners' and the other half, 'guards'. The students took to the roles they were acting, and soon the life-like 'prison' was a scene of realistic baton-wielding tyrannical uniformed guards subjugating and abusing the hapless, helpless prisoners to such an extent that few even suffered from severe trauma, and had to be replaced. During the experiment, it was noted that decent, (presumably) law-abiding boys behaved in a manner totally contradictory to their normal attitudes. The 'guards' often abusing and manipulating the 'prisoners' who, stripped of their identity, debased and dehumanised, acted out the part of the oppressed 'prisoner'.

In my everyday life how do I measure success and failure Essay Example for Free

In my everyday life how do I measure success and failure Essay The aim of this paper is to discuss how to measure success and failure in everyday life. The evaluation of the social concept of success should start with acknowledging that social definition of success varies from culture to culture and even from one social group to another. In other words, every society has its own belief about what social success is. For example, if a person drives a 2007 Jaguar and lives in a nice house, he or she is regarded as successful by society norms. People are trying to move up the social ladder because the society is placing a lot of pressure on them to belong to the highest class possible. Government uses the relationship between social class (lower, middle, and upper) to suggest that society is equally just. Growing up in the city, I could witness stereotypical views of low income families. I could witness people being discriminated because they didn’t have nice suits or dresses, and their vocabulary was not equal to or better than the person they were talking to. Sometimes the idea of social success puts too much pressure on people so they sometimes forget their morals and values. The problem is all they want to do is to reach new social status because that is what society has led them to believe and what society expects of them. My grandfather often cited a southern saying that reads as follows: â€Å"Money is the root of all evil. † Through the years I often wondered if he was correct. Society describes lower class as government assisted or a troublesome group of people. Hanratty and Meditz stated that â€Å"[i]n contrast, the masses were composed of the illiterate and the impoverished who lived on the margin of subsistence and possessed little or no security, skill, or stable employment. † I disagree with Hanratty and Meditz statement: most lower class people do have work-related skills and are literate. In a lower class neighborhood at a local barber shop there are always conversations about how the upper class is destroying the lower class, and why lower class people cannot integrate into the mainstream society. Some would say that their major obstacle on the way to social success is fear or ability to adapt to change. Lower class is aware that they are labeled; however, they are determined to be a driving force in society. The stereotype of a successful family implies that a husband and a wife have an income that allows them to live in a nice neighborhood. Society would classify that family as middle class. Samuelson writes that â€Å"[c]ompounding the stress, the price of entry into the middle class is always rising. The more we can have, the more we must have. Keeping up with the Joneses is the curse of our advances and ambitions† (19). The problem with middle class and the problem of trying to belong there is that the upper class considers itself middle class at times. It forces hard-working middle class people to work harder, often taking on two jobs to maintain their social status. Some upper class people continue to downplay their status as middle class. That would put pressure on truly middle class people to stay (or even move up) in the social status. Expectation of what society requires of the middle class often puts pressure on the middle class to advance. Being born into wealth has been the only way to integrate in the upper class. Today the upper class is comprised of a diverse group of people unlike years before when the rich just had to travel and throw socials. The perception of upper class as seen on television is sometimes different from reality, as the rich have large amounts of money and can abuse their power. The rich are excuse from a lot of mishaps, while the middle and lower class would have not received the same treatment. Domhoff writes that â€Å"[f]rom infancy through young adulthood, members of the upper class receive a distinctive education. This education begins early in life in preschools that frequently are attached to a neighborhood church of high social status. Schooling continues during the elementary years at a local private school called a day school. Higher education will be obtained at one of a small number of heavily endowed private universities. Harvard, Yale, Princeton, and Stanford head the list, followed by smaller Ivy League schools in the East and a handful of other small private schools in other parts of the country† (24). The upper class continues to work hard on staying on top: they put pressure on themselves and their children to stimulate them to stay in the same social class. What we as society fail to realize is that success comes from within. In every culture there are social problems that result from being in a certain situation. Everybody has their own definition of what success is; definitions of success range from being rich, driving a fancy car, and living in a big house to simply being in good health and having a stress-free life. I have read a lot of articles through the years on what it takes to be successful and I stil.

asia pop. :: essays research papers

Right now there is a major problem involving the population of South Asia. In India’s best years just about half of the population was properly fed because the population was so enormous. Not to add that the foods they get are fruits, vegetables, and rice. This is not a way to live. Also AIDS is a pretty big problem in India. It is estimated that one in five adults will have been diagnosed with the AIDS virus by the year 2003. Because prostitution is legal in parts if India the AIDS virus can spread very quickly. Besides the AIDS rate skyrocketing, the birthrate does too. I have created a plan worldwide to help India and other countries that need help. In my plan most of the Funding will be provided by a simple tax. I plan on raising tobacco costs by 25 cents. Right now the United States makes 400 billion sales in tobacco a year. That means a lot of money would be available after my 25-cent tax. That tax money would go towards India’s government for education. Phase two of my plan I plan on making prostitution illegal in India. That would cut India’s AIDS population by one third. Officers will enforce the streets and the government would not have to pay extra because of the tobacco increase. Tobacco money will build new jails and hire more officers. This will also provide more jobs. Prostitution crimes will receive a minimum of two years in jail (for the first offense). Phase three takes place next year. It is a law that permits families to have no more than one child. The family will receive two thousand dollars for having only one child. If the family has more than one child the family will have to pay a heavy tax of fifteen thousand dollars. If the family cannot afford to pay the tax the father and mother are forced to alternate turns in jail for a minimum of three years. This plan is not harming the individual because they are harming themselves my having children. The plan will be announced now and promoted for future notice. This way next year the plan can take effect. New jails will be built for the people that do not pay the child tax. The next phase of my plan is to educate the country. More tobacco money will be spent on educating all of India.

Changing Nature of Higher Education Essay

Proprietary education first appeared in the 1600’s about the same time that institutions like Harvard were being created. For much of US History these schools provided popular mass education in contrast to traditional colleges that were often reserved for the elites (Thelin, 2011). Generally, the purpose of these schools, besides profitability was to provide practical and narrowly focused training, thus filling a need not addressed by traditional education (Beaver, 2009). In addition, for-profits also became known for providing training for minorities, women, and in general, students from the lower social strata, a trend that would continue well into the 20th century (Apling, 1993). From an historical perspective, for-profits have experienced periods of relative prosperity and decline. In terms of prosperity, the peak occurred following the civil war as proprietary institutions sought to provide training for an expanding industrial sector. By 1893, there were approximately 115,748 students enrolled at for-profit schools (Beaver, 2009). On the other hand during the Progressive Era, for-profit schools were deemed unnecessary and invaluable especially if traditional schools were developed and managed efficiently. By 1972, amendments to the Higher Education Act permitted students attending for-profit schools to receive federal student-aid such as grants and loans (Thelin, 2011). Congress believed that students attending these institutions should receive an equal opportunity regardless of their disadvantaged backgrounds. As a result, it is estimated that during that year, for-profits accounted for one-half the increase in higher education’s total enrollment (Beaver, 2009). It is interesting to note that tuition levels at many for-profits are set in accordance with the typical amount of government sponsored aid available to the student, thus questions have been raised regarding the accountability of many proprietary institutions with regard to quality student learning. This paper will focus on how governmental accountability standards have transformed policies and procedures at Everest Institute a subsidiary of Corinthian Colleges. Changing Faces of Public Accountability Both public and private institutions are held accountable to the people that support them (Altbach, Berdahl, & Gumport, 2005). For public institutions their support is primarily from the public; however private institutions such as Everest are governed by their stockholders and a governing board of directors. The interests of these institutions are determined by both external and internal political policies that can create a complex system of compromises and the accommodation of several different conflicting objectives (2005). There was a point in time when the general public was not interested in how colleges and universities conducted business. However, times have since changed. Citizens now realize that their future economic, social, and cultural norms are directly influenced by higher education (Altbach, Berdahl, & Gumport, 2005). This increased awareness by citizens, politicians and law makers led to a demand for more accountability in higher education. The early accountability movement went beyond ensuring compliance with federal funding requirements. Research has shown that management fads in the world of business often time find their way into education, and perhaps some of the focus on accountability in higher education was the result of the Total Quality Management frenzy which firmly took hold in the for-profit business sector by the late 1980s and early 1990s (Castigili & Turi, 2011). Eventually, the quality process was being applied to academic settings. This process where the term quality was referred to giving the student customer a desired product at a reasonable cost (2011). Terms such as assessment, informed decision making, and continuous improvements became common terminology in academia just as they were in the business world. As a result, educational bodies of accreditation began require colleges and universities demonstrate accountability in their self-assessments. However, it was the famous 2006 Spellings Report that established higher education reform. Education Secretary Margaret Spellings and the Commission on the Future of Higher Education attempted to incorporate the concept of Total Quality Management into higher education. The Commission also sought to reprogram U. S. colleges in to providing the highest possible quality of education at the lowest possible cost (Basken, 2007). One of the most important of the commission’s recommendations was for colleges and universities to address the â€Å"inadequate transparency and accountability for measuring institutional performance† (Spellings Commission, 2006, p. 13). For many faculty members and administrators in higher education, it was the principle that was deemed contentious and not the quest for high quality (Castigili & Turi, 2011). However, before the Spellings Commission began its deliberations, the majority colleges and universities had already began to adopt cultures of assessment, and were utilizing the results of their assessments in order to improve student learning. The Spellings commission also called for accountability measures that allowed comparisons of student performance. The American Council on Education and several other groups in higher education interpreted this recommendation as a mandate for standardized testing (Basken, 2007). American colleges and universities have always been resistant to standardized testing and accountability templates because many of them feel that they do not account for the plurality of institutional missions and seem to shift the purpose of assessment from self-improvement to reporting. Standardized accountability requirements do not take into account the complexity of the education that takes place in colleges and universities and could have an impact on the overall process of higher education (Castigili & Turi, 2011). Recent efforts of U. S. olicy makers with regards to accountability in higher education have been negatively compared to the No Child Left Behind Act, which, which may educators feel led to the practice of â€Å"teaching to the test† (Cohen, 2009). If the requirement of standardized testing in higher education created the same or similar results, the impact on higher learning would be devastating. However, long before standardized testing became an issue that threatened colleges and universities, Banta (1996) as referenced in (Castigili & Turi, 2011), claimed the requirements of accountability â€Å"seem to chafe at the very soul of the academic enterprise (p. 7). â€Å" The foundation of that which Kuh (2007) referred to as â€Å"higher education’s aversion to transparency and accountability (p. 32)† could possibly be the concern that the need to report outcomes might weaken the primary purpose of assessment, which is ultimately, improving student learning. Evolution of Accountability for Corinthian Colleges According to the Corinthian Colleges website, Corinthian Colleges Inc. (CCI) provides a friendly, small campus atmosphere where dedicated staff and faculty take a personal interest in the progress of each student. The company operates 105 schools in 25 states in addition to 17 schools in Canada. CCI serves a large and growing segment of individuals seeking to acquire careers in the Health Care, Business, Criminal Justice, Transportation Technology, Maintenance, Construction Trades and Information Technology fields. With more than 17,000 employees in North America, Corinthian Colleges is committed to continue to provide quality instruction and fulfill the mission of changing student’s lives. It is the belief of CCI that consistent application of core values such as integrity, teamwork and accountability depends upon each employee making ethical decisions everyday concerning every student every time. Because of recent headlines, the image of for-profit colleges has become considerably questionable. The media and Senate hearings have reported aggressive and unethical behaviors consistent with unethical business practices. In 2011 The Government Accountability Office (GAO) issued its findings after conducting undercover testing of 15 for-profit colleges in the United States. The GAO found that 4 colleges promoted and encouraged its admission representatives to engage in fraudulent practices (De Vise, 2011). The GAO reported that all of the 15 colleges made false or misleading statements to undercover applicants. The misleading statements were directly related to potential, earnings, financial aid, and student loan repayments. Undercover investigators stated that many of them engaged in substandard academic performance that would have almost certainly resulted in censure at any other institution (De Vise, 2011). There were also reports of students cutting classes, plagiarism, missed assignments, and incorrect assignments being submitted for full credit. Everest was one of 15 for-profit colleges cited by the GAO for deceptive or questionable statements that were made to undercover investigators posing as applicants. Two unnamed campuses were cited in this report (Lewin, 2011). Additionally, the U. S. Department of Education statistics indicated that Everest College graduates had the highest default rate of any school in California for students entering repayment in 2010 (U. S. Department of Education, 2010). It is unclear if Everest North Miami was one of the campuses cited in the GAO report, however, the results of the report led to swift and immediate change in the way the campus operated. Three primary areas received the most attention. First, admissions officers and career services representatives were required to participate in a mandatory training that dealt with how to properly converse with students when speaking about enrollment and placement. Program Directors and a representative from Financial Aid, Admissions, and Career Services were required to attend daily at-risk meetings in order to decrease student absences and also provide administrators with an overall picture of those student who were at risk so that budgetary forecasting could be more accurate and less inflated. Lastly, Career Services Representatives were required to spend more time in the field recruiting new business that would be willing to hire students following graduation. They were also required to take additional training regarding placement rate reporting. Managing Gainful Employment and Placement at Everest Current law requires that private sector institutions prepare students for â€Å"gainful employment in a recognized occupation. † In other words, graduates from these institutions must be able to get jobs in their respective fields of study, or the school may risk losing their accreditation. Newly introduced standards would require that student borrowing and loan repayment be regulated to ensure that students are not loaded up with federal and high cost private loans and debt that many students are unlikely to ever repay. Students at for-profit colleges make up 12 percent of those in higher education, but almost half of those who default on student loans (Lewin, 2011). The alarming number of students that have defaulted on their student loans was the catalyst the led to this sweeping legislation. According to Stratford (2012), the cohort default rate is the percentage of borrowers who default on their student loans due to their inability to make payments. Nelson (2012) pointed out that over 9 percent of all students that borrow money to pay for their education, default on their loans in the first two years after they begin to make repayment. The research also noted that 13. 4 percent of student default within the first three years of repayment (2012). Examining gainful employment at any institution is important because it has a direct connection to the cohort default rate. If students are unable to secure meaningful career opportunities following graduation, then they are unable to afford student loan repayments. This is of a major concern not only to legislators, but also to the general public since student loans are funded by the taxpayer. Thus, there has been an increase for accountability for all schools who receive federal financial aid dollars. There is also a concern for the school because default rates are a factor in the institutions eligibility to receive federal student-aid (Stratford, 2012). This is increasingly important for small proprietary schools such as Everest since over 90 percent of proprietary schools revenues are generated through federal student-aid programs such as Stafford loans (Ausik, 2011). Under the new regulations, aimed to reign in for-profit education programs that saddle students with more loan debt than they can pay, programs that receive students’ federal grants and loans because they â€Å"prepare students for gainful employment† will have to pass at least one of three tests: 1) a student loan repayment of at least 35 percent; 2) a ratio of no more than 30 percent between debt that must be repaid each year and annual discretionary income; 3) a ratio of no more than 12 percent between debt and overall income (De Vise, 2011). The new rules take a â€Å"three strikes and you’re out† approach. The first time a program fails to meet all three criteria, it would have to develop and report how much it missed the benchmarks and what it will do to improve. The second time, it would have to warn student that they may not be able to repay their debt and that the program could lose its eligibility. However, a third strike within the four year period would result in the loss of the ability to offer federal student aid (Lewin, 2011). In order to improve placement rates, Everest Institute required that a Career Service Advisor be present at each daily at-risk meeting in order to discuss student placement rates and also to identify with the Program Director those students that were close to graduation. Additionally, each advisor was required to make initial contact with the prospective graduate at the start of their last semester or module in order to develop a relationship with the student and begin developing a job placement plan. The Career Services Department was required to interact more with the Program Directors and gain contact information of students that recently graduated, however, had not been placed. The advisor was responsible for developing a post-graduate placement plan for the student and reviewing the plan with the student on a weekly basis and tracking their individual progress. By assisting student to secure gainful employment, it provides them with a solid financial source of income to repay their student loans. Everest understands the importance of successfully placing student in careers that related to the major course of study. As more students are employed and able to repay their debt to the federal government, the cohort default rate for the institution will begin to decrease. Additionally, the success of the institution will help to increase student enrollments through the appropriate reporting mechanisms. These new initiatives help to create a positive environment where transparency and integrity are valued not only by the staff but also by the students that are being served. Mission and Future Implications Corinthian Colleges is currently undergoing changes within the organization in order to comply with new regulations from several external and government bodies. These and other mandates come as no surprise to the industry as several for-profit private institutions have allegedly been involved in unethical behaviors and practices. The leaders of these organizations are now forced to not only monitor performance and outcomes but to ensure that business is being conducted the right way. It is imperative that the leaders of the organization have a clear understanding of the dynamics of the organization in order to meet the immediate demands of the government. It is evident that Corinthian Colleges understands the urgency of the issue and measures are daily implemented in order to be in compliance. The process by which the organization chooses to disseminate the new policies will determine the success of change implementation. Change is difficult but necessary to achieve success. The Government is not suggesting but mandating that certain practices be overhauled, revised, and improved. Conclusion Despite the newly introduced demands from the Federal Government, Corinthian Colleges is committed to deliver their promise. With strict adherence to the company’s core values of Integrity, Customer Responsiveness, Respect, Innovation, Excellence, Teamwork, Innovation, Positive Energy, and Accountability, enables the execution of the overall strategic approach to become the best career education company in the world. Corinthians Colleges understands that the goal of transparency and accountability is to enable stakeholders to obtain clear and relevant information about college and university performance. McPherson and Shellenburger (2006) warned, however, about the misuse of assessment data. They urged that â€Å"accountability data be used only to compare specific universities with their own past performances and with the performance of comparable universities† (p. 3). To compare vastly different institutions would do far more harm than good, and potentially punish less-elite colleges and universities.

Merck vs Pfizer

Evaluating Merck & Co. , Inc vs. Pfizer, Inc. Amy Lan Lan Liu Connor Buestad Raghul Subramanian Natalia Cosa ACCT 831 March 16, 2011 Table of Contents: Part 1: History, Background and Core Business †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 2 a. Merck & Co. , Inc. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 2 b. Pfizer, Inc. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 2 c.Core Business †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 3 Value Chain †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 4 Porter’s Five Forces †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 6 SWOT Analysis †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 8 Part 2: Financial Analysis †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 5 a. Profitability Analysis †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 15 b. Liquidity Analysis †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 18 c. Solvency Analysis †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚ ¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 19 Part 3: Valuation Analysis †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. .. 20 a.Residual Income †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 20 b. Cost of Equity †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã ¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 21 c. Valuation †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 22 d. Sensitivity analysis †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 23Part 4: Recommendations †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 23 Appendix: †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â ‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 25 Appendix A: Profitability Analysis†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 25 Appendix B: Liquidity Analysis †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 25 Appendix C: Solvency Analysis †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 6 Appendix D: Residual Income and Cost of Equity†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 26 Appendix E: Sensitivity Analysis†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 27 References †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 28 Part 1: History, Background and Core Business a. Merck & Co. , Inc. : History and Background Information Merck is headquartered in Whitehouse Station, New Jersey. According to its website, the company was originally established in 1891 as a US subsidiary of the Merck KGaA German company. Merck became an independent company in 1917.In 1963 Merck launch the first measles vaccine, and, in 1967 launched a mumps vaccine. In 2009, Merck acquired Schering-Plough and now represent the world’s third-largest pharmaceutical company by market share. Today, the company has over 94,000 employees worldwide (2012). Merck is the third largest global healthcare company in the world. The company specializes in prescription medicines, vaccines, animal health, and consumer care products, that are marketed directly and through its joint ventures. The company operates four segments namely Pharmaceutical, Animal Health, Consumer Care, and Alliance segments (merck. om, 2012). Starting 2011, in order to drive future growth, Merck started focusing on reducing costs, making strategic investments in new product launches, and improving its research and development pipeline. Merck’s sales worldwide reached $48 billion in 2011, which was a 4% increase from 2010. With two dr ugs under review with the FDA, the company has 19 other drugs in the Phase III of development. b. Pfizer Inc. : History And Background Information Found by Charles Pfizer and Charles Erhart in 1849 Pfizer, Inc. is the largest pharmaceutical company in the world.Their main goal was to discover new drugs that would help improve the healthcare around the world. Both Pfizer and Erhart were born and raised in Germany before descending upon Brooklyn, New York, where Pfizer first opened its doors as a fine-chemicals business. The first product launched by Pfizer was used to intestinal worms, a disease that was prevalent in mid-19th century America (Pfizer. com, 2012). According to their website, in 1880, Pfizer shifted its focus to manufacturing citric acid which was the raw material for soft drink products such as Coca-Cola, Dr. Pepper, and Pepsi-Cola.In 1944, Pfizer succeeded in producing penicillin with was also called â€Å"the miracle drug. † By 1980, Pfizer was manufacturing a n anti-inflammatory drug called Feldene (piroxicam), which was the first product to generate revenue of one billion dollars from sales around the world. Today, Pfizer is known for its creation of drugs such as Lipitor used for cholesterol, Viagra used for erectile dysfunction, and Celebrex used as an anti-inflammatory (2012). The range of products sold by Pfizer has many applications in the health industry that serves in wellness prevention and treatment of a wide variety of diseases.Some of its promises drugs that are under review are potential cures for Alzheimer’s disease and cancer. c. Core Business: Merck and Pfizer share the same core business model of researching, developing, and marketing pharmaceutical products. As with any business, Merck and Pfizer are facing increasing competition and challenges, not the least of which is the expiration of patent protections on key products. There are three tools that are increasingly useful in analyzing the core business and econ omic characteristics of an industry. These include the value chain analysis, Porter’s Five Forces Model, and the SWOT analysis.The Value Chain The first tool, the value chain analysis, represents the chain of activities involved in the development, manufacturing, and distribution of products and/or services of a company. The value chain of pharmaceutical companies usually consists of research and development of drugs, drug approval by government regulators, manufacturing of drugs, creation of demand for drugs, and marketing to consumers. The analysis of each stage of the value chain can reveal the central focus and competencies of the firm, and can point to the activities that drive profit.According to Fortune 500, the leading pharmaceutical firms in 2011 were Pfizer, Johnson & Johnson, Merck, and Abbott Laboratories (CNN. com, 2011). The two companies we discuss in this paper, Merck and Pfizer, have similar value chains. Merck and Pfizer position themselves as companies that provide innovative and effective drugs and medical solutions globally. Due to the increasing threat of patent expiration and generic drug competition, both pharmaceutical companies focus extensively on research and development and new drug approval value chain activities.Both companies devote considerable internal resources on R&D, and continue to expand through acquisitions or by entering into agreements with other companies that focus on the discovery and development of new drugs. In 2009, Pfizer acquired Wyeth for $68 billion, an acquisition that is considered the largest pharmaceutical merger in nearly a decade (Hoover's Company Records, 2012). In addition, Pfizer acquired Excaliard Pharmaceuticals in November 2011, and in September 2011 it gained 70% ownership of the outstanding shares of Icagen, Inc.Merck is also constantly seeking out collaborations, licensing, and outsourcing agreements in the area of Research and Development (Datamonitor, 2011). In November 2009, it acquir ed Schering-Plough for $41 billion (Hoover's Company Records, 2012), and in May 2011 it acquired Inspire Pharmaceuticals. Pfizer and Merck focus heavily on the new drug approval process. In 2011, Merck had 2 drugs under review by government regulators and 19 drugs in last trial phase, and it also planned to file 5 major products for approval between 2012 and 2013.Pfizer had 19 drugs submitted for FDA for approval, and 5 already approved for 2011. Both Merck and Pfizer benefit from using sophisticated and efficient manufacturing and supply chains. Both companies create, move and sell tremendous amounts of product each year and therefore must rely on a dependable manufacturing system. Their manufacturing network consists of numerous manufacturing sites and distribution networks around the world. In addition to their internal manufacturing, pharmaceutical firms work with networks of external partners to produce lines of product, packaging, and active ingredients.To create demand for th eir products, both companies market extensively in multiple media outlets and encourage consumers to ask their doctors about different drugs. Merck markets its products in over 140 countries through direct sales forces and international distributors. Its customers are drug wholesalers, retailers, government agencies, and healthcare providers (Hoover's Company Records, 2012). Pfizer sells its products through wholesale distributors like McKesson and Cardinal health and it markets its products directly to doctors, hospital, nurses, employer groups, and patients.Porter’s Five Forces The pharmaceutical industry is a highly dynamic with new technologies emerging in the market quite often. Michael Porter’s Five Forces model can be used to study and verify the factors affecting the market performance of Merck & Co and Pfizer. This model focuses on the external forces that the companies must pay attention to in order to maintain their profitability. The five forces of the phar maceutical industry are analyzed below. 1. Threat from new entrants is predicted to be low in this industry due to the following reasons.The pharmaceutical industry is a high-tech industry and involves high capital costs. Economy of scale is required to keep the costs down and the established firms (Merck & Co and Pfizer) are well known for excelling in this area. The existing drugs are safe-guarded by patents at least for a particular period of time before the generic drugs hit the market. This gives companies like Merck and Pfizer a considerable leg up on competitors. However, these patents do eventually expire, thus opening the door to more competition from generic drug makers. Product differentiation is necessary in order to attract new customers.In the field of pharmaceuticals, it is very hard to bring a differentiated product to market. New drugs undergo extensive testing by the FDA before entering the market. The drugs by the established firms get easily passed when compared to new entrants whose credibility is still uncertain. 2. Rivalry among established firms is high in the industry among players like Johnson & Johnson, Merck & Co, Pfizer, Abbott Laboratories etc. The pharmaceutical industry is high revenue industry and there is a tough competition to obtain more market share. No company owns more than 6-10 % of the market share.In addition, high costs of R and marketing are incurred by all the firms involved in this competition. 3. Buyer power would be classified as low to moderate in this industry due to the following reasons. The concentration of buyers relative to overall industry size is low. The demand for chronic and lifesaving drugs is high due to the ageing baby-boom population. The buyers have little knowledge about the industry cost structure and hence the pharmaceutical companies use this advantage to price their products higher. The patents protect the drugs from lower priced competitor drugs, but many patents are expiring. . Supplier po wer is considered medium to low in the industry. The supplier switching costs incurred by pharmaceutical companies like Merck and Pfizer is low. The threat of forward integration by suppliers is low due to lack of knowledge and expertise. Differentiation of the supplier products is low because they have a wide range of applications, with the biotech firms being one of them. 5. Substitute products always present a challenge to companies operating in the pharmaceutical industry. This can be attributed to the following factors.Biotech firms like Amgen are beginning to market their own products, unlike the traditional method of selling them to pharmaceutical companies like Merck and Pfizer. This presents a new segment of competitors that can provide substitutes. Increasingly, patients can use medical alternatives such as surgery, homeopathic remedies, acupuncture and herbal medicines. The overall healthcare industry is very dynamic and always changing. New products and healing methods a re constantly being developed, some of which could serve as substitutes to existing treatments offered by Merck and Pfizer.SWOT Analysis Merck & Co. SWOT Merck is the third largest healthcare company in the world. Over the years, a large investment in R has enhanced the company’s top-line growth. However, new competitors and large cost of drug development could affect their revenue growth. | Strengths |Weaknesses | |Leading market position; third largest healthcare company in |Generic brand competition | |the world. High litigation cost | |Successful launches of new products | | |Merger with Schering-Plough strengthens their industry | | |position | | |Opportunities |Threats | |Cost savings from internal restructure |US regulatory setbacks | |Expansion in emerging markets |Healthcare reform of US | |Strong pipeline | | Strengths Leading Market Position; Third Largest Healthcare Company in the World Merck is a well-known and respected company worldwide. One of their great est strengths is their leading market position. Merck’s worldwide sale totaled $48 billion in 2011, an increase of 4% compared to 2010.The increase of revenue is mainly due to the company’s signature products such as Singulair, Januvia, Remicade, Zetia, Vytorin, Janumet, Isentress, Nasonex, Gardasil, and Temodar (Datamonitor, 2011). Successful Launches of New Products Merck has a proven success record for launching new products. Since 2006, it has successfully launched 10 new therapeutics, including Victrelis, a treatment for chronic hepatitis C (2011), Elonva, a corifollitropin alpha injection (2010), Janumet, a treatment for diabetes, Isentress, an HIV integrase inhibitor (2007), Gardasil, a drug that could prevent diseases caused by HPV, and Januvia, a cure for type 2 diabetes (2006) (Datamonitor, 2011). Merger with Schering-Plough Strengthens Their Industry Position The merger with Schering-Plough has certainly strengthened Merck’s industry position.Schering -Plough owned many popular pharmaceutical drugs such as allergy drugs Claritin and Clarinex, anti-cholesterol drug Vytorin, and a brain tumor drug Temodar. Schering Plough had 1. 4% market share in the U. S. , 17th in the top 20 pharmaceutical corporation by sales (Datamonitor, 2011). Weaknesses Generic Brand Competition Merck pharmaceutical products have traditionally accounted for most of their total sales. One weakness is the competition Merck faces with generic brands. Due to the current economy, we tend to estimate people will shift to more inexpensive and generic brand products. This can cause sizable losses for Merck’s total revenue. High Litigation CostsMerck continues to face litigation related to their Vioxx recall, a drug that is used to cure arthritis and acute pain. In 2004, Merck withdrew Vioxx off the market because it cased potential cardiac attacks among the patients who took it regularly for a period of 18 months or longer. During 2010, Merck was forced to s pend around $140 million in legal defense costs (Datamonitor, 2011). Opportunities Cost Savings from Internal Restructure Merck has emphasized the idea of decreases costs in order to drive greater efficiencies within the company. According to Datamonitor’s SWOT analysis, Merck hopes to reduce costs by $3. 5 billion annually beyond 2011 (2011). Expansion in Emerging MarketsMerck has strengthened its international market share by signing exclusive agreements with other established companies to co-promote and distribute a number of products. For example, Merck and Johnson & Johnson agreed to govern the rights to distribution of Remicade and Simponi. Remicade is a treatment for nasal allergy and Simponi is an asthma treatment for patients above the age of three. According to the agreement with Johnson & Johnson, Merck is allowed to market Simponi and Remicade in Asia, Canada, Africa, The Middle East, and Central and South America as of July 1, 2011. In addition, Merck exclusively markets these products in Turkey, Russia, and Europe.These two products brought in 70% of Merck’s revenue from 2010 (Datamonitor, 2011). Strong Pipeline Datamonitor expects that Merck’s 20 new products will add combined annual sales of more than $7 billion to its top-line by 2015 (2011). â€Å"While Merck retains its internal focus on pipeline productivity, half of its new launches were obtained in the company’s merger with Schering-Plough. Recently Merck has had considerable success with a number of new launches since moving into its core portfolio. It will look to replicate this success with the pipeline programs it has inherited from Schering-Plough as well as with those it has been developing prior to the merger. † Threats US Regulatory SetbacksUS regulatory setbacks include terminations of Merck’s treatments such as for Tredaptive for atherosclerosis, and Taranabant for obesity. The potential for further setbacks and termination can be a conc ern for Merck’s brand image during the drug development stage. There could also be threats for the clinical and regulatory failures with developing Saphiris (schizophrenia), boceprivir (hepatitis C) and TRA (Datamonitor, 2011). Healthcare Reform of US The recently enacted US Healthcare Reform could decrease Merck’s profit margins. According to Datamonitor, Merck incurred additional expenses from increases in Medicaid rebates, which increased from 15. 1% to 23. 1% for the branded prescription drugs.Being in the Medicare Part D coverage gap, Merck was required to pay a 50% discount utilization required by law in 2011. In addition, Merck expects to Also, beginning in 2011, Merck expects that it will pay an additional annual health care reform fee, which will be calculated as a percentage of the industry’s total sales of branded prescription drugs to specified government programs. The fee was $2. 5billion for 2011 (2011). Pfizer Inc. SWOT Pfizer is the world's large st research-based pharmaceutical company and still remains the strongest industry player in terms of sales and marketing capability. However, Pfizer relies on a large-scale M&A structure and lacks some key aspects of an organic sales growth model. Strengths |Weaknesses | |M&A to gain economies of scale |Difficulty in gaining market share due to already | |Strong advertising capabilities |established position in the market | |Acquisition of Wyeth in 2009 |Heavy reliance on Lipitor franchise | |Opportunities |Threats | |Acquisition of King in 2010 |Difficulties in achieving organic sales growth | |Enhancing established products in emerging markets |Development setbacks of Sutent and Chantix/Champix | |Decreasing cost structure | | Strengths M&A to Gain Economies of Scale Pfizer has used large-scale acquisitions to establish and maintain its position as the biopharmaceutical industry's leading player. Since 2000, Pfizer acquired four big pharmaceutical companies: Warner-Lambert, Pharma cia, Wyeth, and King Pharmaceuticals. Pfizer acquired Wyeth in 2009. Wyeth was known for manufacturing over-the-counter drugs such as Robitussin and Advil, around $3 billion in sales annually. The acquisition of Wyeth enhanced Pfizer’s position as the industry's largest prescription pharmaceutical manufacturer.According to an article from MarketWatch, Pfizer’s large economies of scale growth also enhanced the company's ability to implement restructuring programs designed to reduce costs and drive profitability, while maintaining a steady increase in R expenditure (2012). Strong Advertising Capabilities According to MarketWatch, Pfizer has a strong marketing and sales infrastructure that helps grow sales for new products as well as mature product that face strong competition from generic competition. According to MarketWatch, â€Å"The most visible illustration of Pfizer's sales and marketing capability is the significant revenue stream recorded by Pfizer attributable to third party products marketed under-license in selected geographic markets. In short, Pfizer remains a marketing partner of choice for many medium and smaller sized prescription pharmaceutical players† (2012). Acquisition of WyethThe acquisition of Wyeth gives Pfizer an immediate access to many well-known biologic and vaccine products such as Enbrel, an anti-inflammatory product and Prevnar, a vaccine. Pfizer’s financial statement 2011 stated the worldwide revenues from biopharmaceutical products in 2010 were $58. 5 billion. This was increase of 29% from 2009, primarily attributed to the addition of operational revenues from Wyeth products of approximately $13. 7 billion (Datamonitor, 2011). Weaknesses Difficulty in Gaining Market Share Given Pfizer’s current market share (world’s largest research-based pharmaceutical company), it will be difficult for the company to continue to grow at the historical rate of sales without further use of large-scale M&A .According to MarketWatch, â€Å"Pfizer's 15 established blockbuster products in 2010, only a few products, including the neuropathic pain therapy Lyrica (pregabalin), are forecast to deliver a positive sales growth contribution through to 2015 (2012). All other products, including Lipitor, will deliver net negative sales growth, primarily due to generic exposure. † Heavy reliance on Lipitor franchise According to the analysis of MarketWatch, â€Å"Pfizer's blockbuster portfolio is dominated by the Lipitor franchise, which generated global sales of $10. 7 billion in 2010 (2012). However, Lipitor revenue growth slowed substantially since mid-2006 due to the ‘indirect generic impact' of therapeutic substitution via loss of patent exclusivity for Merck & Co. ‘s rival statin Zocor.With the Lipitor patent expiration set to occur in mid-2011, exposure of this one product to generic competition will have a significant impact on the overall performance of the company. â €  Opportunities Acquisition of King in 2010 Pfizer acquired King Pharmaceuticals on Oct 12, 2010, the world's 39th largest pharmaceutical company that focuses on pain management. Its product includes Altace for heart attack prevention, and Sonata, a sleeping aid. According to MarketWatch, â€Å"the acquisition of King represents the latest stage in a diversification strategy implemented by Pfizer over the past two years, as it seeks to prepare for the loss of patent exclusivity on its best-selling prescription pharmaceutical product Lipitor (atorvastatin) in late 2011.King is a leading developer of analgesics and its integration will broaden Pfizer's pain offering to include opioid drugs with anti-abuse technologies (2012). Datamonitor currently forecasts that King's total revenues will increase at a CAGR of 11. 3% during 2010-15, from $1. 2 billion to $2 billion† (2011). Enhancing Established Products in Emerging Markets Pfizer established two independent business units, one focused on established products and the other focused in emerging markets. The goal is to bridge emerging markets with established products. Pfizer, like Merck, plans to expand to the emerging markets by collaborating with local players to source branded generic products. Decreasing Cost StructurePfizer’s aim to grow profit will be depending on its continued use of a decreasing cost structure. According to MarketWatch, Pfizer forecasted the acquisition of Wyeth will save $3 billion by the end of 2012 (2012). Pfizer’s reason for the large-scale M&A is to cut cost substantially (by not having to invest in R&D and the development of new drugs) to drive increased profitability (by leveraging what other companies have developed). Threats Difficulties in achieving organic sales growth Pfizer success relies heavily on large-scale M&A and lacks organic sales growth. Datamonitor believes that further large-scale M&A activity will be undertaken by Pfizer because of growing competition of generics (2011).Pfizer's own R operations will find it difficult to keep up with the historical M for its organic growth. Development setbacks of Sutent and Chantix/Champix Sutent, a treatment of advanced renal cell carcinoma, experienced development setbacks. Sutent’s revenue growth depends partially on approval in additional tumor types; the termination of clinical trials in both colon cancer and breast cancer indicates that the product's performance in the marketplace could suffer. In addition, Pfizer also experienced setbacks in Chantix/Champix, smoking cessation therapy. Revenue declined mainly due to the updated labeling to warn of neuropsychiatric symptoms.As DataMonitor pointed out, â€Å"further failures in clinical trials of Sutent and other products could significantly affect Pfizer's sales growth† (2011). Part 2: Financial Analysis a. Profitability Analysis (Appendix A) Using return on assets (ROA), return on common equity (ROCE), and earning s per share (EPS), one can properly illustrate the profitability of Merck and Pfizer. Merck’s ROA decreased significantly from 2009 to 2010, dropping from 16. 8% to 1. 29%. This decrease was attributed to a decline in net income and profit margin. After their acquisition of Schering-Plough, Merck was left with higher costs, such as an 88% increase in R expense and a 55% increase in Marketing and Administrative Expenses. Total costs increased by 265%, while sales increased by only 67%.Net income also decreased in 2010 due to an increase in Other Expenses attributable to the Schering-Plough merger, an exchange loss of $200 million due to two Venezuelan currency valuations, and a $950 million charge for the Vioxx Liability Reserve. The disaggregated ROA showed a decrease in profit margin as well, from 48. 9% in 2009 to 3. 06% in 2010. A year after the merger, Merck’s ROA bounced back to 6. 7%, which is closer to the industry average of 11% (CNN. com, 2011) by decreasing s ome expenses (R, Materials & Production) and an increase of $2 million in sales. Pfizer’s ROA shows a similar decreasing trend for 2010. Its ROA decreased from 9. 03% in 2009 to 4. % in 2010 due to deductions related to asset impairment charges that were $1. 3 billion higher in 2010 than in 2011, due to the Wyeth acquisition in 2009 and litigation related to their subsidiary Quigley Company, Inc. The ROA has increased in 2011 to 5. 83% because the costs and expenses decreased by $3 million. The disaggregated ROA shows both the decrease of asset turnover and profit margin from 2009 to 2010, and the increase in both for 2011, showing that the operation profitability is getting stronger. However, we believe that both firms’ profit margins are healthy when compared to the industry average of 16. 7% (yahoofinance. com, 2012)After comparing the Asset Turnover, Profit Margin, and ROA for both companies, we can conclude that both are starting to improve in regards to profitabi lity, after their acquisitions in 2009. However, Merck seemed to be using its assets more efficiently to generate sales than Pfizer in 2011. Merck also had a higher ROA. However, both companies are below the industry average ROA of 11% and below the ROAs of competitors (Johnson & Johnson ROA is 8. 5% and Abbott is 7. 8%) (CNN. com). Return on common equity helps to explain how well a company uses its investment dollars to generate profits. ROCE can be very important to shareholders as it informs common stock investors how effectively their capital is being reinvested.Merck’s ROCE decreased significantly in 2010 due to the acquisition of Schering-Plough, which led to a decrease in Net Income due to the cost of acquisition (increase in R, and increase in marketing, administration, materials and production expenses), and an increase in Shareholders’ Equity. Pfizer’s ROCE declined marginally in 2010 as well, due to the acquisition of Wyeth. However, both companies w ere back to normal operations in 2011 and had similar ROCEs, around 11%, which is considered the average percent for publicly traded companies in the US. This means that both companies have healthy ROCEs and are generating healthy returns to shareholders.The desegregated return on common shareholders’ equity reveals a decrease in the financial leverage of Pfizer from 2. 29 in 2010 to 2. 25 in 2011. Merck’s financial leverage is constant, 1. 92 in 2010 and 1. 93 in 2011. We conclude that both companies are not heavily leveraged by short and long term debt, which shows that they are less risky financially. The disaggregated ROCE also reveals low asset turnover ratios for both companies and this is not uncommon for companies with high profit margins in the pharmaceutical industry. Finally, Earnings per Share is also used to assess a company’s profitability. EPS allow us to compare the companies’ power to make a profit. This means that Merck’s Price Ea rnings Ratio performs better than that of Pfizer’s.Whereas Pfizer’s EPS has been constant for the last three years (around 1), Merck experienced a significant decrease in 2010 to 0. 36 for diluted. The notes of their financial statements list the following reasons for the decrease: R impairment charges, restructuring and merger with Wyeth (had to recognize a full year of amortization of intangible assets and inventory set-up), legal reserve deductions related to Vioxx, and the US healthcare legislation reform. Non GAAP results were evaluated as well, and we believe these results give a better understanding of the performance of the company as they exclude the non-recurring costs mentioned above. b.Liquidity Analysis (Appendix B) The following section analyzes the short term liquidity risk of Merck and Pfizer. The Current Ratios for both companies are healthy, above 1, which means that they both have substantial cash and near-cash assets available on their Balance Sheet to repay their obligations within the next year. The Quick Ratios for both companies is also healthy, above 0. 5, which means that both companies have liquid assets on hand to repay their short term obligations. The Operating Cash Flow ratio is similar for both companies, above 0. 4, which means that both companies generate enough cash flow from operations after funding working capital needs.According to the notes of the financial statement, Pfizer’s lower rate in 2010 was attributed to certain tax payments made in connection with the increased tax costs associated with the Wyeth acquisition and therefore, the decrease in net cash flow from operations. From analyzing the Revenue to Cash and Days Revenue Held in Cash ratios, it is noticeable that Pfizer has less cash on hand. Pfizer has less cash because they are more focused on M. Pfizer spent 3. 3. billion on acquisitions in 2011, while Merck spent just 3. 7 million. Merck has a healthy ratio for accounts receivable turnove r. Merck’s accounts payable turnover is almost double that of Pfizer.These findings show that Merck is paying their supplier twice as fast as Pfizer. Pfizer’s lower ratio might be due to the fact that its creditors allow more time to pay off its debt. The Accounts Receivable and Inventory Turnover ratios are also pretty high and pretty similar for both companies. This means that both firms are selling inventory and turning accounts receivable into cash relatively quickly. However, it looks like Merck is collecting money from customers faster and turns inventory over quicker than Pfizer. Overall, we believe that both firms have healthy short term liquidity. c. Solvency Analysis (Appendix C) The following section analyzes the long term solvency risk of Merck and Pfizer.The Liabilities to Asset Ratio reveals that both Merck and Pfizer finance their companies with approximately 50% debt and 50% equity. However, Merck’s ratio is a little lower, with around 45% debt a nd 55% equity financing. As can be noticed in the table, the Liabilities to Shareholders’ Equity, Long Term Debt to Long Term Capital, and Long Term Debt to Shareholders’ Equity ratios are healthy, which means that both companies will have no problems meeting long term obligations and are not heavily financed by debt. The Interest Coverage ratios for 2011 reveal that both companies are able pay interest on outstanding debt and can carry additional debt as well.Therefore, their credit risk is considered low. The Operating Cash Flow to Total Liabilities ratios are around 20% or higher, which means that both firms generate enough cash flow from operations to service debt. Both firms experienced a lower ratio in 2010 due to increased tax costs for the acquisition of Wyeth for Pfizer and due to increased costs associated with the Schering Plough merger and the Vioxx impairment charges for Merck. The liquidity and solvency analysis revel that both firms are not experiencing any financial distress. However, we consider Merck less risky that Pfizer because Merck relies less on debt and more on equity financing. Part 3: Valuation AnalysisAs outlined above, profitability, liquidity, and solvency all go a long way in providing analysts with viable information used to measure the performance of a firm. In addition to these measures, residual income, cost of equity, and valuation can also be used when analyzing companies such as Merck and Pfizer. a. Residual Income (Appendix D) We started our valuation analysis by calculating the residual income for both Merck and Pfizer. In order to achieve this, we used the companies’ 10K reports from 2009-2011 to project the forecast for 2012-2016, a five-year time frame. The method we used for this forecast was the same method used to project the residual income. Pfizer’s residual income for 2012 was $82,621million while Merck’s was $54,517million.Please note that all numbers in our calculations are i n millions. Our valuation was based on the assumption that both companies will grow by an average rate in the following years. We took into consideration three factors: the current growth rate, past growth rate and macroeconomic factors. Both Merck and Pfizer are in the maturity phase of their growth cycles and show steady growth figures. Residual income growth for Merck was negative for 2010, however we believe this was due to Merck’s merger with Schering-Plough Corporation. In 2007 and 2008, Merck showed a positive double-digit growth. In 2011, residual income growth was virtually flat, at 0. %, however we believe this is also due to the Plough acquisition. For Pfizer, residual income growth figures for the previous three years averaged approximately 3%. Based on these values for residual income, we choose to be conservative and assume a 1% long-run growth rate for residual income for years 2012 to 2016 for both Merck and Pfizer. We chose this modest growth number because b oth companies are still adjusting to recent large-scale M activity. On a macroeconomic level, both Merck and Pfizer’s growth may be stunted by an overall down economy, the health care policy restructuring in the United States and the expiration of long-standing patents. b. Cost of Equity (Appendix D)After determining the 5 year forecast for each company, we next calculated the cost of equity. The capital asset pricing model was used to calculate the cost of equity. We used the yield on a ten-year Treasury Bill as the risk free rate which was 1. 98% (US Department of Treasury, 2012). The betas we used to calculate these numbers were retrieved from a financial website index (yahoofinance. com, 2012). The beta for Pfizer was 0. 71 and for Merck it was 0. 8342. The return on market was set at 14. 50% for both companies (NYSE, 2012). Using the Camp Model, the cost of equity for Pfizer was determined to be 10. 869%, while for Merck it was 12. 424%. Therefore, stockholders of Merck require a larger return than stockholders of Pfizer.Given that Pfizer is the number one pharmaceutical company in the world, it is implied that investors require more return from Merck than from Pfizer. c. Valuation (Appendix D) Using the growth rate of 1%, we forecasted 2012’s residual income by multiplying the growth rate by 2011 residual income. We performed the same calculation for the next five years until 2016, and then discounted it to get the present value. From 2016 on, we assumed a perpetuity growth rate, which means we assumed this company would grow forever. Therefore, we needed to calculate the current value for the company as if it were to grow at a rate of 1%, forever. We first calculated next year’s residual income by multiplying 2016’s residual income by 1%, then dividing by 2.The reason we divided by 2 was to account for the fact that the firm might not grow at a rate of 1% forever. In fact, in some cases, there might be negative growth, as Mer ck experienced from 2009 to 2010. Therefore, to be conservative, we divided the residual income in half, and then we discounted the value by the discount factor to get the present value. After we calculated the present values, we added all the values together and divided by the current number of shares outstanding to obtain the value per share. For Pfizer, the value per share was $79. 39 and for Merck $114. 93. The value we calculated is three times the amount of what the stock is currently trading at.We believe this number is high, but not unreasonable. Around the year 2000, Pfizer was trading near $50 and Merck was trading near $100. We think the current low share value is due to the overall weak economy and we believe that the share price will grow in the future. Please note that all the values of the calculations are in millions except for value per share and current share value. d. Sensitivity Analysis (Appendix E) We performed a sensitivity analysis based on changing horizon g rowth factors and discount rates (cost of equity) to show the value per share. This gives investors the value per share for a different discount rate or growth factor. Part 4. RecommendationsAfter a thorough analysis of both Merck and Pfizer based on profitability, liquidity, and solvency evaluations, we found that both companies are preforming well financially. We found that both companies use assets and investments effectively to generate profit and their profitability growth seems to be steady. The analysis of short term and long term liquidity of both firms shows no risk in their ability to generate cash to meet working capital needs, and satisfy short term and long term debt. From the valuation analysis, we can predict that the future share values of both Pfizer and Merck seem to grow at a steady rate, assuming that both companies grow at a rate of 1% each year.From an investor’s point of view, we consider that the earning per share, the price/earnings ratio, and the lev erage are important factors to consider before making an investment. |Company |EPS |Price/Earnings Ratio |Leverage | |Pfizer |2. 14 |10. 47 |2. 25 | |Merck |3. 25 |11. 95 |1. 93 | After analyzing both companies, on the basis on earning per share, the price/earnings ratio, and the leverage, we have the following recommendations for potential investors. Comparing these values for both companies (table above), we found that Merck outperforms Pfizer marginally.We believe that investment in both companies is safe, however, investment in Merck will bring a higher earnings return than a similar investment in Pfizer in the future. In addition, the financial leverage shows that the financial risk investment in Merck is lower than Pfizer’s, which makes it an even better choice for investment. However, the investor should keep in mind that the pharmaceutical industry involves high risk due expiring patents and threats from generic drugs and their profitability can be highly impacted by these events. According to a recent article on Dailyfinance. com, we found that the patents for major drugs like Pfizer’s Lipitor and Protonix, and Merck’s Singulair, which make up a large portion of the companies’ revenues, are about to expire(2011).These patent expirations cause uncertainty in the future growth of the companies and might have a substantial impact on their stock prices. Appendix A |ROA |Pfizer |Merck & Co | | |2009 |2010 |2011 |2009 |2010 |2011 | |Asset Turnover |0. 46 |0. 32 |0. 35 |0. 34 |0. 42 |0. 45 | |Profit margin |19. 50% |14. 60% |16. 50% |48. 90% |3. 06% |14. 70% | |ROA |9. 03% |4. 80% |5. 38% |16. 80% |1. 29% |6. 70% | ROCE |Pfizer |Merck & Co | | |2009 |2010 |2011 |2009 |2010 |2011 | | |10. 28% |9. 21% |11. 53% |33. 47% |1. 73% |11. 74% | |EPS |Pfizer |Merck & Co | | |2009 |2010 |2011 |2009 |2010 |2011 | |GAAP |$1. 24 |$1. 09 |$1. 10 |$5. 65 |$0. 36 |$2. 01 | |Non GAAP | | | |3. 77 |3. 42 |3. 25 | Appendix B Pfizer | |Merck | | |20 11 |2010 | |2011 |2010 | |Current Ratio |2. 0566461 |2. 1306398 | |2. 0425362 |1. 8581932 | |Quick Ratio |1. 438099 |1. 4454533 | |1. 4301631 |1. 2496004 | |Opr. CF to Current Liab. |0. 7210802 |0. 399986 | |0. 7622653 |0. 6918995 | |Revenue to Cash |19. 051992 |38. 649568 | |3. 5508832 |4. 2189908 | |Days Revenues Held in Cash |19. 158102 |9. 438314 | |102. 79133 |86. 51358 | |Accounts Payable Turnover |1. 67 |2. 11 | |3. 77 |3. 89 | |Days Accounts Payable |218 |173 | |97 |94 | |Outstanding | | | | | | |Accounts Receivable Turnover|5 |4. 79 | |6. 16 |6. 59 | |Days Receivable Outstanding |73 |76 | |59 |55 | |Inventory Turnover |1. 88 |1. 53 | |2. 78 |2. 4 | |Days Inventory Held |194 |238 | |131 |138 | Appendix C | Pfizer | |Merck | | |2011 |2010 | |2011 |2010 | |Liabilities to Asset Ratio |0. 560 |0. 540 | |0. 458 |0. 463 | |Liabilities to Shareholders'|0. 583 |0. 555 | |0. 300 |0. 290 | |Equity Ratio | | | | | | |Long Term Debt to Long-Term |0. 297 |0. 303 | |0. 220 |0. 220 | |Capi tal Ratios | | | | | | |Long Term Debt to |0. 422 |0. 435 | |0. 284 |0. 84 | |Shareholders' Equity Ratio | | | | | | |Interest Coverage Ratio |8. 600 |6. 180 | |10. 900 |3. 480 | |Operating Cash Flow to Total|0. 190 |0. 099 | |0. 300 |0. 120 | |Liabilities Ratio | | | | | | Appendix D | | |10 year |Merck's Beta|Merck's Rm | | | | | |Treasury Bill | | | | | | | |1. 98% |0. 8342 |14. 50% | | | | |CAPM |12. 2% | | | | | |Merck |2012 |2011 |2010 | | | | |Beginning SE |54,517 |54,376 |59,058 | | | | |Comprehensive Loss |3,132 |3,216 |2,767 | | | | |Income Available to Com. |57,649 |57,592 |61,825 | | | | |Shareholders | | | | | | | |Required Income |-222 |-222 |-221 | | | | |Residual Income |57,427 |57,370 |61,604 | | | | |Changed in Residual Income | |0. 10% |-6. 7% | | | | | | | | | | | | | |2012 |2013 |2014 |2015 |2016 |CV | |Projected Residual Income |57,427 |58,001 |58,581 |59,167 |59,759 |30,178 | |Discount Factor |1. 12424 |1. 2639156 |1. 420944 |1. 5974826 |1. 795954 |0. 2051731 | |Present Value |51,081 |45,890 |41,227 |37,038 |33,274 |147,086 | | | | | | | | | |Total Value |355,596 | | | | | | |# of Share Outstanding 3,094 | | | | | | |Value per Share |114. 93 | | | | | | |Current Share Value (5/4/12) |38. 84 | | | | | | | | |10 year Treasury|Pfizer's |Pfizer's Rm | | | | | |Bill |Beta | | | | | | |1. 98% |0. 71 |14. 50% | | | | |CAPM: |10. 7% | | | | | |Pfizer |2012 |2011 |2010 | | | | |Beginning SE |$82,621 |$87,813 |90,014 | | | | |Comprehensive Loss |-4,129 |-3,440 |552 | | | | |Preferred Dividends |45 |52 |62 | | | | |Income Available to Com. |$86,705 |$91,201 |89,400 | | | | |Shareholders | | | | | | | |Required Income |3,142 |4,520 |4,510 | | | | |Residual Income |$89,847 |$86,681 |84,890 | | | | |Changed in Residual Income | |3. 65% |2. 1% | | | | | | | | | | | | | |2012 |2013 |2014 |2015 | |CV | | | | | | |2016 | | |Projected Residual Income |89,847 |90,745 |91,653 |92,569 |93,495 |47,215 | |Discount Factor |1. 10869 |1. 22919352 |1. 3627 |1. 5109 |1. 6751 |0. 1653 | |Present Value |81,039 |73,825 |67,254 |61,267 |55,813

Why the Flu Vaccine Doesnt Work All the Time

Why the Flu Vaccine Doesnt Work All the Time The Centers for Disease Control (CDC) is looking at whether or not the flu vaccine is effective. Preliminary results indicate youll get just as sick (with colds, flu, flu-like illnesses) if you got the vaccine than if you didnt. Why doesnt the vaccine work? In order to understand the answer, youll need to understand some specifics about the flu vaccine and a bit about how immunity works. Flu Vaccine Facts There is no single virus that causes the flu; there is no one flu vaccine that protects against all of them. A flu vaccine is designed to confer immunity against the strains of flu that are expected to be most common and most serious. The vaccine is a sort of one-size-fits-all solution, even though there are more types of flu than covered by the vaccine and the flu types vary according to a region. It takes time to produce vaccines, so a new vaccine cant be instantly produced when a new type of flu starts to cause problems. The Vaccine and Immunity The flu vaccine gives your body parts of inactivated flu viruses. These virus parts correspond to parts of proteins floating around in your body. When the virus part contacts a chemical match, it stimulates the body to produce the cells and antibodies that can remove this particular intruder. Antibodies are proteins that float in body fluids and can bind to specific chemical markers. When an antibody binds to a substance, it essentially marks it for destruction by other cells. However, an antibody for one type of flu wont necessarily bind to a virus part from another type of flu. You dont get protection against other viruses. A flu vaccine can only stimulate your immune system to protect you against the viruses in the vaccine, with some lesser protection against very similar ones. Incomplete Protection Against Intended Targets You may not even get protection against the intended virus. Why? First, because viruses change over time. The piece that was in the vaccine may not look the same (chemically) as the real thing (months later, after all!). Second, the vaccine may not have given you enough stimulation to fight off the disease. Lets review whats happened so far: the inactivated virus piece has found a chemical match in your body. This causes an immune response, so your body has started to gear up its production of antibodies and similar markers on cells that can mark the virus for destruction or kill it outright. Its like calling up an army for a battle. Will your body win the fight when the real virus comes to call? Yes, if you have enough defenses built up. However, you will still get the flu if: Your body isnt fast enough producing a response.Get the vaccine and get exposed to the flu too soon (less than 2 weeks).Too much time between vaccination and exposure (the vaccine loses its effectiveness over time).You dont produce enough of a response.Overwhelmed by exposure to a high level of the virus.Your body couldnt recognize the initial virus piece (this determined by genetics).Your body didnt make enough antibodies/cells (this is common in older people or people with suppressed immune systems).The virus as changed beyond your bodys ability to recognize it.The part of the virus that was in the vaccine cant be detected by the body in the intact virus. But Is It Actually a Waste of Time? Yes and no... the flu vaccine will be more effective some years than others. The CDC predicted that the vaccine developed for the winter of 2003/2004 wasnt going to be effective against most cases of the flu because the strains covered by the vaccine werent the same as the strains that were common. Highly targeted vaccines work, but only against their targets! Theres no point in accepting the risks of a vaccine for a disease you cant get. When the flu vaccine is on-target, its more effective. Even then, the vaccine isnt perfect because it uses inactivated virus. Is that bad? No. A live vaccine is more effective, but much more risky. Bottom line The flu vaccine varies in effectiveness from year-to-year. Even in a best-case scenario, it wont always protect against the flu. The CDC study didnt say that the vaccine didnt work; it says the vaccine didnt protect people from getting sick. Even with imperfect effectiveness, the vaccine is indicated for certain people. In my opinion, however, the vaccine isnt for everyone and certainly shouldnt be required for otherwise healthy people.

6 Easy Steps to Finding Career Success

6 Easy Steps to Finding Career Success We all know what it’s like to want to succeed, but feel as though we’re just not cutting it. Here are six proactive things you can do to get over your fear of being rejected and focus on building momentum in the long term. Step 1:  Get used to hearing â€Å"no†Don’t take things personally. Rejection is part of the normal rhythm of a career. People say â€Å"no† all the time, for a wide variety of reasons. It’s not all about you!Step 2: Turn a negative into a positiveSometimes not getting what you want is for the best. You may be disappointed now, but you never know how you’ll feel in a few months or years. Not getting that promotion or that new job might actually be the best thing for you. Give your future self the chance to be grateful.Step 3:   Use rejection as a reason to take more risksThe trick to getting over rejection is actually getting rejected more. You’ll never get a â€Å"yes† if you don’t ever ask the question. After that, it’s just a numbers game! Getting used to the â€Å"nos† will make the time between the ‘yeses† all the sweeter.Step 4: Show off your drive and ambitionBe proactive. Focus on the things you can do to improve your odds. Ask for leads, cross things off your to-do list, and stay ready. Make as many pitches and proposals as you can. You’ll start to notice that every rejection  is still a stepping stone to your ultimate goal!Step 5:  Pay attention to the slightest progressMaking daily progress is immensely satisfying, particularly when your work and goals are meaningful. And it pays off. Behavioral psychology research suggests that improving every single tiny thing by the tiniest 1% can make an enormous difference over time. Consider every increment a building block for building your best and brightest future.Step 6: Take small steps towards your goalsSuccess cannot happen overnight. It’s important to take small steps in the right direction, and to keep taking those steps. Make a daily commitment to yourself, and continue choosing to work towards your goals. You’ll get there much faster and enjoy the road a whole lot more.

40 Actionable Email Marketing Tips That Will Boost Results

40 Actionable Email Marketing Tips That Will Boost Results Email marketing is complex. From list building to copywriting to measurement, there’s always something new to learn and improve. For marketers and business owners with limited time, it can be difficult to keep up with. This post covers 40 important email marketing tips, along with actionable advice to help you implement them right now. Even if you’re an experienced email marketer, you’re sure to pick up at least a few new tactics. 40 Actionable Email Marketing Tips That Will Boost Results via @ Table of Contents: 10 Email Subject Line Writing Tips 10 Email Copywriting Tips 10 General Email Marketing Tips 10 Email List Building Tips 10 Tips for Writing Better Email Subject Lines Success starts with strong subject lines. According to Hiten Shah, â€Å"33% of email recipients open email based on the subject line alone.† You may have heard some variation of that figure before (different reports suggest a range between 30% to upper 40%). The key takeaway here is that paying attention to subject lines matters, and a little extra effort up front can boost the results of your entire email. 1. Test Every Subject Line Before Delivery Wouldn’t it be great if it were possible to test every subject line before you hit send? With the Email Subject Line Tester, there is. This free tool (which is also built into ) makes it easy to optimize subject lines and see how they’ll look in recipient’s inboxes. Enter your subject line: Then, get your score (and more): You can use it free as much as you’d like here. 2. Use a Real Person’s Name in the Sender Field Getting an email from an actual person feels more friendly than one from a brand. So, use an employee’s name in the sender field, rather than your brand name. For bloggers or solo consultants, your name might double as your brand. But, larger retail and B2B brands can benefit from this strategy, too. This example from Threadless shows how both can be combined: Most email service providers make it easy to edit the sender field. Consider using the name of the individual sending the email, or the best point of contact should a recipient have questions. Sending marketing emails? Use a real employee's name in the sender field:3. Add Personalization People want to feel like they’re more than just a number. So, to further make your emails more personable, include the recipient's name. Here’s an example of a plain-text email from Michael Hyatt using personalization: Make email marketing more conversational with personalization4. Use Power Words Subject lines should inspire readers to take action. So, include power words that motivate audiences to open and click. Use this cheat sheet: Use power words to increase #email open rates5. Experiment With Numbers and Stats According to a study from YesWare, including a number (like an interesting stat or percentage) can influence a modest increase in clicks and replies: There are at least a couple reasons this might be the case: Numbers are concrete. Subject lines that make vague promises are less compelling than those that state specific claims or benefits. For example, â€Å"Save 25%† is more useful than â€Å"Save Money.† Sometimes, stats are hard to believe (even if they’re accurate). And you just have to click for confirmation. So, if you have stats or interesting percentages to share, consider including them. Experiment with numbers and stats in #email subject lines6. A/B Test Subject Lines No study nor external data point will ever be as meaningful as your own results. One of the best ways to get insight into what works for your audience specifically is to A/B test as much as possible. Subject lines are one obvious email element to split test, and most email service providers make this easy. Here are some shortcuts to help documentation to get you started: MailChimp Campaign Monitor Active Campaign Constant ContactAre you using A/B testing on your #email subject lines? If not, you might not be as successful as...7. Create a Curiosity Gap According to Wordstream, a curiosity gap  is: The curiosity gap is a theory and practice popularized by Upworthy and similar sites that leverages the reader’s curiosity to make them click through from an irresistible headline  to the actual content. By creating a curiosity gap, you're teasing your reader with a hint of what's to come, without giving all the answers away. How powerful can leveraging an informational gap be for copywriting? For Copyhackers, powerful enough to drive a 927% traffic increase to a pricing page. Imagine what it can do for your email marketing. To incorporate this technique into your subject line writing, do this: Identify the beginning and end of the story in your email. Leave out crucial information in the middle. Now, done poorly, this is an easy recipe for cheesy clickbait. But, it can also be a simple formula for carefully crafted copy that piques curiosity (and gets more clicks on your emails). Here are some examples of what this might look like in practice: â€Å"The easiest way to achieve your goal isn’t what you think.† â€Å"What’s the fastest way to achieve [GOAL]?† â€Å"Should you use this tactic to achieve [GOAL]†? All of these examples leave something out, that can only be learned by clicking through to read the email. Create curiosity gaps in your email subject lines to get more opens.8. Make Use of Available Preview Text Preview text appears in some email clients after the subject line. Usually, this space will be filled with copy from the email itself, if no preview text is specified. Leaving it blank is a missed opportunity, though, as it offers a chance to give your subject line more context. Here’s a great example from MarketingProfs: The subject line inspires urgency (â€Å"last call†), while the preview text offers more specifics (exactly how long the offer will remain, and how much can be saved). This example from Stone Temple Consulting follows a similar principle: Making use of preview text is simple: write your subject line, then add context. Here are some ideas: Tease an offer, then add more specifics. Include information about additional content in your email (that isn’t implied by the subject line itself). Ask a question in your subject line, and use the preview text to tease an answer. Get creative with it and see how it impacts opens and clicks. Writing email subject lines? Don't forget to leverage space in the preview text field.9. Never Use All-Caps Just don’t. It sounds like you're shouting in your reader's face. Avoid all-caps in email subject lines (and get 39 more email marketing tips here):10. Experiment With Emojis Emojis are more than just fun illustrations. They can actually help improve opens on emails. In fact, according to Kim Courvoisier (formerly from Campaign Monitor), â€Å"brands that are using emojis have seen a 56% increase in their unique open rates.† Impressive. Will you achieve similar results? There’s only one way to find out: experiment! To quickly grab emojis you can copy and paste into your own emails, visit GetEmoji.com: Could emojis help increase your email open rate? 10 Email Copywriting Tips Strong copywriting skills are essential for effective email marketing. Here are ten different ways to sharpen yours. Recommended Reading: The Email Copywriting Process You Need to Get More Conversions 11. Keep It Brief Whether you’re writing subject lines or body copy, make everything as long as it needs to be, and no more. Here are some basic guidelines to follow: Keep sentences under 25 words, and paragraphs under three sentences. These are considered basic best practices for web writing. Aim for 17-24 characters when writing subject lines. There’s no real â€Å"best subject line length,† but shorter copy is more likely to avoid getting cut off on mobile devices. Get to the point. Every word and sentence in your email should serve a clear purpose. If it doesn’t, then remove it. Here’s an example from Google. It’s extremely brief and concludes with a simple CTA: Keep your #email marketing copy brief.12. Include One CTA (But Don’t Be Afraid to Include It In Multiple Locations) Including a single call-to-action is a classic piece of email marketing advice. But, what about including that one CTA in multiple locations? This is a simple tip that can help increase clicks by placing a link at multiple spots where a reader is likely to be scanning across your copy: This email includes a CTA in each of the following places: Header graphic. Inline text. Conclusion CTA button. If one item doesn’t entice clicks, there’s a chance the next one might. Consider including one #email call-to-action in multiple places.13. Add a PS If You Need Extra Links Newsletters and roundups, by their nature, include multiple links to various pieces of interesting content. But, if you’re writing a plain text email, it’s best to direct readers toward one location. For plain text emails though, if you have additional content to share, there is one place you can turn to: your PS section. "Check out this example from Sujan Patel, co-founder at Voila Norbert, which lists information about his upcoming speaking appearances: Some other things you could consider including might be: Related articles or blog posts. Upcoming events. Recent company news announcements. This is an easy way to get extra eyeballs on stuff you want to promote, without distracting from your core call-to-action. Get more email traffic by including additional links in a PS after your signature.14. Offer Something Valuable Great copy won’t save a crappy offer. If what you’re selling isn’t worth your audience’s time, there’s nothing you can do to salvage success. Before sending an email, ask whether it passes the following criteria: â€Å"Is the content or offer this is promoting high-quality?†Ã‚  This is obviously somewhat subjective, but if you’re sending email simply because you feel like you have to, it may be better to hold off. â€Å"Would I even want what I’m selling?† Put yourself in your readers shoes. If you read this email from another brand, would you even remotely care? Be honest. â€Å"Is there anything that could make this email more valuable?† An additional PS, a related piece of content, or something else? Never send a marketing #email if you don't have anything valuable to offer.15. Always Put the Reader First No one wants to listen to a brand talk exclusively about itself. Brands that solve problems for people, though? Those are the ones that get heard. When writing email copy, put the reader’s interest first: Strong Example: â€Å"Cut your grass 35% faster with new, sharper mower blades.† Weak Example: â€Å"Our new mower blades are 35% sharper.† The first example establishes a clear benefit and helps the reader envision themselves spending less time mowing their lawn. The second example isn’t bad, but it puts the company first, and fails to make as strong a connection between product improvement and tangible consumer benefit. Put your reader first when writing #email #marketing copy.16. Sell Benefits, Not Features This is another classic piece of copywriting advice, and one that directly ties into the previous tip. Generally speaking, customers care more about benefits than features. A sharper mower blade isn’t important because it’s sharper; it’s better because it means the customer can spend less time mowing their lawn. Here’s an interesting example from MailChimp: Now, this could have been some superdry copy about GDPR. But, odds are, if GDPR means anything to you, you already know what’s up. So, it instead focuses on how MailChimp made creating GDPR-friendly forms easy enough to do in a few clicks. Perfect. Selling benefits, not features is #email #marketing #copywriting 101:17. Maintain Message Match Between Email + Landing Page Copy You’ve sent out an awesome email. Your unsuspecting reader clicks, compelled by your copy, only to find the landing page doesn’t exactly sound like the email. Maybe the offer is different. Or, the theme of the copy isn’t quite aligned. Whatever the case may be, strive to maintain a consistent experience with your copy throughout the entire experience, from first click on a subject line, all the way through to a conversion on your landing page. Here’s a basic example of this done well, starting with a subject line from Adobe: Based on this text, one can assume the email will link to something with interesting photography from Tokyo. Once clicked, the headline on the body content makes it clear the reader is getting what they thought with this email: After clicking the button, the first thing you see is a blog header using the same banner image from the email: The body copy in the blog post also follows through on the story the reader expected based on the initial subject line: One consistent experience, from start to finish. That’s what marketers should always aim for. Make sure email copy matches the message on your destination landing page.18. Avoid Generic Templates There’s nothing wrong with using a template as a starting point. But, everyone has seen the same plain text email templates, repeatedly. So, if you’ve seen something similar sent before, it’s time to go back to the drawing board, and come up with something fresh. That’s all there is to this tip. Say no to generic templates. Writing outreach emails? Say no to generic templates.19. Develop a Distinctive Voice Everyone gets too much email in their inbox every day. To stand out, developing a distinctive brand voice is important. Create a brand voice chart similar to this one from Content Marketing Institute: Write more engaging #email copy by developing a distinctive #brand voice:20. Make Copy Skimmable Dense paragraphs of text typically perform poorly for email. So, keep sentences brief, and cut down paragraphs to a sentence or two (three at the max). Here’s an example from Siege Media that’s clear and easy to skim: Don't make readers work! Make your #email #marketing copy skimmable instead. 10 General Email Marketing Tips Here’s a roundup of basic (but often overlooked) tips that, while small, add up to delivering a better experience for your subscribers. Recommended Reading: The Best Email Calendar Template You Need to Manage Marketing Newsletters 21. Make it Simple to Unsubscribe Once you’ve got people on your list, you probably want to do everything you can to keep them there. So, why make it easy to unsubscribe? Because it creates a more positive experience. Someone might be interested in your brand, but just doesn’t want your emails anymore. If its tough to get off your list, that positive brand sentiment can quickly evaporate, to the extent they choose a competitor instead. This can be as simple as making the unsubscribe link clear and easy to find: In this example, the unsubscribe link is subtle and unobtrusive, yet easy to find for anyone looking for it. Making email unsubscribes easy creates a more positive experience with your brand.22. Don’t Pay For Lists There are lots of reasons you shouldn’t send emails to a paid list. Here are a handful: None of those people will understand why they’re getting email from a company that may or may not have ever heard about. A lot of those people are liable to unsubscribe and they won’t convert anyway. Worse, you could violate the CAN-SPAM Act. This could be extremely bad news for your business. Build your list fair and square, and avoid paying for lists. Avoid paying for #email #marketing lists:23. Use Mobile-Friendly Design Check out these mobile email stats from Campaign Monitor: Emails that don’t render properly on mobile devices may get deleted in under three seconds. At least 50% of email opens happen on mobile devices (an exact number is tough to pin down, but that’s a lot). Mobile users check email 3X more frequently than desktop users. 52% are less likely to buy from a company if their mobile experience is poor. What do all these numbers mean? In short, you need to provide subscribers with a strong mobile email experience. At a basic level, make sure you’re using responsive templates for designed emails (most modern email service providers should make this easy), and easily skimmable text for plain-text emails. If you’re working with a developer building HTML emails, explain the importance of optimizing for mobile devices (if they’re not already on board). Use the stats above to build your case. Are your marketing #emails mobile-friendly?24. Add Alt-Text to Images and Buttons Image alt-text  helps tell web browsers and email clients more about the contents of an image. It’s useful for two reasons: Helping the visually impaired understand what your images are. Providing context for images in case they can’t load. Here’s a brief tutorial on how to do this with Constant Contact (other email service providers work similarly): 25. Send Email at the Best Times for Most Opens and Clicks The best time to send email will differ depending on your audience. But, there’s been plenty of research done to give us some solid starting points. Follow these guidelines: Are you sending your #marketing #emails at the best times?26. Plan Your Email Schedule Around the Best Days to Send, Too Start with a schedule that looks like this: Here's how to pick the best days to send #marketing #email27. Manage Your Email Marketing Schedule on a Calendar Calendars and planning tools help build consistency. Consistency helps deliver results. Instead of slipping on your sending schedule, get it organized. If you haven’t downloaded the email calendar included in this post, grab it for free. Or, if you’re a customer, use its email integrations to map out all your sends (alongside the rest of your marketing projects and campaigns). If you’ve got some time, this demo recap video shows how it works: Email calendars make planning newsletter sends easier28. Optimize Your Email Sending Frequency Consistency is key to success. But, that doesn’t mean you should stick to doing things exactly the same way you always have, indefinitely. Smart marketers optimize their approach based on performance data over time. Email marketing should be no exception. Once a month, consider analyzing your email marketing sending frequency and note: Which times perform best? Which days perform best? Do open rates appear to drop off once a certain number of emails are sent? Are you getting a high number of complaints about excessive email (and do those complaints correlate with a drop in opens)? Gather this data using the in-app analytics in your email service provider. Then, adjust your schedule accordingly. Are you optimizing your #email sending frequency based on data and performance?29. Add Whitelisting Instructions to Your Emails Whitelisting  is a simple process email recipients can use to make sure messages from a certain sender go straight into their inbox (rather than a SPAM folder). According to Campaign Monitor: â€Å"Many email senders link to whitelist instructions from their email campaigns, to ensure that their campaigns are delivered straight to the inbox for as many recipients as possible. A common approach is to add a short message to your email content, like, â€Å"To keep receiving emails from us, please add us to your address book†. Head here to find a free code snippet  you can use to drop a link like this in your email. Make sure your emails get read! Learn all about whitelisting (and get 39 more great #email...30. Create Unique Email List Segments The subscribers on your email list may have unique interests or different backgrounds. Sending the same messages to different groups of people might not always get similar results from each one. For example, if you run an auto parts ecommerce site, customers interested in Honda Civic accessories might not be interested in information about pickup trucks. How could a marketer in this situation keep both groups equally engaged? By segmenting their email list based on interests. Here’s how to get started using four different email service providers (each of which integrate with ): MailChimp: Getting Started with Segments List segmentation in Campaign Monitor Active Campaign: How Do I Create a Segment of a List? Constant Contact: Create More Targeted Lists Using SegmentationUse list segmentation to make sure the right emails get to the right people 10 Email List Building Tips Without an email list, you’ll have no one to market toward. Use these 10 tips to build up your list and get more leads into the funnel. Recommended Reading: 21+ Easy Ways to Build an Email List That Will Skyrocket by 140% in 1 Year 31. Create Valuable Gated Content Upgrades Content upgrades are downloadable freebies gated behind an email opt-in form. To get these configured on your blog, website, or landing pages, you may need to get some developer help. But, once you’re ready to roll, here are some great ideas for content upgrades you can try: Templates. eBooks. PDF guides. Research reports. Slide presentations. White papers. Case studies. Ivan Kreimer wrote a great guide on creating content upgrades here. In the struggle to build an email list, content upgrades are your secret weapon.32. Include a Sticky CTA on Your Website Here’s an example from the Blog: If you don’t have the capability to set this up yourself, work with a developer to add an email signup CTA somewhere on your blog or website homepage. Use a CTA on your website to drive more #email signups33. Mention Subscriber Count to Leverage Social Proof Another note to make your sticky CTAs more effective: include some social proof. Mentioning your subscriber count (once you have some subscribers) shows potential leads that you’re offering something of value. Leverage social proof by mentioning your subscriber count in your email signup call-to-action:34. Include a Signup Link in Personal Emails If you email folks around your industry with your own work email account, drop a link in your signature to get your company’s email newsletters, too. If you email folks around your industry with your own work email account, drop a link in your...35. Launch a Contest (With an Email Opt-In Form) Contests and giveaways are a great way to gather email signups. You can do this in one of two ways: With a physical entry form (for brick-and-mortar stores). An online content with a signup landing page. Running a worthwhile contest can take a lot of effort. But, it’s worth it to build up a highly engaged email list. Fortunately, Matthew Barby has created an incredibly in-depth guide here. [Tweet "Contests are an awesome way to build #email #marketing lists:] 36. Run a List-Building Social Media Campaign If people are following you on social media, they’re obviously interested in your brand. So, why not get them onto your email list? Run a creative social campaign directing to your email signup page. customers can easily create cross-channel social campaigns: Create a social media campaign promoting your #email newsletter to get more sign-ups37. Optimize Your Email Opt-In Confirmation Process If you use a single opt-in process, email subscribers will be added to your list as soon as they complete a form. However, if you use a double opt-in process, subscribers will need to click a confirmation link on an email they’ll receive. The second option helps cut down on junk signups (if someone is going to bother to click the confirmation link, you know they really want to be on your list). But, if the confirmation email goes into a SPAM folder, you could miss out on subscribers. Follow your email service provider’s guidelines on using double opt-in processes effectively: MailChimp Campaign Monitor Active Campaign Constant Contact Use a double opt-in process to improve lead quality on your email list38. Use Wistia’s Turnstile to Turn Video Viewers Into Email Subscribers If you use Wistia for video hosting, don’t overlook using Turnstile  to add email opt-in forms to your videos. Find a video in your library and go to Timeline Actions: Then, click add Turnstile: You can then configure your video so viewers need to enter an email address to watch. Use Turnstile in @wistia to turn video viewers into email subscribers39. Try Exit Intent Pop-ups Once someone has spent some time on your site, make sure you don’t lose them after they leave. Exit intent pop-ups make it easy to capture email signups when people start to move their cursor to leave your site: Here are some exit intent popup examples  created with OptinMonster. Get more email signups with exit intent popups40. Add an Email Signup Link to Your Website Footer ’s Head of Demand Generation, Nathan Ellering, says you can expect a footer link to contribute around 1% to your overall list growth. But, they’re also extremely easy to add, and every little bit helps. Ask your developer if they can throw in a footer link to your email signup page.