Economics

This essay aims to analyze the where the American economy is in the business cycle and the implications for the oligopolistic and monopolistically competitive firms in terms of prospects for higher sales and labor cost. Oligopolistic firms are a small group of firms that control a particular market while Monopolistic firms are those which exert control over most of a market. Therefore the two types of firms defined are bound to be affected in a certain way when factors such as real GDP growth, inflation, personal Income, CPI (Consumer Price Index) and unemployment are involved.

The Interpretation of the Statistical Data.
According to the Bureau of Economic Analysis (2010), the estimates released on February 26 indicate that the real GDP had an increase of 5.7 as an advanced approximation. It was based on more complete source data than were available for the estimates issued the previous month. If the economy was growing and the level of unemployment had decreased, this would mean that production would be short-run since there are plenty of people working in the oligopolistic and monopolistically competitive firms. This will lead to increased output of goods and services due to increased labor. The cost will however be high because of the number of people that need to be paid. On the other hand, high unemployment will result to production in the long-run due to decreased labor and low costs because not many laborers will require pay.

The Bureau of Labor Statistics (2008) which has defined inflation as the overall general upward price movement of goods and services in an economy gives CPI (Consumer Price Index) as one of the indexes that measure a particular aspect of inflation. The CPI is often used to raise or adjust payments for rents wages and other obligations that may be affected by the changes in the cost of living.

Therefore, in relation to low unemployment, the inflation would have the effect of high sales and high cost of labor since the economy is growing and many consumers would be able to afford goods and services albeit at high prices. However, when unemployment is high, the sales would be low since not many consumers will be able to afford the goods and services. In addition, costs in labor will be low for the firms.

According to the Bureau of Economic Analysis (2010), the personal income increased by 11.4 billion or 0.1 while disposable personal income decreased by 47.6 billion or 0.4 in January. This was in comparison to December which showed a 41.2 billion or 0.3 increase in personal income while DPI had a 40.3 billion or 0.4 increase. The reflection of this on the firms would show that sales would increase due to the fact that people would be able to afford to purchase goods and services because of an increase in personal income. This in turn would result in high cost of labor because of high level of employment as shown in December. In contrast to this, when level of employment drops, the sales will bear fruit in the long run. This would also mean lower labor cost due to a drop in incomes as depicted in January.

The Bureau of Labor Statistics (2010) show that the CPI-U (Consumer Price Index for all Urban Consumers) for January rose by 0.2 on a seasonally adjusted basis. Over the previous 12 months the index had increased 2.6 before seasonal adjustment.  When this is related to high rate of employment, the sales for the competitive firms will go up due to the increase in the price index which means that the income for the consumers has risen and the cost of labor will also be high given that the laborers are at a substantial number. On the flipside, a high unemployment rate will mean that sales will be low in the short run and high in the short run as well as low costs of hiring laborers.

In regards to unemployment, the Bureau of Labor statistics (2010) reported that in February 2010 the number of unemployed persons was at 14.9 million therefore being basically unaffected resulting in an unemployment rate of 9.7. Among the major worker groups, the unemployment rates for adult men was 10.0, adult women 8.0, whites 8.8, blacks 15.8, Hispanics 12.4, teenagers 25.0 and Asians 8.4 showed little to no change in February. The number of long term unemployed i.e. those jobless for 27 weeks and over was 6.1 million in February and has been at that figure since December. About 4 in 10 people who are unemployed have been in that state for 27 weeks or more. Given this information published by BLS, the sales for competitive firms would be high if adult men and women, whites and Asians worked in them since their rates of unemployment are low. As for the rest, their rates would lead to low sales thus low cost of labor.

In conclusion, the economy seems to be growing shown by the steady growth in real GDP and Consumer Price Index while the rate of unemployment remains unaffected. The rate of personal income appears to have decreased. This statistics therefore mean that the oligopolistic and monopolistically competitive firms will attain high sales in the long run due to the unchanging nature of unemployment.

The ever increasing market in food retailing business is big attraction to supermarkets which according to Hingley (2005) dominate the food retailing business in UK and the rest of Europe. The rise in number of food retailing supermarkets has led to an intense competition between supermarkets with each supermarket constantly looking for ways that they can be better than their competitor. Although they may be retailing the same products, these supermarkets actually provide different types of services to their customers all aimed at gaining a competitive advantage over their rivals. Today in the UK, food retailing supermarket market is currently dominated by four major supermarkets Tesco, Morrisons, Asda and Sainsburrys. According to TNS (2009), the four major supermarkets controlled more than 75 of the total grocery market by the end of 2008.

Every other day, supermarkets constantly review their numerous marketing strategies to increase their number of customers. However, according to Seth Randall (2001), there are only two major strategies used by the supermarkets, which are, reducing their prices and looking for new sites. With the number of potential sites for opening new stores decreasing, other strategies have since been devised. The level of competition in food retailing now is so high that some of the supermarkets which had been reporting high growth rate now report decline in growth while emerging supermarkets indicate impressive growth. A good example is the case of Waitrose which reported a fallback in its growth rate and now only recorded a growth rate of 1.3 in the end of 2008 while other outlets like Asda and Morrisons all recorded a growth rate of more than 9.0 at the end of 2008.

Over the past years, the face of food retailing in UK has been changing from time to time. Supermarkets now focus on increasing their space size to hypermarkets and also extending their opening hours. Competition also now is on the range of products sold to the consumers. Initially, most grocery stores only sold basic commodities such as bread, milk and locally available fruits and vegetables. Today, food retailing supermarkets are going the extra mile to make sure that their customers get not only the best quality of these products, but also a wide range of exotic fruits, meat and also fresh fish. Other supermarkets have chosen to specialize on a specific type of foods for example Aldi specializes in selling canned food while Iceland specializes in the sale of frozen food. All these choices are aimed at making their products and service unique so as to impress and attract customers (Hingley, 2005).

Given that pricing is the main strategy for competition that has been in use by major food retailers, most food retailing supermarkets have been experiencing small revenues and their growth efforts have been hampered. Today, the strategy for winning more customer trust has shifted to product innovation. As shown by the example of Iceland and Aldi dealing with a specific type of product, food retailing supermarkets have also introduced technology to improve their customer service and shopping experience for their customers. Focus has now also been put on reducing the overall time needed by a customer for their shopping experience. With the changing shopping trends in the UK customer base, supermarkets have introduced innovative solutions to help their customers shop at ease and in the shortest time possible. They have introduced home shopping systems where a customer shops from home over the internet or telephone 24 hours of the day.  A good example is the case of Tesco which has home delivery service and had around 200,000 customers on home shopping by 2006 (Rhodes, Warren  Carter, 2006). Asda and Sainburys also reported to have heavily invested on this type of service (Telegraph UK. August 29, 2009).

Although competition between supermarkets has been there for a long time, the competition strategies being employed today are a bit different. Initially competition between supermarkets was based on pricing mechanism and the major supermarkets were reporting high profits despite their prices being higher than other food stores. A good example of such case is when major supermarkets have been accused of price fixing in the past. The office of Fair Trading (OFT) have in the past investigated major food retailing supermarkets for accusation of uncompetitive behaviour and excessive profits (Rhodes, Warren  Carter, 2006). These claims originate from the fact that food prices at supermarkets are much higher when compared to the prices they get them from the suppliers. The major reason that has been given for this is that supermarkets invest a lot in creating brands for the foods they sell. This is a competition strategy which helps them create unique brands for their products so as to retain their customers. For example, supermarkets buy fresh produce from their suppliers and then repackage them to produce unique products for their shelves. According to Cole (2004), major brand names such as Unilever, Heinz and Kellogs today are forced to produce under supermarket brands so that they keep their supplies to these supermarkets.

To sum up, competition among food retailing supermarkets in UK is increasing by the day and different strategies are being used to retain customers. They include pricing, product range, innovative solutions such as increasing space and reorganizing supply. This competition has created a unique food retailing business in the UK different from that in the rest of Europe.

Privatization is a process of transferring ownership of a business, enterprise, agency or public service from the government or rather the public sector to the business or the private sector. It refers to the transfer of any government function to the private sector including some government functions for instance, revenue collection and law enforcement. There exist three types of privatization, share issue privatization, asset sale privatization, and the voucher privatization.

Share issue privatization is the selling of shares in the stock market asset sale privatization is the selling of the entire firm or part of it to a strategic investor, usually by auction. Finally the voucher privatization is when shares of ownership are distributed to all citizens, usually for free or at a very low price. Of the three, share issue pprivatization is the most common type and its substantial benefit is that bidders compete to offer the highest price, creating income for the state in addition to tax revenues.

Voucher revenues on the other hand, could be a genuine transfer of assets to the general population, creating a real sense of participation and inclusion (Joseph,  Maya, 2000, p. 72). If the transfer of vouchers is permitted, a market in vouchers could be created, with companies offering to pay money for them.

The concept of privatization is one in history whose influential experience became more prominent during the 1990s with the emergence and introduction of structural adjustment programs as put forward by the Breeton woods institutions. The structural adjustment program as established by the world bank and the IMF were certain kinds of conditionalities instituted as away of assisting developing countries to reduce fiscal imbalances created through borrowing and lending of  money from IFM  and World bank. I a free market economy these conditionalities were established as mechanisms for helping the developing countries revive their economies. One among the was the privatization of state owned corporations. It was highly perceived of various advantages especially in restructuring the week economies of different states.

State owned enterprises are the registered companies listed in the schedules of the state owned enterprises act 1986. They include many government owned companies and the statutory trading organizations. Many of these were government enterprises before being coporatised. The function of these agencies is to operate as profit-making businesses. Examples of such firms include Genesis Power Limited, New Zealand Post Limited, Airways New Zealand among others. On the other hand, there are those agencies that were originally state owned, but they have been privatized, they include National Film Unit, Bank of New Zealand, Terralink International, State Insurance Office, Telecom Corporation of New Zealand Limited (Frank, 2001, p. 136).

The basic economic argument given for privatization is that governments have few incentives to ensure that the enterprise hey own are well managed by the people responsible. The problem is the insufficiency of comparison in state monopolies. It is hectic to recognize if an enterprise is efficient or not without competitors to compare against. Another problem is that the central government administration, and the voters who elect them, have difficulty in evaluating the efficiency of several and very diverse enterprises (Hackey, 1999, p.12). A private owner, specializing and gaining great knowledge about a certain industrial sector, can evaluate and then reward or punish the management in much fewer enterprises much more efficiently. Also, the government can raise money through taxation unlike a private sector.

There have been lots of arguments for and against privatization of state owned enterprises in the emerging markets in the business world. Few support privatization but many are opposing the issue. Many argue that if more and more agencies are privatized, there will be a number of positive effects that will be noticed in the business world. Privatizing a non-profitable firm that was owned by the state may force the company to raise prices in order to become profitable (Roman, 1998,  p. 34). However, this will remove the need for the state to provide tax money in order to cover the losses. If there are two firms, one private and the other state owned, competing each other, the state owned may borrow money more cheaply from the debt markets, that private enterprises. This is because the state owned enterprises are ultimately backed by taxation and the printing press power of the state gaining an unfair advantage.

One of the arguments supporting privatization is that performance of the firms will definitely go high. State run agencies tend to be very bureaucratic. This is to say that they are mostly governed and controlled by the state. A political government may only be motivated to improve a function when its poor performance becomes politically sensitive, and such an improvement can be reversed by another regime, for instance the new management that will take office after privatization (Joel, 200o, p. 176).

Another argument that tends to support the privatization of state owned agencies is the profits that will be gained. Its evident that corporations exist to make profits for their share holders. Private companies make profits by enticing consumers to buy their products in preference to their competitors. This can be done by increasing primary demand of their products and reducing their costs. Such private corporations profit more than state owned enterprises if they serve the needs of their clients well.

Privatized agencies of different sizes may target different market niches in order to focus on subsidiary groups and satisfy their demand. A firm with good cooperate governance will therefore be incentivized to meet the needs of its consumers efficiently (Kamanadhan, 2001, p. 87).

Job gains are another probable merit of privatization. As the economy becomes more efficient, more profits are obtained and there are no government subsidies and less tax are needed. There will be therefore more private money available for diverse investments and consumption and more profitable and better paying jobs will be formed than in the case of a regulatory economy.

Poorly managed state agencies are insulated from the same discipline s private companies, which could go bankrupt and have their management removed or be taken over by competitors. This is called lack of market discipline. Private companies are also able to take greater risks and eventually seek bankruptcy protection against creditors if those risks become unfriendly (Alberto, 2005, p. 123).

Economists tend to argue that nationalized industries are prone to disturbances from politicians for majorly political reasons. This is regarded as political influence. For instance, making a firm buy supplies from local producers, which often a time is considered expensive than buying from abroad, forcing a firm to freeze its prices to satisfy the electorate or control inflation, increasing its staff to reduce unemployment or moving its operations to marginal constituencies. This affects most state owned firms and therefore, the issue of privatization is encouraged.

A capital investment is another issue that supports privatization of agencies. A privately held firm easily raises investment capital in the financial markets when such local markets exist and are suitably liquid. Whereas interest rates for private companies are often higher than for government debt, this can serve as a useful constraint to promote efficient investments by private companies, instead of cross-subsidizing with the overall credit-risk of the country (William, 2005, p. 9). Investment decisions are then governed by market interest rates. State owned firms have to compete with demands from other   government departments and special interests. Political risk may add substantially to the cost of capital.
An emerging financial market has got civil-liberty concerns. A firm controlled by the state may have access to information or assets which may be used against dissidents or any individuals who disagree with the outlined policies of the particular firm. Also, an emerging financial market has goals that it wishes to accomplish (Yang, ea, al, 2006, p. 123). A political government tends to run an industry or company for political goals rather than economic goals.

Further, we can still develop an argument that, in the merging markets, there is concentration of wealth that is brought about due to privatization. Ownership of profits from successful enterprises tends to be dispersed and diversified particularly in voucher privatization. The availability of the of more investment vehicles stimulates capital markets and promotes liquidity and job creation. Privatization further improves security in the business world (Domekopor, 2000, p.44) . Governments have often had the tendency to bail out poorly run businesses, this arises due to the understanding of job looses, when economically, it may be better to let the business go bankrupt.

To turn the other side of the coin, we get a clear glimpse why most economists have tried to oppose the fact of privatization in the emerging financial markets. They tend to dispute the claims regarding the alleged lack of encouragement for governments to ensure that the enterprises they own are well managed, on the basis of the idea that governments are surrogate owners answerable to the people (Hackey, 1999, p.14). It is argued that a government which runs nationalized enterprises poorly will lose votes and public support, while a government which runs those enterprises well will gain public support and votes. Thus democratic governments do not have incentives to maximize efficiency in nationalized firms.

Undisputedly the gains achieved from privatization of public enterprises cannot be underestimated, however every aspect has got its pros and cons. The privatization of state owned corporations has been critiqued severally by experts claiming that it is an unfair game which favors economic development in one pole while translating to poverty and creation of imbalances to another pole if assessed critically. When national or rather public resources are transferred to national elites or foreign investment corporations, the general benefits accrued to the public prosperity are replaced with the goal and ultimately private interest of wealth accumulation (Frank, 2001, p.137). These aspects therefore turn negatively to some weaker economies and at the same time enhancing the development and growth of other economies.

Privatization does not whatsoever serve the needs of the nationals but it serves the interest of the national elites and most probably those of developed worlds. Privatization however translates essential needs and necessities to commodities of higher value which cannot be afforded by the local citizen (William, 2005, p. 10). A good example of these phenomena is what happed to the privatization of water in Angola and consequently privatization of health care in Sub- Sahan Africa. Governments own corporations subsidize their prices so that they accommodate even the poor at the grass root level. Governments also service social amenities such as hospitals, schools and the like in order to avail these services to the larger population.

Most of the economists warn against the practices inherent tendency towards corruption. As many areas which the government could provide are essentially profitless, the only way private companies could operate them would be through contracts. In these cases, the private firms performances in a particular project would be removed from their performance and risky cost cutting measures might be taken to maximize profits (Alberto, 2005, p. 125). Further more, opponents to privatization have argued that it is undesirable to transfer state owned firms to private hands for the reasons below.

First it is the issue of the performance of the firm. A democratically elected government is accountable to the people through legislature and it is motivated to safe guarding the assets of the nation. The profit motive may be subordinated to social motives. This is to say that the primary objective of a business is not met, which is the profit maximization. Instead of that, the firm is used for political reasons such as social functions and to promote politics.

Over governing a firm in the financial emerging market leads to downsizing of the firm. Private companies often face a conflict between profitability and service levels and these could over react to short term events (Yang, et  al, 2006, p.129). A state owned company might have longer term view, and thus be less likely to cut back on maintenance costs, that are the staff costs. Many private companies have down sized while making record profits.

Another argument rises from the issue of profits. Private companies do not always have any goal other than to maximize profits. A private company will serve the needs of those who are most willing to pay, as proposed to the needs of the majority, and are thus anti democratic. The more necessary a good is, the lower the price elasticity of demand, the more people will attempt to buy it no matter the price (Joseph  Maya, 2000, p. 176). If price elasticity is zero, demand part of supply and demand theories does not work.

In the emerging markets, it is acknowledged by many studies that there are winners and losers with privatization. The number off losers, which may add up to the size and severity of poverty can be unexpectedly large if the process and the method of privatization and how it is implemented are seriously flawed that is lack of transparency leading to state owned assts being appropriated at miniscule amounts by those with political connections, absence of regulatory institutions leading to transfer of monopoly rents from public to private sector, improper design and inadequate control of the privatization process leading to asset stripping (Hay, 1996, p. 16).

As we had seen earlier that privatization can lead to creation of jobs in the support of privatization, we can also argue that privatization to some levels can cause job loses. His can be due to the additional financial burden placed on privatized companies to succeed without any government help, unlike the public companies, jobs could be lost to keep more money in the country.

Some scholars have argued that to some point, in emerging markets, privatization enhances corruption. Government ministers and civil servants are bound to uphold the highest ethical standards, and standards of integrity are guaranteed through codes of conduct and declarations of interest (Mandel, 2008, p. 147). However, the selling process could lack transparency, allowing the purchaser and civil servants controlling the sale to gain personally.

Some issues like the goals and chances of insecurity will also arise if the mode of privatization is not well installed. The government may seek to use state companies as instruments to further social goals for the benefit of the nation as a whole. There are probable chances of lack of market discipline (Roman, 1998, p. 36). Governments have chosen to keep certain companies under public ownership because of their strategic importance. This will in the log run lead to natural monopolies. Privatization will not result into a true competition if a natural monopoly exists.

Privatization allows the government currently in power and its backers to siphon a large portion of the entire net present value of state assets away from the public and into the accounts of their favored power brokers. This only happens in the emerging financial markets. Without privatization, corrupt officials would have to slowly harvest their corrupt earnings over time. This clearly explains the diverse arguments for and against privatization in the emerging financial markets.

Immigration reform is arguably, one of the major issues that many policy makers are confronted with in most developed countries. The increase in the number of illegal immigrants especially in the United States of America has been rising each year, leading to concerns of its implications on the public finances, wages and the security threats that it poses for the country and her citizens.

This paper is going to focus on the implications of immigration on labor market economics with special reference to the United States, since the general global market is very diverse and different variables are different for different markets. The negative implications of illegal immigration into the United States has prompted the government to increase its spending on ensuring that the borders are well protected. It has also been argued that programs that encourage guest workers which the Congress has been considering does not put into account the economic implications that it may have on the country, despite the fact that it benefits the workers that are undocumented and increases their desire to work and reside within the United States, and the employers that are looking for cheap labor that is flexible according to their needs.

Implications of Immigration
Illegal immigration is a concern that has been rising for the United States politicians, especially since the population of these illegal aliens increase by more than 100 over the past decade. The congress has approved of measures that are geared towards ensuring that the United States  Mexico border security is tightened to regulate or even stop the flow of illegal aliens entering the country (Hanson 2006). Some of the measures that the congress has taken include the first immigration reform law for the last 20 years (Buchanan 2006). There is this belief that legal immigration is not bad for the country but the illegal immigration is detrimental for the country. Despite these different views and opinions regarding immigrants, it is evident that the reduction in the number of illegal immigrants would go a long way in the improvement of the United States economic welfare. Also to be looked into in this paper is the argument is illegal immigration bad and legal immigration good The implications of an immigration reform on the economic welfare of the country is also an integral part of the market, with special focus on the labor market. Also in this paper, the costs, incentives and benefits of illegal immigration in the context of economic analysis. These immigration reforms would be effectively geared towards targeting individuals who are in possession of skills which are in the shortest of supply in the global market, their tax contributions are enormous and the cost that they pay for public services are highest possible. Allowing immigrants from occupations that are scarce or rare to come by is destined to increase the incomes of the government despite their level of skill upon entry into the country (Cornelius 2001). In the United States, rare labor would not necessarily mean skilled labor such as doctors or programmers, but it could also mean workers from the informal sector such as catering, sanitation and construction whose services have been dwindling within the native labor market. Either way, the national labor market favors these workers, as compared to the other labor markets abroad in terms of wages payable to them.

The economic consequences that immigration policies posses do not account for the other considerations that it could have on other factors such as politics, civil rights and national security. If the government continues to condone high rates of illegal immigration, it could affect the governments ability to enforce regulations on the labor market due to the undermining of the rule of law. The influx of illegal immigrants also makes the employers to relax on their commitment towards the United States labor market institutions, and towards creating a set of workers with a limited ability to be mobile vertically thus creating an uncertain working environment. There is not much evidence proving that legal migration is more advantageous in an economic sense as compared to illegal immigration. As a matter of fact, illegal immigration has shown to respond to the market forces in a couple of ways that the legal immigration does not. Statistics show that the illegal immigrants tend to migrate in to the United States when the economy is in a booming state, and they further tend to move in to areas that are strong in terms of job and opportunity growth (Cornelius 2001). To the contrary, legal immigration is usually subjected to delays due to the stringent selection criteria and the bureaucracy, and thus it is relatively disassociated from the United States labor market conditions. Thus, over the past 50 years, there has not been any response of legal immigration in relation to the United States employment rate. It is also by chance that such admitted legal immigrants have their skills matching those which the industries within the United States require at that particular time. Most of the legal immigrants come in to the United States on the invitation of a prospective employer, and the process of receiving the visa usually delays owing to the fact that it is arduous. Even when they do get to enter the country, such workers are incapable of moving between jobs with ease and this proves to be less beneficial to the economy of the United States (Cornelius 2001).

The Current Immigration Policy
There are three options that a non citizen of the United States can take to live and work within the country. Option number one is to become a legal citizen or resident. The second option is to obtain a temporary work permit or visa and lastly, to enter the country illegally as an illegal immigrant and continue staying there as an unauthorized alien. Each type of such immigration is subject to their own set of principles governing admission and behavior. The United States awards visas for green cards based on a quota system. This was established in 1965 thanks to the Hart-Cellar Immigration Bill. For immediate family members of American citizens, they are guaranteed admission, provided they are exempt from the quotas for entry. There are some other specified quotas that are assigned to other family members of citizens, persons with specific special skills, and individuals seeking political asylum due to persecution from their native countries (Hanson 2006).

The granting of these work permits is normally biased towards individuals with family members within the country. When an individual has stayed within the country for five years as a legal resident, he  she can now be eligible to apply for citizenship in the United States. With the citizenship status, comes a lot of privileges such as the right to vote, and the benefits from the government programs. Foreign citizens can work within the United States for a certain period of time provided they have a temporary visa permit. Such visas are allocated to foreign investors who come from countries that the United States has signed a free trade treaty with, temporary workers and transferees from intra companies. There are different visas for different types of individuals for example, the H-1B visas which are available for the high-technology workers in industries. There is also the H-2A visa for the agricultural sector, due to its seasonal nature thus seasonal labor, H-2B for seasonal workers whose work is mainly manual in nature such as construction workers and workers in the tourism industry. The other work visa available are for those with abilities that are extraordinary and gifted such as sportsmen, artists and missionaries. Thus, the highest majority or percentage of temporary visas except for the H-2 visas, go to the individuals that exhibit high levels of specialty in these specialized occupations or those that are highly educated. Though the United States government does not determine the levels of immigrations, they enforce policies that only permit an allowable number of immigrants to enter in to the country. Most of the illegal immigrants enter the country by crossing over the United States  Mexico border or by simply overstaying their temporary visas. Initially, especially when there was the Bracero program between 1942 and 1964, workers especially casual laborers in the agricultural sector would be allowed to cross over from Mexico and the Caribbean (Hanson 2006). Today, these workers are more likely to be found working in the sanitation services, construction industry, manufacturing industry especially low end, and catering and food preparation.

Currently, the level of enforcement against illegal immigrants working in the United States work site is relatively low. This is because the law requires that before an employer hires any employees, he she has to confirm if the employee is a legal citizen by asking for legal documents such as the social security number and the green card. So long as the employer believes that the documents presented are real, then he  she is not obligated to any other legal implications. The influx of illegal immigrants is normally dependent on the economic conditions with the inflow of them rising during periods when the United States economy is expanding and that of Mexico is in a contraction mode (Hanson 2006). This is true considering that statistics show that when the wages in the Mexican country fall by say 10, in relation to the United States wages, then the attempts that these illegal aliens make to enter the country also increase by about 6. This type of response by illegal immigrants in relation to the economic condition is expected, and thus they come to work within the United States with their main motivation being the different conditions under which they have to work in and the wages expected as compared to their home country. Legal immigration on the other hand responds to the economic conditions at a slower pace. The yearly quotas allocated for green cards are normally fixed and the queues that have to be cleared are also relatively long, thus several years are required making legal permanent immigration inconsiderate of the United States business cycle (Hanson 2006). It is also important to note that since these illegal immigrants are not tied down by their employers if they are employed, then they are capable of changing jobs whenever they want to. This mobility that they poses reflects the informal type of relationship that they have with their employers. Thus it is easy for employers for example in the construction industry to hire illegal immigrant workers without promising them of a new job if the current project being done gets completed. This also applies to such illegal immigrants who are employed in the agricultural sector, who have no guarantee of employment on the same farm in the following year once that growing season is done. In the sanitary, catering and child care industries, the demand for illegal immigrant labor is less seasonal, but that does not mean that the employment relationships are more permanent or secure in nature. Such employees are normally employed at will and thus there is no contract defining the terms and conditions of their employment. Such kind of informality is what makes illegal employment contribute to the manner in which the illegal labor markets are flexible.

The United States Economy and Illegal Immigration
When the skills of incoming immigrants are very scarce, then the gains in productivity from immigration will be greater, for a given flow of labor into the country. The skill of a certain type of worker may be low in the United States owing to the fact that his type of skill is low in the country in comparison to the rest of the world, or due to the fact that the United States demand for this type of skill is high in comparison to the rest of the world, for example scientists. The steady increase in the completion rates of high school has made finding United States born-natives, with low level of schooling hard to find. Though it is important to note that they are still very important in the economy of the United States since they build homes, clean offices, offer catering services, work in farms and fill the jobs in the factories (Camarota 2004).

The migration of workers from Mexico to the United States create a scenario where they move from an area where their relatively high population provides them with low productivity with low wages, to an area where their low population presence presents them with an opportunity for higher earnings. The total economic impact that immigration may have on the economy of the United States may be small but the gains that the households from which these immigrants depend on may be high. It is thus true that illegal immigration has achieved, or is achieving what legal immigration has failed to achieve which is moving a considerable amount of low skilled workers from an area of low productivity to an area of high productivity (Camarota 2004).

Illegal immigration has also managed to bring low skilled workers in to the country when the gains from productivity appear to be the highest from that action of immigration. Mexico has been experiencing severe contractions within its economy, and emigration has been increasing in the event of such downturns in the economy. In the case of highly skilled labor, legal migration is the best way for them to enter the United States. In comparison to the rest of the world, the United States has a high supply of educated labor. The past two decades has seen the United States improve its technology thus increasing the demand for highly skilled labor. Even though the United States in itself is abundantly endowed with educated labor, technological advances induces the need for an increase in the labor market demand for educated workers from all over the world (Camarota 2004). Thus the presence of temporary work visas and green cards based on employment make the immigration of such a skilled workforce possible. The United States economy is provided with workers who are scarce in supply, through illegal, employment based permanent, and temporary immigration. The largest component of permanent immigration which is immigration based on family, is not set by the government in regard to the United States labor market conditions. The nature of legal immigration such as the presence of long queues and lags in the adjustments of visa level tend to reduce the economic importance of this type of immigration. On the other hand, the flow of illegal immigrants is normally connected to the United States and Mexican business cycles.

The Economic Benefits and Costs of Immigration
There are economists that argue that an influx in the number of illegal immigrants is very costly in economic terms, since it lowers the domestic wage and raises the expenditure on public services. If such economic costs become increasingly high, then the economic reason for the introduction of an immigration reform policy would be justified. In general, immigration is beneficial to the residents of the United States as it increases their incomes by allowing the economy to fully utilize on the domestic resources available in a much more effective manner (Cortes 2005). But the diversity in the types of these immigrants in terms of skills, the ability to earn income, size of the family and the right to use public amenities, produces different impacts on the economy. Immigration is also known to affect the incomes of the residents of the United States through the impacts that it has on the revenue collected from tax and public expenditure. Immigrants that have large families and a low income tend to be major drainers of public spending. Immigrants pay a number of taxes, with the low skilled immigrants making small contributions. The high expenditure that these immigrants spend on public amenities could include education, health care, transportation and police and fire services, with those immigrants with larger families spending more on public expenditure. The tax payments of these immigrants minus the value of the public amenities they use gives a rough estimate of the overall impact that immigration has on the United States economy (Camarota 2004).

Immigration is also a source of extra income for the United States economy even though it pushes wages downwards for some of the workers. The productivity of resources that are complemented by labor are raised by the increase in the supply of labor. For example, if the supply of labor in an acre of a wheat field is increased, it will mean that the overall output of that acre will also increase (Cortes 2005).

It is however important to note that these benefits are not equally shared. For instance, the workers who immigrate from abroad cause the possible income to be redistributed among all the workers thus competition within the labor market between residents and immigrants. On the other hand, the low cost of labor also means that the cost of goods and services that are labor intensive also tend to be lower especially in the case of those whose prices are set in the local markets as opposed to the global markets which is much more competitive. This low price of goods and services tend to raise the real income of households especially those that are in the regions with the largest population of immigrants. In the case where the immigrants pay more tax than they use in the services provided to them in the form of government benefits, then the native tax payers receive a net fiscal transfer of funds. On the other hand, if the immigrants were to pay less tax than they receive from the government benefits, then a burden of net fiscal value will be bore by the native taxpayers meaning the native household will be transferring their incomes to the immigrant households (Camarota 2004).

If immigration reform has the ability to replace flexible and mobile illegal employees with non flexible non mobile guest workers, then it would less likely diminish the immigration surplus that the foreign labor market generates for the United States economy. The most dividing issue that surrounds the immigration reform is whether to offer these illegal immigrants an opportunity in legalizing their status. Some of the other views include legalizing of unauthorized immigrants status is seen as a form of rewarding individuals who have broken the law and thus encourages others to do the same. It is thus established that there is no economic reform package even through economic analysis that would improve the national welfare. The short term economic consequences of the legalization of immigrants status is very limited. To the contrary, the fiscal consequences will not be felt for at least the next 10 years after implementation and control would be defined by the type of government benefits which these immigrants are eligible for (Cortes 2005).

Conclusion
It is evident that specific groups of taxpayers, employers and workers are bound to gain or lose if the immigration reforms are implemented through the changing of government policies that govern illegal immigration. The overall economic effects of these reforms do not appear to be as enormous. When viewing the various proposals that are under discussion during the immigration reform, it is important that these policy makers separate the impacts that such a reform would have on the distributive functions from the aggregate effects. As discussed in the paper, the economic implications of this reforms in the economic sense does not produce a substantial amount of gain or loss, thus any new reforms that requires a huge amount of funds will only serve to lower the economic wellbeing of the United States. Illegal immigration is also something that is persistent due to its economic rationale. With the current status of illegal immigration, not implementing an immigration reform that creates other avenues for legal immigrants to enter will be in conflict with the market forces that push for the move of labor from the low productivity low wage areas to the high productivity low wage United States labor market (Camarota 2004).

Abstract This paper attempts to examine the past and present performance of the Nigerian manufacturing sector. The major problems and limitations that impede the growth of the sector were analysed. In the 1960s and 1970s after the countrys independence, the Nigerian manufacturing sector had been developing positively as a result of direct foreign investment. Foreign companies had introduced new manufacturing technology that saved time and cost, and improved the quality of the products manufactured. Despite this initial flourishing growth phase though, the sector was not able to successfully meet local demand and cost the country much to pay for manufactured goods. From the end of 1980s to date, many problems were found that were responsible for low growth and development in the manufacturing sector. Some of these problems were dependency on oil for income, weak infrastructure, shortage of skilled labour, lack of adequate financial resources, lack of proper management and planning, and so on. The paper concludes that it is essential to work towards resolving all these problems in order to attract foreign investment again and to enable the sector to play an important and active role in Nigerian economic development.

Keywords Nigeria, manufacturing sector, oil-based economy, developing countries.

1. Introduction
This paper presents a review of research studies conducted during the last forty years that describe the performance of the manufacturing sector of a particular developing country. The focus country for this paper is called Nigeria and it is located in sub-Saharan Africa. The purpose of the paper is not only to evaluate and examine the performance of the Nigerian manufacturing sector, but also to find what gaps there may be in the literature so that further study can be focused on filling these gaps.

While discussing the Nigerian manufacturing sector, it is very important to understand its entire basic economic structure. Nigeria depends largely on oil for its export and this dependence has a significant negative impact on other sectors. To effectively study the manufacturing sector then, it is necessary to study the role of the oil sector and its corresponding effects. Thus, the review of the studies related to the Nigerian manufacturing sector performance is led by the study of the oil-based economy of Nigeria.

2. Nigeria  An oil-based economy
The Energy Information Administration (EIA) reported that Nigeria is the worlds 11th largest producer of crude oil with a production output of 2.5m barrels of crude oil per day as of December 2006, and it is among the influential members of Organisation of Petroleum Exporting Countries (OPEC) 1, 2. Because of this, the oil price decline affects the economy of Nigeria considerably and in turn, also affects countrys economic activities such as working conditions and productivity 3, 4.

A researcher, Hale 5, revealed that the since the entire economy of Nigeria depends on oil revenue and the country has very large oil reserves, it has a great potential to build a strong and vibrant economy simply on the basis of huge oil revenues. Unfortunately, oil revenues failed to improve the poverty level of the country and it was among the worlds poorest countries until 2002. The researcher pointed out some of these main reasons for this failure. He observed that while the Nigerian government did set the target for some reforms related to spending, inflation and privatization, very few of these reforms were actually put into practice and as a result the International Monetary Fund (IMF) discontinued the stand-by credit agreement with Nigeria. Hale also stated that political instability and corruption further hindered the development of the economy. The researcher then concluded that in order to accelerate the growth of its economy, Nigeria should reduce the level of oil dependency and concentrate on the development of other sectors like agriculture, energy, transport and manufacturing.

Another researcher, Obadina 6, also concluded that the country possesses great potential to prosper economically on the basis of its huge oil reserves. He also states though, that due to its management legacy the country still faces some major problems like inadequate infrastructure, high level corruption and inefficient deployment of resources. Oil, rather than be the blessing for the country it could be, has become a major source of debt.  Due to fluctuations in the oil prices in the global oil market, there is a burden on the country as it has to pay a large amount for its import bills.

In another study, Rankin et al 7 observed that when there was boom in oil prices during the 1970s, the country committed the serious mistake of neglecting other sectors like agriculture, mining and micro, small and medium manufacturing. At that time the country was earning enough from crude oil exports that could have been used to develop other sectors and yet these other sectors were ignored because of dependence on this very income. There were also other factors that precipitated the decline of particular sectors. For example, from 1970 to 2005, many foreign countries expressed interest in the manufacturing businesses in Nigeria such as steel, wood, food, electronics, chemicals and vehicles sub-sectors among others. But due to regulations and other restrictions, need for capital and expertise, only a few companies were able to establish a significant presence in those sectors. However, a number of those foreign companies that were able to establish joint ventures with Nigeria companies were substantially large. As such, some sectors such as fuel refineries, electronics, chemicals and vehicles have seen a substantial foreign ownership and product output growth over the years as shown in graph 1 while those of others declined, such as textile, wood and plastics. The main difference in the interests of the foreign firms in the industries came from legislation and restrictions to enter the market.

Onayemi 8 put forward that the economy of Nigeria is too dependent on oil and it is not progressing significantly due to inconsistency in macro economic policies for the growth of different sectors in the economy. When the government only works to safeguard the oil companies interests, the price of oil does not remain at an affordable level and the manufacturers have to pay more for the energy resources they consume in the manufacturing process. When there is news about the discovery of more crude oil wells in the country, foreign investors start paying attention towards it, resulting in the rise of foreign direct investment (FDI) as well as the employment rate. In this way, the economy of Nigeria is determined by oil production and oil prices. It is therefore evident that Nigeria remains highly dependent on oil, which accounts for 80 of its foreign exchange during the last four decades. This policy has proved to be quite harmful to the country because oil price fluctuation has a negative impact on the economy, causing a certain level of instability and uncertainty. The government neglected the non-oil sectors including manufacturing industry which has made Nigeria the least industrialized country in the region.

Eedes 9 studied the economic conditions of Nigeria and observed that since Nigeria is one of the least industrialized countries of the sub-Saharan African region, this resulted in some major weaknesses in the economic structure of the country. These varying levels of negligence contributed to the collapse of the countrys basic infrastructure as well as its social services in 1980s. The fluctuation in oil prices further contributed to the economic instability of the country and poverty was widespread, especially in the rural areas 7.

Though the Nigerian manufacturing sector cannot support economic development in its present condition, it has great potential to since Nigeria is one of the most attention-grabbing markets of the region by having about 140 million consumers and millions more consumers in the neighbouring countries 10. The importance of the manufacturing sector is also realized from the fact that private consumption expenditures are significantly increasing in the country up to the rate of 15 to 20 per year. However, many problems are hindering the growth of the manufacturing sector in Nigeria and as a result the country is progressing very slowly towards economic diversification. Dipak and Ata 11 summed up the economic scenario in Nigeria and the role of the manufacturing sector by identifying the main hurdles that mostly and historically affect its development and growth. These barriers include insecurity, political instability, market-distorting, state-owned monopolies, weak infrastructure and unavailability of finance while Adenikinju 12 added excessive bureaucracy and rampant corruption.

3. Historical performance of the Nigerian manufacturing sector
Adenikinju and Chete 13 conducted an empirical analysis of the performance of the Nigerian manufacturing sector over a 30-year period and observed that the sector was performing with satisfactory growth levels from 1970 to 1980. However, after that phase there was a sharp decline in the growth and profitability of the Nigerian manufacturing sector. Especially after 1983, the negative effects of the oil price collapse in the international oil market can be clearly seen on the sectors performance. Due to that global oil crisis, the revenues of the Nigerian government sharply declined which resulted in reduction in foreign exchange earnings. This in turn forced the government to take several initiatives with the intention of strictly controlling its trade. There were several import duties enacted in the form of import licences and tariffs, and some quantitative restrictions were also imposed on the importation of certain items. As a result, the manufacturing sector was negatively affected because the manufacturers faced multiple problems when obtaining raw materials and spare parts for their products and processes. As a result of massive cutbacks in raw materials and spare parts, many of the countrys industries were shut down and the capacity utilization in the manufacturing sector declined.  For example, between 1977 and 2007, the Nigerian bicycle manufacturing sub-sector recorded a systematic decline in capacity utilization by about a total of 485 that is, from 948,000 units of bicycles in 1977 to 161, 500 units of bicycles in 2007. Details are shown in Graph 2. This disturbing trend was also observed by Adenikinju and Chete in most of the other manufacturing sub-sectors in the country 13.

Dipak and Ata stated that the effects of the trade restrictions resulting from the oil price crisis were clearly observed in the form of a 25 decline in the real output of the manufacturing sector from 1982 to 1986. Although the annual growth rate of the Nigerian manufacturing sector was 15 between 1977 and 1981, the government trade restriction measures resulted in the succeeding sharp decline in the growth rate of the sector 11. The share of the manufacturing sector in the total GDP of the country also clearly declined during this era. In 1977 there was a 4 increase recorded in the manufacturing sector share in GDP and this reached the level of 13 in 1981, but after that it declined to less than 10 in just a few years. Dipak and Ata 11 and Adenikinju and Chete 13 concluded that the unavailability and inadequacy of the companies access to the raw material and spare parts needed were among the major factors that contributed towards the decline in the growth rate of the manufacturing sector especially after 1981. Hence, the oil price shock is identified as the reason behind the policies that ultimately resulted in the decline of manufacturing sectors growth.

Adejugbe 14 examined the impact of the Nigerian trade policy on the manufacturing performance of Nigeria after the previously discussed observed decline. The researcher studied manufacturing sector performance after 1985 and observed that some significant steps were taken by the Nigerian government in an attempt to make the Nigerian trade regime liberal, and also to promote manufacturing and import-export activities. The adaptation of a flexible exchange rate mechanism, along with the some trade liberalization policies, brought some major changes to the scenario as these steps helped reduce tariffs and trade rates. At the same time, duties on the importation of foreign goods were also raised, especially of those competing with domestic products. In the same way there were also some steps taken to reduce import duties on many of the raw materials and spare parts that were used in the manufacturing sector, the factor pinpointed for the previous years decline. These steps were taken by the Nigerian government with the objective of providing the local manufacturing organizations with a sense of protection so that they could be motivated to become more productive and efficient.  

Anyanwu 15, with findings similar to that of Adenikinju and Chete, pointed out that the collapse of the world oil market in the early 1980s and the prolonged economic recession resulting from this collapse contributed to the sharp fall in the foreign exchange earnings of Nigeria. This further led to a fall in the performance level of the manufacturing sector of the country. The introduction of the Structural Adjustment Programme (SAP) in 1985 was expected to bring an improvement to the situation, but unfortunately no notable improvement was observed. As a result of the continuing low performance of the manufacturing sector, along with other important reasons, today Nigeria is among the more poverty-driven nations of the world 16.

Ukaegbu 17 observes that conducting a complete analysis of the Nigerian manufacturing sector is a complex issue because there is a lack of adequate data about the productivity levels of the Nigerian economy. In particular, there are little authentic data related to the productivity of the Nigerian manufacturing sector. However, some of the research studies conducted at different levels do give some viable information about the performance of the manufacturing sector of the country through the years 17. For example, an ad-hoc study conducted in 1989 by Chete and Adenikinju 18 indicated that the overall productivity level of the Nigerian manufacturing sector over the years has seen very little increase and most of these companies have even faced a decline in productivity as well as profitability. These findings were further confirmed by a report by the Manufacturers Association of Nigeria (MAN) which revealed that there was a generally negative trend in the growth of the Nigerian manufacturing sector during the period of 1980-1989. The report also stated that the expectations were low of observing any considerable improvement in the situation. The research studies conducted after that period confirmed this expectation, as they provided evidence that the trend of negative productivity continued and that neither was there an improvement in the profitability level of the sector well into the 1990s and 2000s 19.

In 2000, Adenikinju and Alaba 20 conducted an empirical study which evaluated the Nigerian manufacturing sectors performance with regards to the relationship between productivity, performance and energy consumption within the manufacturing organizations. Utilizing an aggregate model, the researchers measured the changes in the total factor productivity of the sector relative to the change in energy consumption. The research concluded that efficiency and productivity of the Nigerian manufacturing organizations are indeed related to the energy supply and energy price. While the energy resources were found to play a critical role in the manufacturing sector though, it was also discovered that the energy source alone cannot effectively improve the performance of the manufacturing sector in Nigeria.  An important point identified in the research was that the manufacturing sector is too wedded to using old technology and as such, there is a great need for the adoption of more advanced energy-efficient technological devices and techniques. For this reason, reforms concerning the prices of energy options alone do not significantly affect the performance of the sector because it is hindered by the need for improved technology and energy supplies. Thus, the reforms in the energy sector need to happen alongside technological reforms, otherwise the manufacturing organizations cannot entirely enjoy the advantages of the energy resources.

Ayanwale 2 studied the effects of foreign direct investment on the performance of the Nigerian economy and manufacturing sector, and revealed that the country is striving to attract more foreign investors. This is so that the operations and activities of the manufacturing sector can be supported by the revenue gained through these investments. However, available statistics of the Nigerias manufacturing and macro-economics data does not paint a good picture of manufacturing contributions to GDP and national employment as shown in table 1. For example manufacturing contributions to GDP has been below 10 between 1990 and 2005, and the countrys expectation that it will reach 15 by 2010, from the trend, seems almost impossible. Other manufacturing macro-economics variables and their trends are also shown in the table.

Another vital point that Ayanwales work brought to light is that while foreign investments in manufacturing could be beneficial to the economy, it is necessary that human resource issues are resolved as well so that the financial resources can be effectively utilized 2. In a survey report for the United Nations Industrial Development Organization (UNIDO), Malik et al 21 discloses that for many years the Nigerian manufacturing sector has been working with mostly unskilled and unqualified labour. Actually, to date, the qualifications and skill level of the sectors workforce is still very low. This is an important issue as it directly affects the quality of the manufactured products in Nigeria. As it turns out, the reason behind the employment of unskilled labour is the inability of the manufacturers to pay actual skilled labour well.

Mazumdar and Mazaheri 16 argue that average wages are very low in most of the manufacturing firms in Africa as the owners settle for unskilled labour. This is because highly skilled labourers come with high salaries that the firms cannot afford, thus, they keep on employing unskilled labour on low wages. So though there were employment opportunities in the manufacturing sector, they did not alleviate poverty levels all while the quality and standard of the labour were stagnant. The researchers suggested that the manufacturing companies must realize the importance of investing in skilled labour so that the manufacturing process can be run on updated methods. Also, the overall poverty level could be raised by the stimulation of paying good wages to skilled labourers 16.    

Alli 10 reviewed the situation and stated that after going through several ups and downs, the final shape of the Nigerian manufacturing sector is mainly made up of a few players. These players are the multinational, national, regional and local manufacturers, investors, and companies. It was also disclosed that while the multinational companies are still operating and surviving in the country because of strong financial and resource support, the other operators have either disappeared from the scene or are struggling to survive in the manufacturing industry. This is because of the unpredictable policies and strategies implemented by the government, effects of globalization, and the lack of raw materials obtained locally for the manufacturing process. As a result, the aforementioned players of the sector started diminishing from the scene, and the productivity and efficiency of the manufacturing sector were negatively affected. At present, the capacity utilization in the sector remains lower than 35 2. This also provides evidence and reasons to conclude that the Nigerian manufacturing sector is inefficient.

The Nigerian Bureau of Public Enterprises itself identified some of these main barriers that affected, and continue to affect, the growth and development of the Nigerian manufacturing sector. Their reasons include high interest rates, unpredictable government policies, nonimplementation of existing policies, ineffective regulatory agencies, infrastructural inadequacies, dumping of cheap products, unfair tariff regime, and low patronage 11.  On top of these, as mentioned, a skilled workforce and foreign investments are also in short supply.

In summary, the retrospective analysis of the manufacturing sector of Nigeria could serve as a lesson for other countries. It shows how the mismanagement of resources and the negligence of an important sector can contribute to the low performance of the whole economy. In Nigeria, the government used to place sole emphasis on the oil sector and as a result the manufacturing sector failed to prosper. Now, even after the spike in oil prices, the country can only look towards a very insignificant contribution from the manufacturing sector caused by the inadequate policies and planning of the past.

4. Present situation
Alli 10 reviewed the more current performance of the Nigerian manufacturing sector by surveying the results of a study conducted in 2007 by the Manufacturers Association of Nigeria (MAN). The report disclosed that during the last few years many of the manufacturing companies in the country have, as the past studies predicted, faced bad times. It was discovered that only a meagre percentage of manufacturing companies (10) are operating at a sustainable level, whereas as much as 60 are going to shut down or have already shut down after facing several series of financial and other kinds of crises. Many factors were identified by MAN to be the root cause of the problem. The reasons behind the low growth and performance of the Nigerian manufacturing sector during the last few years include high production costs caused by energy, high interest and exchange rates, influx of inferior and substandard products from other nations, multiplicity of taxes and levies, poor sales partly as a result of low purchasing power of the consumers, bogged down with delay in clearing consignments due to existence of multiple inspection agencies at the ports, etc 22.

However, according to Mazumdar and Mazaheri, despite this uncertainty in the business environment some Nigerian companies are successfully operating in the country and getting high returns on their investments through superior competitive performance 16. The researchers analysed the strategies and management planning of two Nigerian firms that have achieved a high level of performance in the business sector. They then highlighted the main factors that contributed towards the success of these organisations. Some of these factors were the introduction of transparent management policies, proactiveness in competitive strategies, among others.

Dipak and Ata 11 argue that the main problems facing the Nigerian manufacturing sector are the ongoing advancements in technology, as these are taking the international manufacturing market towards higher levels of competition. When there is less protection for companies, these unprotected companies have to focus more and more towards the quality of their products and do so by increasing their expenditure on research and development. In Nigeria however, the research and development work is not being done at a good enough level required for the constituents to even see a steady growth in the performance of manufacturing organizations. It becomes necessary then, for the Nigerian government and the private sector partners to intervene in order for the situation to improve.

Malik et al 21 discloses, in a survey report administered under UNIDOs Centre for Study of the African Economy, that the skills and technology usage levels in the Nigerian manufacturing sector are not very satisfying. Not only that, the report also revealed that the Nigerian manufacturing sector is not even open towards the usage and adoption of the new technologies and skills thus stagnating and even negatively affecting the efficiency of the firms. The reason behind giving less importance to new technologies and skills is traced back the deficiency of adequate investment in the sector. Only half of the companies that participated in the survey disclosed that they made investments in technology during the period under study, this alone shows the trend in technology investment in the sector. The survey also divulged that the lack of financial facilities is exacerbated by the unwillingness of the investors to give their money to the manufacturing companies. When firms invest less in technology, they also invest less in the skilled labour needed for these and with no other sources for capital for investment they are not in a position to remedy the situation. With barely any advanced machinery and techniques of production, the firms are rendered unable to compete in a larger scale. And as all of these issues continue to result in the low level of competitiveness of the Nigerian manufactured products, the overall efficiency and productivity of the sector will always remain on a lower scale 21.

Ojowu 23, with his analysis of the situation of the Nigerian manufacturing sector, came to the point that capacity utilization is an important issue that must be properly addressed in all discussions and all measures to be taken in the future. The researcher argues that the sector is progressing very slowly due to low capacity utilization. Issues associated with capacity utilization such as capacity decline, capacity expansion and capacity mortality are essential discussion points in the issue of bringing quality into the performance of the Nigerian manufacturing sector. On top of these issues, the burden of external debt is also affecting the sectors performance. The researcher also argues that the government is not giving enough attention towards the policies related to the manufacturing sector as compared to those of other sectors. To contend with Ojowus last point though, reforms must also be applied to different sectors that are associated with the manufacturing sector and not just the manufacturing sector itself as the high or low performance of one sector can affect the progress of the others. For example, if the government works to improve infrastructure then the manufacturing of products will also be improved.

Enebong 24 predicts that the level of the Nigerian manufacturing organizations performance will continue to see a decline because as it is now, the manufacturers will have even more problems in accessing raw materials due to stiff competition from foreign firms. He theorizes that many of the policies implemented by the government in the late 1990s are still acting as barriers to manufacturing sector growth. Some of these policies include backward integration and the inward orientation strategies towards import substitution. The private sector also failed to play a significant role in the manufacturing industry and there are certain reasons behind this such as import barriers, tariffs, licenses and other policies that resulted in raw materials unavailability.

Alli 10 however, points out that the government plays a very important role in the entire scenario of bringing improvements into the Nigerian manufacturing sector. The researcher observed some positive signs from the present Nigerian government and identified some of the major strategies that are being adopted with the intention of improving manufacturing sector performance. According to Alli, the government has realized that the manufacturing sector can act as the backbone of the economy and as it progresses in a positive direction, the country will consequently grow and prosper also. In this regard, the government has decided to make sure that the manufacturing sector will receive access to the domestic, regional and international markets. This is of course after adding value to the companies products and for this, the sector will need to take advantage of the countrys oil and gas sector. The Nigerian government also seeks to apply the Public Private Partnership (PPP), wherein the government will invest in the development of infrastructure and will become a facilitator to the manufacturing sector. In effect, the manufacturing industry will gain great advantages from the improved infrastructure and the private sector will also be encouraged to invest in different productive manufacturing industries. Moreover, the government is also considering the cluster concept suitable for the economic condition of the country, keeping in view the geographical proximity and other ground realities.

5. Problems and limitations
The performance of the Nigerian manufacturing sector over the last four decades shows that there are some important problems that acted, and are still acting, as barriers to the growth of this sector. Researchers have also argued that some basic limitations are impeding the growth and development of the sector, even despite past studies and proposed solutions. In order to identify these core challenges, many of the researchers have conducted studies of the past and present conditions of the manufacturing industry of Nigeria. These researchers have conducted different quantitative and qualitative studies during different periods and have identified certain important limiting issues to aforementioned solutions.

Bigsten and Soderbom 25 conducted a study which investigated the main challenges confronting the manufacturing firms using ten selected variables as shown in Graph 3. From the graph, it is clear that the first perceived variable retarding manufacturing firms is physical infrastructure problems (98) followed by stiff competition from Asian products (90) and then inappropriate technology (71) and so on as shown in the Graph.

One other approach to identifying the causes of manufacturing failure in Africa is to classify them according to external and internal sources, as illustrated in Table 2.

Indeed, when reviewing the above values, there is no general consensus in terms of the variables for forecasting either failure or success although capital, appropriate technology and experience are featured slightly more frequently.

Ayeni 26 identified the core problems surrounding the Nigerian manufacturing establishments after he analysed their pattern of growth. The researcher pointed out that the establishments are lagging behind in attaining sustainable growth because most of the time, their operators and the Nigerian authorities reacted to market situation by formulating short-term policies and strategies. The researcher pointed out an important flaw in the economic policies of the country by arguing that there is less attention given to satisfying the needs of the domestic consumers, thus the demands for locally manufacturing products and goods remain low. In addition to Ayenis findings, the acute shortage of infrastructure can also be identified as a factor that frequently hinders the manufacturing growth because organisations and agencies related to the provision of different infrastructures often failed to adequately deliver. This affects the flow of work in the manufacturing sector. At the same time the manufacturers and the investors also need motivation and encouragement so that the investors can become open towards investing in the different manufacturing firms. Ultimately this would lead to the manufacturing companies obtaining access to the finances needed not only to keep their manufacturing operations afloat, but to run more effectively.

Alos 27 analysed the business environment of Nigeria and observed that the performance of the manufacturing sector has been very uncertain, even nearly chaotic, for many years. The researcher also pointed out another important barrier that exists in the Nigerian manufacturing sector, and that is the low rate of capital utilization not unlike the conclusion put forth by Ojowu 23. He observed that in the manufacturing sector there is gross underutilization of resources and only 30 to 40 of the capital is being utilized in this sector due to frequent power outages, lack of funds to procure inputs, fall in demand for manufactured goods and frequent strikes and lockouts by workers and their employers 27.

Okejiri 28 revealed that one of the largest constraints for the high productivity of the Nigerias manufacturing sector is, again, the low level of technology as advancements in technology are changing the manufacturing sectors of countries all over the world. Developing countries are rapidly adopting new technologies so that they can secure higher productivity and revolutionize their manufacturing industry. Unfortunately, the Nigerian manufacturing companies are still not focusing enough on acquiring modern machinery and as mentioned, up to now they are still using the same methods and machinery that were introduced as far back as the 1960s and 1970s 29. It is this stagnant, almost stubborn, mindset that greatly limits this solution for the future growth of the sector.

Meagher 30 meanwhile viewed the problem of Nigerian manufacturing sector from the perspective of inadequate academic research and development support from the Nigerian universities and other like institutions.  He recommended that the Nigerian research institutions should be adequately funded by the Nigerian government and public, private, and even multinational organizations. This is so that these institutions will engage in purposeful researches that will help revive the decaying manufacturing sector. These institutions may also essential in preparing for the challenges of new oil discoveries especially in the deep platform areas and in the northern part of the country where initial studies conducted by foreign oil companies have shown the possibility of the presence of oil. On the part of the manufacturing firms, the researcher also concluded that they must set up or upgrade their research and development departments so that new technologies and new raw local raw materials are discovered, tested and used.

A study conducted by Havrylyshyn 31 pointed out some of the other major problems that act as barriers to high quality growth and performance in the Nigerian manufacturing sector. The researcher concluded that while the government of Nigeria has shown its willingness to promote and support the growth of the manufacturing sector, despite the measures they have taken there is a long way to go for the manufacturers to progress in an efficient manner. According the researchers findings, investors in the manufacturing sector often lack a business-friendly environment. This environment is due to the legacy of the past misguided trade-related government policies that caused negative impact on investment-related operations damage that cannot be easily repaired.

In this same vein, Adenikinju 13 blamed the government for the current inefficient performance of the Nigerian manufacturing sector. The researcher claimed that the increased interference of the government in different issues related to the manufacturing industry minimized the role of the private sector due and as such, the contribution of the private manufacturers seems to be very low in terms of manufacturing output.  

Nishimizu and Robinson 32 observed that the Nigerian manufacturing sector has been in great need of reform for many years as the sector has been unable to support the economy of the country due to its many problems. For example, the manufacturing sector strongly feels the need for private sector friendly policies so that the entire manufacturing process can be boosted to a private sector level, and so that there could be better capacity utilization in the sector. The researchers also pointed out that there is a great need for many reforms in the sectors related to manufacturing, such as the power sector. As mentioned, when the power sector starts to progress effectively then the manufacturing sector will also perform well with the support of a reliable power supply. In the same way the infrastructure also requires improvement including the railways, roads and other communication systems. Although the government has put forth reforms regarding these issues and those put forth above by Havrylyshyn and Adenikinju, it is not until they are fully implemented that progress will be underway for the manufacturing sector, and even then time is needed for adjustment and stabilization.

Talabi 33 argued that the problems associated with the decimal performance of the Nigerian manufacturing originations are the by-products of policies and strategies that have been in practice for many years. To resolve these challenges, the government must focus upon the formulation of an equipment-leasing law that will work to improve the weak infrastructure of the country. If this is implemented, in turn the manufacturers will be encouraged to manufacture high quality products. It is also vital that there must be good management of funds and donations in a proper manner to assist manufacturing activities. Many of the funds and finance facilities provided by international and regional financial and trading institutions like the World Bank and the African Development Bank (ADB) are highly mismanaged at a national level as a result, the fruits of the funds do not reach the manufacturing sector 11. If the government succeeds in providing the funds to the manufacturers, and if the manufacturers will make positive use of the funds, then the manufacturing industry of Nigeria can progress and make its presence valuable at the regional and international level.

6. Conclusions
The above literature review has presented a detailed account of information related to the past and present performance of the Nigerian manufacturing sector. It is revealed that the economy of Nigeria depends heavily upon the oil sector and fluctuations in oil prices in the global market have contributed towards the economic instability of the country. The present government of Nigeria is though, is slowly aiming to diversify its economy towards the non-oil sector. At present, the growth and performance of the Nigerian manufacturing sector is found to be in great need of reforms and improvement because the share of manufacturing sector in the countrys GDP is just at 5 which is very low. It is explained that there is a great need to increase the contribution of Nigerian manufacturing organizations in the economic growth of the country, and it has great potential to do just that if reforms are handled correctly. For this happen though, the government of Nigeria is also required to come up with support policies that will encourage and promote this and more private sector participation.

There are some problems highlighted in the review that continue to pull down the Nigerian manufacturing businesses that are difficult to address locally as the sector is facing great challenges due to globalization and high competition. Though within the country, issues of human resource management, technology adoptability, cost competitiveness and availability of skilled and qualified labour are some of the common challenges hindering the progress of the sector. The Nigerian government appeared initially unaware of these challenges because it was only in the past few years that they increased the importance of manufacturing sector. The role of the government is important in increasing the industrialization Nigeria, and the government even benefits from doing so because improving the sectors of the country will help it grow and prosper.

The paper also identified some gaps in the literature. Most of the past research studies evaluated the performance of the Nigerian manufacturing sector within the boundaries trade liberalization or technological adoptability. For example then, there appears to be little to no presence of studies that have compared the performance of the Nigerian manufacturing sector with that of other developing countries. Also, the past researchers have only identified a few strategies that are successfully being utilized by developing countries, as these can be applied to improve the Nigerian manufacturing sector. Although raising the level of research and development was cited by many researchers as a possible improvement strategy, there may be other cues that Nigeria can take from other developing countries. This gap in the literature should be filled in by future research studies. The resulting detailed account of strategies and policies can be adopted by Nigeria to attain high quality performance of the manufacturing industry. It is also suggested that Nigerian research institutions should be well supported by the government and other public and private companies in order to conduct the researches needed to finally arrest the declining trend in the Nigerian manufacturing sector.

The existing stiff competition in the business world calls for an equivalent strong business strategies in order to thrive in the market. In this regard, many firms have emulated product diversification, rebranding and expansion of product line as a technique of fighting off the competitors while maintaining strong competitive advantage. In the same way, big and small firms have increased their investments in the areas of innovations so as to produce quality products which the competitors are not able to copy. This paper will keenly analyze the marketing strategies adopted by Coca-Cola Company, one of the Fortune 500 firms with operation in the United States and overseas. The paper will also discuss some of the major innovations put in place by the company in its endeavors to improve the quality of its products.

Firms history
Coca-Cola Company is US based soft drink company which is headquartered in Atlanta Georgia. The company mainly deals with production of carbonated soft drinks which are sold in restaurants, stores and in the small enterprises in US and in the foreign countries. Coca-Cola Company was established in 1886 in Atlanta during when its products were sold as patent medicine. John Pemberton, the pioneer of the Company promoted his products by claiming that the soft drinks would cure wide range of diseases including impotence and headache. In order to increases the consumption of the soft drinks Pemberton initiated the first advertisement strategy in May 29, 1886.The advert appeared in the Atlanta journal, which was the major source of information during that time (Mireles, 2007).

Overall size and concentration ratio of Coca Cola in the Soft drink industry
The beverage industry has for along time attracted large number of firms. One of the major reason as to why companies have entered the industry is in order to compete with Coca Cola Company which has dominated the market for a long period of time. With the large number of products which the company has introduced in the market, it has effectively counteracted its competitors who have not been able to diversify their product line. Coca Cola Company market segment covers more than 200 countries in the world. With more that 100,000 employees and revenue generation of more than 50 billion US dollars per annum, the company has widened its market base to cover regions which competitors have failed to dominate. Due to the high demand of its products in US, the company has increased its concentration in the US market. In turn the company has been able to increase its annual sales and profits. The company annual profit is approximately 5,808 billion US dollars.

Revenue generation
Coca Cola Company marketing strategies have positively affected its profitability. Due to the intensive advertisement and promotion, the number of consumers of the company products has continued to increase. As a result, the company has continued to enjoy increasing revenue and huge market segment. With more than 52 billion beverages products which are consumed daily by the consumers, Coca Cola soft drinks account for more than 1.7 billion. In turn the high annual revenue of the company which currently stands at 31,944 million US dollars has made it possible for the company to execute its operations as well as undertake more research and development strategies. It is good to note that based on the 2007 Annual Report, the company registered 37 sales in US, 20 in the rest of the world while sales in Brazil, China and Japan stood at 43 (Simon, 2009).

Production technology
One of the techniques which Coca Cola Company has adopted in order to dominate the market is the high production technology which the competitors are not able to duplicate. In the same way the company has adopted modern technology which has made it possible to diversify its product line. Some of the new brands which the company has introduced in the market include Coca-Cola Vanilla, Coca-Cola Cherry and Coca Cola Zero. In its production facilities the company utilizes caffeine, Phosphoric acid, sucrose and carbonated water. It is imperative to note that the company utilizes franchising model in its production and distribution of its products. This implies that the company produces concentrated syrup which is then sold to various bottlers in different parts of the world. The distributors prepare the final soft drink by mixing the syrup with clean water. In order to safeguard the exact formula applied in the production of Coca Cola products, Sun Trust Bank acts as the custodian of the original copy of the formula on behalf of the company. In this way, it has been very difficult for the competitors to come up with products which are exact like those of Coca Cola Company both in terms of quality and color.

Product lines
Coca Cola Corporation top management team has for a long period of time realized the importance of products diversification. Having in the soft drink industry for more than 100 years, the company has more than 400 brands of soft drinks. Some of the major products includes Cherry Coke which was introduced in 1985,Diet Coke with lemon to improve its quality, Coke with lime, Coca-Cola zero, Coca Cola blak,Diet Coke plus, Vanilla Coke and Diet Coke with citrus zest. With this wide product diversification, it very clear as to why the company enjoy a competitive advantage over its competitors.

It is also vital to note that due to the high number of company products it has made it possible for the company to continue with its operations. This is based on the fact that a loss by one type of a product is counteracted by profits made by another type of brand. This means that the aspect of Coca Cola as a going concern is highly valued by the entire management team.

Market share
As mentioned earlier Coca Cola Company market segment covers global market. It is due to the company strong advertising strategies which has made it possible for the large number of consumers to emulate strong loyalty towards the company products. In the same way, the company has been able to put off its major competitors in the soft drink industry(Pfeffer and Salancik, 2008).Some of the notable competitors are Kola Real in South America, Corsisa in French and Inca Cola, one of the major soft drink in Peru. However, due to the effectiveness of the marketing and promotional strategies adopted by the company marketing department the company has continued to dominate a large market segment which has resulted to an increased level of profitability for the company.

Management style
The company top level management team is based in US. The team is under the effective leadership of Muhtar Kent who is the also the CEO of the company. In order to effectively manage high number of other affiliated branches in different parts of the world, qualified managers are responsible to oversee their operations. The management style adopted by the company puts into consideration the need to perform company duties as a team and the desire to enhance performance. It is based on this fact that Robert Goizuetta, former CEO changed the management structure after the company recorded a decrease in the revenue. In addition, Robert streamlined the recruitment process of managers and senior company personnel and as a result a great level of performance was realized by the company.

Coca Cola Company RD (Research  Development) strategies
Research and development (RD) is an aspect that every organization which is focused towards maximizing its profits and the overall shareholders returns cannot overlook. Coca Cola has put in place proper avenues through which it has initiated strong innovation strategies. Under the leadership of Danny Strickland, the technology and innovation personnel, the company has ensured that its quality products meet the needs of its consumers. One of the important RD strategies which the company has put in place is a RD center established in Turkey. This has positively the operations of the Company in Turkey and the neighboring countries. Coca Cola Company commitment to RD tactics is geared towards providing valuable products to the consumers. In order to achieve this, the company has established four more areas of technology in addition to its core business of producing soft drinks. These areas include Vending equipment, Water treatment systems, Fountain equipments and modern packaging system (Zyman, 1999)

Marketing strategies adopted by Coke the major product of Coca Cola Company.
This part of the paper will analyze the marketing strategies adopted by Coca Cola Company in marketing Coke, the companys main product. Coke was established in 1944 by a Griggs Candler, a famous businessman. In the 20th Century the marketing tactics applied by the Griggs made it possible for this brand to dominate the soft drink industry.

Coke pricing strategies
In order to penetrate the market effectively the prices of the Coke was initially very low. For instance, a single glass of Coke was sold for five cents. This was a proper strategy to put off the high number of competitors who were entering the market with an intention to compete with Coke. Depending with the costs of production and the transportation costs 1 litre of the Coke soft drink is priced between 1.5 to 2.0 US dollars. With these flexible and low prices it has been possible for many consumers to comfortably acquire the beverage. Likewise, the pricing strategies have created a positive customer company relationship thus increasing the sales level for the company (Murden, 2005).

Coke Competitive strategies
Distribution strategies
Coke is distributed by the members of channel who have been licensed by the company. In the same way, the distributors are responsible for diluting the concentrated syrup which is obtained from the companys production department. This gives coke a competitive advantage over its competitors in that customers are able to get their favorite beverage on time. Secondly, through the assistance of the distributors in preparing the final product the costs of production is distributed among the producers and distributors.

Advertising strategies
Since its introduction in the market, Coke has been effectively identified by most of the consumers due to the intensive advertising campaign it has initiated. In order to make the product acquire more awareness in the minds of the consumers, the company has used celebrities to advertise Coke. One of the celebrities used by this brand in its marketing strategies is Selena. Through the television commercials in the US she strongly influenced the advertising strategies for Coke. In addition, Coke used slogan which were very different from those of the competitors but which were and highly recognizable. Such slogans include Id like to buy the world a coke, Coke the drink that pauses and the other side of Coke. Based on such an intensive advertisement, the company has been able to effectively put at bay its main competitors such as Big Cola in Mexico, Breizh Cola and Corsica Cola in the French market.

Recommendations
With the increasing competition in the soft drink industry, it imperative for Coca Cola Company to invest in improving the existing products. Since most of the competitors have now taken more strategies to go global and to utilize e-marketing, it is vital for the company to improve on the quality of the existing products.

As mentioned in the production technology section, Coca Cola Company utilizes sucrose and HCFS (High-fructose corn syrup) in the production of its products. However, it is important to note that even though the two ingredients are important in the production of Coke their adverse effect is a great concern to the consumers in US and in other countries. The first major effect is that their consumption results to an increased chance of Obesity to the consumers. Secondly, excess in take of sucrose leads to increased level of insulin which results to gout. Likewise, HCFS has also been a major cause of increased body sugar level. However, HCFS has less negative effects as compared to the sucrose. In this regard, it is imperative for Coca Cola Company to consider a change in its composition of the Coke ingredients. One technique which the company can adopt is use of real sugar in its production of Coke. As a result, the company will reduce the expenses incurred in the carbonization and affination processes involved in the refining of the sugar. This will also lead to increased profitability and reduced health expenses for the consumers of Coke brand.

Another advantage of using real sugar in place of sucrose is that it avoids use of harmful chemicals such as phosphorus and calcium carbonates which are harmful to the consumers. In turn, this will positively enhance more purchases and loyalty a fact which will lead to more consumption. To avoid the high costs of importing real sugar, Coca Cola Company should come up with a program which will enable it acquire land where it can grow its own sugarcanes. Alternatively the company should encourage farmers to adopt sugarcane as an agricultural activity. This will increase the sugarcane production reduce cost of raw material and increase profits for the company. Since the company utilizes locally produced and imported HCFS, replacement of sucrose with real sugar will reduce the cost of importing the HCFS.In this way, the company will provide an avenue through which more revenues will generated by Coke brand. More sales for Coke will act as a source of income for the company to support other Coca Cola brands which are currently in the market or which are going to be introduced in future.

The company should also increase its CSR (Corporate Social Responsibilities) programs. This can be undertaken by use of tree planting exercises and digging of boreholes in dry areas especially in African and Middle East countries. In this way, it will not only improve its relationship with the customers, but it will also create a positive image of the public as well as the government. Based on the above analysis and recommendations competitors in the soft drink industry will not be able to outdo Coca Cola Company in the soft drink industry. The prices mechanisms and the continued marketing strategies including brand diversification by the company will pray a vital role in ensuring that potential competitors are kept at bay.