...SWOT ANALYSIS The swot analysis Strength: • Name recognition which makes them the largest product marketplace • Long term experience • Leading position in their industry • Premium quality reputation • Distribution • Public Relation Strengths 1. LVMH¡¯s prestige brand focus is a key foundation of the group¡¯s strategy. It has the leadership in luxury product market 2. Its presence in wines and spirits constitutes an advantage for the group. Thanks to its strong position in champagne and cognac, Weaknesses • Their Diversification • Conflict of interest within company (fashion vs. wine and spirits) • Forward and backward integration • Finance problems: net sales decreased by nearly 6% in 2003 • Declining shares Weaknesses 1. The luxury goods are very sensitive to the fluctuation of economy; any economic wave could influence its sales. LVMH’s business largely depends on the economic sitation of the buyer, if economy was depressed, its sales growth slow down sharply like it did in 2002, ( after 11th septmber ) or the financial kises in 2009nsince demand for luxury goods declines markedly when recession or depression happens. 2. Broad acquisition makes no sense and could bring burden, such as it acquired Pury & Luxembourg, which is criticized since there was no room for art auction market. Opportunities • Merger and acquisition (The small companies are seeking shield to exist in fierce competition.) usage of snob effect makes rising the demand...
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...Case Analysis – Unretired Issue and Problem Retirement financial security is one of the hot topics today during the economic downturn. A Growing number of people who retired in recent years are finding themselves strapped in the economic downturn. With most of their assets in the stock market, many retirees are forced to return to the workforce. Retirees have a hard time looking for a job or career because of the weak economy. In addition, one survey finds that a large percentage of people make investment decisions by themselves. The goal of this case study is to find out the major cause of this social problem and to provide some solutions to the issue. Moreover, the goal of corrective action is to make sure retirees can retire at their retirement age and have a better financial security. Evaluation and Analysis The United States retirement system is established in both public and private sectors for a long time. In general, both employer and employee will contribute to the retirement fund during the employment period. In most cases, the retirement fund will be set aside and handled by investment companies. Large percentages of the fund will be invested into either mutual fund or stocks. The issue arises with the economic going downhill since the stocks tend to get hit the most. Economic downturn is a normal business cycle which happens in a regular basis. If retirees have most of their retirement funds in stocks, they will bear incredible risks during retirement...
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...Analysis of the Business Cycle – The Beauty Salons By Jacqueline R. Jones Presented To Dr. Saad M. Khalil December 5, 2010 ECO550009016: Managerial Economics and Globalization Strayer University Abstract The scope of this paper is to investigate, prove or disprove the implications that due to our current economic status for the past twelve months our GDP (Gross Domestic Product) growth, inflation, unemployment, corporate profits and other data has played a relevant part on where our economy currently is in the business cycle today. It implies that these factors may play a significant part on our prospective for higher sales, labor cost and growth from a monopolistically competitive firm or industry. Various official U.S. sources on statistics have been complied and examined as well as information from numerous websites and articles and have been studied to see if these analysis are founded for today’s economy. Studies from the Labor Statics, the Bureau of Economic Analysis and the Federal Reserve Board have conducted, similar aspects on the business cycle pertaining to GDP growth, inflation, unemployment and corporate profits about the business cycle. We will also look at the of a monopolistically competitive firm (beauty salons) to see if they will experience growth when unemployment is low or what will happen when higher employment effect a downturn in the business cycle. According to the Burea of Economic Analysis the GDP (Gross Domestic Product)...
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...PEST analysis chart, you'll want to examine several external factors that may influence business operations and decision making, then classify these factors into four distinct buckets: policitcal, economic, social, and technical. Political factors are essentially how and to what degree a government's policy will impact a business's operations and decisions. Political factors include tax policy, labor law, environmental law, trade restrictions, regulations, tariffs, and political and economical stability. Governments have great influence on national infrastructure and the general education of the population as potential employees and customers. Economic factors are local, national, and international economic conditions that can influence a business's operations and decisions. Economic factors include economic growth, interest rates, taxes, consumer confidence, exchange and inflation rates. Social factors include lifestyle trends such as health consciousness, population growth rate, age distribution, career attitudes, and ethics. Trends in social factors also affect the demand for a business's products and how that business operates. Technological factors include R&D activity, licensing and acquiring patents, available research funding, communications, automation, technology incentives and the rate of technological innovation. Technological factors may determine barriers to entry, minimum efficient production level, and influence outsourcing decisions. PESTLE ANALYSIS BY PEPSICO...
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...Changing Market Local, state, and national economic trends play a large part in the success and failure of businesses. When the economy experiences a downturn, consumers spend less and seek more for the money they do choose to spend; this puts companies in a unique situation. Many companies must choose between increasing prices and letting employees go in order to keep themselves in business. The United States recession of 2008 put employers in the same situation; in fact, this recession put employers in an even more difficult position. The recession saw a decrease in employment of over 6 percent—double that of all previous postwar recessions (Auguste, Lund, & Manyika, 2011). The retail sector lost 1 million jobs during the most recent economic recession. Since then the industry has added over 90,000 jobs, but this still results in job losses offsetting job gains due to this rough economic time (McCall, 2011). Wal-Mart, like any other retail business, feels the effects of recent economic trends. Unfortunately, Wal-Mart has had to resort to eliminating health insurance coverage for part-time employees and increasing premiums for other workers in an effort to cut costs (Wright, 2011). This strategy, though unfortunate, allowed the company to cut costs during the recession without eliminating positions or increasing prices. Wal-Mart also implemented strategies to increase profits even before the economic downturn. In 2005, the company implemented a plan to...
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...Greggs Case Study – Business Report of Greggs “To be successful, you have to have your heart in your business, and your business in your heart.” By Thomas Watson, Sr. Subject : Business Report of Greggs 1. Executive Summary - Greggs is the top bakers’ chain in UK. - Greggs owned 1400 shops and employ 19,000 workers. - Ken McMeikan – Chief Executive leads Greggs to success. - Greggs has a good performance in the economic downturn. - Changes and strategies help Greggs to defy economic downturn. - Greggs is planning for an international expansion. - Greggs is a company responsible to its stakeholders – customers, employees and shareholders. - Part of the ideas are generating from analysis of Greggs’ reports and PESTEL analysis. 2. Introduction Greggs is a national company which has recently owned more than 1400 shops in UK. After the closure of its Belgium operation, Greggs changed from a decentralized to a centrally run business. This successful bakery chain is led by Mr. McMeikan who served under some of the most-respected retail sectors’ leaders before. In the near future they are planning to open a further 600 shops to create 6000 new jobs and will carry out an international expansion in the next few years. In the report, we can see the latest performance of Greggs, how its chief executive manages the changes and the considerations of the business development and how it treats its stakeholders. 3. Environment that Greggs works in Greggs...
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...value of greater than 1 reflects that the volatility in the stock’s price is greater than the broad-based index. While this may be unappealing for risk adverse investors, many companies have a beta greater than 1 and this paper will examine and analyze the strengths and weaknesses of Alcoa’s beta analysis. To calculate Alcoa’s historical beta, we used weekly adjusted stock prices for dividends and splits posted on Yahoo Finance and weekly S&P 500 index value for the same period. The beta calculated using this data was 2.06. As shown on table 1 the correlation with the S&P market is significant, that is also evident if we plot the values together in the same graph, figure 1 shows a positive relationship between the market and Alcoa stock price. Table [ 1 ]: Regression Output AA and S&P Similar to other market indicators, it’s crucial to recognize that the economic downturn of 2008, as well as the recent recovery, resulted in Alcoa’s stock price and the broad-based index in general returning numbers that were disproportionately high. In several instances, variations over 5% occurred. Especially when Alcoa rebounded as the market remained flat. A three year analysis provides results which may not be indicative of the actual beta relationship that Alcoa maintains with the index today, therefore, several steps were also taken to obtain a more short term view of Alcoa’s relationship to the market. Figure 1: Scatter plot AA and S&P500 Calculating Required...
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...to create a smile for all candy lovers. The company has a large product line of candy. The core brands consist of the Hershey’s Bar, Hershey’s Kiss, and Reese’s. Hershey’s products are found in over 80 countries and Hershey’s strategically focused to increase international global market share. Currently, its business strategy is to focus on innovation of new products, core brands, and recent business acquisitions to maintain its stable revenue. Hershey’s 5-year compound growth rate is 6.8%, and the company experienced positive growth during the economic downturn. Overall, Hershey’s main competitors are Mars, Mondelez, and Nestle. RISKS As the economy continues to recover from the economic downturn, increased prices in the cost of sales will occur, especially as Hershey’s moves towards certified cocoa. Cocoa beans, sugar, and dairy show trends of increased prices; however, Hershey’s uses hedging instruments to minimize the impact of higher cost of sales. Therefore, the company is able to maintain the average cost of sale of 56%. Also, Hershey’s has lost international market share, but recent acquisitions Brookside and Shanghai Golden Monkey Food have recently shown improvement in international presence. Also, consumers demand for healthier chocolate candy is causing Hershey’s to invest in innovated candy. The company has kept up with customer feedback throughout the years. Figure 1 shows the net profit of Hershey’s compared to its major competitors and concludes its strategies...
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...Work list and recognition in health magazines. The vision is encompassed by the company motto “Whole Foods, Whole People, Whole Planet.” These principles are of the utmost importance to the company. By supporting the whole foods industry, healthier people from healthy food, and a healthier planet through green movement in agriculture and operations, this company is essentially promoting the way of life that best suits their ideal target market. By promoting the benefits of this way of life the company is promoting the products and lifestyle that it sells. Literally, the company is promoting its whole way of doing business and setting itself apart as the leader in green, organic, natural foods, and as a business entity. According to my recent...
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...Q 1 How has the global economic down turn, Discussing in opening profile and throughout this chapter, impacted jobs outsourcing in the BPO industry? Ans: The global economic downturn has impacted jobs outsourcing in the BPO industry as it has helped to be one of the largest job creators in India. Due to this, many companies had to increase their operations output and therefore employ more and more people to keep up with the expanding trend. Job outsourcing seemed to be the only viable option as global economic downturn had created many problems when it came to funding and financial institutions. There needed to be cut backs in order to keep things afloat and most companies would see that job outsourcing would solve at least one of the many problems involved in the economic downturn. The global economic downturn provided merges and many acquisitions for the BPO industry and helped to create certain flexibilities for some companies which helped with resource management. The main reason why the economic downturn has impacted on job outsourcing in a major way is because it is cost effective and helps companies concentrate on core areas. It also contributes to improvement in productivity. Referringto chapter, The International Institute for labor has discussed in the opening profile “The reason behind the global economic downturn is the financial crisis which is hitting the world of work”. The credit crunch and collapse of stock markets are starting to effect firm’s...
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... 2- Financial Market Analysis and its effect on the retail market. 3- Analysis of TESCO financial position and performance2008-2010 Profitability Analysis: Profit Margin/ Sales trend/ ROCE Liquidity Analysis: Current ration/ Acid ratio/ Operation Cash Flow Ratio Activity/ Efficiency Analysis: Debtor Day, Creditors Day, Inventory turnover Leveraging Analysis: gearing Ratio/ Interest Cover Ratio/ Market Analysis: EPS, P/E 4- Expected Performance had the downturn not occurred Profitability Liquidity Efficiency Leverage Market 5- Conclusion 1- Introduction in this report I analyse TESCO's financial position and performance in the context of recent financial market crisis. In my analysis I will have a short review on the financial market development in the last 2 years and then I will consider TESCO's position and performance before and after this development. In reviewing TESCO's financial position and performance I will be using various financial ratios to evaluate its performance, market risk, liquidity as well as future prospect of the company. As with many other industries, grocery and food industry’s growth will be affected in a volatile market. However the effect of a economic recession in this industry could be limited compare to other industries as grocery and food is not considered, to some extend, a luxury industry and people will need to buy food and clothes even in the recession. 2- Financial Market Analysis and its effect on the retail...
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...The United Kingdom has the seventh-largest economy in the world, has the second-largest economy in the European Union, and is a major international trading power. A highly developed, diversified, market-based economy with extensive social welfare services provides most residents with a high standard of living. The UK joined the European Economic Community (now known as the EU) in January 1973 and it is a founder member of the World Trade Organization. The United Kingdom is one of the world’s leading advanced economies. And it is the second biggest exporter of services in the global economy and ranked eighth in global exports of goods. The United Kingdom is the world's fifth-largest trading nation, highly dependent on foreign trade. It must import almost all its copper, ferrous metals, lead, zinc, rubber, and raw cotton and about one-third of its food. The United Kingdom's exports manufactured items like telecommunications equipment, automobiles, automatic data processing equipment, medicinal and pharmaceutical products and aircraft. Its main trading partners are European Union countries, The United States, China and Japan. United Kingdom is also the European Union's only significant energy exporter. It is also one of the world's largest energy consumers, and most analysts predict a shift in U.K. status from net exporter to net importer of energy by 2020, possibly sooner. Oil production in the U.K. is leveling off. Therefore, UK should export the oil energy from foreign countries...
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...key strategic business position, possessing a significant portion of the equipment finance market, and made the decision to improve upon their position by purchasing an equipment manufacturing company, which they accomplished in 1951. Because of this single managerial decision, the company was able to grow and be profitable for the next 55 years. The company stock has risen from $5 per share to $85.60 per share. The company has witnessed six stock-splits over the decades, and the current stock price is $35 per share. With the global market downturn beginning in the late 2000s, the once stable and profitable company found itself facing declining revenues, increased competition, environmental catastrophes, and political obstacles. The company was forced to lay off one-third of its labor, and watched its profits decline 30% in a year. Neither of these two events had ever before occurred in the company’s lengthy history. Objective Recent historical data indicates that FGI’s current managerial...
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...SWOT ANALYSIS The swot analysis Strength: • Name recognition which makes them the largest product marketplace • Long term experience • Leading position in their industry • Premium quality reputation • Distribution • Public Relation Strengths 1. LVMH¡¯s prestige brand focus is a key foundation of the group¡¯s strategy. It has the leadership in luxury product market 2. Its presence in wines and spirits constitutes an advantage for the group. Thanks to its strong position in champagne and cognac, Weaknesses • Their Diversification • Conflict of interest within company (fashion vs. wine and spirits) • Forward and backward integration • Finance problems: net sales decreased by nearly 6% in 2003 • Declining shares Weaknesses 1. The luxury goods are very sensitive to the fluctuation of economy; any economic wave could influence its sales. LVMH’s business largely depends on the economic sitation of the buyer, if economy was depressed, its sales growth slow down sharply like it did in 2002, ( after 11th septmber ) or the financial kises in 2009nsince demand for luxury goods declines markedly when recession or depression happens. 2. Broad acquisition makes no sense and could bring burden, such as it acquired Pury & Luxembourg, which is criticized since there was no room for art auction market. Opportunities • Merger and acquisition (The small companies are seeking shield to exist in fierce competition.) usage of snob effect makes rising...
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...I. What are the advantages and disadvantages of Rosetta Stone going public? II. Conduct your own analyses to estimate the value of Rosetta Stone. How do these values compare with the current range? III. If you were part of the underwriting syndicate, what price would you recommend for the offering? IV. Should Mark invest in the IPO? V. What alternatives to the IPO might be available to the company? I. Advantages & Disadvantages of Going Public The main advantages of Rosetta Stone going public are that an IPO would allow them the capital to expand their business into new markets as well as build on the Rosetta Stone brand. The IPO would also help them establish business credibility as a public firm. As a public company, Rosetta could enhance their image and reputation with newfound capital. It may also be advantageous to proceed with an IPO as the market has shown encouraging signs after the crisis of 2008. Changyou.com, a video game developer recently went public at 6.5 times EBITDA. Likewise, Bridgeport Education has recently considered going public and estimates that they could do so at a range of 10-12 times EBITDA. This may indicate that an IPO would behoove Rosetta Stone as it would be a successful business decision. Furthermore, the language learning industry largely consists of self-study learning as it counts for $32 billion of the $82 billion industry. Going public would allow Rosetta to be a major market presence in a booming industry. Another...
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