...Blue Nile Inc. Created by A, B and C. Executive Summary Incorporated in 1999 as a Delaware corporation, Blue Nile Inc.is the leading online retailer of high quality diamonds and fine jewelry. Blue Nile offers its products for sale through the bluenile.com website in over 40 countries and territories throughout the world. The company is headquartered in Seattle, Washington and employs 206 employees as of December 2012. The objective of Blue Nile is to offer high-quality diamonds and fine jewelry at competitively attractive prices and at the same time providing useful information and guidance throughout their purchase process. High end jewelry shopping has in fact taken a surprising turn as more and more customers order them online at websites like bluenile.com instead of vising a brick and mortar store. Blue Nile is definitely not the only online jeweler. It has competitors like diamonds.com, whiteflash.com and successful retailers like amazon.com have also tapped this market in the recent years needless to say that the competitive market is intense and highly fragmented with brick and mortar stores also selling a big percentage online. While barriers to entry is high in this industry due to high capital costs, regular brick and mortars are entering this online market due to the ability to keep costs down while reaching a huge market. Threat of substitutes is really low which is a significant advantage to all diamond jewelers. The bargaining power of customers is medium...
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...Comparison of Transactional and Transformational Leadership: Case Study of the Difference between William Wong (Lukfook Jewelry) and Yu-tung Cheng (Chow Tai Fook Jewelry) Leadership Styles i TABLE OF CONTENTS 1. Introduction ............................................................................................................ 1 2. The literature review of leadership......................................................................... 2 2.1. Transactional leadership ............................................................................... 3 2.2. Transformational leadership......................................................................... 4 3. Jewelry industry in Hong Kong................................................................................ 6 4. Leaders’ background ............................................................................................... 7 4.1. Background of William Wong ....................................................................... 7 4.2. Leadership style ............................................................................................ 8 4.3. Background of Yu-tung Cheng ...................................................................... 9 4.4. Leadership style .......................................................................................... 10 5. Comparative analysis on leadership ......................................................................
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...1/5 Excellent performance for LVMH in 2012 Paris, 31 January 2013 LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, recorded revenue of €28.1 billion in 2012, an increase of 19% compared to 2011. This includes the integration of Bulgari as of June 30, 2011. Organic revenue growth was 9%. All business groups saw excellent momentum in Europe, Asia and the United States. Louis Vuitton, in particular, once again recorded double-digit revenue growth during the year. Revenue increased by 12% in the fourth quarter, compared to the same period in 2011, with organic revenue growth of 8%. The last quarter saw a modest increase in growth compared to the third quarter of 2012. Profit from recurring operations increased by 13% to €5 921 million, a performance which is even more remarkable when compared to the strong growth in 2011. Current operating margin was 21% in 2012. Group share of net profit was €3 424 million, an increase of 12% compared to 2011. Bernard Arnault, Chairman and CEO of LVMH, said: "2012 was another remarkable year for LVMH, especially in the context of the economic slowdown in Europe. All of our businesses demonstrated excellent momentum driven by innovation and the quality of their products, thereby strengthening their positions in traditional markets while continuing to develop in new ones. Looking beyond the appeal of our brands, it is the talent of our teams and their motivation that enables us to so effectively execute our strategy...
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...Executive Summary While demand for the costume jewelry reproductions is strong and business is brisk, your museum jewelry business is incurring a 7.4% loss in the amount $10,400 per year. In order to achieve your financial objective of $25,000 earnings per year (after taxes), this reports recommends two key changes: 1. Increase price to museums by 25%, from $680 to $850 per batch 2. Increase average number of batches per week by 20%, from 5 batches to 6 batches. These increases would generate an annual profit before taxes of $34,750 and it represents an overall gain of $45,100 over your current earnings. Recommendations The two key recommendations are detailed below. Key Recommendation 1 – Increase price to museums by 25%, from $680 to $850 per batch. The museums are currently marking-up the price to their customers by 900%. This is a hefty mark-up. According to the Hallman Company, the average retail mark-up for jewelry should run between 60% and 67% (Retail mark-up). Ralph Gonzalez with StartUp Growth suggests a mark-up of 300%-400% for jewelry (Gonzalez, 2010) . A 25% increase in the price to the museums would allow the museums to charge a reasonable mark-up of more than 600% while improving your bottom line as illustrated in table 1 below. Sensitivity Analysis Actual Sales Price 25% Higher Sales in Dollars $136,000 $170,000 Batches per Year 200.00 200 Variable Unit Cost $116,000 $116,000 Contribution Margin...
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...they are very different from most companies. Rio Grande is a family-owned business run by the Bell family. These individuals make up the board of directors. They did not want to run their company with the typical hierarchal structure so they developed a structure they refer to as participative management. Participative management consists of a board of directors, a team of business coaches, and functional teams. According to Rio Grande Careers (2011), “associates know that part of their job is to complete and continuously improve the tasks for which they are responsible. Another part of their job is to participate in the management of the company” (A Principle-Based Company). Rio Grande defines participative management as a decentralized organization. In a decentralized organization lower-level managers make the important decisions of the company, in this case the associates rather than the board of directors (Bateman, 2011). The next part of the organizational structure is the horizontal structure. According to Bateman (2011), “the three basic approaches to departmentalization are functional, divisional, and matrix” (p. 287). In a functional organization, the company groups individuals into departments that specialize in...
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...income either on the Schedule C of the individual return or as gross income on the LLC tax return for the law firm. The reason why it could be either is a result of different state laws specifying what a single person LLC can report on a business return. For the states that don't allow separate reporting, the LLC is said to be 'transparent,' meaning it does not report separately from the individual. (1) 1(b). How is the $25,000 treated for purposes of federal tax income? The $25,000 advance for expenses would have been classified as a client advance two years ago and reported as a deductible expense on this year’s tax return due to the GAAP matching principle. This year, when the $25,000 is reimbursed, the revenue minus the expense equals zero. In other words, there is no net taxable income to report. 1(c). What is your determination regarding reducing the taxable amount of income for both (a) and (b) above? If the income was received in 2011, there is little you can do now to minimize the tax consequence, except to claim all allowable deductions. Since they would generally have to be paid in 2011 to be deductible in 2011, you can't incur any new expenses now to help. If you qualify to make a Traditional IRA contribution and haven't already for 2011, you still have until April 17, 2012 to do so, but that is little help for substantial income like the $300,000 earned...
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... Blue Nile Inc. in 2011: Will Its Strategy to Remain Number One in Online Diamond Retailing Work? In the Article, “Blue Nile Inc. in 2011: Will its Strategy to Remain Number One in Online Diamond Retailing Work?”, we identify the Blue Nile Company sustains competitive advantage through the strong practice of Porter’s Five Forces Model. After conducting a Five Forces Analysis, the most important factors in the Blue Nile case, were the threat of new entrants and the rivalry among existing competitors in order for the Blue Nile Company to compete in the market and the ability to sustain competitive advantage. The Blue Nile company sustained competitive advantage by diminishing potential threats of entry to a moderate level. The threat level of new entrants was kept moderate by ensuring that network effects were present. These network effects were enhanced by the policies the company had. The Blue Nile customers faced high switching costs by giving up on valuable characteristics the Brand created for its consumers. Blue Nile’s strategy of providing educational information, in-depth product information, grading reports, customization, and attractive prices were all key drivers that increased costumer’s brand loyalty. All of theses unique services Blue Nile provided for the consumer became valuable for the costumer, therefore, creating high switching costs. Throughout the case we become aware of some of the government regulations that exist in the jewelry market making it very...
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...It was a pleasure to meet with you last week. This memo is in regard to your concerns that you mentioned during our meeting and my recommendation for each one. Please review this memo and call me if you have any questions. 1) John Smith tax issues: a. How is the $300,000 treated for Purposes of Federal Tax income? Gross income means” all income from whatever source derived, including (but not limited to the following items: Compensation for services, including fees, commissions, fringe benefits, and similar items…..” (http://www.taxalmanac.org/index.php/Internal_Revenue_Code:Sec._61._Gross_income_define d#Location_in_Internal_Revenue_Code) According to IRC Publication 3402 Taxation of Limited Liability Companies “an individual owner of a single-member LLC classified as a disregarded entity is not an employee of the LLC. Instead, the owner is subject to tax on the net earnings from self-employment of the LLC which is treated in the same manner as a sole-proprietorship.” (http://www.irs.gov/publications/p3402/ar02.html#en_US_publink1000205890). The $300,000 is his active income. It is subject to self-employment income tax. Also, based on the cash method accounting sole proprietorship, your fee/ compensation will be taxed when you receive it. b. How is the $25,000 treated for purpose of Federal tax income? According to IRC Sec.104 (a) (2) “Any winnings in a personal injury lawsuit that covers the treatment of physical injuries are not taxable except for attorney fees which are taxable...
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...taxes and not any other tax” http://www.irs.gov/businesses/small/selfemployed/index.html B. How is the $25,000 treated for purposes of federal tax income? The 25,000 is treated as an income and at the same time as a business expense. The $25,000 should be included in John’s income since he received it, while he still can claim this amount as a business expense, so he will be taxed on this amount. C. What is your determination regarding reducing the taxable amount of income for both (a) and (b) above? The $25,000 has been used already as business expenses, so it is not taxable income. The $300,000 is considered a lump sum payment for two years of work on this case; therefore John needs to see what his best option to report this income is. If John reports his income in one year, that will put him in a higher tax bracket. The more income you make, the higher taxes you pay, so the better option is to review last year’s tax return and compare...
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...Consumer and Shopper Insights August 2011 Korea’s luxury market: Demanding consumers, but room to grow By Aimee Kim and Martine Shin Key themes from the 2011 McKinsey Korea Luxury Consumer Survey Every year since 2006, sales of luxury goods in South Korea have risen at least 12%1, to an estimated $4.5 billion in 2010. In the first four months of 2011, sales at department stores were up more than 30% compared to 2010. 2 This continues an established trend, as last year’s report on the market showed (see report at csi.mckinsey.com: “Living it up in luxury.”) Still, insiders are asking whether it can last. For one thing, according to McKinsey’s survey, the percentage of household income that luxury consumers spend on luxury is already higher in South Korea (5%), than in Japan (4%)3—and the Japanese luxury market has been stagnant in recent years. Moreover, the performances of famous brands in Korea have been mixed. For example, LVMH and Ferragamo continued to do well, but others, like Gucci Group and Dior, saw sales drop in real terms in 2010.4 1 2 3 4 5 6 Thus, while the headline news is that the luxury market is still growing strongly, uncertainty is also mounting. In this year’s report, McKinsey addresses these concerns, which come in the form of three key questions: Can South Korea keep it up? What’s changing? And what do these trends mean for the players in the luxury industry? To answer these questions, for the second year in a row, McKinsey surveyed 1,000 Koreans...
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...Axia College | Miranda Assignment | Week 8 Assignment ADJ 275 | | | 7/10/2011 | | * When should the Miranda warnings be given and why? * How might this situation not require Miranda warnings? * Explain your reasoning. Miranda warnings should be given as soon as the suspect is in custody and before any questioning or interrogation. Miranda warnings are given in order to protect the constitutional rights of the suspect. Miranda warnings also ensures comments made by a suspect are admissible in a court of law. If the suspect is made aware of his or her rights, and choose to waive them, any incriminating statements can be used against them. If they waive the right to an attorney, they can be questioned without an attorney coaching them. A suspect may also, at any time during interrogation, request counsel. At this time, questioning must stop until the suspects attorney is present. A request for counsel must be clear and unambiguous. If a suspect decides they want an attorney after initially waiving thir rights, they must clearly state this. Officers conducting the interrogation may ask questions to determine if the suspect is indeed asking for an attorney. Example case: Davis v. US The Supreme Court ruled that clarifying statements were not required if a suspect makes an ambiguous statement of their Miranda right to counsel. The defendant Robert L. Davis, was accused of beating a sailor to death with a poolcue after an argument...
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...As mentioned by the GS analysts in their Equity research report, there is a rosy growth for the coming fiscal years (2012). It is not hard to understand this due to the below 2 reasons: A clear market leader – Building on its 80-year heritage, CTF enjoys the largest market share of 12.6% and 20.1% in China and Hong Kong, respectively. Its retail network of 1,506 stores as of Sept 2011 is also the largest among peers (such as Luk Fook 590.HK) and Chow Sang Sang (116.HK). There is no doubt that CTF can enjoy a high growth when compared with LF and CSS for the 2012. [pic] Source: Frost & Sullivan, AAstocks Vertical integration - CTF produces about 50% of gold and 80% of jewelry products in house. The higher-than-average self-production ratio allows CTF to closely monitor product quality and react to market trend better. CTF currently has 9 jewelry factories and 3 diamond cutting and polishing factories. The costs involved in production will be greatly reduced which can directly and indirectly increase the profit margin. CTF is also a site holder with Diamond Trading Company (DTC), enabling good access to high quality diamonds. Among HK listed jewelry retailers, only CTF and Chow Sang Sang are DTC site holders in Hong Kong. (Source: http://corporate.chowtaifook.com; http://www.diamondworld.net/contentview.aspx?item=2082) Financials Analysis from GS: We look for 40% growth in FY13E and 29% in EY14E CTF has higher earning risk than LF and CSS 10% downside risk...
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...departmental stores. It is currently operating under two brand names the Macy’s and Bloomingdale in over forty five states of America. The company specializes in the range of products including jewelry, furniture, house hold items, footwear, clothing and other related items.It also offers online shipping services to the clients in large numbers of countries. The company currently operates in four business segments including Macy’s, macy.com, Bloomingdale’s and Bloomingdales.com (one source, 2011). The company’s stocks are listed in the New York Stock Exchange under the symbol M (Macy’s Inc, 2011). The current market capital of the company is over thirteen billion US dollars and holds second position while Kohl’s Corporation has over sixteen billion US dollars market capital holding first position in the markets (NYSE:M, 2011). SWOT Analysis SWOT Matrix Strengths * Market position * Business operations * ecommerce | Weaknesses * Legal issues * Geographic concentration | Opportunities * Business expansion * Expanded product lines * mergers | Threats * Competition * Regulations * Economic conditions | Strengths Macy’s Inc. is among the largest retail outlets operating in the United States that deals in the diverse range of products like apparel, households, jewelry etc. The company earned over twenty million US dollars for the year 2010 from its business divisions. The brand name Macy offers over eight hundred departmental stores and future galleries...
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...of departmental stores. It is currently operating under two brand names the Macy’s and Bloomingdale in over forty five states of America. The company specializes in the range of products including jewelry, furniture, house hold items, footwear, clothing and other related items.It also offers online shipping services to the clients in large numbers of countries. The company currently operates in four business segments including Macy’s, macy.com, Bloomingdale’s and Bloomingdales.com (one source, 2011). The company’s stocks are listed in the New York Stock Exchange under the symbol M (Macy’s Inc, 2011). The current market capital of the company is over thirteen billion US dollars and holds second position while Kohl’s Corporation has over sixteen billion US dollars market capital holding first position in the markets (NYSE:M, 2011). SWOT Analysis SWOT Matrix Strengths • Market position • Business operations • ecommerce Weaknesses • Legal issues • Geographic concentration Opportunities • Business expansion • Expanded product lines • mergers Threats • Competition • Regulations • Economic conditions Strengths Macy’s Inc. is among the largest retail outlets operating in the United States that deals in the diverse range of products like apparel, households, jewelry etc. The company earned over twenty million US dollars for the year 2010 from its business divisions. The brand name Macy offers over eight hundred departmental stores and future galleries in over...
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...| Macy’s Inc. Valuation Report | | Table of Contents Objective 2 External Sources of Information 2 Company Identification 2 History 3 Executive Management 3 Financial Overview 4 Stock Classes and Ownership 5 Market Data and Analysis 5 Overview of Valuation Approach and Method 7 Valuation Results 9 Appendix A 10 Appendix B 11 Macy’s Valuation Report Objective Our objective is to estimate the Free Cash Flow (FCF) value of Macy’s Inc. as of July 24, 2011 (date of valuation). Macy’s Inc. is a C-Corporation organized under the laws of Delaware. It is primarily engaged in the business of premier retail fashion. The standard of value was Free Cash Flow Value, which measures the company’s ability to generate cash after accounting for capital expenditures, which is a fundamental basis for stock pricing. FCF provides a viable indication of Macy’s ability to develop new products, buy back stock, pay dividends, or reduce its debt depending on the amount of cash the company has to expand. Since FCFs indicate the financial health of a company in its current environment, this valuation’s purpose is to determine Macy’s ability to increase stock prices and maximize shareholder wealth. External Sources of Information We have used various external sources of economic and industry data to assess the condition of the general economy, trends in the fashion retail industry, and the condition of the securities markets. Among those sources, we used Plunkett Research...
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