Callaway Golf Company: Analysis

The driver of the Callaway Golf Company is a world-class institution designed to provide a clear advantage, and to please different golf products, including breakthrough technology the backup these products significantly superior customer service, and generate a return to shareholders the cost in excess of capital.
“CGC was led by Ely Callaway, a powerful motivator who defined the company’s culture.” It’s a world famous golf brand of club and product. CGC’s sales had increased from 1988 to 1998. However, CGC’s sales have decreased after 1999. What are the problems to stop that eagle? “In fall 1999, Callaway faced these questions; the answers would guide him in refocusing CGC’s retail channels, new-product development, and marketing strategies.” In my case study, I will focus on new-product development and described my plan. Logistic include products transport, warehouse, and information processing center. Callaway Golf Club is in expensive price, but popular amateurs and professionals alike. Through its website and golf sporting goods stores, sporting goods retailers, large shopping malls selling its products in over 100 countries and regions,.(Hoovers, Dec)
External Environment
CGC is in the Cash cow. It means high relative market share and low market growth rate. That’s because CGC is well known in the world and their products in a lots of retailer stores and the clubs are famous. When Callaway buy the company, his first initiative is to develop original products. Product of golf innovation and superior performance is very important, because the equipment is considered to have a significant impact the performance of the players. In addition, innovation is very important too, because the CGC technology leader in sales of its premium products continue to exceed our customers’ expectations. However, his competitors more focus on specific target market. The technical quality of the product, to enhance the CGC of high quality brands and keep customers to replace the brand. The impact of the external environment, customers are more likely to have special clubs and low cast. To pay the annual high. The CGC is located in Carlsbad, CA(CGC official website) which full of sunshine. It is usually a good place to travel and enjoy golf. People in there might feel more relax than other states. Also, in CA, the employees are enough to do the work.

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For the external analysis, the company has a lot of opportunities. Many sports good manufacturers are expanding in the golf market. The aging of the world’s population, many old people play golf, they have flexible income to buy golf equipment. Also, in New England state, Mid- Atlantic state and parts of south west, there are many golf players and the number is increasing. (New York Times. Feb) In Figure 3,
CGC strengths are new-products development and well known in the world. The weaknesses are high prices and company relied more heavily on off-course shops. The opportunities are new-products on existing markets and marketing strategies. The threat is new-products sales decrease, low prices, cannot have good value. I will talk about products transport and warehouse in my first step, information processing center will be a follow page.
The catastrophic storm affects not only the golf round in the storm, but a significant period of time. The external analysis will change, because face different economic and compare the situation in the global market.
There are several reasons that will treats the external analysis. The high rate of unemployment rate and the increase in the level of consumer debt. Rejected consumer confidence and spending is increasing year by year. The most important reason is that the increase in the euro against the U.S. dollar, sales in euros had a negative impact. For internal analysis, small golf club manufacturers, new technologies and new production methods to become the world’s largest manufacturer of premium golf clubs and a dominant force in the industry. (ELY: NEW YORK)
The CGC sell more units, the highest price of more equipment than any other company in the business of golf. This is a successful marketing decisions and strategies. , And provide high quality at a high price sales. People will be willing to buy products and interest rates high.
Callaway consumers can trade allowances. From their club to the new Callaway clubs. This option is for consumers to upgrade their equipment.
However, the internal analysis is also have weaknesses. Callaway marketing is focused on promotion, by professional players. The company tracks imitate, resulting in higher administrative costs and loss of income, this is very difficult.
Global Manufactory and Warehouse
CGC need to set up manufactory in different countries for new-products’ transporting and saving. In figure 1,
I can clearly find that CGC is in the Product development’ square, the top right side. It means new-products for the existing markets. “To achieve that, CGC had to consistently be on the leading edge of technology and to continually exceed customers’ expectations” (CGC’s case page 505). CGC need to make new-products to continually exceed customers’ expectations. But that “CGC’s biggest challenge, therefore, was to have products differentiated not only from competitors’ products but also from its own. If a product stayed in the pipeline too long, even if it was the best product, its sales would begin declining. This decline occurred because the people who really wanted the product would buy it within the first two years of its introduction” (CGC. 4). The key word is “pipeline”. What is that? It’s “a conduit of pipe, especially one used for the conveyance of water, gas, or petroleum products”( Yes, products transport. CGC’s wasted time in new-products transportation. For instant, main manufactory transports new-products to global market need a month. If CGC has global manufactory, they just need a week or least in the transportation. That is the reason why manufactory set in foreign countries is very important stratagem. For instant, Apple Co. set his manufactory in China, cheap labor and costing, and than area manager saved those products in their warehouse in location and reported main logistic manager how many products they reserved. Marketing research, area manager build profitable relationships and create customer delight and reported main company about their area’s demand. And they made every month’s demand figure for data copy. Manufactories know how much product they need to make and warehouse will has enough room for new-product and old one. Aside from that, global warehouse good at fix that demand exceeds supply and supply exceeds demand problems. In CGC’s case, manufactory made new-product and transport to off-cause retailers have at least two problems. One is transport slowly, wasting time and declining value of “new”. Another problem is retailer hasn’t enough room for new-products. The second question CGC tried to use other way to fix. “Closeouts generally occurred when existing equipment was discontinued to make room for new products or when CGC had too much inventory itself and wanted to get rid of it. At the time of a new-product introduction, for example, if a retailer had eight of the previous clubs left in inventory, CGC would supply the store with one more new club for free, which brought down the average cost of the remaining inventory. Once a new product was introduced, the retailer had the discretion to mark down the remaining inventory to a price at which it would sell” (CGC’s case page 514). It’s helpful to make room for new-products and low price to sell closeout. “In 1999, CGC held its own closeout and sold $40 million of excess inventory of Great Big Bertha, Biggest Big Bertha, and Great Big Bertha irons to the market at a lower price” (CGC’s case page 514). If they have global warehouse, that would be saving resource and decreasing supply exceed demand risk rate.
Information Processing Center
Information processing center is the place that customers’ require report department. Their have information collect and transmit system to support manufactory, warehouse, and logistic manager or decision center. In case, CGC’s customers are from True friends shift to Butterflies.
Customers are no longer loyalty and they just need the products to play golf that’s it. New-products are the way to continually exceed customers’ expectations, that’s a reason why CGC need to know what customers needs and wants. “Golf was a difficult game whose participants’ emotions ranged from frustration to addiction, with passion and fun mixed in. Even when played in teams, golfers were very competitive with themselves. Golfers often blamed their equipment for their poor play and thus often wanted to update their clubs” (page 506). Those are all different level’s golfers’ wants and needs, high-level golfers doesn’t matter what type of club they used. Average golfers want to play golf and win the game in golf clubs, so they will keep the clubs. “Although one’s mental state and skill level had much to do with on-course achievement, in golf, unlike almost any other sport, the equipment also had a significant effect on a user’s performance. Even though highly skilled golfers would play well no matter what type of club they used, average golfers were able to see noticeable improvements in their game when they used premium equipment. Beginning golfers also benefited because the more forgiving clubs allowed them to make ball contact sooner, frustrating them less so they would not quit the sport prematurely”(case page 506). Beginning golfers would more advice of salespeople. “For a beginning golfer, buying new clubs was a daunting task. Retail shops offered a wealth of options that forced beginners to rely on the advice of salespeople”(page 507). CGC need to have those require from information processing center and make marketing strategies, refocusing on retailer. For example, focus on salespeople training for new-products promotion. For a beginner, salespeople can promote new-products or some old-model with 30%-50% discount. Old-model with discount would easier for people needs. It would not cast a lot of money and good for closeout from warehouse. And CGC gives those salespeople who are selling master 10% of $500 units sold encourage and 20% maximum. Those encourages also be used to information processing center to collect information from customers’ demand. And transmit this information to decision center.
CGC has a premium pricing strategy. It provides a high-quality product premium average players who want the performance benefits of the product.
Callaway’s strategy is successful, mainly because of its innovative edge. In addition, the average golfer that their products provide performance advantages.
The country has contributed to the success of the industry. During this time the public interest in golf increased a lot. In addition, the market is not over saturated, the Internet is not in selling products an important factor.
Establish a global manufacturer and warehouse sales will add new products and maintain profitability. And information processing center is useful to study the market and customer feedback and requirements. This will help from the external environment and threat reduction rate.
“Callaway Golf Company”. New York Times, 8 Feb 2013. Web
“Callaway Golf Company Company Information”. Hoovers, 31 Dec 2012. Web
“Callaway Golf Company (ELY: NEW YORK)”. Bloomberg BusinessWeek, 2 Feb 2013. Web

The Maesrsk Line Company

The Maesrsk Line Company is the global containerized division of the A.P. Moller. The company delivers its services across the world through ocean transportation services. They built their vision and their mission from a strong constant care, heritage of uprightness, and innovation, and this vision has made a path for their business operations since Maersk line’s first vessel sailed in 1904. The focus and commitment to this vision made them able to expand the business and become largest ocean carrier of the world. And they are constantly recognized as the most reliable container shipping company. A.P. Moller – Maersk Group headquarters at the waterfront in Copenhagen, Denmark
The fleet of the maersk line is consist of more than 600 vessels and the total number of containers is more than 3,800,000 TEU*. This shows a comprehensive and reliable coverage worldwide.
Maesks Line’s Philosophy:
We share the same values and principles of business with the maesks line group — to be a known, highly respected and world-class group.
The founder Mr. A.P. Moller wrote “Loss should not hit us, and constant care is needed for it”. These words are highly followed and having deep meaning at the company. Word “constant care” is highly focused on the safety and good health of the employees and others in the industry and environment around them.
Our Values:
The core values of the Maersk line group are the demonstration n of constant care, regard for our employees, humbleness and uprightness and the protection of the name of the company. The success lies in the fulfillment of these values while carrying out the business.
Our business principles:
The “maersk fundamental business principles” is comprises of how do we conduct our business, these principles are applicable on national as well as international legislation.
Our constant care also revolves around the protection of environment. We maximize the use of the resources and handle the waste. The policy regarding environmental protection is “we focus on the protection of the environment and environmental consideration is our first priority in conducting our business”.
Our mission:
We provide opportunities in global commerce.
Company facts and information:
Maersk Line is the leading container shipping company all over the world. It has more than 600 vessels and more than 3, 800, 0000 (a container is 20 feet long). It shows the comprehensive and reliable coverage all over the world.
What is container shipping?
Containerization, it is large and worldwide system of intermodal cargo transport by using standardized containers. This can be sealed and reloaded onto container ships, trucks and planes, railroad cars. Before the containers were introduced, it was time consuming and expensive to handle the cargo for sea transportation. The containers have brought change in that and it made transport easier and affordable than ever before.
All the types of commodities and the type of goods can be carried and loaded in ‘the box’; as a result the modernized container shipping has changed the ways of transportation around the world and played a vital role in globalization.
Since it is a biggest shipping line in the world, Maersk Line plays a vital role in facilitating efficient and reliable supply chains for many companies. It is recognized that the position of maersk line as an enabler of global trade have brought great opportunities.
Global trade of manufactured goods has increased over 100 times, from 95 billion USD to 12 trillion in the last 5 decades. Today 90% of global trade is done through ocean transport and containerization have played very important role in this development.
Awards and Recognition:
Maersk Line wins ‘Shipping Company of the Year’ award in the Middle East
14 December 2012
Maersk Line takes home two Global Freight Awards
26 November 2012
Maersk Line wins Lloyds List Environment Award for the Middle East and Indian Subcontinent
19 October 2012
Maersk Line wins Clean Excellence Award
25 September 2012
Maersk Line wins Social Media Campaign of the Year Award
17 September 2012
Maersk Line wins 2012 Best Global Shipping Line Award
7 June 2012
Maersk Line’s Ágnes Hernád wins Best Young Manager of the Year
20 February 2012
Maersk Line Wins “Shipping Line of the Year Award”
1 December 2011
Maersk Line wins two awards at AFSCA 2011
Maersk wins European Business Award 2010
Maersk Line ‘Best Global Shipping Line’, ‘Best Shipping Line for Asia-Europe’, and ‘Best Green Service Provider – Shipping Line’ 2009.
Maersk Line awarded Container Shipping Line of the Year 2007
Maersk Line wins Best Global Shipping Line 2006
Maersk Sealand named “Best global shipping line” 2005
Best Global Shipping Line” award 2004
HR Processes:
Recruitment and selection at Maersk Line:
Maersk Line strictly follows the Equal employment opportunity Law while hiring candidates for a particular department. They make sure no discrimination take place throughout the procedure of hiring an employee. The advantage of strictly following such law is that Maersk Line never face any problem pertaining to legal complexities and law suits regarding the hiring of candidates.
The recruitment process starts with the submission of online application by a candidate and a confirmation pop-up appears on the screen.
A reply will be sent within few days so that the applications can be reviewed carefully.
Applications are reviewed on the basis of some standard tools so that company can make it sure that a candidate is eligible for giving interviews.
The mediums of recruitment which they prefer are:
Employment Agencies:
These agencies make links between the employers and employees.
The advertisements on different job websites, which capture the a huge pool of candidates who can apply in the company to get the job they are capable for.
Employee Referrals
Its an internal recruiting method which identifies their potential candidates from the existing workforce’s social networks. This scheme encourages existing employees to choose the suitable candidate for a particular job from their social networks. A referral bonus is given to referring employee as a reward. It is the most efficient and cost effective method for recruitment.
Announcement on the official website
They Announce the new jobs on their official website i.e. Website has the particular portion of vacancies and the whole process of “how to apply” is mentioned.
Evaluation of internal labor supply
They prefer Internal Labor Supply over External:
Those positions which are at higher levels and become vacant due to transfers, deaths, demotions and promotions, are filled by the internal employees who are already familiar with the required managerial roles and responsibilities of those positions. These positions are then posted on the notice boards throughout the PSO offices and are also posted on a software device that is displayed on almost every computer desktop at PSO offices. The interested employees are screened, interviewed and positioned.
The criteria of selecting the internal employee depend on requirements of the qualification, age and experience recommended by the line manager
Selecting and interviewing Process:
Selection process:
1st Interview
2nd Interview
There is a predetermined criterion for hiring of candidates, which includes
Logical and personality Test
It is the standardized instruments of testing individual’s character of psychological makeup. It also reveals the aspects of how logical the candidate is. These tests play an important role in making the selection process easier.
Behavioral Interviews
These interviews discover the behavior of an interviewee. It reveals that how an interviewee acted in particular situation faced in the past. And it will predict that how he or she will act in the future. In traditional interviews there is a series of question asked, that has the straight forward answers Like “what challenges did you face? How did u handle them? Or “what are your strengths and weaknesses?”But in the behavioral interviews questions are more pointed and more specific than questions in the traditional interview. Like “describe any example of a goal reached by you and how did you achieved it?” or “how did you work effectively when you were under pressure?”
In order to get selected, candidates must fulfill the criteria they are tested upon.
English Grammar:
English comprehension
Basic Mathematics:
Identification of Resources required in particular Department:
Need Analysis
Departmental Goals
Organizational Goals
Interviewing Process:
Two structured interviews are generally conducted of a candidate at Maersk Line.
The first interview is conducted by Human Resources which are focused on the candidate’s personal skills and capabilities. They use online or hard copy assessment tools to try to form an objective picture of candidate’s personal characteristics and logical capabilities and a feedback is provided as a part of the process.
The second interview is normally conducted by the hiring manager – who makes the final hiring decisions and focuses on the specific qualities and skills which are required for the particular job.
The whole recruitment process usually takes 4 to 6 weeks; it could be vary depending on the locations.
Orientation and Trainings:
Training and development is a continuous process, and is designed to bring about a change in attitude of employees with respect to the job they are doing, the people around them, the new procedures, the new techniques and skills that they can use. It is also to make them more conscious of their responsibilities and how to perform them effectively. Therefore, all training is planned and coordinated in a systematic manner by the company, in term so identifying following needs and the skills required in the company. The training and skill development efforts are not confined to a formal class room course but extended in all directions, hence, helping to improve the productivity of employees by imparting useful knowledge and training in the areas, which are neglected, and to add up to the most of their strengths. The growth of the employees is not only a short term vision of enhancing inputs through skills based on training but also an effort for the long term development of employees by education and planned management development inputs.
Types of Training at Maersk Line:
Orientation Program:
Newly inducted employees are given a short orientation course to familiarize them with the company, organizational functions, activities, policies, procedures and programs. This type of training program may be arranged on individual basis or group class room training, depending on number of participants available.
The duration and contents of the course is determined to meet the needs of individual concerned in consultation with respective departmental heads. Depending on the type of job, newly hired employees, as well as the promotes assigned to new field of activities, are given on the job training for a period ranging from one week to four weeks, as may be deemed necessary.
“They make sure that people are empowered to do their job well”
Indoor simulators:
Job knowledge is an essential part of everyone’s responsibility in any position. Since technology, methodology, processes are changing at a fast pace, it is imperative that employees should learn new skills and techniques through specialized and technical courses organized within the company.
Seminars and constructive discussion groups:
seminars are conducted to spread the awareness regarding different programs plus it provides a platform for the employer and the employees to socialize. Group case studies play an important role in a constructive discussion between the employees.
Practical exposure and experiences:
As a trainee in their company an employee will be given a responsibility from day 1 and will be provided with a proper toolkit enabling him to experience a “real” job.
The Maersk group runs a trainee program which provides opportunities to get solid and a broad shipping knowledge. The applicants will be the part of business represented in many countries
they are looking for energetic, passionate about shipping and eager to learn individuals who can apply as a Chartering or Operation Trainee in this program.
Chartering Trainee:
as a chartering trainee, he or she will be responsible for fixing the vessels and cargos. You are to ensure that the vessels sail with the right cargo.
Operation Trainee:
as an operation trainee employee will be responsible to make sure that the operations of vessels are efficient and safe. And will have to perform following tasks.
Issuing voyage instructions
Appointing agents
Planning bunkering
Market voyage analysis
Handling insurance and legal matters
The trainee will have a broad network of stakeholders including agents, ship managers, port captains and charters.
Performance Management:
To maintain a sustainable Performance of an employee, Maersk Human resource management measures some of the main factors which has a high impact on employee’s performances.
Work output
Personal Competency
Goals achieved
Performance appraisal Methods at Maersk Line:
HR managers should be very careful while selecting methodology used to measure performance of an individual. Maersk Line uses the following methods.
Each employee is assign with the specific tasks and goals, and then the progress of those goals is reviewed periodically. Goal setting is done by mainly focusing on the Organizational goals. Secondly the departmental goals are assigned to different departments working in the company, then these goals are discussed with the employees and employees get to know what is expected from them, which defines their individual goals. Finally the progress of these goals is reviewed and employees receive feedbacks.
Paired ranking method
ranking employees by making a chart of all possible pairs of the employees for each trait and indicating which one is the better employee of the pair.
Forced distribution method
similar to grading on curve; predetermined percentages of rates are placed in various performance categories.
– Example:
15% high performers
20% high-average performers
30% average performers
20% low-average performers
15% low performers
Goals achieved
The process starts when HR throws performance appraisal forms to different departments. This appraisal form has two sides:
Employee Development Report-1 (EDR1)
Employee Development Report-2 (EDR2)
In EDR1 employee he identifies the Key Performance Indicators (KPIs), the employees themselves set the objectives and targets for the following year.
In EDR2 it is the line manager who rates the employee performance by quoting significant performance achievements and deficiencies for the past year. He indicates what development and training will employee need in the future according to the highlighted areas in the current year.
When both of them end up the negotiation then the appraisal form is sent to HR department for further follow up of the respective training or development arrangements. This way the Performance appraisal system reaches to end.
These performance appraisal methods are very useful in order to maintain competition and for employees to focus on Key performance indicators (KPIs). And the results extracted from these methods become the basis of promotion, rewards, incentives, bonuses, or layoff and punishment for an employee.
Compensation Benefits:
Since the Maersk line is very careful in maintaining the equality among their employees, they never face any equity issue.
The wages and salaries are set on the basis of employees’
Market conditions
Human capabilities
The pay raise is given to an employee on the yearly basis.
Maersk line negotiate the salary with a candidate on his own terms and conditions only when the job is highly skilled, when company wants to retain its loyal employee and when an employee is an exceptional performer.
Career Development at Maersk Line:
Maersk line is highly involved in investment in training and education. Over the years A.P. Moller – maersk group has its own training system which is implemented over the years and constantly updated. And it is directed towards meeting the global and international organization’s particular requirement.
Their experience shows that the employee cannot be evaluated solely on the basis of written applications and the examination results. It is essential that the personal impression of the individual behind the papers should be evaluated.
Everybody who is formally eligible and has the qualification required for the certain position, can expect to be invited for the interview with Human Resource Department at Maersk line.
Maersk Line believes that career development is one of the most important steps in maintaining organizational performance. Maersk Line always helps its employees to build their career and achieve their personal goals by giving their best. And contribution which is made by the company is:
Job enlargement
Job Rotation
Career Path Defined
It is important to recognize when the employee is ready for promotion, because if an employee will not be promoted at the right time he might get demotivated. Maersk line recognize such employees when there is availability of position and employee’s exhibition of competencies for performance in the new role.
In case, when the employee leaves the organization when his/her promotion plan is ready, the HR gives someone else dual responsibilities for the time being.
There are number of potential drawbacks in different stages.
One of the greatest concerns regarding relying too much on employee referrals could become the reason of limited diversity at workplace. Hiring from the same existing networks may bound a company to capture diverse pool of candidate, it is good for reducing cost expenditure but on the other hand it could become the big hurdle for the company if the company is relying on such method too heavily. This simple method could have many risks, e.g. when there is a need to fill particular Job the simple question is asked from the existing employees i.e. “Is there anyone in your mind who can fill this Job?” In response to this question employees may think of the potential benefits for their close ones in their network, rather than thinking constructively for the organization. It is not necessary that every time a new employee comes in through reference is beneficial for the company, it carries risks with it, it could take time to measure his/her effectiveness, and if the new employee is not productive, eventually it will increase the cost of the company and employee will become the liability on the company.
There is certain planning and strategies which can save the company from these problems
Communicate the benefits to employees for the successful referrals; give them rewards, incentives and bonuses for the successful referral. This strategy can change the way employees think when they are asked to bring the best candidate for the particular job, now they will think of the best candidate in their mind, who will serve the company most efficiently and effectively. The reward amount should be sufficient enough to motivate the employees who make referrals but not too much that may lead them to make referrals of unqualified candidates. The bonuses should be given in installments because the effectiveness of the new employee cannot be measured in few days, it may take time. In order to be safe from a big loss company should make payments of bonuses in installments.
The company may limit the number of bonus qualifying referrals that is made by each employee per year. This will reduce the number of employee referrals per year.
The mandatory qualification and specifications should be clearly mentioned and delivered to the employees who make referrals. It will reduce the risk of getting unqualified employees. All the requests for employee referrals should be added to the pool of the candidates.
Problem: 3
The advertisement for the Job which is offered by the company is very much important in order to gather a better pool of candidates. Maersk Line is highly dependent on the internet as medium of advertisement for the jobs. They don’t prefer NEWSPAPER for the advertisement of their Jobs; as a result they are missing a large number of candidates who prefer Newspapers to find jobs.

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In order to get better employees a company must have a large pool of candidate so that it can be used for hiring employees when there is a need to fill the job in emergency. Newspaper plays an important role in spreading awareness among public. Since its an oldest and most popular medium of advertisements civilized and educated people read newspaper as a matter of habit in all over the world. Therefore it has a wide and general appeal. The message can reach a large number of audiences quickly. Choosing the best newspaper is also important, so the Maersk line can improve its pool of candidates by spreading word through Newspaper.
Problem: 4
When we asked them;
Has it ever happened that an employee might have left the Organization due to some reason; while the HR had plans for his promotion ready?
Yes No
They chose “YES”,
And then we asked the next question;
With Reference to the above scenario, what did the HR do? (If the above Question is answered as a NO, then suppose a scenario with the above details & answer this question, what would the HR do?)
Promote an immediate subordinate
Bring in a Contingent Employee
Give someone dual responsibilities for the time being
Hire an individual from a pool of already collected CVs.
They chose the third option which is “Give someone dual responsibilities for the time being”
It may create a problem we identified, because in case of fulfillment of the job which has been left empty by the previous employee due to any reason, Maersk Line shifts the tasks to other employees. This creates a burden on them. Assigning dual responsibilities to an employee may become the reason of his/her demotivation. The workload given to someone more than his/her capacity may push them towards demotivation. As a result that employee may leave the Job which actually creates a problem for the company.
It is normal that when employees get better options and more secured jobs they switch their jobs. If we see the answer of first question we asked, it shows that maersk line has issues with their employees regarding their promotions. The timing of the promoting employees is not accurate, that is why it leads employees to leave the job right before the promotion.
The main problem is to put dual responsibilities on existing employee rather than promoting him/her to that post. The Maersk line lacks the succession planning; they prefer distributing the responsibilities instead of immediate fulfillment of the empty position. Because it is the best time to get benefit, by promoting the employees to fill the job and if the company doesn’t find any potential candidate among the existing employees who can fill the post, then they should focus on the pool of the candidates. It ensures that the collected CVs are not useless
Maersk Line doesn’t have any well defined strategy to retain their employees who are really important for the company’s growth. It usually happens in Maersk Line that employees leave the organization due to some reason; while the HR had plans for their promotion ready. Recruitment is an expensive process, and when employees leave the jobs it is actually a loss in the cost incurred in the recruitment process.
Hiring employees is an important stage but to keep them in your organization is also very important to be safe from the high employee turnover costs. In order to retain the employees, maersk line should create some tactics to retain their employees. These tactics may include:
Offering competitive benefits:
Providing your employees life insurance, health insurance and a retirement savings
Give rewards and incentives
Provide some small perks:
Conduct “stay” interviews in addition to exit interviews
Promote whenever possible
Create open communication
Get managers involved:

Balance Sheet Analysis Of The Coca Cola Company Finance Essay

Introduction: Coca-Cola
The Coca-Cola Company is one of the world’s largest and most diversified nonalcoholic beverage companies. It owns or licenses and became market leader with more than 500 beverage brands, prominently sparkling beverages. It also have a variety of still beverages like waters, juices, enhanced waters, juice drinks, ready-to-drink coffees and teas. Moreover, it has sports and energy drinks too. Along with Coca-Cola their identity drink, Coca-Cola owns four of the top five most famous nonalcoholic brands including diet Coke, Fanta and Sprite. Coca-Cola is one of the most valuable brand names in the world. Finished beverage products of Coca-Cola brand have their origin from United States since 1986.
Coca cola has the world’s largest distribution system for beverages. They operate though company owned or controlled bottling operations. Approximately 55 billion beverage servings are sold worldwide each day, Out of which approximately 1.7 billion belong to coca cola
 Coca cola attributes their success to its ability to connect with consumer’s desires, needs and lifestyles. That is the reason why the firm provides its consumers with a plethora of options to choose from. The company uses its assets – its brands, unrivaled distribution system, financial strength, talent and strong management commitment-to create value for its stakeholders and associates.
Financial Statements
Balance Sheet
Current Assets
Current assets usually include cash and some other type of assets that usually get converted into cash with normal course of time within an operating cycle. Operating cycle is important terms in current assets as it refers to a period between acquisition of raw material and cash realization cycle time of finished goods sale. Operating cycle usually posses cash cycle and inventory cycle which also shows the amount of current asset and current liability which affirm usually have. More the cash conversion cycle, more will be inventory therefore current asset and less of real revenue. Seeing this can say that there is 20% rise in current assets. It rose from $2354mn to $2650mn.

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Cash is just money available for any contingency. Company kept it just as a buffer to meet their short term liquid fund need. It is usually listed a first item in balance sheet as it is highly liquid and normal accounting rule suggest listing as per descending order of liquidity.Cash and cash Equivalent has increased as compared to last year from $7021 mn to $8517 mn in 2011. Short term equivalents has also increased from $2130 to $2682 mn
Marketable Securities
These investments are kind of temporary investments usually made from extra cash company have. These are highly liquid can be cashed anytime that is why they can are usually considered cash equivalent and also comes in category of Current asset only. Sometime it is done due to government obligations only. Here seeing the Coca-Cola Marketable securities we can say that it gets doubled in 2011 than 2010.Figures changed from $62mn to $138mn.Usually Marketable securities and other assets constitute a tradable securities. This tradable security has taken a huge jump from last year to this year. It has changed from $61 to $209. This more than 200% change has shown that company has fairly utilized it extra cash to get some interest and monetary benefit.
Accounts Receivable
Simply, accounts receivables are the sum owed to a firm and are written on balance sheet by use of promissory notes. Account receivable is bills owed to you by your customers. They magnitude depends upon the collection ways company have and credit period company has. This is the actual amount yet to be collected from customers. From the given figure below in the table we can say that account receivable has been increased from $3700 to $4400 in last one year. This means that company has either increased the collection cycle or it’s started giving more good on credit to fight against competitors.
Inventory are the good company has unsold or unmade into final product. Inventory is of different types like raw material, semi-finished goods and finished goods. Usually inventory is not good as this is the product which is their left unsold and their cost incurred in raw material and processing are the cost you losing as opportunity cost. From the below figures we can say that Company’s raw material inventory more or less remains the same but company’s finished goods inventory has increased from $1029 to $ 697.This means that company has either made extra goods than it can sell or Coca-Cola was not able to sell as per the last year’s estimates.
Prepaid expenses
There are expenses like payments need to be given for service we have availed or the payments we have to give for the supply of materials. These payments are sometime made in achieve supplier loyalty or goodwill. Company’s prepaid expenses shows an increment from $2226 to $3162 which means that company Coca-Cola has prepaid to its supplier or insurance premium more than last year. This strategy companies usually follow to get their supplier be loyal and should supply on time. This strategy also comes into play in case company wants to remove extra hassle of paying insurance premium again and again
Investments are kind of cash funds or securities which Company holds for a particular purpose for a usually indefinite period of time. Term “Investments” usually include
Bonds corporate hold another company,
Real estate
Mortgages that corporate hold for income-producing aims.
Money that corporate may keep holding for pension fund.
Investments can be either amortized cost or have fair value. Investments usually in debt securities for which Company has positive intent and has ability to hold till maturity are usually carried at kind of amortized cost and generally classified as held-to-maturity .Those not coming in this category are generally carried at fair value and can be classified as either available-for-sale or trading. Trading securities are reported as either marketable securities or other assets in our consolidated balance sheets. Coca-cola Investment patterns shows that they have major portion of their investment mainly in Equity method Investment. Their investment in equity is around 10% of the total asset and 90% of the total investment
Property, Plant and Equipment
Property, Equipments and plants are the real fixed asset and always come under this category. Plant asset include buildings, land, equipment and machinery which are generally used in business operations. These things usually stay for a longer period that is why they are called fixed asset and their requirement usually doesn’t change with the number of unit manufactured. On December 31, 2010, date of balance sheet reference, the carrying value of Coca-Cola equipment, plant and property has net of depreciation that was approximately $14727 million which was around 20 percent of Coca-Cola total asset. Usually, this dip is caused by depreciation, impairment loss and revaluation of assets. May be even in Coca-Cola is he same reason.
Intangible Assets: Goodwill, Trademarks and Others
Intangible assets are usually classified into three categories:
Intangible assets having definite lives subjected to amortization,
Intangible assets having indefinite lives that are not subject to amortization,
Usually, for intangible assets having definite lives, Impairment test must be performed to check out whether accounted value is correct or not as many of these highly valuable intangible assets lose their value with time due to obsolescence. The following table carries values of intangible assets that got included balance sheet (in millions):
Coca-Cola’s Intangible asset shows in table that their goodwill is the major thing which they can boast of. Goodwill constitutes 16% of all the intangible assets which is logical only seeing the greatly history of Coca-Cola since 18th Century. Bottle’s franchise rights come close second with 10% of all intangible assets. By the way most of these intangible things are not recoverable until and unless somebody buys it.
Other Assets
At the time of preparation of balance sheet, there are conditions that the asset cannot be classified into any of the category such as investments, current assets, intangible assets or plant assets. These types of assets are therefore listed on balance sheet under section other assets. Seeing Coca-Cola Balance sheet and Notes thereafter we can say that these unclassified ‘other assets’ also increased in last one year by around 10%.It got changed from $1976mn to $2121mn in 2011.
Liabilities are the sum which company is obliged to pay. For Coca-Cola, the liabilities are like given below:
Contingent Liabilities
Three examples of contingent liabilities include
Warranty of company’s products
The Guarantee of other party’s loan
The lawsuits that is filed against a company
Basically, Contingent liabilities are considered potential liabilities. Since they are dependent upon future event’s occurrence or nonoccurrence, they can or cannot get converted into actual liabilities.
Coca-Cola has, as can been through its Contingency liability Note snapshot, has contingency liability due to Guarantee to its third party customers. Coca-Cola has made some guarantee withn bottlers and vendors regarding buying and selling assurances which can become liability in case company is not able to fulfill his terms already agreed. The amount is approximately $683 mn.
Other contingent liability which Coca-Cola has is in term of legal liability. It is a legal obligation as per a company “Aqua-Chem” which is asking Coca-Cola to pay $10mn out of pocket. This problem get created as “Aqua-Chem” was earlier owned by Coca-Cola and its now owned by someone else and who is blaming Coca-Cola for some defective gasket-asbestos.
Current Liabilities
If the company has payable loans then the principal to be paid in next one year is considered as current liability and all the other things will be considered as long term liability in balance sheet. Over and above this, whatever interest is charged as part of loan will be considered in income statement only not in balance sheet. Only the due interest will be considered as liability in balance sheet. Current Liability of Coca-Cola has increased recently from $13721mn to $18508 mn. The main difference has come only because of the maturity of some long term debt company has taken earlier.
Long Term Liabilities
Owner’s Equity
In finance or accounting, equity is considered as the residual claim or can be said to be the interest of most simple class of investors that have invested money in assets. This is money which is paid to these investors after all the liabilities are paid. If assets are more than liabilities, than it is the case of negative Equity.
The owner’s equity is always subdivided in the balance sheet under the liability column. One of the parts represents the money invested by investors as paid-in capital and any part of retained earning converted into paid-in capital of the company. The other part shows net-earning money usually retained of the company. Usually, stockholders, or owners, don’t become personally responsible for the debts that a company contracts. A stockholder can lose his investment most of the time, but creditors cannot look to their personal assets for the satisfaction of their usual claims. Normally, the stockholders can withdraw with cash dividends as an amount measured as corporate earnings. But creditors don’t.
Stockholders’ Equity
Misc Stocks Options Warrants
Redeemable Preferred Stock
Preferred Stock
Common Stock
Retained Earnings
Treasury Stock
Capital Surplus
Other Stockholder Equity
Total Stockholder Equity
Relevant Notes
Usually, all the information which is relevant for the investors cannot be included in the financial statement. There is some information in the financial statement which is shown just under a category without any explanation. But as part of Annual report everything should be clear and transparent therefore notes are included. Notes are actually included in order to reveal something of importance in addition to what is already there in the financial statements. Notes can be of importance to the investors who are willing to know more about the company or those who faces problem in understanding the main financial statements. The note reference is mainly to allow clarity in the annual report about the financial statements. Below given statement shows the use of notes in the balance sheet. Here the definition and calculation part of BASIC NET INCOME PER SHARE will be there explained in the notes told to be referred.
Significance of structure of Balance Sheet
Structure of balance sheet is also important part of the balance sheet. Basic accounting convention shows to present the balance sheet in two major ways. One way to present the balance sheet is to present it is Horizontal presentation (account form). Other form of presentation will be to present it in Vertical presentation (Report form). Though there are two forms, Vertical report form is mostly used and is famous. Disadvantage with the vertical form is that it doesn’t confirm typical explanation among investment literature about the balance sheet should have “two sides” that shows balancing out of two sides. We can see here Coca-Cola has followed vertical form of balance sheet only usually followed by corporate.
One more thing is which section should be considered first and which at later point of time. Usually, in asset sections, the accounts are taken in the descending order as per their liquidity Means most liquid asset will be taken first then the next level of liquid asset. In the same way liabilities are written in the order of priority for payment. Usually, in financial reporting, the term short-term and long-term is synonymous or interchangeable with the terms current and non-current items respectively. That is why the asset part of balance sheet of Coca-Cola has followed decreasing form of liquidity. Cash being most liquid followed by marketable securities this is followed by Investments and Intangible assets like goodwill coming at last. These intangible assets come at last because they are the most illiquid fund which cannot be cashed until and unless firm is sold or acquired.
Trend Analysis of Coca-Cola of five year duration
If we check out the performance of Coca-Cola over five years, we can say that on most of the parameters of Coca-cola is showing consistently downward trend. Current Asset has decreased from $2230 mn to $3800 mn in last five years. Total Equity has been fluctuating in this period of five years from a low of $ -35 mn to high of $ 4500 mn in 2006.Total Asset has been decreasing $23366mn of 2006 to $8596mn in 2010. Good thing is that total liability has also decreased for $ 18000 mn to $5 453 mn. Total Debt has been reduced to its one-fifth in these five years.
Coca-Cola is doing well in 2010. The company is totally out of slowdown that was there since recession. It has its hard-earned goodwill in the market which the company is cashing through higher purchase making higher profit. Its market Capitalization has reached $153Bn recently and its enterprise value has reached $168Bn in May 2011. The company has became the epitome of globalization with so much of expansion and diversification that ‘Coke’ is the second most recognized word after ‘Ok’.

Effect of Market and Business Plan on Company

Milestone 1: Draft of Business Problem and Literature Review


All over the world there are many organizations that have been facing business problems related to numerous aspects such as financial management, human resources, and product management.  As time and organizations have developed these challenges have made it harder for organizations to maximize their production and profits. Maruti Suzuki India (MSIL) is an example of a company that has been facing different obstacles which has led them to having a disadvantage in their current segment of business. The research provided will pinpoint the business problem that MSIL is facing and how it is effecting its operations. The research will also interpret the data provided for the organization and explain the differences within the market.

Business Problem

Research Problem

  Overtime Maruti Suzuki dominated the Indian market for a segment cars until it started to fail in the product management department in 2013. After reading the case, MSIL did not make it a priority to focus on its product management like its competitor such as Hyundai and Tata in the A segment. Hyundai and Tata both introduced products that were accepted by the Indian culture which caused major problems to Maruti Suzuki. This caused MSIL market share to drop as well as sales.  There were many aspects of the product management that brought negative results to the company. The first being there was poor research and development by MSIL.  The research and development group did not broaden its scope because they did most of their work in India. They were only looking in the geographical perception not an overall perception. They built products that were meant for customers who were looking in the a- segment, not people who are looking for cars in general. Its competitors Hyundai took the approach of appealing to a wide range of customers and produced a global image which MSIL did not do. Tata also developed a global image which kept customers engaged in its products. MSIL missed this which caused the organizations to fall behind its competitors. Another is that MSIL did not did not keep up with market trends of the customers whose needs were growing and evolving when it comes to the products they would like to have and that affected MSIL tremendously. Although the lace of research was MSIL down fall they have made strides to correcting the problem such as engaging and design product features that they have found was critical to their consumers, by adding this effort it has helped them in their market share.

Key Stakeholders

Maruti Suzuki company has different quite a few different stakeholders, the company is considered a joint venture due to its collaboration with Indian government. As time went on MSIL involved other stakeholders in the financial and public institution. After reading the case one of the main stakeholders are the people who are working for MSIL, as the market share starts to decline the company gets low returns which means the business receives low dividends at the end of the fiscal year. With this effect the management of the company who act as representatives of the shareholders of the organizations. Another stakeholder that is affected are the customers due to the lack of proper product management they will not be able satisfy product needs. According to the case, it shows that Maruti Suzuki motor has suffered with this problem and it is resulted to low sales and stiff competitors in the market.

Research Objective

The research objective in this case is product management had major effect on the growth and profitability of Maruti Suzuki in India. One of the benefits of knowing the research objective is being able to understand where the company started to down fall in the a- segment vehicles. Knowing this information, it helps also mold how the company can rise above the adversity that it currently is facing with its competitors.  Also, the objective is to better understand the aspects of product management that failed and the aspects that contributed to a huge lose in market share to its competitors.  One major factor that goes into this is the hiring and development in the product research department. If MSIL would have allocated more resources to this area they could have possibly avoided poor product management and they could have had proper product management and the stakeholders would have not had as many issues. 

Research Question

For MSIL, how has product management effected its market and business plan.?

Ethical Issues

Any potential ethical issue for this study would reside from the people or society that data is collected from. One ethical consideration, is that making sure that the data that is collected does not violate the rights of the people. Two ways of collecting data in a manner that can assist with this is through questionnaires or interviews from people who are randomly selected. If this method is chosen, they must consent and agree to be a part of the research that would be used to promote the product. Data that is collected should be recorded and collected in a data base that is secure and not tampered with. Also, protecting human rights will be effective and significant that advocates the well-being of the people who have participated. The human subjects will only be required to provide information that is relevant to the case study. Another major aspect is confidentially of the participants and will be maintained in an efficient manner to ensure privacy regulations laws. Respect to privacy will be highly prioritized in the study.

Literature Review

The following review will analyze theories that adhere to the organizational problem in Maruti Suzuki               and the bias and limitations that are present, it will touch upon research studies that have similar issues and an organization with similar issues.


The problems that are affecting Maruti Suzuki India is poor product management. Overall management is the main problem affecting the organization. There are many theories that can be applied to ground the problem that MSIL is facing. According to Anderson, Rungtusanatham, & Schroeder (1994), they outline that Maruti Suzuki company failed at applying the scientific management theory in its overall operations. The main responsibility of the management team was to make sure there was improvement in the process and that it grows from a regional to a global stand point when it comes to production. Scientific theory of management indicates that when ensuring growth fails, it causes negative problems to the business (Locke, 1982).  This theory grounds the problem affecting MSIL ensuring that productivity and poor product management is the reason why Hyundai and Tata took over the market. Another theory that grounds the problem is the product management theory.  For instance, the product management theory involves brining in the best product. The product can be new or old to the market but market research shows that business must identify changing needs of the consumers, research on improving product is best when facing the competitors (Nambsian, 2002). Another element is that product management covers marketing as well.  In the case study, it highlights how MSIL failed to ensure proper product management and how the product management theory grounds the issue that it is currently facing. One example of this is that product management theory asks for market research to figure out the needs of consumers as well as constantly improving with the need and standards and MSIL failed to do so causing them to suffer in market share.

Bias and Limitations

After reading the case study there are many biases and limitations. In the case, it states that Maruti Suzuki has a had a huge loss of market share overtime.  The data presented shows the percentages and the trends of different players in the segment over the years. Although the stock given shows positive bias (Anderson, Rungtusanatham, & Schroeder, 1994). There is a huge drop as a result of lower production that is supported by the data. One major element that is missing in the case is that it shows how the market changed by how the data was collected causing reason to question the validity of the data used in the case. Another limitation is the data collected cannot be verified so it’s not clear if the data is biased or not. These biases and limitations can affect an organization negatively if it relies on informed judgment to resolve the issue.

Other Research Study

According to Becker Ritterspach (2005) research it illustrates a similar problem of biases and limitations of studies specially to Maruti Suzuki India. According to the research it highlights that there is bias and limitations present in the case. The case study didn’t give any evidence of the source of the information provided and data was collected based on people’s review similar to MSIL. It manufactured products and the information given was not reliable.

Other Organizations

One other organization that had similar issues was Blackberry. Blackberry used to be one of the top runners in telecommunication industry. They were competing with apple but the lack of product management brought down their stocks. Blackberry chose to be very limited with its operating system. The other companies such as Apple were always evolving and improving their operating system. Android and Apple interface changed the world of mobile applications, by the time blackberry noticed this it was too late which resulted in Blackberry now not being a top cellphone company. This case is prime example of poor product management. Blackberry has now joined the android platform but it’s too late and blackberry has lost market share that they may never get back.


Anderson, J. C., Rungtusanatham, M., & Schroeder, R. G. (1994). A theory of quality management underlying the Deming management method. Academy of management Review, 19(3), 472-509.

Becker-Ritterspach, F. A. (2005). Transfer, intercultural friction and hybridization: empirical evidence from a German automobile subsidiary in India. Asian Business & Management, 4(4), 365-387.

Blackberry, Where it All Went Wrong. Retrieved from;

Locke, E. A. (1982). The ideas of Frederick W. Taylor: an evaluation. Academy of Management Review, 7(1), 14-24.

Nambisan, S. (2002). Designing virtual customer environments for new product development: Toward a theory. Academy of Management Review, 27(3), 392-413.

Mukherjee, J., Mathur, G., & Dhar, N. R. (2015). Maruti Suzuki India: Defending Market Leadership in the A-Segment. Sales and Marketing Case Study. Canada: Ivey Publishing.

Company Financial Ratio Analysis Report Finance Essay

The aim of this report is to analyse the financial ratios of the Super Cheap Auto Group Ltd and ARB Corporation Ltd from 2008-2009. This would help to give a better understanding of both company’s financial health and performance. This report has analysed the financial ratios of both companies and discovered that both companies are profitable. ARB Corporation is more efficient than Super Cheap Auto Group. All its efficiency ratios suggest that the company is efficient in its operations. The weakest results came from its inventory turnover which remained constant over the two years period. Super Cheap Auto Group needs to improve on its inventory and debtors turnover so as to achieve optimum efficiency. Stability ratios suggest that ARB Corporation is more stable than Super Cheap Auto Group. The report as gives recommendations that can help both companies to perform better.

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The performance and interpretation of financial ratios are one of the most frequently used ways to analyse a company’s financial performance. This report would examine the financial data provided in the financial reports of two companies, namely; Super Cheap Auto Group Ltd and ARB Corporation Ltd. The report would analyse some of the data reported by both companies in their financial statements. At the end of this report, readers would be able to tell a number of things about the above companies. For example, it would be possible to tell if whether the companies are operating in excess debt or inventory and what corrective actions can be put in place so as to keep the business moving in the right direction. These financial ratios would help to throw more light on some salient business issues such as whether the customers are paying their debts on time, or if the company’s operating expenses are too much to make it generate maximum profits. Ratio calculations can also help to make financial analysts to better understand whether the company is making the best use of its assets. It is possible for a business to either over or under utilise its assets in its quest to maximise profits. Ratio analysis can guide a company to know whether it is making good use of its assets and when it is not the case; the outcome of the calculations can guide the financial analyst to recommend management to take the appropriate corrective measure. In order to ensure that the best decision is made, businesses compare their ratios to the general industry ratios compiled by the industry in which they operate. A business can compare its individual ratios to the average ratios compiled for industry to understand whether it is moving in the right or wrong direction.
Profitability Ratios:
Profitability ratios are used to measure the ability of a business to yield returns on the capital invested into the venture. The fact that a company is making profit is not sufficient to classify it as a successful business (Epstein & Jermakowicz, 2007). This is because some businesses make less profit than they would have made if the factors of production were combined differently. Profitability ratios are not just there to tell whether a business is making profit or not (Wild, 2007). In addition to the above; profitability ratios tell if a business is as profitable as it ought to be. A rise in profitability ratios is a possible sign for any business (Wild, 2007). The profitability ratios of both Super Cheap Auto Group Ltd and ARB Corporation Ltd are all positive. They ratios suggest that the companies are making profits and are worth the investment of investors. The table (Appendix A) depicts the performance of the various profitability ratios. Positive implies that the profitability ratios were good. Both businesses had positive outcomes on all the ratios performed. Below is an explanation about the various ratios and how to calculate them.
Gross Profit Margin:
The gross profit margin can enable the management of a business to assess the ability of the business to yield returns on investment at the gross profits level. This ratio covers three issues which include pricing, production and inventory. This ratio can be calculated by using the formula below (Epstein & Jermakowicz, 2007):-
Gross Profit
Total Sales
Net Profit Margin:
The net profit margin can quickly enable a business to know how much net profit it generates from each dollar received in sales revenue. It is an indicator that management can use to assess whether it has well managed its operating expenses so as to ensure that the business generates the best possible returns on investment. This ratio also indicates whether the organisation is making the right volume of sales that can enable it to meet up with fixed costs while making some reasonable profits. Net profit margin can be calculated by using the formula listed below:-
Net Profit
Total Sales
Return on Assets:
This ratio can be used by management to measure the level of efficiency with which the company makes use of its assets to make profits. This ratio is used to measure a company’s level of efficiency in the use of its assets.
Net Profit Before Taxes
Total Assets
Efficiency Ratios:
Efficiency has to do with the evaluation of the various ways in which companies manage their assets. Financial analysts are always interested in evaluating the value of a company’s assets as well as the how the company manages these assets. There are many ratios that can be used by financial analysts to evaluate the level of efficiency within a business (Wild, 2007). The efficiency ratios analysed in the table titled Appendix A depicts that both companies are efficiently run even though there is need for some minor improvements that can only go to improve on the level of efficiency (Williams, 2008). ARB needs to improve on inventory turnover as it had a flat trend from 2008-2009. Creditors’ turnover was also negative as creditors seemed to mount more pressure to get loans repaid faster over the same period. Super Cheap Cars had even worse efficiency performance. The ratios performed suggest that the company had negative trends on both inventory turnover and debtors’ turnover. This means the company has to improve on both areas in order to attain optimum efficiency. Debts need to be collected faster to ensure liquidity (Williams, 2008).
Accounts Receivable Turnover:
This ratio is interested in analysing how many times accounts receivable are paid within a specified accounting period. When turnover is high, the business collects cash faster and this makes the business to have a higher level of cash in hand (Williams, 2008). The formula used to calculate this ratio is:
Total Net Sales
Accounts Receivable
Accounts Receivable Collection Period:
This refers to how much time it takes a business to collect its accounts receivable from its clients. The shorter the period the better for the business just like with turnover discussed above. And when a company has a shorter collection period; the more likely it is that it would have more money in hand. The formula used to calculate this ratio is below:
365 Days
Accounts Receivable Turnover
Accounts Payable Turnover:
This ratio depicts the number of times that a business repays its creditors within an accounting period. When the number is high, it implies that the business might have decided to pay its creditor on a later date or it could simply have problems in paying back its creditors (Weston, 1990).
Cost of Goods Sold
Accounts Payable
Days Payable:
This ratio depict the number of days it takes the business to pay accounts payable. When the business takes longer to pay; it might lose more money as it might not benefit from a number of discounts associated with the prompt payment of loans. This ratio can be calculated with the use of the formula below (Epstein & Jermakowicz, 2007):-
365 days
Accounts Payable Turnover
Inventory Turnover:
This ratio enables financial analysts and businesses to evaluate the number of times that their inventory is sold within a specific accounting period. Faster turnover is a positive sign which allows a business to increase its cash flow and cash in hand. It is a positive trend that businesses value (Weston, 1990). The ratio is achieved as depicted below:-
Cost of Goods Sold
Days Inventory:
This ratio is used to analyse the average duration that each inventory lasts on the average. When it takes fewer days to sell the inventory, it means there is more cash flow and subsequently cash in hand. The goal of most businesses is to use fewer days to sell its inventory. Fewer days means more sales and profits. Days inventory formula ratio can be achieved using the formula below:-
365 Days
Inventory Turnover
Sales to Total Assets:
The aim of this ratio is to demonstrate the level of efficiency with which the company generates sales on its assets. It measures the ability of the company’s assets to generate sales (Weston, 1990). This ratio can be achieved using the formula listed below.
Total Sales
Total Assets
Debt Coverage Ratio:
This ratio is used to analyse the ability of a business to meet up with its debt obligations and the capacity to manage more debt. Debt management is an important part of business as business always involves lending and borrowing.
Net Profit + Any Non-Cash Expenses
Principal on Debt
Stability Ratios
The stability ratios for ARB are good. The company is enjoying good stability as depicted by all the ratios performed. All the ratios resulted in positive outcomes. The same was true for Super Cheap Cars except for the fact that it had negative outcome in its times interest rate ratios. This implies that the company needs to revise its strategy for managing debts. This would help to reduce business risks for the company.
Gearing is used to evaluate the proportion of assets that have been acquired through loans. The more a business depends on loans the higher are its survival risks. This is because the repayment of loans and interest rates are compulsory (Bodie et al, 2004). They are not like dividends that may not be paid when the business performs poorly. However, gearing can be very helpful to some businesses that have strong and predictable cash flow. Gearing can be calculated using the formula below:-
Net Assets
Interest cover:
This ratio is used to measure the ability of a business to meet up with payment of interest rates that are associated with its loans. The question here is whether the profits made from the business are sufficient enough to pay for the interest and other financial expenses associated with loans. The ratio can be achieved by using the formula below:-
Operating profit before interest
Earnings per share (ESP):
This is a very important ratio that can be used to determine how stable a business is. It is used to measure the profit generated per share over a specified period. Many investors always make their investment decision by looking at the returns per share in order to know whether the business is worth investing into. When a business has high share profits, investors tend to believe that the business has stabilised. As such, they believe investing into such a business would include fewer risks. This ratio can be achieved as described below:-
Ordinary share earnings
Weighted average ordinary shares
Price Earning Ratio:
This ratio is used to gauge the way the market values a particular business. This is used by comparing the market price per share to the earnings per share in a particular business. The level of earnings can tell whether the market highly values that particular business when it has a relatively higher return when compared to shares in similar businesses (Groppelli & Ehsan, 2000). In order to get this ratio, the formula below needs to be applied.
Market price per share
Earnings per share
Dividend Yield:
This is also described as the ratio of pay out. It can help to tell whether a business can maintain the payment of a dividend. It also gives an idea of the level of earnings that the business retains for itself. This proportion is profit that is ploughed back and not distributed as dividends.
Latest dividend per ordinary share X 100
Current market price per share
Limitations and Conclusions:
Although financial ratios have been touted for their ability to enable management to assess the financial performance to analysts and management, these ratio also have limitations as they can some times send wrong signals about the financial health and performance of a business (Helfert, 2001). Financial ratios best explain what have happened in the past and can help management and financial analysts to understand business trends. Even though some trends can help to give an idea of what the future of business might look like, these ratios cannot provide forecasts for businesses (Bodie et al, 2004).
Ratio analysis is mostly based on accounting data. And this data is mostly drawn from the company’s financial statements. The right forecast needs to come from the economy instead. This is a major weak point when it comes using financial ratios to make business decision and analysis. This is especially true when it comes to predicted future trends in business (Groppelli & Ehsan, 2000). These ratios mostly take account of figures drawn from the balance sheet. The balance sheet is drafted during specific periods within the financial year and does not take into consideration some important issues. As such, these figure do not truly reflect the off balance sheet data (Watanabe, 2007). These ratios may also differ from one business to the other based on the accounting policy that the business uses. This makes it possible to have different ratios and interpretation from the same firm based on what accounting principles it uses (Weygandt, 1996).
Profitability Ratios
ARB Corporation
Super Cheap Auto
Gross profit margin
Net profit margin
Return on equity
Return on Assets
Efficiency Ratios
Asset turnover
Inventory turnover
Debtors turnover
Creditors turnover
Current ratio
Quick ratio
Stability Ratios Outcome
Debt asset ratio (interest bearing debt)
Debt asset ratio (total debt)
Debt equity ratio (total debt)
Times interest ratios (times)

Inventory Management In A Manufacturing Company Finance Essay

This research work serves as a practical operating guide for those who wish to introduce effective inventory control in their organizations. More importantly, the research work studies the effect of inventory management on profitability, inventory and the associated costs as well as challenges encountered with keeping inventory.
The research work focused on the perspective of inventory control and management in Nigerite Nigeria Limited with a view to identifying lapses that may impact negatively on the performances of the manufacturing industry.
Questionnaires were administered to obtain data from the employees of the Nigerite Nigeria Limited for the purpose of analysis using some descriptive statistical techniques such as percentage. The result was further validated by using Statiscal Package for Social Sciences (SPSS)- Pearson Correlation.
The results from the data analysis showed that Nigerite Nigeria Limited keeps inventory of raw-materials, components parts, semi-finished and finished goods for the purpose of production and generate sales; categorizes inventory into fast-moving and special items, and applies continuous inventory counting as well as spot-check by auditors. It was also discovered that the inventory valuation technique in use in the company is first in first out (FIFO). Also, the company’s replenishment procedure is Economic Order Quantity (EOQ) which minimizes the over all relevant inventory cost. The research concluded, based on the available data, that there is direct relationship between inventory management and final prices of products, the productivity of the company and the regular flow of materials. However, the study revealed that storage facilities constitute one of the major challenges of inventory planners. The company is thus advised to improve and monitor the condition of her storage facilities. This will ensure that orders are not outside the limit their storage capacity and ensure good condition of materials in store over a considerable. Similarly, the company is encouraged to adapt herself with the modern inventory forecasting techniques that would enable her to determine the future needs or demand of customers in order to determine the level of stock to keep.
Title Page —————————————————————————— i
Certification ————————————————————————— ii
Dedication —————————————————————————– iii
Acknowledgement——————————————————————– iv
Abstract ——————————————————————————– v
Table of contents ———————————————————————-vii-ix
1.1 Background of the study 1-3
1.2 State of the problem 3-5
1.3 Purposes/Objectives of the study 5
1.4 Significance of the study 6
1.5 Research Methodology 6-7
1.6 Scope of the study 7
1.7 Limitation of the study 7-8
1.8 Organization of the study 8-9
1.9 Definition of terms 9-10
1.10 References 10
2.1 Introduction 11
2.2 Brief History of P.Z. Industries Plc 11-12
2.3 Literature Review 13-14
2.4.1 Management of Inventory 14-15
2.4.2. Inventory Control 15-16
2.5 Importance of Inventory Management 16
2.6 Role of Inventory Management 16-17
2.7 Reasons for Carrying on Inventory 17-18
2.8 Cost of Inventory 18-20
2.9 Inventory Levels 20-24
2.10.1 The Basic Economic Order Quantity (EOQ) 24-27
2.10.2 Formation of the Model (Graphical Approach) 27-28
2.10.3 Stochastic Inventory Model 28-31
2.10.4 Production Run: Economic Batch Quantity 31-33
2.11 Inventory Control Method – ABC Analysis 33-35
2.12 Materials Pricing 35-37
2.13 References 37
3.1 Introduction 38
3.2 Restatement of Research Questions and Hypothesis 38-39
3.3 The Population 39
3.4 Sample Size and Sampling Design 40
3.5 Data Instruments 40
3.6 Methodology for Data Analysis 40-41
3.7 Limitations of the study 41
3.8 References 41
4.1 Introduction 42
4.2 Presentation and Analysis of Data 42-56
5.1 Summary of Findings 57-58
5.2 Conclusions 59-60
5.3 Recommendations 60-61
5.4 Suggestion for Further Studies 62
Inventory figures in the balance sheet of companies, especially manufacturing firms, are of immense significance. Every naira (N) added or subtracted from the inventory value overstates or understates profit by the amount. Therefore, inventory management is of great importance to companies because it constitutes a vital and valuable item in the financial statement. This is because the inventory balance (value) in the financial statement has a direct effect on reported profit. (Pandey, 2004).

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One widely used measure or parameter for managerial performance relates to Returns on Investment (ROI), which is profit after tax divided by total assets. Because inventory represents a significant portion of the total assets, a reduction of inventories can result into a significant increase in Return on Investment. Excessive inventory on the manufacturing floor tends to conceal a wide variety of problems. Moreso, inventory storage costs are typically very expensive, averaging 30 to 35 percent of the value of inventory itself. And in some cases, especially when and where inventory management is not taken seriously, storage costs are much than the cost of inventory. (Shim and Segel, 1999).
Therefore, for an organization to achieve its profitability objectives, its inventory management must be effective and very strategic.
Pandey (2004) opined that inventory management is of great importance to companies in that the majority of their operations revolve around the inventory resources. Hence, the need for a close examination of this aspect becomes imperative. Inventory control constitutes an integral aspect of financial control. The amount of funds that inventories represent in recent years has led to a growing emphasis on the importance of inventory management and control.
Inventory refers to any stock of items used within the production system or in the operation of the business. They include such items as basic raw materials, supplies of components and parts, work-in-progress and finished goods that are ready for delivery to customers.
Shim and Siegel (1999) assert that inventory accounts for a sizable portion of firm’s assets next to plants, building and equipment. It serves a definite function and if efficiently used, earns return like other assets. The return is expressed ultimately in terms of increased productivity, lower cost of production and avoidance of stock out costs which all translate to higher turnover and in turn higher profit for the organization.
Banjoko (2004) viewed inventory as the soul and livewire of any manufacturing organization. Poor inventory management can present a serious challenge to productive capacity. The overall objective of inventory management is minimizing the total cost associated with stock which in turn leads to higher profit. This is done by establishing two known factors: when to order and how to order. Also, different reasons have been advanced as to why an organization would want to hold on to a reasonable portion of its resources in the form of inventory.
Over the years, the study of inventory management has provoked a lot of interest from various groups including academics and industry practitioners. Consequently, a lot of models have now been developed to assist managers / organizations in planning and controlling their inventory. Thus, for large manufacturing concern with elaborate and complex inventory profile, models involving the use of computers are readily available while for relatively smaller ones, with simple inventory outlook, manual system involving normal recording would suffice.
It is pertinent to stress that whatever system of inventory management that is to be adopted, it should take the need of the organization vis-à-vis its cost – benefit relationship into account. A careful balance will result in the minimization of cost which ultimately would lead to the realization of the organizational objectives, that is, profitability and growth.
In a manufacturing company, the efficiency with which its inventory resources are managed is crucial to the attainment of its set objectives. Hence, it demands a great deal of attention from the management and all other levels of the organizational hierarchy.
Inventory management is an essential factor in the satisfaction of customers needs at the right time. For an organization to achieve anticipated profit, it must satisfy its customers at all time.
This greatly depends on the adoption of effective and efficient inventory management policies that will help to lower production cost, and help the organization to meet customers demand at any point in time and smooth production runs of the firm, in order to achieve favourable profit level.
In recent time, failures of most organizations can be traced to poor inventory management and control because of the huge amount of funds that inventories represent on the balance sheet of organization.
It is the belief of the researcher to examine those factors which include, effective inventory management, that are imperative to organizational profitability.
This study is concerned with effect of inventory management on profitability of organizations.
Other reasons are:
To determine the various types of inventory kept in Nigerite Nigeria Limited.
To determine reasons for keeping inventory in the company
To establish various costs associated with inventory and their effect on profitability.
To examine how inventory management affect productivity, production, sales revenue and profitability of manufacturing company.
To establish how inventories are categorized and stock taking is done in the company.
To determine what problems are associated with keeping inventory in the company.
To examine the forms of inventory control system adopted by Nigerite Nigeria Limited.
In attempting to establish a relationship between efficient inventory management and profitability of manufacturing companies, the following research questions were developed:
What types of inventory are kept in Nigerite Nigeria Limited?
Why is inventory kept in Nigerite Nigeria Limited?
How has inventory management affected profitability of the company?
What costs are associated with keeping inventory and their effect on profitability in the company?
What problems are associated with keeping inventory in the company?
How are inventory categorized in Nigerite Nigeria Limited?
What forms of inventory control system are used in the company?
This study will bring to focus the benefits of having in place, an inventory management policy that would lead to profitability and growth of manufacturing companies. By extension, it will show the consequences of failing to pay attention to the management of inventory. It is expected that this study would produce greater awareness of inventory management within the manufacturing industry.
Finally, it also intended to alert actors in the manufacturing sector of the imperative of having a sound inventory management policy that will ensure the profitable existence of their organization. In doing so, it is intended that the economy will benefit since the growth of manufacturing sector is one of the indices for measuring the aggregate growth in the economy.
This study attempted to look at the effect of effective inventory management on the profitability of manufacturing companies in Nigeria. However, since it was difficult and cumbersome in terms of time, financial resources, logistics and other technical areas to examine the entire manufacturing companies in Nigeria, the researcher chose Nigerite Nigeria Limited. (a leading manufacturer of Building Roofing and Ceramic tiles in Nigeria) as a case study. Investigation has been restricted to concept of inventory management, motives for holding inventory, stock control, as well as problems associated with inventory management and how these impinge on production and consequently on profit.
Cycle Time: This is the time between when an order is received and another order is placed.
Deterministic Model: This is a model which assumes complete certainty of situations. The values of all factors such as demand, usage, and lead time and so on are known exactly and there is no element of risk and uncertainty.
Downtime Production Cost: It is the cost incurred during the period production process was not in operation it is cost involved as result of disruption of operations. It is the cost of troubleshooting, reprocessing and restructuring.
Economic Order Quantity: It is a decision model that, under a given set of assumptions, calculates the optimal quantity of inventory to order.
Lead Time: This is the time between the time an order is made and the time the item is received.
Ordering Costs: These are costs of preparing and issuing purchase orders, receiving and inspecting the items included in the order, and matching invoices received, purchase orders, and delivery records to make payment.
Quality Costs: These are costs that result when features and characteristics of a product or service are not in conformance with customer specification.
Re-order Level: It is the fixed points between maximum and minimum stock levels where requisitions are raised for new purchases.
Review Period: It is the time between successive examinations of the inventory to determine what should be reordered.
Safety or Buffer Stock: This is a stock allowance to cover for error in forecasting the lead time or the demand during the lead time. The stock, in excess of average demand, is to compensate for variability in demand and lead time.
Stochastic Model: This is a model where some or all of the factors are not known with certainty and can only be expressed in probabilistic or statistical terms.
Stock Policy: This is a set of rules which determines how and when certain decision making concerning the holding of stock should be made.
Stock out Cost: These are costs involved when customers’ demand cannot be met because the stock is exhausted. They are the opportunity cost of not having a stock item when there is effective demand.
Central to the existence of any business undertaking, is the profit making motive. This is essential, if the business must survive and ultimately grow. The ability to realize this objective depends on how well available resources of the organization are effectively managed, and a critical component of these resources is the pool of inventory. Hence, it is logical to assert that the optimization in the use of inventory is a vital factor in the operational success of any firm and consequently, an important component of its management function.
The need for an effective control of inventories as a means of improving the performance of manufacturing companies cannot be over-emphasized. Inventory control, a vital element in the management of material is one of the most serious problems confronting modern organizations especially those organizations having a very high investment in inventory items. Effective and efficient inventory controls will therefore, no doubt, aid the organization by substantially improving its performance.
Effective inventory management requires the development of policies that will help to achieve an optimal investment in inventory. This can be achieved with the ability of the concerned managers to determine the optimal level of inventory necessary to minimize inventory related costs. The ability to determine this optimal lot size will bring about a competitive advantage for firms especially those operating under a much tensed environment. A good inventory management is essential to the success of a company because of the impact of inventory on the daily operations, and most importantly, the amount of money inventory represents in the budget of a company.
Over the years a great deal of literatures has been written on this aspect of management function. In this aspect, an attempt will be made to look through these literatures with a view to finding possible areas of application to the inventory management needs of Nigerite Company Limited and by extension the entire manufacturing sector.
Inventory has been described “as idle resources”. Some authors literarily put inventory as “money on the shelves”. Banjoko (2004) posits that in an organization, the existence of these idle resources represents a sizeable proportion of its capital investment that is tied down. In a manufacturing firm, inventory refers to materials that contribute to or become part of a firm’s product output. Like in any investment situation, the motive is usually profit oriented. Hence, firms are prepared to keep inventory at a cost in the belief that the alternative of not doing so will be more costly or less profitable. The need to plan the level of this idle resource has been the pre-occupation of inventory management theorists.
According to International Accounting Standard (IAS 2), an inventory is defined as a “tangible property”:
Held for resale in the ordinary course of business
In the process of production for sale or
To be consumed in the production of goods and services.
Love (1983) defined inventory “as a quantity of goods or materials in the control of an enterprise and held for a time in a relatively idle or unproductive state awaiting its intended use or sale”.
According to Davis, Acquilano and Chase (2003), Inventory Management can be defined as the mechanism used to provide organization structure and operational policies for maintaining and controlling the products to be stocked, the minimum quantity, as well as the period for reorder of stock. Omolehinwa (1991) views inventory management as a managerial function that is concerned basically with planning and control of materials.
Control is a process by which events are made to conform to a plan. Therefore, to control material, there must be a plan of action. Planning focuses on such issues as what to store, where to buy, when to buy and how to buy. To be successful, inventory management should be given top management attention.
To a warehouse manager, controlling inventory means controlling its physical storage, location, age, security from theft, fire, moisture and the likes and maintaining information which provides tractability and accurate quantity record.
To a quality assurance manager, controlling inventory means preserving its fitness for use, which involves similar security measures and record – keeping requirement. To an accountant or auditor, inventory is controlled through the use of cost of quality, information that enhances proper asset valuation, determination of net income and other financial indicators.
Battersby (1970) identified three people whose mental attitude can affect the general level of inventory in an average organization.
They are: (1) The sales manager
The production manager
The purchasing manager
In an attempt to achieve efficiency within their respective departments; the personalities may cause stock to go up. These differences however are not insurmountable. Most of the conflicts evaporate when examined in the light of sound economic judgment. Arriving at a level between too much and too little stock is the major challenge to management. Management is constantly pre-occupied with the challenge of resolving the conflict inherent in balancing the opposing costs of having an inventory and not having inventory.
Ibitoye (1985) noted that though the ideal situation is not to hold inventory, it has been seen that it is not possible to attain this ideal situation because of the uncertainties under which business operates. Hence, stock holding cannot be avoided. Inventory management systems vary from one organization to the other. In a particular organization, it may be formal or informal, cheap or expensive. Yet in another, control may depend on the effort of a large control staff while in another the responsibility may rest with the plant manager.
Different authors have advanced various reasons why business organizations hold inventory. Lucey (1996) gives the following reasons which, he said, are based on deliberate decision by management.
To ensure that sufficient goods are available to meet anticipated demand.
To absorb variation in demand and production
To provide a buffer between production processes. This is applicable to work-in-progress stocks which effectively decoupled operations.
To take advantage of bulk purchasing discounts
To meet possible shortage in the future.
To absorb seasonal fluctuations in demand
To enable production processes flow smoothly and efficiently.
As a necessary part of the production process
As a deliberate investment policy particularly in times of inflation or possible shortages.
Alternative reasons given by the author for stock accumulation which he described as less praise worthy are:
– Poor or non-existent inventory control resulting in over-large orders, being out of phase with production.
– Inadequate or non-existent stock records
– Poor liaison between the production control, purchasing and marketing departments.
Hadley and Whitten (2002) said that the fundamental reason why organizations carry inventories is that it is either physically impossible or economically unsound to have goods arrive precisely when demand for them arises. Without inventories, customers would have to wait until their orders are fulfilled from source or where manufactured. However, customers will not and cannot be allowed to wait for long period of time, for this reason alone the carrying of inventories is necessary to almost all organizations that supply physical goods to customers.
Olowe (1997) is of the opinion that if products are available and customer’s demand is immediately satisfied, prospective customers will not go elsewhere. However, if the firm is out of stock and cannot meet customer’s demand, there would be loss of customers’ goodwill. Loosing customers’ goodwill whether in trading or manufacturing setting is bad for business.
According to Drury (2002), the motive for holding inventory can be considered along the Keynesian postulates of the reasons for holding money. These are:
Transactions Motive: It occurs whenever there is a need to hold stocks to meet production and sales requirement and it is not possible to meet this requirement instantaneously.
Precautionary Motive: This is when a firm might decide to hold additional amounts of stocks to cover the possibility that it may have underestimated its future production and sales requirement. It only applies when future demand is uncertain. It is the need for production against uncertainty since we cannot predict demand with sufficient accuracy.
If goods could be obtained immediately and at no excess cost, then no inventories greater than those needed to satisfy the transaction motive would be required. This implies that if no cost is associated with stock out, then no safety or precautionary stocks are required. However, it should be noted that transaction stock must be supported by precautionary stock to ensure customer satisfaction.
Speculative Motive: When it is expected that future input prices may change, a firm might maintain higher or lower stock levels to speculate on the expected increase or decrease in future prices. This is of interest in terms of rapid price rise as well as if there is known change in cost or in the possibility of sales within a foreseeable time.
The possibility of profit through changes in prices, interest rates or other supply and demand conditions is as pertinent to stock of goods as it is to money. In general, quantitative models do not take into account the speculative motive.
The strategic importance of inventory in an organization demands that necessary attention should be focused on its management. However, in the process of controlling cost, managers are constantly faced with a variety of problems which are associated with inventory management. Davis, Acquillano and Chase (1999) present some of the problems of inventory management as follows:
Forecasting inventory requirement. This represents a delicate phase in inventory planning. It requires the inputs of various functional units such as finance, marketing, production and purchasing departments to enable management come out with a forecast that will ensure that inventories are neither too little nor too much. It is necessary to make some estimate of future consumption to act as a guide and help the organization to plan its order.
Most organizations have storage problems due to lack of adequate storage facilities and this affects the quantity of inventory they carry. Management should ensure that the size of their storage facilities is considered during inventory planning to ensure that orders are not outside the limits of their storage capacity. The suitability of storage facilities in relation to orders demands critical consideration. This is to ensure that goods which require covered storage are not exposed to the air as this could have effect on the environment.
Effective inventory management in organizations is also affected by lack of inventory control system. Since stock is equivalent to cash, it follows that it should be carefully protected, counted and checked in similar way. There are many organizations where the inventory system displays looseness which would not be tolerated in a cash office in spite of the fact that the value of stock is usually greater than cash held.
Inventory planning must take note of the ease of accessibility of inputs. A crucial factor in this regard is the geographical location of the source of supply. In a country like Nigeria, where manufacturers are highly dependent on import as a source of their inventory needs, this has effect on the size and frequency of deliveries. Manufacturers like Nigerite Nigeria Limited can mitigate this problem by embarking on backward integration to provide substitute for imported raw materials. It can establish wheat farms in areas of the country where conditions are favourable.
Whatever system of operation that is established for inventory management, the procedures adopted in its implementation and the workers concerned matter a great deal on the expected result. The logical point therefore, before commencing any worthwhile inventory planning is to analyze the stock being held by an organization. By analyzing the stock held, management can best determine what amount of effort would be spent controlling the various ranges of stocks. The grouping of inventory into various categories for the purpose of effective planning and control is called Inventory Analysis. Banjoko, (2004) gave the following types of inventory analysis.
The ABC method requires that an estimate be made of the total purchase cost for each item of stock for the period. Sales forecast is the basis used for estimating the quantities of each item of stock to be purchased during the period. Each item is then grouped in decreasing order of annual purchase cost. The top 10% of items is stock in terms of annual purchase cost are categorized as A items, the next 20% as B items, and the final 70% as C items. For example, if it is assumed that there are 10,000 stock items, then the top 1000 items in terms of annual purchase costs will be classified as “A” items and so on. In practice, it will be unnecessary to estimate the value of many of the 7000 C items, since their annual purchase cost will be so small it will be obvious that they will fall into the category.
V – Stands for Vital items. When these items are out of stock or when not readily available, production is completely brought to a halt.
E – Stands for Essential items when not available, there is temporary loss in the production process.
D – Stands for Desirable items. These are items which are necessary but their non-availability does not have any immediate disruptive effect on the production process.
2.5.3 F. S. N. ANALYSIS
Here the quantity and rate of consumption are analyzed and classified as:
F – Fast – moving items
S – Slow – moving items
N – Non – moving items
This analysis is useful where most inventory items are not only scarce but have to the imported.
S – Stands for Scarce items. These items are usually imported and also very short in supply.
D – Stands for Difficult items which are available in the market but are not easily accessible.
E – Stands for items which are Easily available. that is, mostly local items.
Each of the above analysis has its specific features, advantages and shortcomings. It is therefore left for management to choose any or a combination that would bring practical and optimum solution to control of inventory.
In an effort to provide an adequate, but not too much stock of materials at any particular point in time to allow for optimality in the use of organization’s resources, firms normally resolve to order for appropriate quantity of materials and decide on when to place such order. Inventory control system is thus the method of managing inventory resources for optimum result. The forms of inventory control system include:
– Re-order level or two bin system
– Periodic review system
– Just-in-time
This is an inventory system

Toyota Company Strategic Planning

1.0 Companys Description
Toyota Motor Corporation is engaged in manufacture of passenger cars and their assembly, minivans, recreational and sport vehicles worldwide. Toyota has a network of more than 45 manufacturing companies and 12 plants affiliated in Japan. Toyota is working on its strategic global vision program of 2010. This program describes the long term Toyota’s policies like recycling of goods and pro-environmental stance. Toyota has its global vision to respect the different people and communities and providing the new marketing opportunities in Asian markets and aims to get more than 35% of vehicle by the tapping the emerging markets. In automobile industry the need of the local customization and global strategy required the regional production. After 1990 Toyota has become first organized car manufacturer. The main targeted markets of Toyota industry are the Europe, North America and Asia with capability to customize the regional markets. Toyota has reacted very quickly and bypassed the regional and trade barriers; based upon the local suppliers to impact the cost efficiencies.

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2.0 Strengths of Toyota
Toyota possesses much strength due to its quality products and reputation. Prices of the Toyota’s products are not affordable as the automakers in America, however Toyota has continued to succeed because customer rely and depend on its products. Toyota has been number one in sale of cars in 2007 and also 2008 better. Toyota has two different significant opportunities. Toyota has a step ahead of its competitors due to its hybrid products; as eco-friendly consumers demand the new brands. Toyota has scope to develop and design the technology for the advance models. Other opportunity lies in untapped market of youth; Scion has brought an inspiring revolution. The Marketing, product design and credit assistance are other hallmarks of Toyota which will prove to be great opportunities in future. Globally Toyota has several regions for its business and purchasing power of large China’s population has been recognized. This has created a place for the Toyota to set up its headquarters in China. The purchase of Toyota’s full size truck is increased in South America due to strengthen of its economy. In Middle East the demand of full size Toyota’s SUVs is increased. This has resulted in the acknowledgement of opportunities of Toyota. Toyota has acted according to the streamlines of its export system.
2.1 Global Strategy
Toyota is ranked among five best companies of automobile industry with total 500 companies. Toyota has made success in global strategies. It has a clear agenda to distribute the channels, production, marketing and supply chain aspects. Toyota’s best production system and continuous improvements are the essential pieces of its global strategy. Concept of Kaizen (continuous improvement) has empowered the company to think about the new strategies and methods no matter in any area of the company. TPS (Toyota Production System) makes a link between the global automaker to manage the supply chain system, inventory management, production capabilities and planning methods. This TPS has empowered the Toyota to dominate the global automobile industry. Actually the Toyota is based in Japan but it has established itself throughout the world. No doubt the Toyota is most well known automobile brand of the world. Toyota’s market is based upon the mission: Stable long-term growth, while striving for harmony with people, society and the environment” (Toyota Motor Corporation Home Page). Toyota is providing thousands of jobs in America. Cultural, economic and social issues have allowed the Toyota to move beyond the brand equity and shaped an international marketing place for Toyota and achieved the success as a global corporation.
3.0 Rivalry of Toyota
When Nissan and Toyota entered in American market the cost advantage for Toyota increased over the American companies. The market share of Toyota in Japan was higher which forced the Nissan to cut the costs of their best cars. Both Nissan and Toyota made rapid increase in shares in Japan. Toyota also impacted the car companies of America. Detroit made efforts to manufacture the small cars but could stay before the products of Toyota Company. Other rival companies included the Ford, General Motors and Volkswagen. It is best know that cars of America’s companies are cheaper in price but not reliable as compared to products of Toyota. Before Toyota the Volkswagen was main dominant company in USA market. Volkswagen being the best foreign car supplier company had shared 60% in USA market. For example Volkswagen Beetle was the best car in America before the Toyota introduced its Toyota Corolla in 1975. Volkswagen’s cars have the vibration problems but Toyota possessed the powerful cars without vibration problems. The yen currency also played an important role to sell the Toyota more cars than Volkswagen. Japan’s yen was weaker as compared to German mark which made the Japan’s currency and goods cheaper for the purchasers in America.
3.1 Bargaining Power: Toyota has facilitated the Buyers and supplier of Toyota’s cars as rental car companies liked to buy large number of cars which did not affect the overall prices of cars. When raw material for cars (steel, fiberglass and plastic) is lowered due in price there are many supplier and bargaining power of supplier is neglible.
The sale of Prius exceeded when overseas units were added to it. The launch situation of Pirus in America and Europe market occurred in a same as in Japan. Local municipalities and people who love to use the new technologies always purchase the Toyota cars.
3.2 Competitor Analysis
Toyota operates in car bodies and motor vehicle center. This analysis is done by comparing the Toyota Motors with other three main companies as shown below
3.2.1 Honda Motors: The sale of the Honda Motors during the year 2010 was noted to be 101.92 $ with 76% Automobile business.
3.2.2 Nissan Motors: The sale of the Nissan Motors cars was $ 89.31 billion during the year 2010 with automobiles 93%.
3.2.3 Motors Liquidation Company: This Company is based in USA and its sale during the year 2008 was noted as $148.98 billion with 99% automotive products.
3.2.4 Toyota Motors: The sale of the Toyota motors was $225.14 billion which decreased to 7.7% versus 2009, when company’s sale exceeded to 2010 year’s sale.
Consumers of Toyota cars prefer to purchase the Toyota’s cars because these are reliable motor cars. During the 2008 survey Toyota and Lexus model won the 11 segment awards out of total 19 (Toyota’s Home Page). This show the commitment of Toyota to its quality products; which also shows that quality of the Toyota Products is the same wherever they are manufactured. It can be said that these products are manufactured by the Toyota.
4.0 Current Attractiveness of Toyota
4.1 Relations with suppliers
Toyota has established good relations with its suppliers to build a harmonious and mutual society. As the business of Toyota has been expanded on a global scale the Toyota is stressing more on close relationships to achieve the customer’s satisfaction. Toyota does respect of its suppliers throughout the world to promote the development and mutual growth. Toyota believes in CSR activities and issued a guideline for the suppliers in 2009. Toyota is focusing to make joint manufacturing activities with suppliers to improve the working practices. To promote the sale of cars in next five years on the basic principle of “Customer first, dealer second, third manufacture” Toyota is acting on the policy to benefit their dealers. Toyota has more than 170 distributers and 8000 dealers located in overseas countries. In this way Toyota engages its partners in many ways.
4.2 Acceptable car building by Toyota
When Prius the first hybrid car was produced with new technology, it was expected to sale this car in various countries. Prius was welcomed at different locations which proved its popularity but usage conditions like culture, regulations and traffic situations were required to do more for the acceptance of Prius a global brand of Toyota. The potential problems and deep understanding of advantages was needed to be focused upon in two next years.
4.3 Innovative Cars
A hybrid system enabled the Toyota to produce the large medium and minivans for their customers. All designers of Toyota dreamed to build an innovative car which offered more enjoyment during driving and riding with low fuel consumption. Estima Hybrid is a example of such cars. Manufacturing of such cars was started before the Prius with great technical issues but Toyota was successful to introduce this kind of cars. As mentioned above Toyota wanted to expand its Hybrid system to evolve the automobile industry in next 5 years of 21st century. Company wants to produce more than 300,000 units per year in next few years.
Toyota Company wants improvement in its Environmental Action Plan 2011 in six key areas: Change in Climate and Energy, Air Quality, substances, recycling and resource utilization, Environmental management and Societal Cooperation. Company wants to reduce the Carbon dioxide emission to ensure that environment is kept clean by adopting and observing all economy fuels values.
5.0 Company’s Strategies
There are main four marketing mix components which are shaped in a way to fight the firms in market and provide the easy access to company’s products and services.
5.1 Product Strategy
The company is focusing on strategies to compete the other firms by adopting a mass production program to sell its product in global market. A hybrid product can enhance its production to meet the demands of changing market.
5.2 Location Strategy
Toyota is a global producer of automobiles and their components, Toyota has positioned itself at the most central locations where it has clear and very optimistic control over the company’s products and their delivery to customers. In next three years Toyota Company aims to achieve the 35% of market share.
5.3 Promotion Strategy
Toyota Company is determinant towards pricing mechanism which can give it an edge over its competitors. Company can get highest level in automobile industry by using the best pricing method to get the hold of market.
5.4 Pricing Strategy
Toyota Company is producing new vehicles of best quality which can be purchased at a reasonable price. The new pricing strategy is aimed to attract more customers throughout the world.
5.5 Target Market Strategies
Each unit of Toyota is designed in a way to attract the targeted markets. The design of the vehicle cars is based on their speed, external appearance like color and shape. There are two seat model cars with high speed, small in size designed for the adventurous young people. Young people like to make drives on smooth tarmac roads, rough and rugged terrains (Thomas, 2001). People in America have made complaints about the Toyota’s products in design and flair as compared to GM and Ford. Launch of V8 pick up resulted in response to this ambitious and a big volume of sale is in progress. Overall Toyota is giving hard time to its competitors as it experienced a recall and holding the leadership position in market.
5.6 Corporate Strategy
Stability, growth and efficiency are the main components of the company’s financial strategy. Company is optimistic towards the automotive market in producing the fuel-efficient, electro and segment vehicles in next coming years. Company is focusing to invest in the technologies for the sustainability and growth of advanced units to meet the customer’s needs. Adequate liquidity is the next step of Toyota Company to invite more investments to improve its technology for the next generation technology (Annual report of Toyota 2009).
Automakers in USA are in struggle to improve their strategies and operations to match the Toyota’s strategies and operations. US automakers have said that three dimensions of Toyota’s business plan they seek to emulate. These three dimensions include the Toyota’s Production System with manageable legacy costs, high quality vehicles and dealers network. Although the Toyota Production System (TPS) has encountered serious quality issues yet Toyota is dominating the American markets. Toyota is also replacing the GM products by giving the timely attentions to correct the issues with a best teamwork. Toyota has learn very painful lessons and concentrated on its TPS system with continuous improvement while other automakers have felt difficulty to implement these systems. Toyota has leant more about the US market and GM motors are also following to make the small cars like Toyota. GM could not continue to work at a joint venture with Toyota.
6.0 Potential Challenges for the Rivals of Toyota
The new firms need a strategy development to face the challenges of rivalry from Toyota. This strategy consists of creation of new brands and exploiting the new resources with new aspiration and distinct from Toyota. Mercedes is in effort to tackle these issues to make A-class small vehicles. Porter (1980) has defined the strategic group where firms or groups follow the same dimensions with similar strategy. The concept of strategic group was well developed in the following years (McGee and Thomas 1986). The use of the Porter’s five forces is very useful to examine the forces which act on the automobile industry. New entrants in automobile industry face the issues of capital requirements, brands equity, legislation and ability to distribute their products. Another force which offers barriers for the new entrants are the bargaining powers of buyers and customers. Toyota is well established automobile with best brands it will be hard for the new firms to get the share of automobile market in a short time. Customers always buy the car of well known company and avoid purchasing the car of new entered company.
In this paper we have discussed the history of the Toyota Company with new development in car industry. Competitors of the Toyota are also given with data of their sales and compared it with Toyota Company. The sale of the Toyota recorded in the financial year 2009 was higher than the year 2010. Toyota Company is focusing upon the global strategy to attract the world’s most famous markets throughout the world and achieving more than 35% shares of car markets. Automakers in USA are try to match the Toyota’s products by offering the best quality cars with reasonable prices. It is discussed that how the Toyota is providing best cars and services to its customers and suppliers by a strategic planning. Porter’s five forces are also included in this paper to analyze the impacts of these forces on automobile industry. We have learnt that Toyota is a leading the automobile industry due to its best strategic planning throughout the world.

Performance Objectives At The Dell Company

Dell is concerned about the satisfaction of the customer’s requirements. The company is also having an eye on the price factor. Furthermore Dell is helping its own suppliers to improve the services they are offering to the company. In regards to Dell, here are the basic five performance objectives of Dell. This includes Quality, Speed. Dependability, Flexibility, Cost (Slack, N. Et al, 2001)
The performance objectives in accordance to the company Dell.
Doing the things in the right way by providing the error free goods and services, which will satisfy the needs of customers, is known as the quality.
According to many case studies, IBM products are ranked as the top of the year in the third party customer surveys. Dell Assembling and manufacturing process covers assembly and software installation of the computer system, also it includes the functional testing and quality control. Most of the company operations are done in house to measure and keep the quality high.
The second performance objective is the speed, which means that by doing things fastly is the key feature of the best companies. It also covers to minimise the time between the order and the availability of the product or service that the customer a speed advantage.
The techniques of Dell are focused to the operations that have reduced complexity by using simple and small process which have reduced complexity. By arranging layout and flow to enhance simplicity improves speed of production. As the era of machines have minimised the working of the human beings. So the company Dell is using the most advanced and simple means of building and assembling the computers.

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Dependability is another performance objective of operations. It means that doing things in time for customers to receive the goods or the services when their delivery is promised. The Dell process includes Just-in- time (JIT) production system. To get the good result Dell is holding the multi skilled workers to cope up with its daily business operations. At Dell improving quality and efficiency is a concern for the managers and the technical staff and all other concerned employees. By doing this, Dell is giving a dependability advantage to its customers.
Dell have the philosophy of responding to the dynamic environment is that organization change their products and services the way do the business. This performance objective is known as flexibility.
A clear result of responding to a dynamic environment is that organisation change their products and services and changes the way they do business. This performance objective is known as ‘flexibility’. According to research that we must learn to love change and develop flexible and responsive organizations to cope with the dynamic business environments (Peters, T., 1998)
In the company Dell, the manufacturing means the ability to adopt its efficient resources so that it can develop new products. On contrary IBM was able to achieve high level of flexibility, producing relatively small batches of different products with little or no loss of productivity and quality. During the past years Dell, has provided range of options that customers are able to choose the example is customised computer system, which user can modify the parts according to their own needs by going on the website of Dell.
One of the major Dell operations objectives is to remain the low cost producer. Particularly the companies are competing on the pries is the cost factor. As the low price is the universal attraction for the customers, which can be achieved at producing the low cost.
In order to do things cheaply, Dell is looking to be the low cost provider of goods and services. So already the company have planned and on other hand got some operations majorly in china where the cheap labour is available and the factors of production like resources physically available to be remained the low cost producer. Also internally, cost performance is helped by good performance in the other performance objectives that Dell has managed to produce high quality computers at a reasonable price.
By improving the quality, speed, dependability, flexibility and cost operations performance, Dell is a global growth and high percentage of customer satisfaction. Because of the success in the production by using the Just-in-time system of manufacturing and developments, Dell is world known brand. Dell is world leader in supply chain management and it keeps the production cost down with the high quality, maximum speed, on time delivery, flexibility. Dell has the supplies from those companies which are also the market leader in the computer industry. Dell has shifted its operations to different countries like china, Korea and Taiwan in search of the cheap input (raw material and labour). This makes easier for Dell to produce products at a lower cost.
Operating continuously gives dependability advantage to its customers by making it easy to deliver its production in the market palace. Using these operations objectives Del has managed to keep its customers happy and compete successfully with other companies in global market. Analysing these characteristics we can say that Dell is a world class company
Quality Management Tools at Dell
The company Dell is following the Japanese philosophy of lean manufacturing and Just-in-time system which is enabling the company to be the fastest growing company in the Technology market.
The basic concept of this system is to reduce the waste and increase the productivity, side by side this system have the efficiency that it reduce the labour cost by cutting the idle working hours for the production of a particular product.
Dell computer is participating in both of the above activities and that is why they are the industry leaders. Dell Company has got a warehouse space at their manufacturing plant in which suppliers keep parts directly on site which is a quintessential JIT layout. Further to this the company is using the JIT for its inventories purpose where they are keeping all the inventories for only four days and this is how they are solving the supply chain problems.
On the other hand Del is maintaining the Just In Time inventory level as it is a part of JIT scheduling. By introducing such systems Dell Company is working to reduce inventory to the lowest possible working levels. Secondly by introducing such systems Dell is adjusting its schedule of ordering and delivering the computer systems. This is also filling the gap of communication both up and down of supply chain management.
The word partnership is the only key to success for making JIT truly working. A firm particularly cannot implement the JIT system by itself. It must be having a complete cooperation with its supply chain. The company have successfully implemented the concept of JIT. For that reasons Dell have particularly formed and nurtured a demanding relationship with its partners. That is why Dell and its suppliers are working a one company. Why Dell is the best example of JIT, because Dell has its suppliers store raw materials directly at the manufacturing plants. The whole scenario of lean manufacturing can be shown in the diagram below:
The other concepts of Just In Time system also needed to be introduced if the company is going for the lean manufacturing systems. The first thing that Dell makes is the rule of continuous improvement in its processes and products by means of quality and for production efficiency is another tool for that. To achieve its best Dell is always looking for the innovative ways to solve problems and increase focus on the quality of its suppliers. Dell believes that all are the cornerstones of JIT system.
On the other hand Dell is working its best to the workforce to get indulge them into the JIT system. The company have the philosophy that without the dedication of the workforce, any invention will fail. On contrary Dell is using the simple way to achieve workforce commitment. Dell is providing the facility of training its employees outside their work environments and business functions and also company is helping them to increase the problem solving ability.
Dell also believes that by practicing the above exercise the firm is empowering and giving the employees an overall view of the entire Dell operations, not just their single job. By doing this dell is supporting from the management side also they are increasing the resources to solve problems and an increase in employee roles and responsibilities. The workforce automatically feels empowered and works to make Just In Time a success for the business of Dell.
Benefits to Dell
Following are benefits which Dell has achieved so far by implementing the JIT system in its operations.
JIT enabled Dell to be cost effective, more efficient and customer responsive.
It enabled the company to purchase and store the components just before they are needed in the assembly line. This is how Dell is cutting the cost of housing and managing the idle parts of computers.
The company Dell enabled its suppliers to store their products in the Dell owned warehouses near to the assembling plants which is enabling Dell to produce double as compared to its production in past.
Dells keep the inventory for only four days; this is enabling the firm in operating context the size and the production technology management.
JIT enabling the company to remain dealing with its other operation and process of production rather to stuck with inventory that may become obsolete.
Dell is also enabled with the waste management system by introducing the JIT system.
JIT In Practice
Dell is a well known brand which is operating in the business of Technology. This is a only company that is effectively utilising Just in time system. Dell has the revolution of selling the personal computer system using the direct business model. According to this model Dell is taking the orders directly from the customers. This is how they are reducing the inventory and managing the distribution of its products. According to this model Dell start assembling the product when they receive the customer order.
For this particular purpose Dell have introduced the pull system within the supply chain. A pull system is a reactive system, it start responding when customers order something from the company. This unique system is making Dell to remain competitive with in the industry on computer systems.
The company Dell use to keep their inventory for a week almost. This is providing Dell with a time to market its product as a market leader. Also it is enabling the customers to get the fresh, latest and greatest technology of processors and all associated operating system currently introduced in the market. The minimal inventory helps Dell with the economic advantage. Because according to a research the value of the computer components and manufacturing material declines about one percent per week. The one week inventory system also minimises a customers’ ability to change their desires before they receive their product.
The company Dell is using the JIT system which is resulting in the cost saving, superior customer’s satisfaction, limited waste and the ability to provide their suppliers with more information. In the end it is making Dell an industry leader and the company which holds minimal inventory (
While concluding the report for Dell, it is important to say that there are many factors which ar enabling the company to be an effective organization and the operations objectives and the JIT system of manufacturing is also allowing the company to remain as the market leader in the computer industry.

Ford Motor Company: Market Research

Executive Summary

Ford Motor Company is a powerhouse of American-made vehicles and a market leader in the automaker industry. Ford’s brand image is built around rich tradition and the reputation of being a rugged, durable, and American-made car that people trust.  Ford Motor Company has been vastly successful in America and around the world over the past 100 years, manufacturing and selling quality cars, commercial vehicles and  trucks inline with these perceptions. However, over recent years, Ford has been faced with a new challenge, adapting and evolving with the digital age. 

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Ball Busters have identified the decision problem of a decreasing revenue and market share over the past four years and subsequently, developed research questions which aim to help us understand aspects of the industry and Ford brand itself which may have impacted these measures.  We conducted both qualitative and quantitative research to provide us with primary data. Including a focus group interview, targeted at consumer attitudes towards of the Ford brand, the automobile industry and wider purchase inclinations and a Qualtrics survey, developed from the findings of the focus group to broaden the scope of answers to similar questions from consumers.

Through conducting research, collecting data and analyzing results; we were able to further investigate Ford’s decision problem.  Based on our finds, we have concluded that Ford holds a strong industry standing and their future is promising – provided that they adapt to changing technological demands of customers into the foreseeable future and remedy perception based discrepancies discussed in the report which follows.


Ford Motor Company is an American brand that was founded by Henry Ford. Ford is one of the biggest producers of American-made cars in the world. Even though this is a plus, Ford company has seen the decline in revenue of the past couple years (Ford Motor Company Financials, 2019). This observable symptom is likely due to growth and advancements of competition within the industry.

Ball Busters chose to conduct market research to assess the feasibility of Ford finding success in soley producing Trucks and Mustangs going forward. Beyond this, we wanted to determine the impact technological advancements on consumers purchase decision industry related trends. The market place is both changing and growing and we identified the importance of examining this adjusted environment before making this decisions regarding the feasible of our proposed strategy (Newman, 2019). This lead us to develop the following additional research questions 1) What are consumers perceptions of Ford? 2) What is the demand for technological advancements in the future? And 3) What factors influence general automobile purchase inclinations? Through the analysis of the data we collected, we were able to answer these questions, make recommendations and draw conclusions about the position of Ford in the industry and whether it is feasible for them to only produce trucks and mustangs going forward.  Our findings are presented in the following report.



Industry Trends

Automobiles have become a necessity for the everyday life in the 21st century. The ability to transport to any destination efficiently is a must. This includes safety, reliable, quality, and the added benefits the truck provides. The introduction of electric and hybrid cars have allowed the industry to become more environmentally friendly. Diesel engines pollute the environment which can turn off some potential customers. “In the trucking industry, electric and hybrid motors are something manufacturers prefer to avoid for production rather than encourage and are unlikely to be integrated in production in the near future” (Kiger, 2019). Consumers who have laborious job need a high towing capacity for their task at hand. They need a vehicle that will get the job done. Customers that are looking to buy a truck, mainly use it for towing, hauling, and the durability of the vehicle. The importance of the benefits sought is a key ignitive when marketing a new line of cars, trucks,SUVs, etc. The automotive industry has little growth over the past year and is expected to remain constant.

Market Share


Vehicles that offer similar products as the Ford trucks include: Chevy Silverado, GMC Sierra, Ram 1500, and Toyota Tundra. The 2019 Chevy Silverado is the 2nd best selling truck behind the Ford F-150 model. The Silverado is a very durable car that consumers love. The maximum towing capacity of 12,500 pounds can allow the driver to haul heavy items that he/she may need (Amend, 2019). The Silverado has many technological advancements where Ford may be lacking.The average market price for a new 2019 Chevy Silverado starts at $41,684 (2019 Chevrolet Silverado 1500 TrueCar, 2019) .

Another contender that gives Ford a run for their money is GMC. The GMC is similar to the Ford with the same exterior finish. They both appear to be strong and very durable. The GMC Sierra is known for having the largest cab area making driving a lot more comfortable. GMC Sierra interior seems to have more detail than other trucks. One technological advancement GMC has adapted to the start stop engine. This engine stops at red lights to preserve gas and appear better for the environment (GMC , 2019). The fuel can last longer and is a benefit for the low gas mileage most trucks fail to overcome.

General Motors is the market leader in the automotive industry with a market share of 16.5%. Toyota is closely behind with a market share of 14.7%. Behind Toyota, Ford comes in 3rd place securing a good capture of the market. (U.S. automotive market share 2018 | Statista , 2019). Differentiating from these other competitors is crucial. Technological advancements in automobiles today seems to be a driving factor. Ford has a chance of capturing the #1 market leader but the most importantly they need to watch their competitors. Understanding what your competitor is doing allows the company to engage what they are lacking.

Ford Motor Company Background

Founded in 1903 by Henry Ford, Ford vehicles were the first car to ever be invented. They are known for being American-made and their stable affordable pricing. Ford produces cars a numerous amounts vehicles from sudans, SUVs, trucks, and sport cars.Ford has existed for 115 years, longer than any other automotive company (Ford , 2019) .

Target Markets

Primary Market- Middle-aged Laborious Men (35-45)

Market Size: 32,536,336

Psychographic Values:

●       A reliable truck that is not just for driving but can tow and store items

●       A quality truck that shows their rugged personality

Secondary Market- Middle aged Family with Active Lifestyles Women (35-45)

Market Size: 30,536,336

Psychographic Values:

●       A truck that can protect their family in emergency of an accident

●       The ability to keep up with a high pace lifestyle

Ford’s Financial Performs

Research Methods

The Focus Group interview took place February 21st at 9:30 AM in the USF Library. This interview was conducted in a private study room and involved 5 members of our group, one of which was the mediator. The advantages of this research type was that is provided us with rich qualitative data and developed ideas which have our eventual quantitative data direction. The option to express more than a set of options gave deeper insights into perception, opinions and feelings towards our research questions. The disadvantages were that not all members were not in the target market. All members were between the age of 19-22. One possible bias which is important to acknowledge is groupthink; the phenomenon where group members bounce off the same idea and new views are not mentioned.  This is not conducive to creativity and individuality in a group settings – however, it is difficult to measure the actual impact it has on subjects in a study.

 Our quantitative method of research was a survey which we created and then distributed through social media. This data collection method is referred to as convenience sampling, which can lead to sampling error. Convenience sampling occurs when you ask people that are close to you to collect data. This can lead to participants possessing similar characteristics and thus not representative of the true population. This creates trends of similarities that may not correlate with the data provided.

Data from both the focus group and survey is primary data, collected first hand by us, the researchers. The advantages of primary data is that it is tailored the specific research problem we stated above and therefore, is better suited to help us solve the questions we have.



Focus Group:

●       Consumers have an overall negative attitude towards Ford as a company

In our focus group interview, everyone that took part knew and understood Ford Motor Company, however no one really had a strong connection to the company.  The general consensus from the group was that they knew Ford to be a tough and reliable car or truck, as advertised, but did not know Ford to be revolutionary but more traditional, instead.  Most of the group participants had a parent or a grandparent that drove a Ford car at sometime in their life, but no participant had driven one themselves.  In fact, one participant who was not from America stated that they would rather purchase a car that was not American made.  We found that based on where the consumer is from and the opinions that the consumer is surrounded by can influence a decision or attitude towards a company.

●       Technology is important to consumers

Every participant in the focus group agreed that technology is necessary in modern day cars.  Because of the technological advancements of the digital age, it is impossible to not incorporate such feature into vehicles.  Technology is valued not only for entertainment and comfort, but also for the wider safety and performance of the driving experience.  Participants stated that the features which they look for most in a new cars included, bluetooth speakers, backup cameras, and park assist.  People generally newest and most up-to-date technology, therefore, Ford needs constantly adapt and innovate in order to keep up with the rapid progression of the digital age.

●       Consumers have a positive attitude towards autonomous vehicles but negative attitude about Ford autonomous vehicles.

Consumers have an overall positive attitude towards the autonomous vehicles of the future.  Tesla and other companies are paving the way and making themselves known as the front-runner in the industry of technology.  Consumers are excited for this new wave of technology, however, Ford has some catching up to do if they want to stay relevant.  Consumers trust companies like Tesla to produce these self-driving vehicles because these companies are proven and known for their technologically minded vehicles.  Ford however, is not renowned for innovation or technology and, therefore, people are less likely to trust autonomous vehicles produced by Ford.  Our findings showed that Ford could produce an autonomous vehicle in the future, but it would have to be after other companies have had success with self-driving cars.

Survey Findings:

Participates view the quality, technology, and appearance of Ford to be negative. By viewing these trends in what consumers’ want, Ford and position a new stance.

Customers who won Ford have the highest rates of their parents owning Ford over any other brand. This says something about the influences of parents.

This show the likelihood of people purchasing an autonomous car by Ford. Participates were very unlikely to do purchase.

Ford ranked the least popular brand amongst 6 different options of other truck brands specifically. These options contained GMC, Chevy, Dodge, Toyota, and Honda.

Consumers are using their vehicles are transportation to work more than any other activity. Ford trucks and Mustangs are geared towards outdoor and social activities.

Conclusions and Recommendations

This research project has lead us to making several conclusions and recommendations which Ford should consider when designing, manufacturing and marketing vehicles in the future.  We found that customers perceive Ford as being American-made, reliable and durable, however, lacking in technological advancement . In the digital age, technology related features are strong drivers for consumers when making vehicle related purchase decision. It enhances the quality of the driving experience, adds comfort and improving safety and performance substantially.  From our study, we observed that respondents value features such as bluetooth, backup cameras, and parking assist most in vehicles they purchase. Therefore, we recommend that Ford invests in developing and implementing features such as these in there 2020 models and beyond to satisfy the changing needs of the target market.  Consumers want the driving experience and feeling safe while doing so; technology has the potential to benefit Ford and help improve upon their existing level of quality and appearance. If they do not adapt accordingly, we foresee that competitors who evolve with the digital age will become more of a threat to Ford and their market share.

Our second recommendation Ford aims to create positive perceptions by moving away from the traditional truck and expanding its investment into the development of different models.  Although this is what Ford is known for, it can keep that image while at the same time making revolutionary changes to its product line.  With the company specializing in Trucks, SUVs, and Mustangs in the beginning of 2020, this would be a great time for Ford to focus on improving external features such as better quality suspension, coil overs, and handling.  They can bring in better features to the driving aspect of the car so it can be a more comfortable and enjoyable ride.  Internally, Ford should focus on adding technology features that customers can customize and have fun with.  Example may include automatic seat and mirror adjusters, advanced touch screens with smartphone connectivity, and more comfortable seating.


2019 Chevrolet Silverado 1500 Prices, Reviews & Incentives | TrueCar. (2019). Retrieved from

Amend, J. (2019). Chevy Silverado Marketing Conjures Up Familiar Themes. Retrieved from

Ford – New Cars, Trucks, SUVs, Crossovers & Hybrids | Vehicles Built Just for You‎ | (2019). Retrieved from

Ford Motor Company – Financials. (2019). Retrieved from

Kiger, P. (2019). The Trucking Industry Is Gradually Embracing Autonomous Vehicles. Retrieved from

Newman, D. (2019). Top 6 Digital Transformation Trends In The Automotive Industry. Retrieved from

Trucks, SUVs, Crossovers, & Vans | 2018 GMC Lineup. (2019). Retrieved from

U.S. automotive market share 2018 | Statista. (2019). Retrieved from


Analysis of C Seasons Footwear Company

For the business world today, the aim of every company is to invest in an environment that is economically safe with the aim of working towards making profit, make maximum returns on investment and to kept the interest of the company’s shareholders in mind and also to have the interest of customers in mind in order to gain competitive advantage by working on core competency of the organisation.
The company is in the athletic footwear industry called C SEASONS. The company used a differentiated strategy for the sale of its sports footwear. This is going into the footwear market in a different way from other footwear making companies in order to have a competitive advantage over other athletic footwear industry.
C Seasons Footwear Company has been in the footwear industry for the last five years supplying the best footwear to four different regions namely, North America, Europe – Africa, Asia Pacific and Latin America.
The BSG Online simulation was based on twelve industries that were into athletic footwear located in four regions (North America, Europe Africa, Asia Pacific and Latin America. It started with twelve companies and to compete with other company and make necessary decisions and design and implement a strategy that will provide a longterm return for shareholders over the next five years. The report will focus on company 25 (C SEASONS).
According to Johnson, et al (2009) a differentiation strategy seeks to provide products or services that offer benefits that are different from those of competitors and that are widely valued by buyers. p.153.
The aims and objectives of the BSG online simulation are:

Becoming the market leader in the footwear making industry.
To have a good shareholder returns.
To have a high net profit at the end of the game simulation.

Various report, tables and graphs would be used to help decision making processes.
The table below shows the strengths and weaknesses for C Seasons on both the internet segment and wholesale segment of the business for the five years.
Simulation Result.
Year 1.
In order to be the market leader, we decided that in year 1 we would be making a 1% charitable contribution, by doing this it would help reduce the tax payable by the company at the end of each financial year. The company would also be involved in workforce diversity programs. The company also decided that at the end of the year we would have certain percentage of our unsold stock on clearance sales. For the North American market clearance would be 25%, Europe Africa would be 25%, Asia Pacific would be 50% and 50% for Latin America. The company also had strengths in all regions in the models offered, rebate offers and advertisement. Some weakness were also identified such as the style and quality, delivery time and the wholesale price. At he end of the first year the company had an image rating of 66 and a credit rating of A. The net profit margin in the first year was 14.1% while return on equity was 22.8%. The current ratio in the first year was 2.74 while the asset turnover was 0.93.
Year 2
In year two the strengths of the company in the regions were the models offered and the rebate offers. The inventory clearance was left as the first year which the company believed would attract more customers.
The weaknesses in year two were style and quality, wholesale price offered to retailers, the delivery time, celebrity appeal and free shipping. Return on equity in year two was 23.4% while the net profit margin was 16.4%. This was a 3.1% rise from the first year which points out that the company was selling well. Asset turnover in the second year was 0.93 while the current ratio was 4.11%.
Year 3
In year three the strengths of the company in the three regions were the free shipping offered, rebate offers, celebrity appeal and the models offered. The return on equity in year three was 19.7%. Net profit margin 16.9%. Asset turnover was 0.57 while the current ratio was 5.37%. The company had some weaknesses in the third year of business delivery time, retail outlet, and advertising were the setback for the company.
Year 4
In year four the company decided to pay shareholders, a sum of $0.50/share is to be paid to each shareholder per the number of share(s) they hold in the company. Shareholders were paid dividend as a sign of goodwill and also to show value for the money they have and would invest in the company.
The company showed some strengths during the trading year such as the models offered, the free shipping offered, rebate offers and good advertising.
The company also had some weaknesses in some of the regions such as the style and quality, retail outlet and the delivery time. The return on equity for year four as 10.3%. Net profit margin for the year was 10.5%, the reason for this was the dividend paid to shareholders during the year. The asset turnover for the year was 0.76 while the current ratio for the company was 7.32%.
Year 5
In year five the current ratio for the company was 8.21% while the operating profit margin was 25.7% and net profit margin was 17%. In the fifth the company had some weaknesses such as wholesale price, style and quality and the retail outlet.
The strengths during year five were free shipping offered, the good advertisement made, the delivery time, the rebate time offered and the celebrity appeal the business had. The asset turnover for year five was 0.72.
Strategic Thinking
a.) Strategic Analysis
The basis strategy used in the simulation was a differentiation strategy “this seeks to provide products or services benefits that are different from those of competitors and that are widely valued by buyers” (Johnson et al, 2006) pg 153.
C Seasons offered a good quality product and started with a slightly lower price for a quality product that it was producing.
C Seasons used the PESTEL framework to analyse its external environment. “The PESTEL framework categorises environmental influences into six main types; political, economical, social, technological, environmental, and legal factors” Johnson et al (2006) pg 25.
The aims was to achieve competitive advantage by offering better product or services at a reasonable price or enhancing margins slightly higher. Although, Seasons product may be identical, but possible to differentiate on the basis of the following

Quality product
Reasonable price
Global brand
Broad market
Unique value
Niche market

Product differentiation is another strategy for gaining a market foothold, and to be successful, product differentiation must be valued by target customers. It must be protected by products, make duplication by rivals difficult or impossible
Today, most successful and powerful companies grew out of business model that were elegant, compelling in their logic and powerful in economic potential as some variation of the value chain that support business.
b.) Mission And Vision
“A mission is a general expression of the overall purpose of the organisation, which, ideally, is in line with the values and expectations of major stakeholders and concerned with the scope and boundaries of the organisation” Johnson, et al (2006) pg 9.
“A vision can also be described as desired future of the organisation. It is an aspiration around which a strategist might seek to focus the attention and energies of members of the organisation” Johnson, et al (2006) pg 9.
Therefore, the mission of C Seasons will be to become ‘the major player in the market’ and the vision is ‘to produce the best footwear that are worn and cherished the world over by both children and adult.’
External Environment
External environment examines opportunities and threats that exit in the environment. Both opportunities and threats exist independently of the firm (Adkins, March 2008). See appendices.
Internal Environment
The internal environments are those that the company can set up strategies for and make sure that the decisions are the right one for the company. See appendices.
Value Chain
Value chain analysis also highlights the mechanisms through which developing countries and their procedures have upgraded their activities and linked to producers and consumers in the global economy, or may do so in the future in a manner that can lead to a sustainable income growth. The results of this type of analysis should indicate the way to policy challenges confronting the private and public agents operating in or promoting the chain (Kaplinsky,2000).
The VRIO framework was the foundation for internal analysis in order to lead to sustainable competitive advantage a resource or capability should be valuable, rare, imitable and organised.
Decision Making And Personal Learning
C Seasons decided not to take a bank loan in the first year of business, the reason for this was to see if the company could sustain itself without a loan or overdraft. At the end of year one the company had a total sales of $267,140m with a net profit of $37,666m. In year four the business decided to issue dividends to shareholders, a $0.50 was to be aid to each shareholders per the number of shares they hold. The reason for the dividend been paid to shareholders was as a result of increase in the businesses market share and profit.
The reason why the net profit in year four was low was as a result of the exchange rate at the time which went up to $21,764m compared to $6,756m in year three. The company had problems with its style and quality during the first two years of business and were able to sort it out by year three.
In order to generate net income on our investment, we signed a celebrity to endorse our product and also wear the footwear during shows and also placed some adversitment on TV and billboards. We tried to create a new concept with good features in order to meet customer’s aspiration at this period our firm started making sales.
In all, this exercise have exposed me to know how business can be done in real life and make necessary strategic decision that will make the business more viable to operate. These also allowed me to have an in depth understanding of business practice and ability to have a longterm vision and generate positive customer and shareholder expectation. I was also able to know how to use the accounting ratios in calculating for businesses.
To gain return on investment, strategic decisions must be made in accordance with the set objectives, the report focused on developing strategic decisions which helped in comparing the simulation to a real life business. An important skill derived will monitor numerical information and analysing these statistics in order to forecast the future and successfully survive in the business.
The various experienced gained during the cause of the simulation game and comparison of other group result to improve the firm’s decision making were utilised this included taking risks to ensure that the firm performance in the market is high. Charts and financial ratios were analysed during the course of the simulation exercise to complete the tasks, this helped the decision making process. Making use of resources and information that is available.

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C Seasons is clearly the top of its industry, but no company is invulnerable. Season’s has several avenues of improvement. If they want to continue to build upon their lead and maintain their status in the industry, they need to take a hard look at their mission and define it in SMART terms. The ability to reach some of their target customers in such a fashion could be a huge marketing advantage.
Season’s reputation will be more positive and if they can gain back customers lost due to negative publicity. People already associate Season’s with quality retail products. It would be even better to feel good about buying their product and not feel as if people are being exploited every time they purchase a Season’s product.
The Summary of Internal and External Analysis
The SWOT summarizes the key issues from business environment and the strategies capability useful as a basis against which to generate strategic options and assess future courses of option(Harvard Business Essentials,2005). Its helps to generate strategic alternatives from a situation analysis, and can be applicable to either corporate level or business unit level and do appears in marketing plans
The internal and external situation analysis can produce a large amount of information, much of which may not be highly relevant. The SWOT analysis classifies the internal aspects of the company as strengths or weaknesses and the external situational factors as opportunities or threats. The following diagram shows how a SWOT analysis fits into a strategic situation analysis.
SWOT Profile
The internal and external situation analysis can produce a large amount of information, much of which may not be highly relevant. The SWOT analysis classifies the internal aspects of the company as strengths or weaknesses and the external situational factors as opportunities or threats.
In summary, the interaction of the internal and external analysis will result to SWOT important. e.g, the strengths can be leveraged to pursue opportunities and to avoid threats, and managers can be alerted to weaknesses that might need to be overcome in order to successfully pursue opportunities.
In a SWOT analysis, the capabilities that enable Seasons company to perform wellcapabilities that needs to be leveraged. The company has introduced many innovative products giving it a competitive edge. Its global reach provides it an opportunity to tap growing global footwear market. The company’s consistent innovations have enabled it to remain competitive and maintain market share
In a SWOT analysis, the characteristics that prohibit Seasons company or unit from performing well and need to be addressed. The season’s company falls behind in brand awareness compared to its competitors because of lacking celebrity endorsements. The company faces intense competition from global players such as other competitors.
In SWOT analysis, the trends, forces, events, and ideas that Seasons company or unit can capitalize on. The global footwear market has shown positive growth in recent years. The North Americas and EU markets are expected to grow at CAGR of 4.3% and 3.2%, respectively, to reach values of $93.2 billion and $60 billion in 2010.
The Asia Pacific region is set to grow more strongly in the 20052010 period, recording a CAGR of 4.7%. a positive outlook for the global footwear market would boost the revenue growth of the company.
In a SWOT analysis, the possible events or forces that Seasons company or unit must plan for or mitigate. The principal materials used in manufacturing footwear products are natural and synthetic rubber, plastic compounds, foam cushioning materials, nylon, leather, canvas, and polyurethane films used.
As a result of rising oil prices, the prices of synthetic rubber and plastic based products has increased. Rising oil prices will further increase the prices for petroleum based products. Increasing raw material costs would increase the company’s production costs and may affect its profitability.
SWOT Analysis Limitations
The classification of some factors as strengths or weaknesses, or as opportunities or threats was somewhat arbitrary. For example, a particular company culture can be either strength or a weakness. A technological change can be a either a threat or opportunity. But, the most important was that firm’s awareness of them and its development of a strategic plan to use them to its advantage.
Competitive Environment
The prospects for longterm industry wide growth in footwear sales are excellent. Athletic shoes have become the footwear of choice for children and teenagers, except for dressy occasions. Increased adult concerns regarding physical fitness are boosting adult purchases for use in exercise and recreational activities.
Distribution Channels
The ultimate customers for athletic footwear, of course, are the people who wear the shoes. But athletic footwear manufacturers have all refrained from integrating forward into retailing and making direct sales to the final user. Customer demand for athletic footwear is diverse in terms of price, quality, and types of models. There are customers who are satisfied with no frills budgetpriced shoes and there are customers who are quite willing to pay premium prices for topoftheline quality, multiple features, and fashionable styling.
Wholesale Selling Price
The higher your company’s wholesale price to retailers, the higher the prices that retailer will charge customers. Consumers are quite knowledgeable about the prices of different brands, and many do comparison shopping on price before setting upon a brand to purchase.
The Number Of Retail Outlets
Retail outlets are essential in accessing the consumer market. The more retail outlets a company has carrying its brand of shoes, the more market exposure a manufacturer has and the easier it is for consumers to purchase the brand.
Celebrity Endorsements
Footwear companies can contract with celebrity sports figure to endorse their footwear brand and appear in company ads. Celebrity endorsements, along with the impressions and perceptions people gain from watching a company’s media ads over time, combine to define how strong a brand image a company enjoys in the minds of athletic footwear buyers.
Customer Rebates
Manufacturers who give rebates provide retailers with rebate coupons to give buyers at the time of purchase. To obtain the rebate a customer must fill out the coupon and mail it to the manufacturer’s distribution warehouse, along with the receipt of purchase.
The VRIO framework was used to evaluate how capable Seasons
A resource is valuable if it helps the company to meet an external threat or exploit an opportunity. If a resource helps to bring about any one of these four things then its valuable
Quality Service
Seasons offer a quality service, and the good does what’s designed for exceptionally well.
Process innovation can influence efficiency rather than having a direct effect, because the company can have at least temporary monopoly on new product.
Season’s brand name is valuable but most of its competitors ,also have widely recognised brand names as well, making it not that rare. The Seasonl’s brand may be most recognised, but makes it more valuable not more rare.
It’s a prime locations, design, and intellectual property.
The inimitable resource are often result of historical, ambiguous or social complex causes. Intangible resources or capabilities like corporate culture or reputation are very hard to imitate and so inimitable e.g Seasons marketing strategy leads to distribution, partnership programme leads to customer relation management.
A resource is organised if the firm was able to actualise it. If analysis does turn up a valuable, rare and imitable resource that Season’s was not taking advantage of, then recommendations.
Porters Five Forces
“The essence of formulating competitive strategy”, writes scholar porter “was relating a company to its environment. Every company’s environment includes with customers, competitors, suppliers and regulators etc, and has impact on its profit potential (Harvard Business Essentials,2005).
Both current and potential customer, each requirements for product quality, features and utility. Changes in the external environment may be related to competitors, suppliers, partners, customers, sociochanges, economic environment etc.
The external analysis was use to examine opportunities and threats which do exists in the environment, and both opportunities and threat exists independently of the firm. The opportunities were favourable conditions in the environment, which produce the results for an organisation if agreed. But, the threats were conditions or barriers that may prevent the firms from reaching its objectives.
Power Of Buyers
The bargaining power of buyers was very high, as Seasons continue to market their products and differentiate their brands against competitors, so as to increase sales and market share. With the use of internet marketing, helps the company to improve accessibility and intimacy among users. It helps the brand entity plays its role in purchasing behaviour, strong identity will gives customers trusts and loyalty. Some of the online customers are sensitive to price and switching cost for the buyer was low.
Power Of Suppliers
The threats of bargaining power of Suppliers was very low, many suppliers in this industry, little differentiation among suppliers and makes it nonexistence. The suppliers dependent on the firm in order to survive can switch between suppliers quickly and cheaply due to geographical locations, cheap labours on various regions.
In this industry, raw materials were abundantly present (Leather, rubber, cotton) etc, will help the seasons to standardise their input procedure especially to material used, labours, suppliers, services and logistics in some of the regions.
Threats Of Substitutes
The buyers’ propensity to substitute was very low. Consumers are not likely to substitute due to the performance specification of the product. e.g, a basketball player would not wear boots to play basketball. Therefore, there are no real substitutes for athletic footwear. Consumer substitutes for athletic footwear products are low because there are little alternatives to switch, some substitutes for athlete footwear could be boots, sandals, dress shoes or bear feet.
Barriers To Entry
Threats of entry was very low in the sense that, season’s is able to control their costs to retain performance advantage over emerging competitors in the industry. The capital injection into web site development is high and must be updated frequently with new promotions and added features to attract online shoppers. There are many proprietary product differences in the industry therefore brand identity has an immediate competitive advantage.
The online footwear industry is highly abundant with hundreds on online merchants. Switching cost is low for the consumer, and may occur frequently depending on consumer preference and other factors affecting consumer, and may occur decision, (i.e. price sensitive consumers). Selling footwear online is highly competitive; however, barriers to enter into this ecommerce industry are quite low.
Rivalry Among Existing Competitors
The rivalry among existing competitors in the footwear industry was very high. Most individuals in North America have access to high speed internet and online purchasing has become the new trend for the twenty first century. Almost every large firm has a web site, and most of these web sites contain virtual stores which provide convenience to consumers. Competition is fierce in the footwear industry and those who dominate or lead the market do so with high capital expenditures, aggressive sales and marketing strategies, and strong brand identity.
Pestle Analysis
Political Analysis
Political environment vary widely between countries and can alter rapidly. Government can of course create significant opportunities for organisations. It is important, however, to determine the level of political risk before entering a country (Johnson et al, 2009) pg 218. Examples are the political stability of the country, tax policies, etc.
Economic Analysis
key comparators in deciding entry are levels of gross domestic product and disposable income which help in estimating the potential size of the market. However, companies must also be aware of the stability of a country’s currency which mat affect it’s income stream (Johnson et al, 2009) pg 218. Examples inflation rate, interest rates, labour costs, etc.
Social Analysis
Social factor will clearly be important, for example the availability of well trained workforce or the size of demographic market segments – old or young – relevant to the strategy (Johnson et al, 2009) pg 218. Examples are income distribution, consumer behaviour, living standard.
Legal Analysis
Countries vary widely in their legal regime, determining the extent to which businesses can enforce contracts, protect intellectual property or avoid corruption. (Johnson et al, 2009) pg 219.
Another external factor that C Seasons faced was other competitor, this was difficult because we new that other industries would have access to our details and would see what we were doing and try to target our business. The edge our industry had was that we spent more on advertising and reducing our delivery time to two weeks.
Internal Environment
Technology Capabilities
All the industry under the simulation game has got one thing in common and that it we are all making athletic footwear. We all want to make the best footwear and so we would make sure that we use the best and very latest technology to produce the best footwear for the athlete or for the public that would wear them.
This is how the footwear is distributed to the wholesalers and private customers. C Seasons was able to reduce delivery time from four weeks to two weeks which helped sales.
Purchase Decision
Purchase decision is what will determine the product a customer will purchase or buy, this would in turn reflect in the decision to be made by the company. In all cases, before customer makes a decision to purchase a particular product they would compare prices of the product with the value they hope to enjoy from such product. C Seasons was able to enhance the purchase decisions of it’s customers by making their footwear a high quality with good styling.