The Honest Company

The Honest Company is a consumer goods firm that was founded back in 2011 by actress Jessica Alba (The Honest Co., n.p). Other founders of the Honest Company include Christopher Gavigan, Sean Kane, Brian Lee and Maria Ivette. The company offers household products cleaning detergents, personal and baby care products among others. Back in 2008, Alba was motivated to start the company by the birth of her first child together with her childhood sickness (The Honest Co., n.p). The inspiration to start the company was further reinforced by her child’s illness that was caused by baby care products. After three years, Alba succeeded and found four business partners who participated in the launching of the company. By the end of the first year, The Honest Company had 17 products only that revolved around baby care and cleaning products.

After three years of operation, the company recorded gross sales of approximately $50 million (Macmillan & Rolfe, n.p). By 2014, The Honest Co. had a total of 275 employees and projected to raise approximately $150 million in revenue (Macmillan & Rolfe, n.p). As a matter of fact, the company was able to raise more than $160 million in terms of sales by the end of fiscal year 2014. The valuation of the company by 2014 was approximately $1 billion (Macmillan & Rolfe, n.p). Since then, the company has made several mergers and acquisitions with companies such as Alt12 Apps and others which increased their valuation to $1.7 billion in the current market (Macmillan & Rolfe, n.p). Generally, The Honest Co. has dominated their target market within four years of operation. The tremendous success of the company has been promoted by their best services in delivering premium family essentials to their customers.

Reference      

The Honest Co. Our story: who we are. 2016. Retrieved from https://www.honest.com/about-us/who-we-are

Macmillan, Douglas & Rolfe Winkler. “Jessica Alba’s Startup, Honest, Valued At $1.7 Billion” The Wall Street Journal. 13^th August 2015. Retrieved from http://www.wsj.com/articles/jessica-albas-startup-honest-valued-at-1-7-billion-1439477917

Henkel versus Reckitt

Reckitt Company has grown in revenue from the year 2005 to the year 2009. The percentage increase from 2005 to 2009 is about 50%. In the year 2005 to 2009 the revenue growth were 8%, 18%, 10%, 25%, and 18% respectively. This high rate of growth could have been influenced by the growth in organic substances which particularly showed a rather high rate of improvement. The products sold around the world especially in Europe gave a higher return rate more than any other country in the year 2009. The growth rate at Henkel is very low and mostly as observed it has declined since the year 2005 to 2009. From 2005 to 2009, Henkel showed a reduction in organic growth rate from 12.5%, 5%, 2.6%, 8.1%, and -3.9% respectively (Henkel, 2016). The decline in the revenue margin is much caused by the industrial adhesives. The revenue driven by organic drivers for Reckitt is about 25% of the total 50% of growth profit compared to Henkel which is about 15% of the total 25% of revenue. The growth is for Henkel’s division is not consistency since there has been a reduction in profit margins since 2005 to 2007. This is much likely to be caused by the rate of reduction in industrial products.

What causes the big difference between Reckitt and Henkel company operating margins is the high rate of intangible assets that give Reckitt a competitive advantage over Henkel. Henkel has a higher advantage over Reckitt in terms of the plant and properties. The profit margin of Henkel is however greatly influenced by the European countries since 2005 the rate has improved significantly allowing the company to reap maximum benefits in terms of revenue earned on outside sale offs. However on the personal care companies, Henkel has lesser profits since much of the products are sold locally and at a considerable cheaper price reducing the revenue earning margins of Henkel (Henkel, 2016). On the other hand, Reckitt has also a higher earning capability especially in the year 2009 in the European countries mainly contributed by a cheap selling price of their products. This has given Reckitt a higher profit margin compared to the personal care companies. If the adhesives are stripped off, the numbers in operating margins reduce significantly since the high rate of profits is mainly obtained from the adhesive figures, therefore, leading to a decline. In the year 2009, the adhesives were very little and this is similarly the same year the company experienced a reduction in profit margins therefore if the adhesives are not present for Henkel, a reduction in revenue.

Considering the income capability of both the Reckitt Benckiser and Henkel AG, Reckitt has a higher earning capability (Henkel, 2016). This can be caused by the reduced rate of products they deal with overseas and also the debt rate is much lower from what Henkel has in terms of debts. Reckitt presents a set of payables which in turn helps in reducing losses since the grants, and also the insurance services are well catered for by the company thereby allowing bonuses to stream into the companies operating cost. Henkel, on the other hand, receives a high sales order on a yearly basis and this creates the working and the morale needed to increase the sales. The strong values at Henkel could see the company rise in profits making it a high earning company compared to Reckitt.

Reference

Henkel AG & Co. KGaA. (2016). Henkel AG & Co. KGaA MarketLine Company Profile, 1-150.           

Sushi restaurants industry in the US

Industry size

Sushi restaurants in America have gained popularity since 1980s where the California roll was introduced which included an avocado, some pieces of meat and some cucumbers (Issenberg, 2008). The California roll was a bit different from the American roll and thus many people were pleased by this roll which ensured the sushi restaurants became popular. Sushi restaurants ensured their prices were a bit lower but due to competition from other substitutes the restaurants have faced competition (Issenberg, 2008). IBIS World experts suggest that Sushi restaurants are growing annually and the growth is expected to rise since they are coming up with more products which are loved by the American people. The restaurants have become established in the American food market and thus the industry size is expected to increase since the restaurants are making more profits. The industry was fragmented such that the restaurants were privately owned were mainly small scale businesses unlike today where the restaurants are big and compete with other restaurants that were established earlier.

Maturity

Sushi restaurants have grown since 1980s when they were established. The restaurants were established as small businesses but with time the businesses have developed and thus compete with other large businesses in the American food industry (Issenberg, 2008). Sushi restaurants have grown and developed in a positive manner since they have established their market even though they are mainly owned by non Americans. The restaurants are affordable and thus many people would prefer having dinner in the restaurants therefore showing that people love the restaurants. This indicates that the restaurants have grown despite the high competition in the food industry (Issenberg, 2008). Revenue is expected to be on the rise in this industry despite the high competition sushi restaurants face as they compete with other industries in the food industry as the IBIS report suggests.

References

Issenberg, S. (2008). The sushi economy: Globalization and the making of a modern delicacy.      New York: Gotham.

Firm Analysis

To determine if it is viable to invest in a given company, four specific aspects are analyzed about the firm. The aim is to find a business venture that can be easily understood , has long-term prospects  that are quite favorable , whose management and operations are carried out by competent and honest individuals and whose prices is attractive and thus making it affordable. The outlined aspects must be satisfied if a business is to be considered a favorable investment option.   Abercrombie & Fitch is assessed in terms of these aspects to determine it qualifies to be a good investment option.

Understandability

Abercrombie & Fitch is brand that was established in 1892 with a business aim of supplying rugged outdoor gear. It serves as retailer with focus on upscale casual wear especially for young consumers and has it’s headquarter in New Albany Ohio. Through the exchange of 43 million worth of shares belonging to the Class B stock, it was repositioned by Limited, Inc to become an apparel business that is oriented more towards fashion.  The selling of an IPO worth 8.05 million shares belonging to Class A stock made The Limited to have an 84.3 percent ownership. The company is located in more than 300 places across the United States and has   still expanding into the international market.  The companies also had two offshoot brands under its operations, Gilly Hicks and Reuhl No. 925 but were closed down in early periods of 2015 and 2010 in that order (Hamblin, Kampf, King, Sabah & Stancu, 2015).  The company filed declared its self bankrupt in relation to chapter 11 bankruptcies and thereby closing its main store at East 45 street and Madison Avenue in 1997. The name was later revived in 1978. The Abercrombie & Fitch later shifted its focus products belonging to young adults, initially as Limited Brand’s subsidiary and then separately as a public company. It was to become one of the biggest apparel companies in United States. It has consistently maintained a high profile publicity driven by advertising, philanthropic efforts and involvement in various legal battles over clothing style, branding and employment practices. Other big specialty retail firms also gain profits from by extending credit to customers by use of credit cards that are branded (Hamblin et. al 2015).

The retail industry in which it operates consist of very well established retail companies such as TJX Companies (TJX), Ross Stores (ROST) , Lowe’s Companies (LOW), Bed Bath & Beyond (BBBY).  Therefore the specialty retail firms focuses on diverse products which include but not limited to the improvement products, beauty and shoes and other supplies. The products also include products such as sporting goods, fashion apparels for both men and women and even toys and teddy bears (The Street Ratings, 2016). 

The company operates in an industry whose environment is fragmented, cyclical and highly competitive. Having low entry barriers and few functional differentiation characteristics across various apparel brands, a strong emphasis exists on market efforts and perception of the brand. The main issues in this industry include globalization, economic volatility and the non –traditional channels. The industry continue being competitive in the midst of uncertain global economy and various geopolitical landscapes (Euro monitor International, 2016). The retail industry has been performing better than the overall U.S and global market which has been affected by the slow growth of economy  , but these companies face a lot of pressure on demand for apparel just before critical  holiday season when shopping is high (Abercrombie & Fitch Co. 2013). The company is also faced with increased risk which relate to international operations where foreign exchange market is very volatile.  The emerging markets are facing slow economic growth but the emergence of middle class in such markets makes them more attractive for foreign investment. Companies that want to capitalize on such foreign opportunities are faced with various challenges related to government’s regulations which consist of requirements for local sourcing, restrictions and tariffs on foreign direct investment.  Due to economic conditions that are very challenging, the consumers are continuing to be sensitive when it comes to price. This has made companies such as AFN to venture into demographic markets that are new while attempting to consider the various pricing points.  The apparel firms that want to penetrate markets that have new pricing methods come across challenges related to the preservation and enhancement of their brand and those that want to enter consumer markets consisting of lower-end user are faced with increased pressure on their profitability (Pricewaterhouse Coopers, 2013). With faster advances in technology the last decade, there is more emphasis for companies such as ANF to consider integration in both digital and physical channels to maintain their competitiveness. Metrics for direct customer sales are the major concern as challenges for facing traditional channels persist. Multi-channel shopping has made possible for companies to continue expanding their margins and take advantage of emerging markets such as China which is leading in the use of internet channels for sales purposes. ANF adoption of online business in way of advertising, social interaction and shopping has enhanced customer data collection useful in the formulating branding strategies for apparel products. Firms which are able to use the information they have on consumer behavior or preferences can personalize products so as to target certain demographic markets (Abercrombie & Fitch Co. 2013).

The Porters model of Five Forces will be used in determining where the power is located within the industry. This is done through a definition of both competitors’ strengths and weaknesses in the market, barriers that can be adopted to prevent the entry of other firms into the market and threat posed by substitutes (Hamblin et. al 2015).  The rivalry among the existing firms, threats posed by new entrants and substitutes are high. The customers’ bargaining power is high while that of suppliers is low. The apparel industry categorized into various age sections but the main competitors for ANF is Aerospatiale, American Eagle and Gap which sell same products and services. ANF to some extent reduces their power in terms of controlling buyers and suppliers. The threat posed by new entrants can be attributed to low barriers and no company can be said to have an upper hand in the market. The bargaining power of the consumers is as a result of similar products offered different firms and the same reason leads to high bargaining power for suppliers who are majorly price takers (Hamblin et. al 2015).   The rivalry among the existing firms is high due to the many firms in the market competing for the apparel market. The rivalry in this industry can also be attributed to the fluctuating growth rate where it is expected that competition will increase when the rate is low (Zacks, 2013).  There have been fluctuating sales in apparel industry over the past decade which has lead to increased competition.  The segment of the market has previously been estimated to be around $23.4 billion in 2010 but for the following two years, the growth rates were 2.9 %-7.7% so that revenues picked at $26 billion in 2012. The following two years saw a decrease in revenues – 1.6 percent and 1.4 percent making the total to drop to $ 25.3 billion.  The high competition can also be indicated in the market share of the firms in terms of sales whereby ANF controlled 14.8 percent, American Eagle 12.9 percent, The Gap 64.9 percent while Aeropostale had 7.3 percent of the market segment in 2014.  For Abercrombie it shifted from 14.8% to 17.3 % and dropping to 14.8 % in total sales for the 3 year period ending in 2014(Hamblin et. al 2015).

There has been an ongoing internal debate in Abercrombie that relates to balancing a premium brand position and competitive pricing in the promotion of store sales. The downturn in economic growth globally has made the issue to be very prominent considering that some competitors have used discounts to a large extent in acquiring market share while ANF continues to struggle with pricing and brand positioning (Abercrombie & Fitch Co. 2013).  The company has in past rejected relying on discounts to promote sales as this would lead to diminished brand image. This is why in the past periods – 2009-2010 – the company experienced very low sales especially when compared to its competitors.  Currently, the company has seen the close of some stores reducing their number to 3,300 from 3,700.  Such closure shows that competition in the industry is very high and is continuing to rise as time passes (Hamblin et. al 2015).

Financial analysis

The Abercrombie & Fitch Company can be rated as a hold. The main factors leading to such a rating are quite mixed with some showing strength, others weaknesses and insignificant proof that can be used to justify the expectation of a positive or negative stock performance  as compared to  majority of other stocks . The strength of the firm can be seen in various areas like its financial position which is mostly solid with debt levels that are by most measures reasonable, growing profit margins and considerable return on equity.  On the other hand, there are weaknesses that counter the identified strengths which consist of a stock performance that is basically disappointing, the firm’s weak growth in earning per share and a net income growth that is not impressive.  The company’s debt-to-equity ratio is at a low of 0.28 which is presently below the average in the industry which shows that management of debt levels has been very effective.  The quick ratio is adequate, maintained at 1.07 which indicates the capacity to prevent cash problems over a short-term.  The firm’s gross profit margin is quite high presently at 68.00 %, even though it dropped slightly as compared to the same period last year.  Regardless of the mixed results in terms of the gross profit margin, it largely underperformed in relation to net profit margin at -1.67% which was a significant underperformance as compared to the average of the industry.

There has also been a significant in net income by 1520.9 percent in comparison to the same time a year ago , which is a drop from - $0.81 m to around in net income by 1520.9 percent in comparison to the same time a year ago , which is a drop from - $0.81 m to around $13.13m. In comparison to the same period last year, the 2016 show a significant decrease in Net Operating Cash Flow to about 3.85 per share.   In general terms, there was no change in gross profit margin over the 2016 second quarter while net income and sales dropped. The liquidity of the company shows it has increased from the same financial period last year.  The equity for stake holders has remained constant over the similar period in 2015 only experiencing a decrease of 4.56 %.  These key measurements of liquidity show that it is relatively improbable that the firm will undergo difficulties financially in the foreseeable future.  These are indicators of good prospects in future even though the company has many times performed below the average of the whole industry.

In the past, lower results than expected has been attributed to the poor performance of those segments which cater for the fashion needs for teens and women as well as an overall reduction in international and domestic traffic volume. The company had even predicted that it would experience some losses over the following quarter due to the international reduction in sales (The Street Ratings, 2016).   In the past the company has experienced large backtracking in its efforts to expand internationally which can explain why the firm has overtime not been experiencing good performance as compared to the overall in apparel industry. The company last year surpassed the estimates put by analysts and therefore it can be expected that it will continue performing well.  The company’s sales are forecast to grow fro, $3475million to about %3530 million although the gross million is expected to remain unchanged. Net profit is expected to increase to 2.1 percent in 2017 from 1.6 percent.  A recovery on profit can still be attained considering the assumption that improvement will be experienced in the coming half of the financial year (The Street Ratings, 2016). Management has been expecting the results to be better in future which is a positive thing for future prospects (Ritson, 2016).

Company valuation (by stock)

                                                                                     SCORE

Management

The company’s management is headed by Arthur C. Martinez who is the Executive Chairman.  The chairman has wide range of experience given that he seats in the boards of other recognized institutions (Abercrombie, 2016). He is a non-executive chairman of HSN, INC. He also seats as a member of Northwestern University’s Board of Directors and at Art Institute of Chicago, Greenwich Hospital, Maine Coast Heritage Trust, Chicago Symphony Orchestra Association and Norton Museum of Art Inc. His wide experience was gain from the previous employment at RBS Holdings NV’s Member – Supervisory Board, President and Chief executive at Sears, Roebuck & Co., Independent Director by Pepsi Co, Inc. and various such positions in many reputable organizations. He got his Undergraduate degree at New York University Polytechnic School of Engineering and also an MBA at Harvard Business School.    

The Abercrombie management consists of many individuals with wide range of experience especially among the board of directors. The company’s management team used a lot of time a creative director appropriate for the firm who would be placed with the specific demands for interpreting brands origin and foreseeing the a different point of view of concerned with high street fashion . The choice for Aaron Levine was an appropriate move, who was the former designer for menswear at Club Monaco. In fact his initial collection for 2016 spring/summer has attracted lots of praise for its admirable combination of fashion sense and practical cool. The designer has been able to understand the company’s new position and connecting with it. This has brought a sense of optimism around the atmosphere of the company and a sense that the once admired success may not be lost forever. This new management team is doing a great job and they are being recognized as the one who might bring the success again (Ritson, 2016).

Conclusion

ANF Company is quite large and offers a variety of apparel products that serves a very diverse but competitive environment. The company has in the past experienced a big drop in terms of sales and profitability especially due to unfavorable economic environment and the entry of new competitors who came with new marketing strategies that offset AFN’s market dominance. The company has also seen a replacement of management team with one that is organized by brand. The team is expected to turn around the case of poor sales. Regardless of the past poor financial performance, the last financial year saw the company perform fairly better. The returns are thus expected to be favorable in future.

References

Abercrombie 10-k, 2010-2016

Abercrombie & Fitch Co. (2013). Q4 2012 Abercrombie & Fitch Co. Earnings Conference Call. Retrieved from http://www.abercrombie.ca/anf/investors/investorrelations.html

Abercrombie & Fitch Co. (2013). Abercrombie & Fitch Analyst Day Presentation. Retrieved from http://www.abercrombie.ca/anf/investors/investorrelations.html

Pricewaterhouse Coopers. (2013). Retail and consumer trend watch: The shifting sands of going global. Retrieved from http://www.pwc.com/en_GX/gx/retail-consumer/publications/assets/pwc-r-and- -trend watch the-shifting-sands-of-going-global.pdf

Zacks.com, (2013). Abercrombie dressed to disappoint. Forbes. Retrieved from: http://www.forbes.com

 Hamblin, N., Kampf, M. King, H., Sabah,N., Stancu, C. (2015).Abercrombie and Fitch Firm valuation and Financial Statement Analysis. Retrieved from: http://mmoore.ba.ttu.edu/ValuationReports/Fall-2015/Abercrombie-Fitch-Fall-2015-5324.pdf

The Street Ratings,(2016).ABERCROMBIE & FITCH. NYSE-ANF. Retrieved from: https://www.thestreet.com/files/r/ratings/equities/ANF_weiss.pdf

Organization paper

Airbnb, Inc. is an American company founded in 2008 and it is headquartered in San Francisco, California. The firm operations includes providing an online market place where people list accommodations worldwide and others discover and book them online or by use of a mobile phone.  It provides a space where people can rent out extra spaces in their property and display it to audience. The property owner sets the price of accommodation and the firm receives part of the services fees from both the host and the guest in addition to every booking. Its operations aim at connecting travelers all over the world with affordable and comfortable rooms. The Company is privately owned and operated (Airbnb, n.d).   

The story of Airbnb growth involves peer-to-peer rental website for vacation whose market place expansion throughout the globe can be attributed to creativity.  The company’s strategy involves providing world class serviced to its customers (Airbnb, n.d).  It has managed to do this through digital marketing and referrals of new participants by users in an email invitation.  The digital marketing approach was aims at matching the set company mission.  It was not doing well initially but to survive the company started improving its listing image quality. This involves not only using ratings systems for the listings of rentals like other firms but ensures that ratings from the website trustpilot.com are shown in their Adwords listings. Ratings are usually forms a big part of business plan involving online vacation rentals more so in a peer-to-peer market. The strategy also involves content matters where the listings management is dine in form of content that I carefully curated (Patel, 2015).In the search results of the website, the spaces which are most appealing are ranked higher while those that have lower ratings or quality content that is low cannot easily be found. This is attributed to employees and a good algorithm that ensures the best content is featured and curated. The site also uses professional photos on the provided spaces while offering guidelines for images generated by the users. Therefore, better content I provided by the visuals and the spaces become more appealing to the users who are searching for accommodation (Patel, 2015). This represents a win-win approach given that the digital marketing approach ensures listings on the search engine are optimized and this allows the cream to appear on the top and their own content becomes always fascinating.  

In addition, the company decided to focus on Google display advertising using banner –ad campaigns which include images of the actual spaces being offered on this site. The strategy also uses referrals as part of marketing. In this scenario when new participants are referred by users, the referrers are offered a travel credit of $25 I case the new members complete their first trip and a credit of $75 when the new members host their first guests.  The only benefit going to Airbnb is the pay out for the referrals after payment is made into the system by the new user (Patel, 2015). This allowed the firm to grow by use of the referral program in a way that is sustainable.  Essentially, the company noticed the need integrate with at least two big digital marketing forums to attract enough customers.  The company integrated with Craig’s list and Google. This allowed the company to obtain clients and hosts necessary to provide for them a good starting point in their market. Given that people were already posting short-term housing ads though the Craig’s List, the firm allowed people the opportunity to use the List to share their Airbnb post with an effect of bringing more traffic to the Airbnb website and user’s listing.  This highlights an effective growth and marketing strategy. The referral program is a successful way of growing start-up and making the brand to catch the attention of the important influencers (Helm, 2014).  It is a reflection of a well developed growth strategy which involves resources mobilization, marketing research and competitive analysis and client relations. The strategy should be directed to the mission of the organization and any efforts that can help in the achievement of the desired results must be focused on simplifying services delivery or solving a problem facing the community (Rao & Krishna, 2003).  The mission of Airbnb involves serving as a market place for the community for listings, discovering and booking unique accommodation thought out the work.  

The Airbnb Inc. can be analyzed through the framework of Michael Porter’s competitive rivalry. He services provided by the company represent the most recent disruption that can have faced the travel lodging industry.  The competitive rivalry can be seen in the way many automated intermediaries in the travel industry have replaced the traditional ones. The online platforms can manage to compete with Airbnb in the provision of information about property space sales and an interaction between the sellers and buyers (Galliani, 2014).  However, in an age where consumers demand convenient related to ICT service delivery, Airbnb takes a disintermediation step where it acts as the provider of information and the product. The competitive advantage enjoyed by Airbnb originates from the manner in which it has managed to introduce the customer to customer model in an industry which has traditionally operated through the business to customer model.  Airbnb can be said to be a ‘cybermediary’  to refer to a firm which benefits from a cost structure which is leaner , has a global reach and possesses technological economies of scale. This can be attributed o large quantities which informs low cost of transaction. The rivals of Airbnb include Orbitz and Google and the hotels themselves (Galliani, 2014). It is able to beat competition form hotels due to the fact that it is not constrained by increasing variable costs. Rather, Airbnb can provide expansive list of rooms all over the world without being constrained by cost

Airbnb organizational culture   

Organizational culture means a system of assumptions, beliefs and values that are shared by people and shows them what is the right or wrong behavior (Kummerow & Kirby, 2014).The basic understanding of the way culture is approached at Airbnb is the vision of the company to stands for something more than just a home and, hence, a greater purpose of belonging is reflected. The culture is built on values that extend beyond its employees to include the community of guests and hosts. It is a deliberate effort to have the culture of the company extended and having everyone included into the commitment curve.  The focus starts with employees being shifted to the commitment curve until the point where they are treated like owners of the company. The culture created by Airbnb Incl. is shown in its commitments to values and missions and to the strong belief in a two-way communication which is honest. The common rule is that not information should be gotten from external sources until it has been provided internally (Clune, 2016).  The communication takes places through a live stream where everyone around the world joins information is distributed, questions asked, ideas and thoughts are shared. Furthermore, there have been developments of an intranet where every employee is appreciated through anniversaries and birthdays (Clune, 2016).  

The culture also involves the ground control group that is normally a part of a team for employee experience where the aim is to bring the culture to life. The tam looks at the environment of the workplace, recognition of the employee, various events and celebrations.  In recruitment, the company gives preferences for inside filling of roles and then looks externally. The company’s culture ensures that internal recommendations are given a priority. There is also effort to create belonging through bringing across various geographies together (Clune, 2016). Instilling understanding and empathy is considered part of belonging and the management encourages the employees to acts as hosts by assisting them where possible to have that experience (Kummerow & Kirby, 2014).  

The organizational culture of Airbnb to a great extent aligns with the strategy with the strategy of providing world class customer services. The company aims at being an open community where the world can be brought together by way of fostering shared and meaningful experience. This will only be possible if the company adheres to its all inclusive culture that will consider millions of peoples from all corners of the world.  The premise to provide customer services that are of high quality is informed by the manner in which the company’s culture upholds its employees, who are essentially, the determinants of the kind of services offered.  This argument considers Airbnb’s position that treating employees as being part of founders of the firm ensure they feel appreciated and included into the whole system (Clune, 2016). The strategy for growth and development involves digital marketing whose main driver is competent employees. The success of the company from a small start up to multibillionaire can be attributed to a conducive working environment which appreciates the role played by the employees in the whole process.  The company’s culture that emphasis on the career growth for its employee can align to the community focused services delivery since any development, expansion and development strategy undertaken by the firm is carried by the employees. Employees who are content with the way they are treated will give their best to the organization.

Considering that the Airbnb’s culture focuses on communication, personal inclusion and development, my attributes can align well with what the firm stands for to a great extent. My leadership skills which relate a variety of communication skills to engage, inform and persuade others relates to the communication policy upheld by the company. These abilities can enable m to establish a rapport with many employees who follow the culture created in the firm. The company’s strategy of providing world-class services to the customers aligns with my personal value of fairness while dealing with others so that they get quality for what they have paid for. The aspect of belonging is aligned with my attribute of building personal confidence in others by letting them feel part of the whole group.

References

Kummerow, E., & Kirby, N. (2014). Organisational culture: Concept, context, and measurement. New Jersey, NJ [u.a.: World Scientific.

Rao, V. S. P., & Krishna, V. H. (2003). Strategic management: Text and cases. New Delhi, India: Excel Books.

Financial analysis

ABC Company has been manufacturing roofing and siding shingles its annual sales amount to 1.2 million, which is an average increase of 25% compared to last year.  The company wants to increase their sales to 3 million dollars within a period of three years.  The CEO of the company has come up with an idea of using shingle scrap materials to make cedar doll houses. This could be a breakthrough for the company to reach its aim of sales amounting to 3 million by the end of the 3 years, in fact, there may be in a position to achieve the target within less time.

However, this is a major step for the company and the company needs to carry out a detailed analysis to identify whether the decision will be for the best of the company. For instance, the company needs to identify the payback period using the total investment the company makes. Some books also need to be kept for follow ups and particularly for the future. Due to the additional expenses, the CEO wants some feedback from financial controller to analyses some financial statement. Before taking the project the CEO will need to know what will be the product cost, and what is needed to break even and in addition, the level of return the product is expected to provide, the level of return should be high than the total investments made.

Risk profile

A risk profile can be defined as an evaluation of a company which is willing to take risks exposing the company to threats. A risk profile assists in the evaluation of a proper investment asset allocation. Risk profile helps in mitigating potential threats and risks. ABC Company will, therefore, use risk profile in mitigating the risk it is likely to suffer from the new product and more importantly it will help the company in determining the level of risk they are likely to accept and how that risk will affect their decision making. A risk profile also assists in determining the threats that ABC will face and the potential cost as well as the whether the project is likely to cause disruption in the normal operations of the company.

The risks that the company will face is that they may end up investing so much yet the product return might turn to be very low than anticipated. This is very risky for the company since they may end up investing so much and even fail to recover the capital investment. Due to high investment, this means that the company may invest their liquid cash and begin struggling to meet their daily expenses (Spekman, 2004). 

The company must as well plan for the maintenance cost that is required in maintaining the product. There is a probability that the maintenance cost may be too high compared to the return the product is giving the company. They may as well be required to employ new employees to manage the product which will be an extra cost for the company. The other risk is the product breakdown, I have heard of cases where the machine broke down when it was still new though it is a very rare case. Machine breakdown is a big threat to ABC because this will make the company incur a huge lump sum or may be even forced to buy another product. The company must, therefore, come up with strategies that it will use in mitigating the risks and the threats (Spekman, 2004).

Cash flow statement

ABC COMPANY

STATEMENT OF CASH FLOW

FOR THE YEAR ENDED

Cash flow from operating activities                       

Cash receipts from customers                                    60,000   

Cash paid to suppliers                                                     40,000

Stock                                                                            70,000

Cash generated from operation                                   (100,000)

Net cash from operating activities                                                                       70,000

Cash flow from investing activities                            

Proceed with sale of equipment                                    100,000

Net cash used in investing activities                                                                           100,000   

Cash flow from financing activities

Retained earnings                                                         (50,000)

Stock and equity                                                          20,000

Sale of assets                                                               (20,000)

Depreciation                                                               (70,000)

Net increase/ decrease in cash equivalent                                                              (120,000)

Cash equivalent at the beginning of the period                                                           50,000

Cash equivalent at the end of the period                                                                     70,000

Solutions

1. How does our cash flow statement explain the source of funds?

The source of finances in a cash flow includes things like transaction of stock, debt, and dividends transactions. When the company issues stock ownership is changed and cash is received.  Shares can also be sold to the general public. In our case, the main source of funds is the stock and equity. The retained earnings have increased in the period of that one year.

2. Things ABC Company can do to improve cash flow.

ABC Company can be able to improve its cash flow if it maintains a well smooth flow of cash and this will be done by targeting the account receivables, extend their credit limit in order to manage inventory. The importance of managing the flow of cash is to regulate money in and out of the company. We can use some of the listed ways to curb with cash flow problem; billing schedule organizing, the stretch of payables, incentives of early payment advantage, inventory tightening, leasing instead of buying and much more (Jensen, 1986).

3. Can this project be financed with current cash flow from the company? Why or why not?

The current cash available cannot be able to finance this project. The reason is because the cash flow is very tight to accommodate a new project unless we consider external borrowing. The company has sold a quarter of its property and plant this is clear indication the company is not financially stable.

4. What is the best external financing and why?

ABC Company is a small company which has no big capital base. I would recommend the company to consider the ordinary share capital as a way of its huge finance plan. The reason why is because ordinary shares give a degree of ownership in the company. The shareholder becomes the owners of the company so they in a case of loss they will carry the burden. The shareholder will be paid last in case of liquidation of a company. As compared with other preference shares and debt which need to be paid interest which is expense to the company, the ordinary shareholder only enjoys divided which are not mandatory as they are calculated when the company makes the profit.

Production cost of adding 5,000 machine hours

                                    Current production        Adding 5,000

Sales                                         1,160,000            1,725,500

Cost of sales

Direct material                            (104,000)            (154,700)

Direct labour                                (224,000)            (333,200)

Variable factory overhead             (40,000)            (56,000)

Variable selling expenses                (16,000)            (17,000)

Fixed factory overhead                   (198,000)            (198,000)

Fixed factory selling                       (191,250)            (191,250)

Expected profit                                   386,750            775,350   

Solutions

1. The production cost of ABC Company is 773,250
2. After the product expansion, it helps us to absorb the fixed factory overhead and sales expense by using same fixed cost to produce more profit(Needles, 2013). It reduces by 7,000 that is additional 40% of 5,000
3. The selling price of new product after 40% gross margin

Selling price of current product is 14.50

14.50 – 100%

?    -140%

New Selling price will be 20.30

4. Assuming the same sales mix of these two products, what are the contribution margins and break-even points by product?

=             fixed cost

        (Selling price per unit –variable cost per unit)

= 198,000+191,250 = 389250 / (20.30-1.20)

            389,250/19.10 

            B.E.P = 20,380

NPV

Year                 Expected returns ($)

1    15,000

2    13,000

3    10,000

4    10,000

5    6,000

Initial investment - $42,000

Rate 12%

NPV = 15,000/(1+0.12)^1 + 13,000/(1+0.12)^2 + 10,000/(1+0.12)^3 + 10,000/(1+0.12)^4+ 6,000/(1+0.12)^5- 42,000

Npv = 13,392.86+10,363.52+7,117.80+6,355.18+3,404.56

=40,633.92-42,000 = -1,366.08

Npv = (1,366)

Decision

The ABC Company should not invest in buying additional equipment.

Conclusion

The ABC company cash flow needs to be changed as it has been deteriorating. For example, we have noted that the company net worth of asset has been reducing as the company has been selling most of its fixed asset to finance its operation. The company needs to locate a more fixed source of income to improve its cash flow position.

The company needs to consider adding 5,000 extra hours because the production will be added. The profitability has improved in order to exhaust all the fixed cost available.

In the NPV the company should not invest in the new project as it gives a negative NPV. 

Jack Welch General Electronics and Company

            The company fulfilled the social responsibility as it focused in its duty o make wealth by using ways that could not harm, protected and developed the social possessions.  The company made wealth as it bought and sold many small and larger businesses.  They got these businesses to help them and improve their profits in the process.  The point where they avoided harming the society is when the company seems to fall short.  This was done by achieving their objectives in maximizing their profits and making wealth. The company eliminated other outside businesses in the trial of making money and to improve their whole efficiency so as to motivate employees to work harder (John &George, 2003). 

            The main policy of the CSR highlight that companies are the economic institutions that focus on profits and must follow the company’s rules.  The electrical company has the duty to have the diverse social results that they cause, thus the social responsibility changes with the features of the company.  The company managers should be able to meet the need of the shareholders which mainly depicts the matters that have the societal outcome. The company seemed to operate in a way similar to the Merck Company as their main duty was to create wealth in ways that would not harm, as they both protected and developed the societal properties.  Both companies had partnership with other companies that could be healthy when harnessed although the Welch Company seemed to use more independent partnership to help in their budget outcomes than in the improvement of their workplace abilities. Both the companies have the goal of working to solve the societal problems that will motivate their thinking and develop their actions.  They are both focused in finding the solutions to benefit the universe, the public and the global economy (John &George, 2003).     

Response

            The two companies lied under the principle based on the profit run as all the businesses activities made by the companies aimed in making profits.  The managers also acted ethically as they highlighted the effectiveness of integrity in the whole business. The social responsibility depends on the features of the company as the companies have a great social responsibility.  The companies meet the need of their partners such as the work security and conducive work environment. As seen in the Electrical Company, sustainability contributed to the culture and the business strategy their management was more respectable and more socially responsible and their management turned to be of the modest return (John &George, 2003). 

Reference

Steiner, George. A., & Steiner, John. F. (2003). Business, government, and society: A managerial perspective, texts and cases. Boston, Mass: McGraw Hil Irwinl.

Introduction

Media can be defined as to methods of holding information and communicate it to the audience in the big capacity. The media can mean a lot of things and but recently it has been evolved significantly in a few years ago, the reason being technology is evolving too much, nowadays people in most part of the world they can communicate and share information more rapidly and very easy. The communication methods which are mostly used recently have reduced rapidly. 

Information can be explained as those words which are being communicated; it is any message which is being transferred from one person to another. It’s important to note that information can be either direct content of the message or can be indirect. It can be converted into a number of messages and can be interpreted as signs or can be verified and kept in safe storage as information. This is a very good introductory course which covers a bit of advanced concept as well as challenging materials. It deals with information Technology and media. At technological company milestone, the mission is to make information technology more develop by revolutionizing it.

Significant milestone

Milestone Company has managed information technology as one of the ways to close the gap between the technology and the people. One may have an interest in solving the problem and believe that the services which are managed can make the way people make use of technology more easily. Employees can put more emphasis on the competition of their work which they have the passion for it. A company is able to reduce cost by managed services and the efficiency will be increased as enterprises are allowed to the technology to innovate (Cusumano, 1998).

Milestone is able to manage Information technology sector and build a foundation of a given business goal. Technology boosts the entire business. Services like management of IT asset lifecycle and It customer care desk can be used to boost the business (Hirsch, 2003).

In this research, I will discuss apple Inc. company which has been using technology to keep updating its product. The apple Inc. company did its research and concluded that between thirteen and fifteen billion apple watch have been sold and this is an indication customer are aware of the product.  For example Apple watch was developed from the company thought of looking on the ways to deliver on how its customers can track their health using technology. Apple is focusing on people between fifteen years and thirty years of age globally who need luxury lives and simultaneously innovate product. Apple uses five elements of product promotion to market their products to the customers. By promoting one of its luxury items it develops personal attachment between consumers and the Watch by developing one of the newest products in the market. The Apple continue to develop in order to the customers to get their best taste, the packaging of this device is same as those of other Apple products which are protective when I phone is being purchased it comes with services developed specifically for the user, for example, it has physical features like a touch screen, a sensor, Wi-Fi enabled, Bluetooth enabled to connect with other gadgets and some tracking elements. Every company mission statement is to satisfy its customers the Apple mostly targets a certain technology advancement which may be limited in most cases. Apple also faces few threats from bargaining power of suppliers due to their loyalty to Apple (Malone, 1998). Apple Watch is innovating as they adjust the watch not to a mini iPhone but to an evolving product. Apple Inc. has continued to give its customers the satisfaction they need.

Campbell Soup Company

Case study 4

1. Strengths and weaknesses of the Campbell Soup Company’s marketing and information system

            The marketing and information system department of Campbell Soup Company has the strengths more so as a result of innovation; in terms of product introduction, the company has been coming up with new products in the market (Campbell Soup Company SWOT Analysis, 2). For instance the portable soup product, the new microwaveable products like chunky and select. The company also updates the appearance of the products frequently with new photography and more contemporary design. It weakness is the declining market share as a result of new market entrants providing quality products at lower prices, thus some consumers have switched to these new entrants gaining a certain percentage of market share.

1. The objective of Campbell Soup Company on consumer tastes and preference

            The company’s objective is to nourish the customers by providing consumers with nutrition and wellness choices that meet their tastes and preferences (Campbell Soup Company, 2).

1. Comparison of Campbell’s biometric research with deep dive research

            Campbell’s biometric research found out that warmth plus positive attributes that people had associated with Campbell’s soup vanished as they faced store shelves. Campbell’s deep dive research is dedicated to provide manufacturers, organizations and service providers with insights and expert consultation for the edge of competition.

1. Integrating traditional marketing research with Campbell’s research efforts

            Traditional research of marketing can be linked to Campbell’s efforts because it involves assessment of the general market for the products, studying the likes and the dislikes of the consumers, and gauging consumer responses in the event of a new product which is a good approach or marketing research for Campbell soup Company.

Commentary #1

            If I were a key executive facing the same situation, I would recommend the company to take on traditional marketing research because it is necessary for this company for instance analyzing the customers is important for the company to figure which promotions, products, pricing strategies and services can meet the needs of the customers.

Commentary #2: Comparison of Campbell’s situation with one of its competitor

            Campbell Soup Company has been facing intense competition which has been making it to lose market to its competitors. One of its competitors is General Mills which is known to have a larger market capitalization than Campbell. However, Campbell strives so much to innovate its products at minimal costs so as to retain royal consumers and sustain the competitive environment (Food: Company Spotlight, 92).

Work cited

Campbell Soup Company SWOT Analysis." Campbell Soup Company SWOT Analysis (2016): 1-8. Business Source Complete. Web. 19 Sept. 2016.

Campbell Soup Company." Campbell Soup Company Marketline Company Profile (2016): 1-38. Business Source Complete. Web. 19 Sept. 2016.

Food: Company Spotlight: Campbell Soup Company." Marketwatch: Global Round-Up 9.4 (2010): 91-98. Business Source Complete. Web. 19 Sept. 2016

MISSOURI CAN COMPANY

                The company has been performing well over the past years and it has had a long as well as an uneven history. There has been different Implementation of the strategies by the different administrators in the company as they all aim at competing within the competing environment. With the increase in the competitors, there have been several changes in the strategies implemented in the company. However, the company has been able to constantly remain committed towards packaging business in the varying business forms that the company has engaged into. There have been changes in this line of business which have affected the company and thus making the company to have a weaker position among their competitors and thus they lack the competitive advantage. It is due to this weak position and the lack of competitive advantage that the company has engaged in other production activities which have not been able to perform well. It is through these problems that it is important to identify some of the strategies that ought to be put in place so as to enhance the company to realize better opportunities in the business and to be able to have the competitive advantage. This paper therefore will present a five year strategic plan inclusive of the cost estimates as well as a timeline. It will also present the situations that are facing the company and it will discuss on the specific recommendations for the company. It will also analyze the financial impact of the decisions that would be taken and the difficulties that the company may face in the implementation of the recommendations.

Five year development strategy

                Vision: Growth and profitability within the company.

                Mission:  “To effectively produce quality products and services within the company’s restructured sector that involves the packaging, insurance, forest goods and energy so as to be able to attain the competitive advantage from the increased productivity, invention and focus in market”.

                Objectives:

• By 2021, to increase the size of the company’s operations by increasing the sales and the profits on segment property by 15%-18% annually.
• By 2021, to incorporate with the shell and Mobil companies in the construction of the 502- miles carbon (IV) oxide pipeline so as to achieve a profit of 13% annually for the five years.
• By 2021, to look at the franchise beyond the manufacturing of the bottles that are blow molded or aluminum cans but rather as a relationship established with their major competitors in the package business line.
• By 2019, to build two paperboard plants and other plants to be included in the planning and design process that should be on line with the five year strategic planning.

Strategies: The specific strategies to be implemented include:

• Reduce assets in operations that do not achieve the performance objectives or fails in meeting the long term strategy of the firm.
• Selling of these assets and using the funds in areas that have a high promising growth rate in profits.
• Develop long term profit on equity due to the reinvestment approach.
• Reinforce of the organization’s balance sheet as well as the credit standing.

Action plan:

Financial analysis

                The company thus has a low liquidity and thus it requires some recommendations as it shows that it will default on attaining the short term goals like that of the five year and thus there are recommended strategies that ought to be implemented so as to enhance the company to realize more opportunities as well as have a high liquidity. As the company works towards the success of the strategic plan developed for five years, it should have some changes within its operations so as to be able to attain their core vision of expansion and opportunities within the business. There are several recommendations that the company ought to implement in its business so as to realize maximum profits. It is thus recommended that the company should evaluate their assets so as to identify those ones that are not used or those ones that are failing to perform well in the company. The returns from the sale of these assets would help the business in reinvesting in other projects that would help the company to realize more opportunities.  Another recommendation is on the incorporation of the company with other companies as this would help them to have a shared goal and each company will work towards the attainment of the goal and hence increasing the productivity of the company resulting from the corporation.

                The company is also recommended to build competing plants so as to be able to produce quality forest products that would cost less and than that of their competitors thus allowing them to lead in the business segment.

This would result in high demand of the products by the customers and this would help to raise the level of profitability and cash flow within the company thus allowing the company to reinvest the improvement projects so as to realize more competitive advantage. The uncertainties involved in the recommendations included the possible risk of engaging in the large corporations with large ventures. This is because the company lacks a protected position in a firm that is rapidly joining into large companies which have the finances to join, lose and to big bet on the exploration. Therefore the company should focus on the ways in which they can expand their company through less risky practices and as they become big, they can now focus on alternative practices such as incorporation with the large entities.

                In conclusion, the company should consider the following recommendations as they will help the company to be able to be competent amongst their competitors and also to be able to grow and expand their operations. The recommendations include;

• Reduce assets in operations that do not achieve the performance objectives or fails in meeting the long term strategy of the firm.
• Selling of these assets and using the funds in areas that have a high promising growth rate in profits.
• Develop return on equity over the long term as a result of the reinvestment strategy.
• Reinforce of the company’s balance sheet as well as the credit standing.

                Once the recommendations are implemented in the company, it will be able to invest more on advancing investments and this will increase the annual revenues even in the absence of the major investments. This will thus enhance the company to constantly improve, develop, grow and expand hence allowing the company to realize competitive advantage.

References

 D 0

 System analysis

The aim of Wayne Johansen is to have a customized system that will tack all his geocaching activities. The most of these activities include looking for caches and also hiding them. It is very vital that Wayne track every cache that is found and hide it. It might also benefit Wayne when he keeps track o those caches that have not been found yet but are supposed to be found.  Wayne also plan on monitoring of distances, routes and altitudes. The system would be useful in helping in the recording past activities and anticipated future ones. The system will also be useful in location of every cache on a given map and ensure the storage of the taken pictures in the process of finding caches and hiding them. The system is also aimed at sharing the collection with others.  Moreover, the system will have to support various types of geocaching activities so as to include a list of interesting trips and geocaches that Wayne would want to carry out and the various trips he will have taken. Since it is the desire of Wayne to develop his own geocaches, he aims at being able develop and give a description of his own caches and continue those that he has shared to be used in public.

System capabilities

The new developed system should be capable of doing the following;

• Collecting information on each cache that has been hidden or have been found. Such information includes route, location, altitude and distance.
• Keeping track of geocach locations that are interesting and whose location has not been identified
• Keeping track of those caches that have already been allocated
• Keeping records that have ancillary and detailed information about the geocaches that have been located
• Keeping track of the new caches that are being developed by Wayne
• Keeping record of those caches that have been posted and Wayne want to share them in public.
• Enabled GPS capabilities whose purpose is to display every cache on a certain map and calculating the routes in the map and various distances.

Geocaching system Plan

D1.1

The system will be divided by functionality. In the plan, information on the said geocaches that have been completed will be captured by iteration one. To enable developing and posting of Wayne information about geocaches, Iteration two will be applied.  The division provides one machine whose development process is very easy. The computer division provides a single part of the system with one location for the information database. It also makes it easy to build and align it to the specification of Wayne as the client. It also makes it possible to provide for its security for the information about caches that Wayne is not willing to share with the public. The computer division also provides the capability for building of an interface that is automated so that information can be downloaded directly into the computer. The only shortcomings include the inability to access from various number of locations and thus, unless Wayne desires, other users cannot share the same information to the public. However, Wayne as the main user can share information collected to the public. It also provides for an uptime or use of a server somewhere. It also provides for log-in functionality although formatting of a report may prove to be difficult.

D1-2. Steps on breakdown structure of the work.

Find out and analyze the needs of Wayne to record those caches that have been completed

• Wayne together with his colleague is to meet and view websites on geocaching and from there hold a discussion on what Wyne want to do.
• The identification of information that should be kept
• Find out the use cases for capturing and storage of relevant data
• Come up with workflows for the mentioned use cases

Designing of the solution parts

• Database tables are to be designed
• Output and input screens are to be designed
• Software application for a laptop is to be configured
• The relevant program details are to be designed

The programming of the system

• The creation of information storage database
• The writing of the computer program which includes updating of database and user interface

Testing and actual use of the system

• Checking validation through the use of both good and bad data
• To be tested by Wayne using some of his actual or real information
• The system to be handed over for the use by Wayne.

Table on system design: preliminary