A growth company tends to have very profitable reinvestment opportunities for its own retained earnings. Economic growth will affect Etisalat as it would increase their profits due to more people wanting more products and wanting to spend their money. As people have more money to spend on luxuries instead of the essentials it means that the higher value products will be brought. For example the Andrex toilet rolls will be brought instead of Etisalat value, because of this it means more money is being spent in the store which is an advantage for Etisalat. Recession occurs when people involved in business become more cautious and: * Customers cut back on spending, and start to save more * Manufactures and sellers cut back on their orders, produce fewer goods and start to cut back costs in general, including by laying off workers.
However, due to the higher prices, there is a certain segment to which these brands can appeal to – this strengthens the power of the buyers. Because of the high competition and many brands within the industry – there are low switching costs for the buyer. This is complemented by online shopping, which means that the retailers do not even need to be physically in the same place. This lowers the switching costs for the buyer and increases their power. The rise of the ethical social consumer and the information availability that came with the internet made the buyer demanding and less likely to develop loyalty towards a brand – this increases their power.
In a highly competitive business world, on a firm’s priority list is the subject of increasing profit and reducing cost. One might than pose the question, has this put them out of business (mom and pop store)? The answer is absolutely not, but rather, they too benefit from cheaper prices as they continue to buy in bulk and continue to operate as the name suggest, convenient
However, that market is high competitive and almost commodity-like. Company A would need to consider reducing its labor force or even moving its operation to low cost-region in order to be competitive in the iPod/iPhone headphone market. Another new customer group is the people who use noise-cancellation headphones. There are limited players in this market. Also, the quality of noise cancellation headphones vary a lot and the customers are willing to pay higher price for good product.
Why? Give an example of a store that would be on the opposite end of the continuum and explain their differences. Nordstrom’s level of service can be regarded as extremely high. With their business strategy based on “greed on love” as the case study explains, giving their entire focus on the customer. This has proved to be hugely successful as they forge longtime customer relationships.
1.In assessing job offers, what had O’Malley ultimately put a great deal of weight on? He put weights on the certification or “stamp of approval” 6. In the case it is described as follows. What is the best description of three firms in that order? “One seemed to have strong management and a very predictable market; the second offered a chance to Improve margin performance and streamline operations; and the third operated in a fast-growing market.” Strong management and predictable market--- Coming home funeral services Chance to improve margin and streamline operations – 3F AG Fast growing market – YCB 7.
The firms with lower ROS, ‘losers’, must find ways to reduce costs from their operations/products and/or be able to charge higher prices without losing unit sales in order to increase their ROS and avoid domination by the more successful firms. What type of competition is found in each
Tony Qian 1/13/2011 BUAD 441 – Individual Case Study1 Blue Nile, Inc. – World’s Largest Online Diamond Retailer 1. What key factors will determine a company’s success in the online jewelry business in the next 3-5 years? The online jewelry business will be highly dependent technology. They will also need to keep good relationships with the organizations that certify their diamonds. They need to give their customer a safe, comfortable environment in which to make high dollar purchases.
Giventhat the jewelry is made to order, clients at Blue Nile must be willing to wait to receive theirorders, unlike at Tiffany or Zales. The Tiffany brand is very strong and well established. It is associated with glamour, trust, andcustomer service. These associations allow the company to sell at higher margins than itscompetitors. Diamond and other high-end jewelry purchases are expensive, and many customerswill trade off other factors for the Tiffany customer experience when making such purchases.Moreover, when spending thousands of dollars for a single item, customers often want to see andfeel what they are buying.
Externalities cause deadweight loss which can lead to market failure. Businesses can make more money if they can internalize the externalities. Externalities can be internalized if the transaction cost of the business is low. “Transaction costs are the costs of identifying and bringing buyers and sellers together, bargaining and drawing up a contract”2and it is relatively high for department stores like Galeria Kaufhof in comparison to stores like H&M. Similarly, the transaction cost for stores such as H&M is more than that of the jewelry shops but less than the department stores.