Business strategies Best-Cost: Redbox strives to have the lowest cost while differentiating through service and low price. 1. Convenience a. Kiosks located at places people are going to all ready. No need for a special trip to a rental store. b.
Margin of Safety (DOLLARS) Budgeted – break even = 100,000-62500= 37500 (Percentage) 37.500/100.000= 37.5% (Units) 37500/250= 150 3.Compute the company’s margin of safety in units assuming the proposal is accepted. Margin of Safety (Dollars) 137500-58929= 78571 (Units) 78571/275= 286 4. Compute the increase or decrease in profit assuming the proposal is accepted, show the contribution Income Statement for current and proposed. Present Proposed Sales 100,000 137500 Variable expense 64000 80000 CM 36000 57500 Fixed cost 22500 244750 Net income 13500 32750 difference: 19250 4a. What is the operating leverage for the current and proposed?
Lesson 2 (3.0 points) 1. What are consumer motives? (0.5 points) Consumer motives are the reasons why people make specific choices in spending their money. 2. What is a specialty good?
Strategies 9 Porter’s Five Competitive Forces Porter's five forces analysis is a framework for industry analysis and business strategy development to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven to normal profit. Three of Porter's five forces refer to competition from external sources.
This project will need $3.4 million less than the P04 project and the only component in the investment, which will be more, compared to P04 is the building cost (378 K$). Cannibalization of other store’s sales As the nearest target store closest to the project is 80 miles away, no cannibalization of sales is expected. And this store will generate a sale of $30.5 million in 5 years, which will be almost 2.7 million dollars above expected sales from P04. This store is assumed to take it’s a maximum market share from Walmart in 2008. Store Sensitivities Even if this store has 18.1% lower sales than the forecasted level by R&P, it can achieve the accepted NPV of prototype, besides, construction cost can increase to near $10 million and still the project can achieve the expected NPV of the P04.
• NPAT* excluding sass & bide put option revaluation $129 million, down 5.1% • Strong cash flow supports final dividend of 8 cps, full year dividend 18 cps, fully franked “Continued execution of five-point plan” * Excludes sass & bide put option revaluation: FY2012 ($3.0 million gain) and FY2013 ($2.2 million expense) Image: TBC (TBC) Image: Orla Kiely DELIVERING OUR PLAN / 3 Full year highlights • Sales and gross profit growth in key categories • Myer Exclusive Brands now 20.0% of sales mix • sass & bide double-digit sales and profit growth • Increased recognition of our customer service journey • Ongoing investment: new stores, refurbishments, brands, online • MYER one strengthened with Platinum tier, app launched • Online sales, page views and average monthly visits doubled • Net debt down 11.2%, lending facilities refinanced Image: sass & bide OVERVIEW / 4 12 September 2013 2 MYER Full Year Results 2013 • • • • • Overview Financial update Delivering our five-point plan Investing for the future Outlook Image: Wayne by Wayne Cooper (Myer Exclusive Brand) Financial
Sales increased from 25,000 to 30,000 a) Based on this information, what is your best estimate of the price elasticity of demand? b) How valid is this procedure for estimating price elasticity of demand? When will it give reasonable estimates and when will it gives misleading one? c) Panasonic decided to hold the price of its 42” plasma TV at $3000. Their sales fell from 15,000 to 12,500.
Red Box Case Study 1a. What are the chief elements of Redbox’s strategy? * Low price advantage (allows rentals for as little as $1 a day) * Strategic partnerships to raise volume (place kiosks in many high trafficked areas such as groceries or convenience stores) * Rapid expansion (have almost doubled amount of kiosks each year since 2006) * Customer experience (Redbox focuses on the customer having a fast transaction by allowing customers to obtain DVD’s under 1 minute if they were aware of which one they wanted, and returns in 20 seconds) 1b. Which of the five generic competitive strategies most closely fit the competitive approach that Redbox is taking? Low-cost provider * Redbox is using the low-cost provider strategy by offering DVD’s at roughly a 75% discount compared to their competitors * Also by placing their kiosks in areas of different industries that also use the low-cost strategy such as McDonald’s the kiosks are surrounded by their market 1c.
Recommendation: It would be in the best interest of Palladium Door, Inc. to develop a formal exclusive program and start exclusive contracts with willing dealers. Problem Statement: Should Palladium Door, Inc, a privately owned regional manufacturer of residential and commercial garage doors, develop a formal exclusive franchise program to help solve the distribution strategy issue? Facts: Market * Residential garage door name awareness is very low * Steel garage doors account for 90% of industry sales * Residential garage door industry expected to post sales of $2 billion in 2003 * Projected 2004 sales of residential garage doors to the home remodeling market were up 2.4% to $2.05 billion * Demand for replacement garage doors is up with many customers replacing old wooden garage doors with new steel garage doors * Independent retailers had sales of $348.5 million in 2003 Palladium Door Inc. * Privately owned garage door manufacturer. * In 2003, sales were $9.2 million * In 2003, they had a net income of $460,000. * Manufactures insulated and non-insulated steel doors.
(HP tried a similar strategy when it offered customers 50GB free storage on Box.net.) And Epps even imagines some could offer more innovative broadband models, like purchasing surfing time on an hourly or daily basis, rather than by contract or a monthly plan. The idea, simply, is to introduce more diversity into an ecosystem filled with poor iPad knockoffs. Now, it's clear that no tablet can match Apple's iPad at competitve or even slightly discounted prices--all have tried, and all have failed. (Samsung Galaxy Tab, Toshiba Thrive, HP TouchPad, BlackBerry Playbook--the list goes on.)