The larger expenses coming along with high quality and services render salespeople a disadvantage when talking to their clients for business. The standards of performance (SOP) set for extra compensation seem unrealistic, with 75% of salespeople earning no commission in the first half of 1992, and so conceivably, fail to motivate them. This makes the result control less effective as they failed to evoke the desired behaviors – achieving sales targets. Together with other offers by competitors, this resulted in high turnover rate. Profit Sharing - Result controls may serve well with congruence between employees’ and company’s objectives, but employees take for granted the law-required 10% profit sharing of the company’s income and so their motivational effect seems little.
2010) is provided below. 1167872 4 Despite the leading position and the good business results, SWOT shows several sources of potential risks for UST. The company is losing market share against new price-value competitors because of slow innovation and late product introduction and extensions. Historically, UST relied on his leading market position boosting earnings with annual prices increases. But in the meanwhile smaller competitors started to quickly erode market share with prices cut.
This could also lead to a problem in the future because what happens once the competition catches up to Under Armour their profile starts to fluctuate and could result in potential decreases in revenue. We feel Lululemon is in better shape financially, due to being more liquid and being more solvent. Under Armour looks as though it has more liabilities to be paid off, for example endorsement deals with professional athletes, and other advertising expenses. Lululemon has less advertising but generates enough profit from their regular sales. Lululemon has not even reached their potential profitability peak yet and it is already comparable to Under Armour Inc. Company Overview: Lululemon Athletica Inc. Lululemon Athletica specializes in women's clothing designed for yoga, dance, and running but it provides men's apparel, as well.
Under the high competitive and fast-evolving electronic industry, no change means fall behind. The Financial Report from 1991 to 2000 indicated the sales increased, while the gross profit decreased. It means cost of good sold increased year by year. According to the case, Best Buy offering a self-serve mode rather than pay commissions to sales in order to reduce their SG&A, but Circuit City still kept the same one in its sales model, which resulting in increase the sales cost and declines in operating profit. Also, the worst part of this sales model is to ignore the customer’s needs.
First problem we encountered were the current and quick ratios were unusually high due to the amount of cash, receivables and short term investments that Krispy Kreme held. This is an indication that the company was not investing in other projects and remained conservative with regards to the treatment of current assets from 2001 to 2004. The net sales, receivables and inventory turnover were much lower compared to the industry, but ultimately the profit margin and return on equity remained consistent which we considered questionable. The leverage ratios were lower than the industry; the company used debt to make payments and took a line of credit. Although cash reserves were high and debt was very low, the cash ratio was lower
Since textile-mill was a labor-intensive industry, in more recent years, the search for cheaper production costs had begun to move the textile-mill industry to Asia. Secondly, the strong U.S. dollar had made foreign textile manufacturers products much cheaper than those from U.S. companies. In addition, the World Trade Organization recently had announced that it would ban its members from using quotas, which would further open the U.S. market to competition from other countries. So how would Aurora face the crisis, since its sales have decreased four years in row, and its price fell from $30 per share to $12 per share, how would Aurora solve its problems? Zinser 351, a new ring-spinning machine, was under considered by the management of Aurora.
The company is over-liquid and has no debt, from which the shareholders are suffering because all acquisitions and investments are with high costs and low risks. BKI needs to create leverage by borrowing more, thus increase its ROI and ROE of its acquisitions and investments. At the moment Blain shows the lowest ROE in its sector (by far) while increasing its cost of capital, in other words the cash held remains unutilized and thus reduces the value of the company. Companies with low ROE are less attractive to investors. On the other hand, debt has a much lower cost of capita and provides a good opportunity to take on more
There is a failure to realise that long term better economic welfare also means general higher standards of living, as people have enough money to buy everything they need and some of what they want, competition is rife so drives quality up and prices down, and the government are able to take in more taxes from firms who are much healthier financially. This mass employment may lead to more jobs, but the workers themselves or the way they’re used is hugely inefficient. Another reason that labour production in the UK is so low is the lack of competition. There is a strong body of evidence that competition enhances productivity. So, with a lack of one there is a lack of the other.
Most people immigrants who are undocumented don’t pay taxes because they are paid under the table. Edward P. Lazear, Chairman of the Council of Economic Advisers, stated, “Immigrants not only help fuel the Nation’s economic growth, but also have an overall positive effect on the income of native-born workers”. Immigrants are a critical part of the workforce (1 in 7 workers) and contribute to productivity growth and technological advancement. Without the immigrants, we would have a decline in labor force of 3 to 4 percent, we could not have grown nearly as much as we did in the ‘90s and in the last few years our growth would have been slower. Edward Lazear also says that immigrants are more likely to be entrepreneurs than native-born U.S. citizens.
I do not say here that it does not impact at all, but the impact is less. The company can sell its products with better margins if the economy is growing and can earn better profits. Unemployment has a concern on almost all the industries, including FMCG. Unemployment decreases the aggregate demand in the economy because of lesser income with the people. Unemployment also shows a slow growth in economy.