Once again if the president’s bonus is based off of net income, this situation is the most favorable for a high paying bonus and encourages stockpiling inventory to inflate net income. b. If the sales outlook for the coming three years were to increase to 30,000,000, the newly implemented system would prove valuable to B.E. Company. If production is kept the same, the company is predicted to sell every unit produced which would avoid a stockpile of inventory and also safeguarding an extra 5,000,000 units in ending inventory in case sales go above 30,000,000.
| Longest lasting online grocery chain. | They are only located in the New York area. | Can provide better advertising of the company to the potential customers. | When stores put the exact same items or products on sale. | ANALYSIS VIA PORTER’S FIVE FORCES MODEL The threat of new entrants in the online grocery business could lead to the company having to lower their prices and also, may have to lower their delivery fee just to compete with the newer companies that are trying to start out in the online business.
As stated in course book, inventing new products or services also creates value (Brickley, Smith, & Zimmerman, 2009, p. 248). The increase in the demand for corn farming will increase the value of the land significantly and one could reap great profit if the knowledge is there. I think my colleagues are providing great advice but there is a great deal of information and knowledge missing in order for this investment to be successful. Entering a new business and investing can be very difficult. I think this may be a great purchase to operate a corn farmland but do not think the knowledge is in place to manufacture a corn-based ethanol.
Despite scouting for smaller opportunities, a first round of $250 million funding may not be sufficient for Brazos to invest in any more than a few firms which gives them limited scope for diversification. This places greater pressure on a first time fund and in particular, Brazos’ motivation to add value by simply promoting organic growth in cash flow and operational efficiency in the hope of enhancing industry scale. Additionally, the existence of dependable cash flow and management make it easier to acquire debt financing and increase leverage which suits a first time fund. Furthermore, Brazos’ previous relationships and experience in the market allowed it to mitigate aspects of first fund bias which inhibit the entry of many prospective VC firms into the industry. Brazos’ GTT method is one of its points of differentiation which appear limited in its application to a variety of firms outside the ‘family-owned business’ model.
3. Sales Quotas A “tried and true” strategy for motivating dealerships to increase sales of a product is through sales quotas. By setting a sales quota for the dealers to meet each month, Company S will encourage the dealerships to increase sales. This method has the distinct advantage of not costing the Company and funds. However, the disadvantage of this strategy is through the
He believes that the premoney valuation of the company should be at least $10 million based on the potential profitability of the company and the successful efforts to date in lining up several key sponsorships with national retailers. You have been hired by Chapin as a consultant to advice on the valuation and how to negotiate with Biddle. Please use the following topics as a GUIDELINE ONLY: 1. How good an investment opportunity is Mindersoft? What are the key strengths and weaknesses of the opportunity and business plan?
This enables Kellogg’s to attract a much larger proportion of consumers in the market who will be interested in purchasing and tasting their new product. Therefore, in the long term, this would increase sales revenue of Kellogg’s, however profits may not increase as much, due to the cost of carrying out primary research, nevertheless, this would have a positive impact on Kellogg’s. Another reason for carrying out market research is that Kellogg’s will be able to set the price of their new breakfast bar or cereal according to their target consumers’ level of disposable income. This would mean either carrying out surveys as part of field research or analysing readily available databases or past census reports as part of their desk research. From this, Kellogg’s will receive a rough idea of consumers’ level of disposable income therefore helping them in deciding the prices of their new products.
Aurora currently has four plants remaining in operation. The Hunter plant is seeking installation of a new ring-spinning machine, the Zinser 351. This machine would yield higher quality yarn, allowing for sales in a niche market that would increase the selling price of yarn by 10%. Additionally, operating costs would be reduced through greater production efficiency. However, sales volume would decrease by 5%, and the cost of customer returns would be higher even though the return rate would be lower.
The major quality that Wal-Mart possesses is its ability to adapt and change according to the needs of its customers while striving to keep prices of goods and services low. With annual sales of about $300 billion, around 68% of the sales come from Wal-Mart Stores, 19% from its international operations, and 13% from its Sam’s Club. Wal-Mart’s annual profits are about $10 billion and they have a market value of over $250 with assets worth over $105 billion (Mujtaba & Maxwell, 2011). This success has hurt many competitors in the process but their success is an example that many manufacturers and businesses should use as a case study to perfect their own inventorial
For example, last quarter, the company had produced 298,818 ounces of gold, 5% more than the year-ago quarter. Coming to the sales figure, the company had sold 292,181 ounces in the last quarter, up 15% from the prior year quarter. This means that the company needs to enhance its production at a stronger pace as sales are outpacing the output. But, the more important thing for investors to note is that Yamana is being able to increase its production and reduce costs at the same time. Once costs are in control, Yamana’s margins will see a positive impact.