xxxxxxxxx Business Economics GM545 March 2007 Exercise 1: Microeconomic Issues #2 - Ethical Issues in Business. In the early 1990s, I worked for Johnson Matthey (JM) in the division of the company that produced catalytic converter for automobiles. JM's first and largest business was the mining and refinement of precious metals such as gold, silver, platinum, and almost every other type of metal or mineral that is mined. Production of finished products from the refined metals excellent profits and allowed JM to maintain a sustainable advantage in significantly higher margins in finished products. Although market prices for precious metals fluctuated wildly for JM's competitors, JM's costs were tied mainly to mining and production costs which were stable and significantly lower.
Growth platforms and logistic pipeline adopted by Crocs are briefly discussed to highlight the reasons why and how Crocs evolved its supply chain practices. The basic core competencies of Crocs are: effective and responsive supply chain, an unique product, an unique material and a global strategy. First, the most significant Croc’s core competency is the highly effective and responsive supply chain. The company developed a strategic three-step method to shorten time, offer flexibility and lower the cost of the supply chain process. Therefore, It will give bigger profits and an easier operation system.
Acquire or Develop Talent Tanglewood should acquire talent, because it wants to keep performance and customer service at high levels. In addition, while old stores under Tanglewood have the same basic look, the management styles and human resource can use some improvements. Acquire talent is very helpful for new stores, because employees would “hit the ground running” and be at the peak performance the moment they arrive. Hire Yourself or Outsource Personally, I think Tanglewood should hire itself. Outsourcing is more practical for small and medium companies.
Introduction Waltham, Inc. is a publicly traded firm that is considering the acquisition of a private firm, Artforever.com. The acquisition is being considered because there are limited investment opportunities in the core business of vintage shoe restoration at Waltham, Inc. The CEO wishes to expand the company into other growing markets. Waltham, Inc. currently has 100,000 outstanding shares of stock trading at $50 per share. The firm also has $2M market value of bonds trading at a yield to maturity of 6.2%.
Entrepreneurial Finance and Private Equity CASE 2: Brazos Partners: The CoMark LBO 1.Executive Summary: Brazos Equity, a middle market LBO group founded in 1999, was considering buying 73% share of Comark Building System Inc. at the cost of $40 million. Comark, had $35 million revenue in 2001, is a manufacturer of commercial modular Buildings and has a solid connection with government. Brazos thought Comark as a good deal because Comark had a good management, solid cash flow and was priced reasonably. Brazos was trying to decide a stock purchase or asset purchase. The asset purchase option will generate $700,000 million more tax obligation than stock purchase do.
Companies have discovered that adhering to project management methods and strategies reduced risks, saved money and improved success rates. In the business world there is little to no room for error and fewer resources to rely on, project management expertise and oversight is helping organizations streamline their delivery process, cut costs and sidestep risks, enabling them to implement stronger project management practices for the future. Project management life cycle is a methodology made up of four different phases but is not limited to just these four phases. These four stages are Defining, Planning, Executing, and Closing. Some companies expand on these four stages based on what market they are in.
The details of that evaluation: STRENGTHS Dedication from management, employees, and suppliers 1. Company G’s dedication from management, employees, and suppliers to delivery high quality products and great customer service would be a core competency. A high credit rating coupled with a low debt:equity ratio 2. Company G is financially sound due to a low debt:equity ratio and high credit rating. Reduced costs thanks to efficient production 3.
Wilkerson Company’s business is manufacturing of valves, pumps and flow controllers. Due to a high competition on the market the company had to lower the prices. The pre-tax margin dropped to less than 3% and gross margin fell below 30%. The company is using simple cost accounting system that cannot provide correct analyses of the company’s profit structure. With this system direct material and labor costs are standard prices.
Issue Mabe is one of the largest appliance manufacturers and sellers. Around 2004, Ramiro Perez, the international vice-president of Mabe, decided to form a joint venture with Spain’s Fagor to capture the market potential in Russia. Mabe sells appliance, imported from its Central American plants, in Russia. Currently, under intensive competition and unstable economic situation in Russia, Ramiro Perez is considering what to do about the joint venture with Fagor. On the one side, manufacturing locally will be a good way to achieve cost advantage and obtain a higher market share.
This is accomplished through more effective products, processes, services, technologies, or ideas that are readily available to markets, governments and society. Roberts (1988), defines innovation as the successful implementations and exploitation of a new idea or invention . Innovation is the main idea in shaping corporate life and helping companies to adopt various strategic options. It helps to reduce total cost of production, increase income avenues, and maintain efficient operating systems. Innovative businesses also benefit the economy: delivering added value; high quality jobs; successful business; better products and services for customers; and new, more environmentally friendly, processes.