Costco’s Expansion outside US – a very positive tactic. You can see a significant increase in the operating income 2010 – 47% and 2011 – 92%! Capital expenditures rose considerably to achieve those results. Costco’s competitive advantage is sustainable and company has proved it: annual growth, low operating cost, low prices, high customer loyalty plan, continuing profitability, and satisfied employees. Five years from now Costco will be standing as the industry leader if they will continue with the same philosophy, goals, strategy and mission.
From 1974-1978 all the major firms saw increased sales and net income but as time progresses and the market stops growing the firms that have best positioned themselves will begin to dominate the competition. An indicator firm success can be found in looking at firm Return On Sales (ROS). ROS = Net Income/Sales Revenue, it is a measure of firm efficiency and firms with higher ROS are demonstrating an ability to control costs and/or charge a higher price for their product(s) as opposed to competition. Lower ROS firms have lower income in relation to revenue and increasing net income is harder. In 1978 Emerson (Beaird-Poulan) and Electrolux (Husqvarna) are the industry leaders in ROS at 7.9%.
PepsiCo has shown the best current ratio and is able to pay off their debts, which Coca-Cola does not have that and is struggling to pay off their debts. However, Coca-Cola has a higher retained earnings percentage, which means that it is able to have funds available for future growth of the company. The hope for both companies is to provide their financial statement with better information presented over their competitor giving the ability to earn more investors. PepsiCo and Coca-Cola do not need to be at war with each other as they have what it takes to get people to use both products, no matter what. Keep in mind, that it is the people’s choice whether or not to support a company and decide whether to invest in the company not competing against each
It will show where it comes from, and where it goes. This indicates the company’s profitability, as shown in the net income, and their ability to meet obligated debts. It is possible for a company to have success in sales and net earnings and still fail to generate enough cash flow to meet obligations. The Home Depot is reporting a well maintained cash balance as reported in the balance sheet, and its operations continue to keep the influx of cash coming. The Home Depot cash flow shows significant net earnings and the cash flow statement does not indicate a drastic drop from previous years.
This ratio shows the percentage of a company’s total liabilities to its shareholder’s equity. A low debt to equity ratio is favorable as it indicates lower risk. A high ratio is not favorable for a company as it indicates that the business is relying more on external lending, and this can be risky for a business. According to Table D1, in 2008 the debt to equity ratio for Whole Foods was 61.7 and in 2012 it was 0.46. The decreasing trend of this ratio is positive as it indicates a strengthening equity position.
As mentioned, ease of communication and in-person interaction are key to long-term product innovation and China has at least a thirteen-hour time difference from the Midwest while Mexico has a one hour time difference, allowing for a clearer communication channel. This proximity also gives Polaris the advantage of maintaining their high level of quality control at their new plant compared to having a plant in China, considering one of their core competencies are their development of high-quality products. Establishing a plant in Mexico will give Polaris access to other Latin American markets it has free trade agreements with Costa Rica, Bolivia, Columbia, and Venezuela. Additionally, Polaris’s reputation for being an American brand will not be hindered because they still have three manufacturing facilities in the United States. These factors all allow Polaris to smoothly mitigate any information, communication, or disruption risks that may occur.
Notwithstanding increasing dividends and a moderately stable share price, the home improvement retail industry remains to struggle due to the fragmentary world wide economic complications. Throughout 2009 Home Depot recorded expenses as much higher as well as the drop in sales. While Home Depot the company is very strong, the drop in sales and net earnings brought fourth some restraints until the economy shows signs of improvement. With this in mind The Home Depot, Inc. initiated strategies in the fiscal year 2008, to help minimize losses while maintaining a strong customer base. Which in turn may have the company to increase their credit programs for consumers with the intention to increase sales.
Brazo 1. Is Cheddar’s an attractive investment? Did Brazos underpay, overpay or get it just right in their initial investment? The proposed LBO deal of Cheddar’s is an attractive investment for Brazos because it fits into Brazos’ “sweet spot”- a reasonable priced company with solid cash flow and good management. Cheddar’s had always been profitable through that it had ever closed a company-owned store and had shown steady increases in sales and customer counts over time.
This implies there is significant intrinsic value when combined with MidAmerican, the new customer base and economies of scale being the 2 most important factors. As a whole, Berkshire Hathaway has been astoundingly successful since 1965, overall comfortably beating the market, only being beaten in years where there is significant S&P 500 gains and suffering less of a loss of value during bad years. The MidAmerican investment has not been as
Meanwhile, light beer is generally more preferred among younger drinkers, and it is “the only beer category demonstrating consistent growth”. According to the BCG matrix, MM Lager is the company’s cash cow, but with its steady decline in sales, it will soon become a dog, even if the company invests more in marketing to boost sales. MM Light is a question mark, and with sound marketing strategies that may cost the same amount, introducing MM Light would ensure sales and growth. ------------------------------------------------- 1.2 Potential Risks ------------------------------------------------- Risks that this decision may induce: The new product may hurt the long-standing brand equity of MM Lager; Existing customers may be alienated, and new customers will not be as loyal; Costs will increase; other brands that have more resources for advertising cannot be competed against. As a result, we decided to introduce the MM light beer to a new market segment and reposition the brand for MM light so as to reduce the damage it may cause to the brand equity of MM Lager and differentiate MM light from its competitors.