While there is the risk of litigation at UST, this risk is moderate compared to other tobacco companies, such as cigarette manufacturers. The biggest risk facing UST is that they have practically no product diversification, with basically all (97%) of their operating profit coming from smokeless tobacco products. Future growth assessment: UST's Price-to-Earnings (P/E) ratio is
The raise in GDP doesn’t come mainly from taxes, because even if they are legal immigrants (which are not the case usually) they have minimal income. The raise in GDP comes mainly from the production that those workers manufacture. Immigrants are the lower solid base of every industry. Another plus for the economy is that those people, who migrate, are highly motivated to succeed and this makes them better employees. They have no one behind their backs, so they know every single mistake could be hurtful for their job position.
Even though the industry is concentrated, this is a highly competitive industry and the demand is trivial. For example, if Coke raises prices over Pepsi, they will lose a lot of sales. Therefore, I would say the bottling companies have little bargaining power. The fourth force is the bargaining power of the buyers. There are two factors determining the power of the buyers: price sensitivity and bargaining power.
By doing this the threat of rivalry is reduced through pricing strategies and through their relative impact on the performance of low-cost firm and higher-cost rivals. Although SMIC has the lowest market share as its production volume units are the smallest (68.2 mil) among all the competitors after samsung, the company’s fully loaded cost of product is the second lowest among all the firms as $4.84, and SMIC faces the loss as -$9.3%. Therefore, it is expected that SMIC gets closer to Samsung
Wal-Mart: “Everyday Low Prices” in China Wal-Mart, what started out as a few small discount centers in areas where no big retailer was willing to operate, has since grown into one of the top retailers in the world, boasting the top revenue in the retail market and being the once “most admired” company in the US according to Fortune magazine. Wal-Mart’s success can be attributed to a few different strategies, such as the commitment to sell name brands for less than competitors, availability, service, and cost control. Wal-Mart has used a strategy of going into communities in which there would be no real retail competition, essentially where it would be unrealistic for consumers to shop elsewhere. Also by providing a mass variety of goods, Wal-Mart has developed a one stop shopping center, providing convenience to buyers, in particular families. By driving down the costs from their suppliers and overhead as much as possible, it resulted in some of the lowest prices possible for consumers, in which they kept at low prices all the time, as opposed to constant fluxuating prices with sales and promotions.
Most jewelry stores’ prices aren’t greatly different from others’ and buyers have very little influence on prices due to the high cost of raw materials to make the products. Substitutes: Substitutes are a relatively strong force, since there are other companies who are willing to create same or similar jewelry at cheaper prices to undercut their competitors. Government: The government plays a smaller role since the UN restricts the diamonds being sold are mined without conflict (aka
Despite this success, Floren had concerns regarding the sustainability of the corporate strategy’s focused scope. Methanex had been successful in large part due to its cost leadership and reliable delivery, achieved by building multimillion-dollar production facilities in remote, natural gas-rich regions of the world that it supported through its own distribution and logistics system. Unlike many of its competitors, Methanex was not diversified. While Floren believed this lack of diversification allowed his organization to focus singularly and clearly on its strategy, he knew that the company was completely reliant on the stability of the market for methanol. At any time, problems of poor infrastructure and political instability in emerging market economies could result in inconsistent gas supply, crippling Methanex’s production and, therefore, impacting its supply chain.
Case: AXA MONY Question 1: Why is AXA bidding for MONY? Does the deal make sense for AXA; for MONY shareholders; for mgmt? As a MONY shareholder, what are your concerns about the deal? For AXA • Growth: Horizontal merger, AXA’s sales force in US by 25% → hard to achieve organically • Cross-marketing → Distribution systems complementary, and products (AXA strong in the variable annuity marketplace and having some new life products that could be offered by MONY’s sales force) • Bidder share price increased following the announcement; looks like the market is positive as well. For MONY • Poor performance in 01-02, ROE of 1% compared to industry of 10%, valid argument?
Despite few of its members ever having worked together before, Obama realised that by building a team that genuinely wanted him to win he could organize them far more effectively knowing they had his best interests at heart. He also paid many of his top members far less than Clinton, sometimes as little as a tenth of the salary for equally well provided services. This combined with a lack of scandalous behaviour not previously associated with any presidential campaign, meant that Obama was able to overturn Clintons lead and in the end record a comfortable victory for the democratic nomination on his way to becoming
This industry as a whole generates positive economic profits. In addition, the producers of the basic commodities for the coke production (like Caramel Colouring, flavour, caffeine or additives, sugar, packaging) have no power over the pricing hence the suppliers in this industry are weak. Revenues are extremely concentrated in this industry, with Coke and Pepsi, together with their associated bottlers, controlling between 70% & 90% of the US retail outlets in 2000 (Exhibit 7). In fact, one could characterize the soft drink market as an oligopoly, or even a duopoly between Coke and Pepsi, resulting in positive economic profits. To be sure, there was tough competition between Coke and Pepsi for market share, and this occasionally hampered profitability.