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
There was not one dominant player within the industry; they were more equally balanced thus increasing rivalry. The High fixed cost for running a discount store resulted in an economies of scale effect, this can be seen when Wal-Mart decided to gain economies of scale by building their own distribution centres to add value. Going public in order to finance the extra storage was important for Wal-Mart to utilise capacity as efficiently as possible, they did this by creating distribution hub around 15-20 stores. The increased rivalry continues, this was due to the low levels of product differentiation and little in the way of own branding, products were standard in nature through all discount stores. Also the low switching cost and consumer awareness of shopping around to find the best bargains increased competition around stores to capture customers.
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
Amoco offers few options. Pros: lower plan expenses; behavioral plan participants may be confused by too many choices. Active or passive? An average active fund has a negative net alpha, so a few passive funds spanning major asset classes will work just as well, and at a lower cost. However, having a range of active funds gives employees more flexibility to look for alpha and attempt to beat the market.
There were a few primary issues. The licensing and joint venture issue, service issue and the management issue dealing with the replacement of Chapman. Cummins strategy was a cash limited strategy. They’re approach created a revenue stream by licensing. As far as investment aspect is concerned, they were a company that did not throw a way a lot of money.
Blue Niles economical supply chain and comparatively low operating costs allowed it to sell comparable-quality jewelry at substantially lower prices than the leading competitor. Blue Nile found a way to exclusively make arrangements that allowed diamond and gem supplier’s products on the website. These arrangements included multi-year agreements where only designated diamonds were offered only on their website. Second, they didn’t purchase a diamond or gem from suppliers until a customer placed an order. In contrast, traditional jewelers had far bigger
Power of Suppliers The bargaining power of suppliers in this industry is low, as there are many suppliers. The required commodities like sugar, and water are basic goods that are available quite easily. So, producers have little power over the pricing hence the suppliers in this industry are weak. Also, the suppliers have almost no strength to integrate forward, so the threat from them is low. Power of Buyers End consumers and retail channels can both be considered as buyers in this industry.
First of all, private labels provide more profit from margins to retailers, meaning sellers want to promote private labels more than others. Next, when private labels have the lower price than others, most customers absolutely choose the lower one because the quality is not so much different, and it is also cheaper. Third, coupon promotions normally are great, and a lot of companies use it. But, the coin has two sides, meaning there is a negative aspect as well. 3.
Issue Manzana’s commercial insurance is a product for which low price is important in order to compete, but serving customers (agents) is what produces loyalty. Agents want rapid request turnaround so that they, in turn, can impress their customers. The agents will also receive their commissions more quickly. Fruitvale’s performance has deteriorated, as has its competitive position. Average turnaround time (TAT) has grown from about three days in 1989 to more than five days in 1991 while its main competitor, Golden Gate, has achieved two-day TATs and is now promising one day.
There are several strengths in Wal-Mart raising capital by selling stock. Selling stock is less risky than debt financing and it allows the company to raise money without giving up the amount of control it would relinquish from merging with another company. Wal-Mart is already a publicly traded company, so it would be easy for them to issue more stock. Despite all the strengths there are to finance projects through selling stock, there are some weaknesses. The first weakness is that as more stocks are outstanding, the amount of dividends payable increases.