Scholars such as Friedman suggest that treating the economic responsibility as the most important responsibility of a business, is called a profit-maximising view, and “the social responsibility of a business is to increase its profits.” This kind of view states that a company should be operated on a profit-orientated basis, with its sole mission being to increase profits. This approach would seem to benefit stockholders, as well as stakeholders, as the stockholder is going to benefit from the profit made by the company and will gain something back from the company, however problems can occur when the businesses and companies do not balance their ethical responsibility, as they can therefore be perceived as greed and unable to balance their corporate social responsibility, and will cause a bad name for a business. So although the stockholder may also be gaining profit by doing this (what the company sees as doing the right thing) is not necessarily the right thing to do in terms of stakeholders. However, Friedman would argue that as long as the business is maximising its profit, that is the main point and so the loss of the stakeholders is less important. This argument can be deemed as weak as Friedman’s approach does not mean that stakeholders can be benefited alongside stockholders, and so disagrees with
An internal stakeholder is someone linked internally to the organisation that has certain interests which they might look into such as managers might employees might want to have higher wages and owners would want their shares prices to increase to give them more profit when they decide tom sell them. External stakeholders are individuals or groups such as suppliers, the public, lenders and customers which influence and are influenced by an organization but are not involved internally with the business. There are several types of stakeholders as seen below. Michelin Manufacturing Company Customers The interests of the customers are too able to buy good quality tyres that will be efficient, cheap and will be able to last a long time. Also to make sure the tyres are attractive and look good on their specific car.
An integral part in performing a horizontal analysis is the ability to see the variation from one period to the next which are called trends (Horizontal analysis, n.d.). . Within the income statement, net sales increased by 33.3%, $150k, from Year 6 to Year 7. Then, a drastic decrease of 15% which is roughly $900k, took place from Year 7 to Year 8. The 33% increase showed the strength of the company, but the huge drop in sales demonstrated how Competition Bikes, Inc. (CB) struggled to attain a surge in its revenue which is the result of the 15% decline in sales caused by economic situations.
The economic benefits of high customer loyalty are measurable. When you consistently deliver superior value and win customer loyalty, market share, revenues and profitability all go up, and the cost of acquiring new customers goes down. A clear and structured new customer induction scheme will boost customer loyalty and retention, increase the frequency of purchase and raise the dollar value of each transaction and increase referrals. Customer induction schemes are a vital step in business growth as they deliver higher yielding customers and drive up profits by reducing the need to spend money attracting new customers. It is very much about long term retention marketing and is purely created through exemplary customer
This measures the risk of investing in a company. In other words, the decline in margin of safety shows that the difference between sales completed and sales needed to break even getting smaller. These changes can be attributed to their total sales amounting to a value less than the breakeven point in sales. 2) If average prices were reduced 10%, and sales tickets were increased to 14,000 the income of the company would increase. However, even with this change in values, the company is still under its breakeven point.
Home Depot Valuation Analysis The group calculated a per share valuation of $42.21 for Home Depot’s stock. This required certain assumptions regarding various growth rates, and based upon a sensitivity analysis, a declining sales growth rate is anticipated up to 2011. By this point Home Depot’s store expansion program will slow down, if not cease all together, due to market saturation. The inclusion of a maximum constant sales growth rate of 5% seemed to be a good benchmark for Home Depot. While this is a bit aggressive, we feel that as expansion wanes same store sales will increase marginally from the projected 3.5% growth primarily due to the strength of the brand.
Its business strategy makes sense, and that could be proved by its steady growth and strong profits. And with this strategy, it could pursue high-net-worth individuals, in Dimensional Fund Advisors, 2002 1. What is DFA’s business strategy? What do you think of the firm? Are the DFA people really believe in efficient markets?
Concepts: (Total) Profit Approach – This approach is defined as trying to maximize the profit of the Company. While this objective is important, it must be considered in concert with the objective of providing a socially useful function (Perreault et al, 2007, p. 89. A second important function is that the Company must consider their behaviour as being ethical or not when trying to maximize profits. The actions of Premier Fitness were likely motivated by an objective of maximizing its profit. The Company used lower prices to attract customers and then charged them a higher cost than advertised.
Under this strategy, DFA decided to pursue high-net –worth individuals, in addition to institutions, clients though registered investment advisors (RIAs). The DFA’s business strategy is good which is because the high profits and well growth. There are not all of DFA people believe in the principle of efficient market. This is because the weak-form of the efficient market hypothesis asserts that stock prices already reflect all information contained in the history of past prices. Additionally,
Market research and look at all the factors which will impact the business and what is convenient for his customer as well. Below my calculation shows larger facility is more profitable. EV excess Small Facility Expansion = | 0.7 (800,000) + 0.3 (500,000) | = | 560,000 + 150,000 | | $710,000.00 | If he takes the location with potential for expansion, then the expected value of this decision will be: EV Potential Larger Facility Expansion = | 0.7 (100,00) + 0.3 (600,000) |