Furthermore, BJ’s Wholesale is quickly growing into a competitor that should not be ignored. Analysis and Evaluation Costco is widely considered the industry leader in the warehouse club market. However, the financial data presented in Figure 1 provides little proof of whether or not that is true. The only data that is available for Sam’s Club is their operating margin, which is higher than Costco. While Sam’s club does have 183 more stores, Costco leads Sam’s Club in the number of member of members at their stores.
Eric Gillespie, Case Study from Chapter 2: Should Companies Embrace Social Business? When it comes to social media for business, the benefits of marketing via social networking sites are just too plentiful not to take full advantage. While over half of all adults visit social networking sites at least once a month, research shows that only 28 percent of workers use any type of social software at work. Social networking is extremely popular and growing more and more. Companies that are attempting to harness this technology within their respective enterprise are finding the implementation to be at or below average.
The company is involved in marketing its small product offering to approximately 24,000 domestic retailers and numerous retailers worldwide. The Company focuses solely on the stereo headphone industry. In this industry the competition is fierce and the Company competes directly with six major competitors, all of whom are much larger with deeper pockets than Koss. This is where Koss feels that it has a competitive advantage as the Company believes retailers and their customers view the company as an innovative vendor of high quality stereo headphone products who provides excellent after sales customer service. Past Performance Income Statement Net sales over the past four Fiscal Years has seen a steady drop resulting in a net decrease in sales from 2011 to 2014 of (42.5%).
The suppliers were traditionally large US steel companies and more recently Aluminium suppliers. Despite the fact that can companies were significant customers of steel products (fourth largest customers in aggregate) they did not have a strong bargaining position with their suppliers due to their limited individual share of sales amongst the few, large suppliers. The customers of the can companies were predominately major food and beer companies (80% of sales). These buyers had considerable power over the can companies (ability to switch suppliers; threat of self manufacture) and were able to bid down prices and dictate terms (e.g. set service levels).
These two retailers sell almost the same products and they have similar strategies which are low price and high-quality service. As the customers are price-oriented, the small companies and local retailers which are impossible to achieve the same low price can only compete through specialty products. For example: Frank’s Nursery focus on garden related products and Sears specializes in selling craftsman tools. What’s more, the home improvement industry’s expected revenue growth is only 5.39%. It means the competition will become more intensive.
Competitors quickly recognized Dell’s success; however, none were able to successfully restructure their operations to reach the profit levels that Dell achieved. Demand for personal computers began to grow in the mid-nineties due to strong economic growth and the emergence of new computer network services. However, low average profitability was common in the PC market. PC makers were faced with the challenge of developing a PC that consisted of the major components that consumers desired. This was a very complex task considering the numerous combinations of hardware and software components available.
Newell Company: Corporate Strategy Newell, manufacturer and marketer of basic home and hardware products, is a rather unrelated diversified company with more than 30 operating businesses. Grown over the years through many acquisitions, the company is facing one of her most important challenge: the acquisition of Calphalon (high-quality cookware) and Rubbermaid (plastic products). Both the acquisition were part of that period’s CEO’s plan to increase Newell’s strength on the market, and to boost the capitalization to $10 billion, in order to reach higher EPS and, in so doing, create more value for shareholders. Calphalon is a private high-end aluminum cookware manufacturer, distributed in department and specialty stores and with a new developing product line for the mass retailer Target. Analyzing Calphalon’s issues, it comes out that its acquisition by Newell (consisting in a process of related diversification) would create value for both companies.
Date: October 28, 2013 RE: CTM Exercise Four - Boston Beer ____________________________________________________________________________ I. Issue/Problem: Boston Beer was a very low budget start-up with expertise in only a specific area of overall 3 billion dollar beer industry. It competed against big players with vast amount of resources who produced variety of beers at competitive prices. A. Boston Beer was designing a company that to make a profit, had to sell beer at a 15% mark-up to other companies. 1. Beer in USA is almost a drink consumed regularly, hence consumers wouldn’t pay premium price very often just for the sake of better quality and taste.
Being a privately held company, Le Petit Chef is not subjected to the same kind of investor pressure as e.g. P&G does but, nonetheless, making money most likely remains the owners’ main objective. However, the company is experiencing difficulties releasing products that differentiate it from the competition despite their comparatively high investment in R&D. The current innovation process is not delivering product “winners” like it did in the past. 2 Market and Competition The market of microwave ovens has become a global market with Europe, Japan and the USA being the largest market regions.
The company was growing with an higher rate of the industry even if was the market leader (9% vs 5%) b. the operating margin was in line with the industry, that highlights that the company was not leveraging the bigger scale to increase profitability (2-4%). c. The company substituted the CEO, but only 8 Seniors Executives over 30 and no middle manager maintaining the structure of the firm d. Indeed analyzing the 10-k and the DG report we can see that most of the improvement came from operational efficiency 2) What was KKR investment thesis? DG dollar have a leading position in the convenience store market and did not extract all the value from operational efficiency. We can extract more value focusing on maximizing store performance and investing in new technologies to reduce OPEX. Additionally interest rates for store relocation was forecasted to go down since we were on the verge of a crisis 3) Key area of operational efficiency?