There are four competing Business, Government, and Society (BGS) models, the Market Capitalism model, the Dominance model, the Countervailing Forces model and the Stakeholder model. The purpose of these models are simplified descriptions of the Business, Government and Society relationship. According to the Market Capitalism Model business operates within a market environment and responds primarily to the powerful economic forces. There are many important assumptions regarding this model. Some of the key assumptions include slight government interference in the economy, consumers are able to make decisions because they are informed about the products they are looking to purchase and the price of the products and banks and laws exist for the sole purpose of easing commerce.
“In the case of competition law and policy, the main objectives of government intervention are to respond to market failures, to limit abuses of market power, and to improve economic efficiency” (1). In other words you can say that governments intervene, to gain advantages for certain national or international (in the case of European intervention) markets, companies and/ or interest groups. Intervention can be realized by limiting trade through trade barriers, export controls, quotas and tarrifs, which influence the sales and market shares of the foreign business on the national and the international market, where domestic products are needed or are in danger of being copied. Another way is to raise capital in the form of subsidies, where financiers give money to certain companies or branches on the domestic market, to assure their economical success or their gaining establishment on the (international) market. In this text the focus lies on the second displayed way of government intervention – the subsidization.
The large business portfolio with diversified products, together with growth opportunities makes Rohm&Haas a desired target. Not only that, but the company has a strong leadership team with experience based on costumer focus and innovation which can contribute to Dow’s transformation strategy. Valuation using the Original Forecast In order to do the discounted cash flow analysis, we needed to calculate first the weighted average cost of capital (WACC). We have used the following formula: WACC = [KD * (1 - Tax Rate) * (D/V)] + [KE * (E/V) ] (1) As can be observed in Table 1, the value obtained for WACC is 8,5% , which we consider to be appropriate. Weighted Average Cost Of Capital | | Risk-free Rate (Rf) | 4,92% | Equity Beta (bE) | 1,06 | Equity Risk Premium (ERP) | 5,07% | Cost of Equity (KE) | 10,3% | Tax Rate | 35% | Cost of Debt (KD) | 6,1% | Debt / Value Ratio (D/V) | 28% | Equity / Value Ratio (E/V) | 72% | WACC | 8,5% | Table 1.
Workshop Three (Individual Assignment) Case Analysis Averett University International Business Course, BSA 545 February 20, 2013 Question #1: There are several factors that need to be examined in the argument that developing countries ought to be able to maintain their subsidies, the ones to which Hochberg objects, because these countries need advantages to break into and become established in world markets. Will subsidizing exports help the domestic economy in the future? Will the change in operations lead to job exports from the United States and harm the developing countries economy for not leveling the playing field? Will new operations contradict U.S. policies by facilitating the export of products used for repression and providing corporate subsidies? Changes in operations will help increase job exports.
From the moment Tom was in charge of the company he focused on increasing the companies profit margin. This was not an easy job being that the company’s main products are considered commodities. Aside from that the partyware industry is constantly gaining new competitors that capture the market with similar products at lower prices. Tom Rose is currently faced with two marketing strategies that could be considered industry game changers and greatly impact his business. The original strategy is the launch of a brand line for Rose Partyware that will showcase a new printing technology that will improve quality and reduce costs.
To help bring this about, Witte implemented the following policies to modernise the Russian economy. The government became more active in developing the economy, there was greater emphasis on producing more coal, iron, and steel. A great success for Witte was the expansion of heavy industry in Russia. He linked industrial growth with a stronger national, politically and economically, and was inspired by the more developed nations in the west. He invited foreign experts from more industrialised countries, such as Britain, France and Germany to Russia to advise him on modernisation.
Strategic Growth of Dow Chemical Sandy Beltran, Chris Chrisman, Nathan Hoskins, Jennifer Laplante FIN370 September 26, 2011 Steve Kraft Strategic Growth of Dow Chemical Dow Chemical needs to grow territorially and financially to expand their profitability as a corporation. The goal of any company in business is to make a profit. Team C must describe a strategic planning initiative and identify an initiative discussed in Dow Chemical’s Annual Report. The team must also explain how that initiative affects Dow Chemical’s financial planning. The team will determine how Dow’s initiative affects costs and sales.
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?
Eventually Rayovac entered the competitive household battery market, but this was long after Duracell, and Energizer were established in this market. Rayovac had begun to make great strides in order to attempt to gain ground on its competitors, as acquisitions were made to access international markets, which included Europe, China, and Brazil. Globally, Rayovac held a 14% market share, with 20% share in the Canadian market. In 2003 Rayovac bought Remington Products Inc, and in February of 2005 they Rayovac acquired United Industries Corporation, a leading manufacturer of consumer lawn and garden care products, and insect products. This move allowed Rayovac to extend their portfolio, and also access new retailers such as Home Depot, and RONA.
The Components for Aggregate Demand are C (consumption)+ I (income)+ G (government spending)+ (X-M) (net exports) and a change in the components of Aggregate demand will cause a shift of the curve. Fiscal policy is a type of economical intervention where the government injects its policies into an economy in order to either expand the economy’s growth or to contract it. By changing the levels of spending and taxation, a government can directly or indirectly affect the aggregate demand. Fiscal policy can be used in order to either stimulate a sluggish economy or to slow down an economy that is growing at a rate that is getting out of control. There are two types of Fiscal policy put in place to alter the level of aggregate demand; Expansionary fiscal policy and Contractionary fiscal policy.