Nike Research Paper Posted by admin as Example papers Research Paper: Hitting the wall – Nike and International Labor practice Introduction One should start by saying that having read the Nike company case study I understood that the company despite its great popularity in the USA has certainly been questioned for its notorious exploitory practices abroad. One one had the company strives to minimize its costs and maximize the profits, yet on the other hand some claim that it should do everything possible to benefit the society it works in. The following essay will explore the Nike’s global strategy towards cost minimization, explore the ethics behind it and present numerous educated findings together with my personal opinion. Body Outsourcing is one of the most important business practices that the modern day organizations use in their daily practices to minimize costs and improve competitive advantage. There currently are two main types of outsourcing: traditional and Greenfield 1.
Fixed and variable costs should be adjusted to maximize profit • Will is going to need to figure out how much of his product he is willing to offer consumers at different prices. • The demand for this type of product should be researched before setting the price • If there is a high demand for this product, that would help determine selling price • Will has setup a small website to introduce his products selling material where the copyright has lapsed for $10 and copyrighted materials for $15. • In the first six months 1,000 of the older books were sold generating revenue of $10,000 and 2,000 of the copyrighted materials were sol generating revenue of $30,000. • The current market price for books on CD is about $20 for a 500 page book. • It was recommended to Will, by his friend Elsa that he increases the price of his product to allow for additional funds for advertising.
Dilemma Owner of Runners Supply, Julie Yellowrobe has discovered that while her business is doing well, it is no longer experiencing increasing sales. She believes this leveling out has occurred because her previous target market has aged over the past 20 years and have turned to other less strenuous activities to keep in shape and an increase in competition from fashion and discount retailers. Julie has attempted to introduce a wider range of product including more fashionable and custom made products. The fashion product created a direct competition with discount outlets such as Wal-mart who could cut prices more deeply than she could. The custom made product captivated the attention of the serious runner however her previous supplier went out of business leaving her a more financially risky alternative.
Using Budgets and Pro-Forma Statements to Plan Production Capacity One of my key lessons from this simulation was the importance of working in teams and openly discussing decisions that need to be made before making them. I approached the simulation as the only team member because the simulation didn’t include other participants. In retrospect, I would have assigned other members, at least in my mind, to gain additional team insights. I was not careful enough in setting pricing for my two products correctly in the second quarter when we actually began sales. I priced my high end Mercedes line accidentally at the price I had planned for my mainstream Workhorse line and vice-versa.
Trendsetter Opportunity Trendsetter, Inc. is a software-module that makes it easier for clothing retailers to forecast demand. Both owners, Wendy Borg and Jason Kushdog have great experience in the supply chain management and fashion retailing industry respectively. From the start, they had been using seed money to develop the company but in six weeks, their seed money would run out. As software solutions take great investments to develop, the two owners quickly needed to seek the capital to aid the progression of their idea. Neither owner had experience in venture capital financing.
(20 points) MGMT 303 Week 6 Case Study Case Study This week, you will be playing the role of a senior manager whose business is growing and is considering bringing on additional staff. However, the HR manager has suggested hiring potential employees on a temp-to-perm basis. Many organizations are recruiting permanent employees using this policy. Read the case: “The Temptations of Temping.” See the case toward the end of Chapter 14. After reading the case, answer Questions 1, 2, and 3.
For example, Nike’s footwear and apparel lines, which make up a combined 92% of their revenue, are segments that complement each other and are sold through the same marketing and distribution channels. Non-Nike products made up only 4.5% of Nike’s revenue including the Cole Haan brand, a company that sells casual dress and footwear products. Since the Cole Haan is the only business segment that took on different risks than the others and since it makes up such a tiny fraction of the revenues, its impact on the decision is insignificant so one cost of capital should be used for the whole company. II. Methodology for Calculating Cost of Capital Joanna is correct to use the WACC method for computing the costs of capital.
My evaluation of Nike’s share price is based on Joanna Cohen’s analysis. In the following paragraphs I am going to point out the mistakes that Joanna has made and also give my suggestions in the WACC calculation First of all, for as much as over 95% of Nike’s revenue comes from sports-related business, I do agree with Joanna’s assumption of single costs of capital. Although cost of capital of non-Nike branded product may different from its main sport business, it has a minor effect on the cost of capital of the company as a whole. However, I found that she has made a few mistakes in calculating debt and equity weights and cost of debt. Debt and Equity Weights The first mistake in Joanna’s calculation is that the weights of Nike’s debt and equity should be based on the market value rather than book value mixes of Nike’s debt and equity.
After graduating, he spent a year in a research lab to test the feasibility and improve his idea based on the evidence of a brain-boosting power and the taste of it. In the process, he learned about the market and developed a business plan to eventually launch a very successful business across the world. The remarkable thing about Think Gum is that it was launch mostly based on the demand of the product, when manufacturers were not so sure about taking a chance on a new chewing gum. On a second thought, his product isn’t very legit. It does work, but to what extent?
Estimate the after-tax return on capital for the operating portion of this period (Years 3-12) C. Based upon the after-tax return on capital, would you accept or reject this project? A. Operating Income for Nike Apparel: In years 3 and 4, the project will lose money but Nike will offset these losses against other profits to save taxes. There are a number of allocation mechanisms that can be used to compute operating income, and the return on capital is affected by decisions on allocation. For instance, I allocated the entire investment in the distribution system expansion to this project.