Starbucks international business Assignment Example | Topics and Well Written Essays - 1250 words

Starbucks international business - Assignment Example The rise of business opportunity in different markets is creating a strong appeal in terms of market attractiveness to the firms located in the global markets. The factor of market attractiveness is resulting in the entry of firms in to new geographical locations. It is important to highlight that the entry of the firms in different foreign markets around the world is continuously raising the level of competition in the marketplaces. This assignment focuses on the international business aspects of Starbucks. In a more elaborate manner, it can be said that this assignment focuses on analyzing the international business activities of Starbucks as well as understanding the challenges that they face for being present in an international business. This assignment also aims to evaluate the business stage of Starbucks and make necessary recommendations. Analysis of international business activities Starbucks is a widely popular beverage brand of the United States, which has presence in mult iple markets around the world. ... In the current times, the company produces and sources its highly specific Arabica coffee from various international markets like Latin America, Africa as well as Asia (Pashman, â€Å"Do You Know Where Your Coffee Beans Come From?†). While analyzing the international business activities of Starbucks, the factor of international expansion of Starbucks also has to be taken into account. The highly popular news site Forbes has reported that under the leadership of President and CEO, Howard Schultz, the company has designed some very ambitious international expansion plans. The international expansion plans are highly organic in nature and focuses largely on penetrating in the emerging markets of the east like India and China. The company has plans of opening around 1300 stores in various markets around the world, out of which around 600 stores will be opened in the market of China (Loeb, â€Å"Starbucks: Global Coffee Giant Has New Growth Plans†). Talking in regards to the long term expansion plans of the company, it can be stated that the current management aims to open around 1500 stores in China by the close of the year 2015 (Trefis Team, â€Å"Starbucks U.S. Growth Will Remain Solid While Overseas Expansion Continues†). Challenges for Starbucks as an International Corporation While analyzing the challenges that exist for Starbucks, focus has to be given to the fact that Starbucks is an international brand which enjoys presence in multiple global markets. The most important challenge for Starbucks is the level of competition. Since the main offering of Starbucks is beverage, hence the brand faces competition of both primary and secondary nature. The primary competition of Starbucks arises from the multiple

Explain the economic basis of African Slavery and its impact on the Essay

Explain the economic basis of African Slavery and its impact on the emerging nation - Essay Example At the time of slavery, cotton from the South comprised the majority of all cotton grown world wide. With the invention of the cotton gin, cotton could not be grown fast enough to meet the demand. Without slaves cotton production would have dramatically decreased, effecting not only the slave owners, but the pious abolitionists and everyone that wore cotton harvested by the slaves. This is just one example of slaves being cheap labor. Many other professions in the South were based on this cheap labor, such as housekeepers, ironsmiths, and various other jobs slaves worked at for fee. The second economic reason slavery lasted so long was the monetary value of each slave. Each slave cost from two hundred to two thousand dollars depending on gender and age. These prices are an example, different sales had different prices, but slaves had monetary value. Southern slave owners would complain that the government was taking valuable property if slaves were freed. Slave owners did not see slaves as humans with souls, but as property. The monetary value of a slave leads to the third economic reason slavery lasted so long. If slaves were freed, could the government afford it? Questions were raised such as who would pay slave owners for their loss? And who would give slaves money to start their new life as free in America? And lastly who would pay to have the slaves returned to Africa? Would slaves take jobs from whites? The North and the South were at loss concerning what to do once slaves were free. No one took into account that once the slaves were free that they would work for wages to be integrated into American society. The North and the South were overly concerned with the economic issues of slavery. Although the North had many people against slavery, many looked the other way because of the imported goods from the South because of the cheap labor of slaves. The United States government did not want

Comparison Of Domestic Logistics With International Logistics Information Technology Essay

Comparison Of Domestic Logistics With International Logistics Information Technology Essay Logistics is the management of business  operations, such as the acquisition, storage, transportation and delivery of goods along the supply chain. The key elements of the logistics are discussed in the report to make the process effective. There should be a good strategy to make the logistics effective. The NAF clothing company have retail stores in every major city in UK. It has decided to open new branches in all over the world. The logistics operations will differ in every country. So the best transportation method and the logistics system are to be analyzed before opening the branches in the other countries. Companies always have the threat of global competition so they must always be analysing their competitors if their focus is selling or manufacturing overseas. Now the domestic components of the business turn to be a part of the large global supply chain. This involves a lot of tactics in the local operations. There are many things that are to be considered in the supply chain they are feasibility, technology and visibility. These are needed to be employed in order to form a supply chain that functions efficiently, technology is becoming upgraded day by day and hence they will allow different alternatives of systems to communicate and share information. Visibility means to identify where the goods are. This is very critical for companies to in order for companies to manage their supply chain by identifying the important points throughout the supply chain so that they can reduce the risk of delays. In regard to flexibility companies need to integrate the alternate locations to switch d estinations both domestic and global in order to get the goods to their ultimate destination. At global level companies need to collect large amount of data and transform it to useful information to streamline their operations and to reduce inventory. Managing the supply chain is thus regarded as managing information than moving goods. Also globally operational differences come into picture. Though the concept is the same the out show is different between domestic and global logistics but international trade is more complicated than domestic as it requires different modes of transportation and multiple hand changes. Also the skills and knowledge needed to manage differs from a global to the domestic structure. Globally logistics industry has grown to a high degree of sophistication far in the westernised countries than Asia and Africa. Thus information is not well recognised in Asia and other developing countries. Thus there are chances of missing the information flow and ultimately customers cant be confident of what they will receive when the shipment actually arrives as th ere will be gaps in the visibility. In global logistics there are three main operations i.e., getting the goods to the port of the country of origin, shipping from the port to the destination port. 2.1. Inventory holding: In a distribution system it is important for a company to hold stocks at adequate level and not in a higher level. It is very important to hold stock as it is necessary to balance between demand and supply as there is always a difference between the volumes of supply and demand. The other important reasons are To lower the total production costs To regulate the variations in demand To control the different supply times To lower buying costs and to have an advantage of bulk buying To be aware of seasonal variations To help in the smooth functioning of the production and operating systems To minimise delays in production due to out of stock of spare parts. To facilitate the availability of work in progress. There are a number of types of inventory positions held at different strategy positions in a company mainly at the point with customers and suppliers. They are Work in progress stocks Finished products Pipeline stocks General stores Spare parts Consumables Rotatables and repairs It can also be classified as Working stock Cycle stock Safety stock 2.2. Inventory replenishment system An effective inventory replenishment system aims at balancing the cost of holding stock and the service provided to the customers. The inventory replenishment system was designed to minimise the effect of the high or low level of stock outcomes and to identify the most appropriate level of inventory for all the products that are to be stocked. The negative aspect of low level of stock is that the supplies cannot be made at the specified date and there for e it might lead to a loss of the existing business as well as future business opportunities. And since goods have to be ordered now and then frequently this will increase the cost of purchase as it may involve huge ordering and delivery expenses. On the contrary high stock level are also a major disadvantage as the capital is locked up with the stock and it cannot be used up anywhere else and would tend to remain idle for a long time. Also the goods might become outdated or expired and hence may result in loss and the last disadvant age is that there may be a need to provide and maintain large storage space thus involving more expenses. It is always difficult to calculate the amount of demand based on the available next level of demand. So companies need to hold a higher level of transparency in maintaining information to suppliers and stock holding and demand all through the supply chain. 3. Different types of transportation modes: The mode of transportation is defined by which a shipment is moved from point A to point B, such as by air, rail, road, or sea. The transportation modes vary for both national and international distribution. The transportation modes inside the UK are mostly by land. The Land transportation includes road transportation and Rail transportation. Road Transportation: Road transportation mode is better than rail transportation modes. The Road transportation mode is the mode that has expanded over the last 50 years. The road transportation is made by trucks. The trucks are used for the distribution of goods from the warehouse to the local stores. This transportation mode is easy if the roads are good and the trucks have the large capacity of storage. The goods are distributed from the manufacturing unit to the distribution centres. The goods are then distributed from the distribution centres to the local stores. Road transportation modes have some advantages. They are This method is cost effective. The capital cost of the vehicle is low. The low vehicle costs make the company to expand the road transportation. Fast Delivery Easy to monitor the location of goods. Easy to communicate with the driver Ideal for short distances Rail Transportation: Rail transportation is another transportation method used for long-distance shipping. This offers the same speed as the trucks. This is also in-expensive like road transportation. The rail transportation is used to move the goods which are heavy and to move for a long distance. The good are then moved to another truck to get into the local shops. Due to this, for so many transportations the rail transportation is not used. But to move a long distance the rail transportation is the best method. The Rail transportation is the transportation method after the road transportation method in UK. So the Trucking is the best mode of transportation for the NAF clothing company. The roads are good and also can get product anywhere through the trucks. So the communication with the driver is easy and the other advantages are given above. So the trucking is the best transportation method in the national transportation. International transportation modes: International logistics modes are used to distribute the goods throughout the world. The international transportation modes are by Air and Sea. The services in the International ocean transportation are through linear ships and tramp ships. The Linear ships travel on a regular voyage and it has a pre established schedule with the determined ports. The Tramp ships service do not operates on a regular schedule. It travels to the place wherever the company wants the cargo to be delivered. Different types of vessels are used in this. They are container ships, Roll-on/Roll-off ships, Combination ships, Break bulk ships, Crude carriers, Lash ships, Dry bulk carriers and Gas carriers. Different types of containers are General purpose container, Reefer container, Tank container and Dry bulk container. In shipping mode, there is a competition between the conference shipping and the non-conference shipping. The conference shipping is the group of shipping companies operating vessels in the same trade lanes and they agree not to compete in price and they charge the same price for all same type of cargos. This is reliable and will be useful at the time of entering into the international logistics transportation. The non conference shipping is provided by the other members who are not in the conference. They offer different rates for the same type of cargo. So a newly entered person cannot get into that immediately. It takes time to analyze the cost and quality of different services provided by them. The Air transportation is the next method in the international transportation. The Air transportation is expensive but it will be suitable for immediate delivery. The goods which are to be delivered quickly for emergency purpose Air transportation is the best way. There are different types of air crafts in the international Air transportation. They are Passenger air planes, Combis, Air freighters and Charters. So the Air transportation is the best transportation for the food products but for the clothing industry The Air transportation is expensive. So for the NAF clothing company, the Shipping transportation is the best transportation method for the international transportation. The shipping transportation is in-expensive and also can get more profit from the goods. The developing countries like India and China will choose the shipping transportation is the best method. The Air transportation is expensive but it will be suitable for the food products and for immediate delivery. So the shipping transportation is the best transportation method for international Logistics. Monitoring and Control system in Logistics: Monitoring and control process is the procedure to obtain the detailed information about the process used. There are some approaches used in the process control monitoring. The main two approaches are balanced scorecard and the SCOR model. The SCOR model is one which is suitable for taking supply chain strategic decisions: The supply chain operations reference model (SCOR) is a management tool used to address, communicate, and improve supply chain management decision within a company and also with the customers and suppliers of the company. This model says the business process should satisfy the customer requirements. This is the best model for the supply chain strategic decision making. This integrates business concepts of bench marking, measurement and process re-engineering into its framework. This focuses on the five main areas of the supply chain management. Those five areas are plan, source, make, deliver and return. These are the areas which repeat again and again for every process. Plan: The planning comes first in every model. The demand and supply planning management has to be included first in this. The resources for the entire supply chain have to be planned and determined in the first stage. This also includes business rules to improve the efficiency of the supply chain. Source: This includes how to manage the inventory, supplier agreements, supplier performance and supplier network. This also deals with things like when to receive the goods, verify the goods and when to transfer the product. This also describes material acquisition, procurement unit cost and vendor lead time. Make: This includes production activities, packaging, stocking and releasing. This also includes managing the production activities, facilities and equipment requirement. This includes production management also. Deliver: This step includes order management, warehousing techniques and transportation modes. This involves managing product lifecycles, transportation, inventories, assets, importing and exporting requirements. Return: Companies have to be prepared to handle the return of defective products, packages or containers. This includes managing assets, return inventory, transportation and regulatory requirements. The benefits of the SCOR model are (1) It includes every step in the supply chain process. (2) Most of the companies prove that this model has identified the problems in the supply chain. (3)This model enables a two to six times of return on investment. The operation of control systems starts with setting the objectives. Collect the data and compare with the objectives. Find the differences between the current data and the objectives. Then take the corrective action to attain the objectives. These are tre basi operations of the control system. Tracking and tracing technologies: There are different types of tracking and tracing technologies used in the Logistics transportation systems. The efficient technology will provide the details of the product at every stage. The main technologies are discussed below one by one. Electronic Data Interchange: Electronic Data Transmission is the transmission of data between organizations from one computer system to another computer system. The EDI is used for electronic fund transfer between the financial institutions. The companies use EDI to increase efficiency and to save cost. The communication can occur in less time with fewer errors. There is no labour cost in EDI. The data accuracy is more when compare to the paper documents. So EDI makes suppliers attractive to other companies and retailers. Bar Codes: Every product has a bar code in it. The bar code reader is used to scan the bar code in the product. The Bar code reader consists of a scanner, decoder and a cable that connects reader to the computer. When a product is scanned the details of the product stored in the database. The details already stored in the database. But after scanning that there is a confirmation that the product has reached the destination. Radio Data Terminals: Radio data terminals are very effective in the control and monitoring applications. The hand held Radio Data Terminal is very useful because its portable and handy. It is used in many industries where an information is needed while on the movement of products from one place to another place. This has an internal rechargeable battery pack and an integral antenna. This also has a keypad with 20 programmable keys. This has so many features which help to communicate quickly. Radio Frequency Identity technology: Radio frequency Identification technology (RFID) is a technology that used to communicate between a reader and an electronic tag attached to the object. This is used to track the location of an object. There are three types of RFID tags. They are passive RFID tags. They are passive RFID tags, active RFID tags and also batter assisted passive (BAP) RFID tags. The passive RFID tags have no power source and active RFID tags contain a battery. The battery assisted passive RFID tags requires an external source to wake up and provides a greater range and has a high forward link capability. These are the technologies used to track the goods in the industries. By these methods we can know about where the product is moving. NAF clothing company plc has to follow SCOR model for the better performance. The effective mode of transport to be used for national requirement is through Trucking Freight and inters modal freight. For Global Distribution air freight is expensive but less in use, so Sea transportation is the better one. This must have control on stock, maintaining stock. So the company must follow the global logistic process for expanding its market world-wide.

The Lieutenant in Othello Essay -- Othello essays

The Lieutenant in Othello  Ã‚        Ã‚   Iago, in the Bard’s tragedy Othello, detests in an irrational way the very person of Cassio. Does Michael Cassio deserve the governorship of the island of Cyprus? What is his relationship with Bianca? Let’s look at these and other questions relating to the lieutenant in this essay.    David Bevington in William Shakespeare: Four Tragedies concludes that it is the â€Å"daily beauty† in the life of the lieutenant which underlies the destructive behavior of the antagonist:    The â€Å"daily beauty† in Cassio’s life makes Iago feel â€Å"ugly† by comparison (5.1.19-20), engendering in Iago a profound sense of lack of worth from which he can temporarily find relief only by reducing Othello and others to his own miserable condition. He is adept at provoking self-hatred in others because he suffers from it himself. (223)    Blanche Coles in Shakespeare’s Four Giants comments on the character of Cassio:    In a casual reading of Othello, it may seem that the character of Cassio is not sufficiently well drawn, because, for reasons connected with his portrayal of Iago, Shakespeare delays the full characterization of Cassio until almost the end of the play. However, we have a number of brief revelations of his personality that mark him distinctly – in his genuine anxiety for Othello’s safety, in his abstaining from taking part in the bold and suggestive comments of Iago to the two women as they wait for Othello’s ship and, a little later, in his sincere regret about the loss of his reputation after he has partaken of the wine which Iago has forced upon him. (85-86)    Cassio makes his first appearance in the play in Act 1 Scene 2, when he is conducting the official business of the... ...– another emotional revelation for Michael Cassio. Finally, the ultimate emotional blow to the ex-officer comes when Othello stabs himself and dies: â€Å"This did I fear, but thought he had no weapon; / For he was great of heart.†    As â€Å"lord governor† of the island of Cyprus now, Michael Cassio has charge of the â€Å"censure of this hellish villain, / The time, the place, the torture.† Lodovico appeals to Cassio to let his justice, not his mercy prevail: â€Å"O, enforce it!†    WORKS CITED    Bevington, David, ed. William Shakespeare: Four Tragedies. New York: Bantam Books, 1980.    Coles, Blanche. Shakespeare’s Four Giants. Rindge, New Hampshire: Richard Smith Publisher, 1957.    Shakespeare, William. Othello. In The Electric Shakespeare. Princeton University. 1996. http://www.eiu.edu/~multilit/studyabroad/othello/othello_all.html No line nos.

Fahrenheit 451 Pg 113-129 Journal Essay

â€Å"What is there about fire that’s so lovely?†¦ It’s perpetual motion; the thing man wanted to invent but never did†¦ What is fire?†¦Its real beauty is that is destroys responsibility and consequences†¦clean quick, sure; nothing to rot later. Antibiotic, aesthetic, practical† (Bradbury 115). This section of reading is without argument dominated by fire and its effects. For the society in F 451, fire is the magic elixir for cleansing life of its hardships and enigmas. Montag uses fire to cleanse his life of the restraints that are holding him back from freedom. Before Chief Beatty sends Montag to burn his own house, he informs Montag that fire is the solution to everything. Beatty sends Montag into his home with a powerful weapon. This powerful weapon is simply an explanation. To the reader’s dismay, the explanation is later used against its dragoman. As Montag begins to enjoy burning his own house down, he begins to concur with Beatty that fire is the solution to anything and everything. Bradbury makes it evident that Montag enjoys burning his house by using descriptive accounts like â€Å"it was good to burn† (116) and â€Å"Fire was best for everything† (116). As he fires each shot of liquid fire, Montag is incinerating his past into ash. Fire plays a contradictory role in this reading. Montag uses fire as his liberator against his past, while at the same time violates its vast power. Since Montag‘s past has held him down for so long, he is feeling pleasure getting rid of it. To do so, he uses fire’s sheer dynamism to justify his problems, a lesson he derives from Chief Beatty. Montag’s cowering back to his old way of thinking shows the reader that he may not have changed as much as he believes he did. This is the case until he gets rid of the seconds thing that is holding him back from total edification. The barrage of quotes and explanations that Beatty radiates help prevent Montag from becoming completely contumacious and incorrigible against power. To eliminate the force that prevents him from being liberated, Montag uses fire to kill a pundit of fire. Ray Bradbury has filled F 451 with instances of irony, so unsurprisingly he uses a major one in the climax of the novel. Beatty uses fire to defend his mentality and the mentality of society, but ironically the bulwarking of fire leads to Beatty’s demise. In tonight’s reading, Montag successfully exterminates two of the three things that hold him back from outright emancipation. To eliminate Chief Beatty and his past, Montag uses fire. Up to this point, Montag uses fire as a tool for dissipation. In this section, however, Montag uses fire as a tool to free himself from the restraints of a vacant life. Bradbury depicts to the reader that Montag craves change by writing â€Å"burned the bedroom walls and cosmetics chest because he wanted to change everything† (116). The third and final obstacle that is holding Montag back from utter freedom is his own conscience. If he can learn to control his feelings and reasoning, Montag will be free once and for all.

Becoming a Human and the Transformative Power of Grace

Becoming a human has both a philosophical and theological inclination. For Hegel, becoming is the unity of being and nothing. It means that being exist out of nothing and this being undergone a process of development which made the being a becoming. So becoming means the being in transit, or in the coming to be. Theologically however, becoming means more than the existence of being out of nothing.Becoming means not only transformation; it is a movement from one condition to another (Wawrykow, p.  22). Becoming involves change and development. Applying becoming to human being therefore speaks of the origination of the human beings, which was simply nothing as being come out of nothing and what men will be is still a becoming.In theology and religion, becoming a human usually apply to Jesus Christ as God who became man. In Saint Paul’s letter to the Philippians chapter two, verse. 7 referring to Jesus, Paul says â€Å"but made himself nothing,† Here the essence of becom ing is clearly manifested.It was from this situation that Jesus became human and Paul goes on to say that when Jesus became nothing he was becoming a human â€Å"taking the very nature of a servant† verse 7. Jesus previous condition according to Paul is that he was â€Å"in the very nature of God† Verse 6 in which he has moved to a different condition of becoming a human being. In his letter to the Romans, Paul describes the human condition in Chapter 3 verse 23, as being lost in sin and had fallen short of God’s Glory.Paul categorically said that all have sin and God will punish everyone with sure death because of the sins committed. The gravity of man’s sins according to Saint Paul is that even men knew God â€Å"they neither glorified him as God, nor gave him thanks† Chapter 1 verse 21. Thus, Jesus becoming a human is an act of grace made available by God to human being. This is clearly explained by Paul in chapter 6 verse 23, which says,  "For the wages of sin is death but the gift of God is eternal life in Christ Jesus our Lord† (NIV).Here there are two theological discussions involve about the condition of human being. First, all human beings according to Paul have fall into sin and deserved God’s punishment. Andrew Purves and Charles Partee call this fallen condition as depravity. Although depravity for them does not mean of total abandonment of God of the human being, they pointed out that human depravity means, â€Å"nothing about us is beyond the reach of sin. In other words, all the human faculties are exposed to sin and are indeed contaminated by sin.Paul admits this in Romans Chapter 7: 14-25, in his confession of his condition with sin contaminating all his being. Paul confessed that he wants to good but he cannot do the good he wants but the evil the he do not want to do. In verse 23 Paul explained that the reason of his struggle is that there is another law at work in him. Paul said, â€Å" But I see another law at work in the members of my body, waging war against the law of my mind and making me prisoner of the law of sin at work within the members of my body† Romans 7: 23.Because of this condition of the human being, Paul emphasized that there is an extreme need for human being to be rescued from the fallen condition. Theologians call this as redemption. This was exactly the purpose of Christ’s human becoming which Paul explained in his letter in Philippians chapter 2. G. M. Newlands contends that Jesus life, death, and resurrection were in relation to humanity in order to be reconciled to God. Newlands pointed out, â€Å"It is through the transformative humanity of Jesus Christ that we recognized the divinity within him† (p. 107).He meant that God is not only compassionate on the human being’s predicament but also the source of effective transformation. The nature of God’s grace according to William B. Arnold, there are two importa nt manifestations of God’s grace. According to him, God’s grace Comes to us â€Å"freely and without dependence on our asking† (p. 30). Paul in Romans Chapter 5 verse 8 explains this, Paul says â€Å"But God demonstrates his own love for us in this: While we were still sinners, Christ died for us. † Arnold pointed out that God’s transformative grace is God’s initiative.The implication of God’ transformative grace in human being is that it reconciled man to God, in a way that his fallen nature has been restored to its former condition prior to his fall in to sin. Paul stated in Romans chapter 11 verses 30 that gentile people had been at one time disobedient to God â€Å"have now received mercy as result of their disobedience. † Conclusion Human becoming must be seen in the context of Jesus intension of taking human dorm and live a human life, and die on the cross for the forgiveness of sin and for the redemption of humanity from the fall to sin.The transformative grace of God has been the God’s initiative and the proof of God’s love for his creation, as he did not totally leave humans just by them selves despite of their sins. The transformative grace is the grace of God that enables human to able to be united with God, through the work of the Holy Spirit. It is also the saving grace of God given to human being through the life, death, and resurrection of Jesus Christ, that who ever believes in him shall not perish but have eternal life, John 3: 16. He be then a new creation and his old fallen nature is gone I Corinthians 6:17.Work Cited Arnold, Williams. Introduction to Pastoral Care. Pennsylvania, USA: The Westminster Press, 1982. Newlands, George M. Christ and Human Rights: The Transformative Engagement. England: Ashgate Publishing Limited, 2006. Purves, Andrew and Partee, Charles. Encountering God: Christian Faith in the Turbulent Times. USA: Westminster John Knox Press, 2000. Wawrykow, J oseph Peter. The SCM A-Z of Thomas Aquinas. London: SCM Press, 2005. John 3: 16 Romans 1:21 Romans 3:23 Romans 5:8 Romans 6:23 Romans 7:14-25 Romans 11:30 I Corinthians 6:17

buy custom Free Case Study Sample about Logistics and Supply Chain Management

buy custom Free Case Study Sample about Logistics and Supply Chain Management Assessment and Briefings of Logistics and Supply Chain Management Introduction to Logistics and Supply Chain Management If a company produces a product or offers a service that consists of several parts that are sold to the customer, then supply chain is one of the main aspects of the business. By managing this supply chain, it is possible to illustrate logistics as well as management practice that directs the flow of services and/or goods to the customer by means of delivering the best quality. Every company that either produces products or offers services on the market has to ensure thorough logistics and supply chain management. Heads of the companies all over the world should evaluate the quality this procedure and constantly improve it to remain afloat in the industry. Analysis of the company that the research is going to use as an example will allow to illustrate aspects of both logistics and supply chain management.

Arguements against cloning essays

Arguements against cloning essays In 1997 the world was introduced to a six month old lamb named Dolly, the first successfully cloned mammal, putting everyone around the world into shock. The time has come where our technology in science and medicine have advanced so much that human cloning has left science fiction and has now progressed into science. A high percent of people feel that there could be nothing good we could get out of cloning human beings and nothing scientifically or medically important would be lost by banning colonal reproduction (Kass). According to a poll taken by CCN of 1,005 adults in 1997, 69% said they are afraid of the possibility to clone humans, 89% feel it is morally unacceptable, and 74% believe human cloning is against Gods will (Robinson). There are, however, those who support the cloning of humans. A select amount of scientist feel that research cloning will lead to cures and treatments for the sick and cloning would also allow people to produce or raise a child to whom they are b iologically connected (Wachbroit). Although these are a few hopes of creating a human clone, such processes should be banned not only because they are extremely risky for the clones and the women who would birth them, but it would also diminish our world that is valued for individuality, despite the feelings of cloning supporters on the contrary. Although many scientists who support cloning do so in good intentions to help create cures for those who have diseases that we do not have treatments for, there are other ways of doing so without cloning. It would almost be impossible to restrict some forms of human cloning without banning it completely. The lives of humans are more valuable than to risk one for the benefit of another. Also, once research cloning is allowed and embryos become available, even the tightest regulations would not be able to prevent to birth of cloned babies (Robinson). Instead of using cloning to m...

Capital Budgeting Process and Decision

For any company, success is determined by capital budgeting decisions. This is one of the decisive factors for the failure or success of a company. Financial managers are tasked with perhaps some of the most important decisions that affect the business (Capital Budgeting Valuation, 2013). However, it is important to note that there are several factors that combine to make decisions in capital budgeting these decisions continue for a number of years, thus, the decision makers or the managers are part of this flexible process. Since capital assets must be used when needed, then this makes opportunity a very important consideration in the capital budget. Capital budgeting process is important because expansion of assets implies very large expenditure.   Before a company uses a very large amount of money on a project the managers should ensure that the company has sufficient available funds to finance the entire project. Two examples of capital budget decisions (Donovan, 2006). Information required within the firm may vary in accordance to the level of organizational structure.   Senior executives or CEOs decisions are structured less in the sense that there are no situations that are repetitive and subsequently no single solution can be applied; On the other hand, evaluation and assessment criteria and points of view should be known for each situation where the data is accurate and must come from subjective and external in uncertain and risky environments. Since it is not possible to determine and control all the variables or factors that affect a situation, it is that models are sought to represent reality for their analysis in the hope that those decisions made are satisfactory and not optimal decisions within the context of rationality of who They must make decisions (Kalyebara, & Islam, n.d.) . Specific and concrete at each level to the lowest levels. The information required in all these decisions represents the point of departure for carrying out a ctions that will ultimately affect the performance of the organization Capital Structure of the Company The optimal capital structure is that for which the cost of capital is minimal: if the company is financed with this debt / equity ratio, the market value of the company will be maximum. Optimal financing structure e = Debt / Own Resources in practice is difficult to determine. Generally speaking, financing projects whose economic profitability exceeds the cost of the project itself will increase the shareholder's profitability in that difference (depending on the margin between the investment return and the cost of the debt). : It is necessary to see the project independently of the rest of the projects of the company. This approach, however, considers only the explicit cost of debt, that is to say, the derivative of comparing the revenues and disbursements originated by indebtedness. There are other costs apart from the explicit so that it diminishes the profitability of that project or even that it is negative. But the ability to borrow is not unlimited because if we borrow now, we will have to opt for more expensive debt or own financing in the future (Rasmussen, 2003).   Therefore, the debt has an implicit cost: to finance itself today with debt, may mean having to give it up in the future. This is related to the formulation of the capital budget according to which the financing of a project has to be studied within the framework of the general and future situation of the company. That is why we speak of the weighted average cost of capital at the time of comparing with the profitability of a project: the project has to be taken into account as integrated into the company and not in isolation. You have to collect all the debts of the company and find the weighted average cost to match. Capital Budget is a tool used to carry out certain cost planning processes for companies, families, businesses, among others, which would produce certain economic benefits with terms stipulated within a year. The capital budget can also be defined as a valued list of projects which may be feasible for the acquisition of new economic benefits, that is to say, for example, when a company makes a capital investment it incurs the current cash outflow and this Expected future benefits, the benefits usually extend for more than a year (Vogt, 2004). Within the Capital budget we can find the following advantages: It supports the development of the procedure and / or purpose.   It promotes interaction, communication and help between the areas of the company. They give common sense when making investment proposals. They serve to evaluate and choose a referential point of view. Within the capital budget we can also find the following disadvantages: It does not recognize the value of money over time. Your money recovery process is much slower than agreed. The way the parameter is set against which the recovery period of each project is compared to arrive at a decision (Shah, 2007).The fact that this method has these disadvantages does not mean that one should avoid its use in any circumstance that requires it, this means that they must be taken into account in order to make the best decision. The budget brings a number of advantages to the organization, being a planning tool. They include; The working capital of a company is what allows it to develop its social object, and of the administration that is made of it, it depends that the company grows at a greater or lesser speed, or in the worst case, that its assets are diminished or it leads to the definitive bankruptcy of the company(Nice, 2002). In such a way that the working capital is the basis on which the operation of a company is supported, which is why the importance of its administration will be exposed in this essay, the decisive and definitive one that can be in a business to manage and Budget correctly. Most capital budget studies focus on the problems of calculation, analysis and interpretation of risk. One of the most important tasks in preparing a capital budget is to estimate the future cash flows for a project. The forecasts for these are based on estimates of incremental revenues and costs associated with the project (Hornstein, & Yeung, 2005). In each investment proposal it is necessary to provide information on the expected future cash flows after taxes. For example, if a company is considering launching a new product that will compete with existing ones, it is not appropriate to express their cash flows based on their estimated sales. It is necessary to take into account the possible "affectation" of existing products; therefore, the estimation of cash flows should be made based on incremental sales. The key is to analyze the situation with the new investment and without it.The most important are incremental cash flows(Nice, 2002). The "sunk" costs should be omitted, the focus is on incremental costs and benefits; the recovery of past costs is of no importance to the project.. It is also important to note that certain costs do not necessarily mean a disbursement of money; it will be necessary to include the opportunity cost in the valuation of the project. The most important application of the cost of capital is the capital budget, in addition to serving to determine the decision or to buy or lease, for the repayment of bonds and in decisions to use debts or stockholders' equity. It is possible to fully fund a company with equity funds, which must be equal to the required return on the stockholders' equity of the company, and must consider their cost of capital from various sources of long-term funds (preferred shares or debt In the long term) and not only the stockholders' equity of the company.. The weighted average cost of capital is calculated as a compound value, made up of the various types of funds you will use, regardless of the specific financing for a project. Capital components are the type of capital companies use to raise funds (debts, preferred shares and common stockholders' equity), any increase in assets is reflected in any of these capital components. The cost of post-tax debt is the interest rate on new debt and is used to calculate the weighted average cost of capital (Baker, & English, 2011). Costs components of debt after tax = interest rate - tax savings (interest is deductible), is used because the value of the shares depends on the cash flows after tax. The component cost of preferred shares is also used to calculate the weighted average cost of capital; it is the rate of return that investors require and is equal to dividing the preferred dividend. Baker, H., & English, P. (2011).  Capital Budgeting Valuation  (1st ed.). Somerset: Wiley. Bierman, H., & Smidt, S. (2007).  The capital budgeting decision  (1st ed.). New York: Routledge. Blackstone, William, and Edward Christian.  Commentaries On The Laws Of England. [Place of publication not identified]: [Nabu Press], 2010. Print. Capital Budgeting Valuation. (2013) (1st ed.). Hoboken, N.J. Donovan, S. (2006).  Budgeting  (1st ed.). Minneapolis: Lerner Publications Co. Hornstein, A., & Yeung, B. (2005).  Essays on the corporate capital budgeting decisions of multinational enterprises  (1st ed.). Jacobs, Davina F.  A Review Of Capital Budgeting Practices. Washington: International Monetary Fund, 2008. Print. Kalyebara, B., & Islam, S.  Corporate Governance, Capital Markets, and Capital Budgeting  (1st ed.). Nice, D. (2002).  Public budgeting  (1st ed.). Belmont, CA: Wadsworth/ Thomson Learning. Rasmussen, N. (2003).  Process improvement for effective budgeting and financial reporting  (1st ed.). Hoboken, N.J.: Wiley. Shah, A. (2007).  Local budgeting  (1st ed.). Washington, D.C.: World Bank. Vogt, A. (2004).  Capital budgeting and finance  (1st ed.). Washington, D.C.: International City/County Management Association.

Financial Strategy Essay Example | Topics and Well Written Essays - 1500 words

Financial Strategy - Essay Example Thus, a risk-conscious enterprise already has strategic plans in hand to handle any sort of crises prior to its happening and furthermore, it would inculcate such strategies in its daily working environment which would minimize any foreseen risks so as to avoid danger. To begin with a theoretical point of view a firm that does not prioritize and foresee danger points in the ongoing business lacks the power to cope up with any kind of transformation that a potential risk may bring in the long run. It might overrate its focus upon other profit-making strategies than making alternative strategically workable plans to overcome those risks (Ackermann, pp.5-6, 2008). As a matter of fact, potential risks that big firms and organizations may face are divided into three categories which include hazard risks, operating risks and financial risks (Slywotzky, 2007). The case of Toyota is quite obvious in this regards. In the 90s, though the company enjoyed a very good position and had a well know n repute in the eyes of its consumers with leverage over other competitors, they worried about what future could bring to them since; a period of maturity never lives very long. The foreseeing ability of potential threats of the company made the executives plan for the first ever car of the 21st century by Toyota even a decade ago. They penned down unique characteristics of any comfortable car ever and assigned an engineer, who had never worked for a whole new developmental project, to transform the ideas into concrete proposal. The Japanese automaker lived up to its promises when it launched its breakthrough car Prius in the 90s. The strategy was to lend three years to the task force of the new car to analyze each aspect of the internal working of Toyota and to have the company’s first hand knowledge to produce the new generation of the model. This move worked a lot and the assigned engineer made his team from the most talented engineers whose ages reflected maturity yet eag erness in adaptability. The idea was to introduce hybrid engine in the newly-designed car. Nevertheless, the potential risk was that the competitors were experimenting the same sort of experiments. Assessing the risks, Toyota decided to make their breakthrough as fast as possible so as to be ahead of all (Slywotzky, 2007). One crucial move that Toyota took was to bring the Resident Engineers (REs) during the phase of design development who usually work at the manufacturing plants to take care of the problems that arise in the production stage. This move was taken so as to avoid any possible fault that is probable to happen in a stage where everything is in blueprint. One more strategy that it employed was to create alternative options with regards to engine design and the overall car design so that they may end up choosing one which proves to be the best among all. During the whole process, cross-referencing of the experts continued to be taking place to implement the best given ide a in the making (Slywotzky, 2007). Consequently, the world knows how Prius took over the market in a few period of time. In theory, the Competitive Strategy Theory by Michael Porter talks about certain focus points to be made and implemented by any firm to achieve a sustainable ground in any market in the absence of which the company is prone to serious losses. A firm’s risk consciousness is quite visible if it emphasizes upon planning for ‘differentiation, overall cost leadership and focus’

China Specialty Coffee Industry Assignment Example | Topics and Well Written Essays - 3500 words

China Specialty Coffee Industry - Assignment Example It is evidently clear from the discussion that the existence and mere survival of an industry lie in its ability to effectively respond to the internal and external influences. It is irrefutable that business organizations' strategies mirror their unique responses to the external challenges and opportunities in the environment which, in turn, is facilitated by their internal resources and competencies. This paper will concentrate on the responses of the China specialty coffee industry to the various internal and external influences that it currently faces. Recognizing that this sector can be properly examined through the use of different strategic management tools, this report will be utilizing famous technique PEST Analysis for the external environment scanning. Meanwhile, the internal environment will be assessed through the identification of its various stakeholders through the Porter's Five Forces Model. The next section will focus on the Chinese specialty coffee market responses in the face of social and cultural diversity. This report will thoroughly examine the impact of the social and cultural trends in the industry's strategies while assessing the efficacy if their responses. Lastly, recommendations for improvement will be identified. Gaining the traditional recognition of being a tea country, marketers are aggressively and strategically transforming China into a coffee drinking nation. From its strong preference of" jasmine, oolong, green, black, and myriads of other fragrant teas the Chinese mainland is becoming more and more attuned to the rich flavor of the coffee bean, driven by the urban savvy rich and an increasingly wealthy middle class more receptive to Western taste". The current perception of coffee as a statement of fashion leads to the creation of the China coffee industry. Coffee consumption has always been associated with a cosmopolitan lifestyle which originated from the Western nations. Thus, the Chinese coffee market is largely concen trated in large cities like Beijing, Shanghai, and Guangzhou and is dominated by adventurous, young, open-minded, affluent, urban consumers.

Local, regional, or national current event or political issue Essay

Local, regional, or national current event or political issue - Essay Example Fiscal and tax policies impact the way people live directly or indirectly according to the rates they pay for their products and services. An increase in the rate of national insurance or the income tax rate will lead to a rise in direct tax, which effect reduces the net earnings of working individuals since net income is reduced for every hour spent in the workplace. This will lead to individuals working for extra hours in order to maintain their income targets to facilitate their needs. On the contrary, this effect might make people work less since the increased taxation might act as a deterrent to productive employment work due to the high taxes and low net earnings. Changes in the benefit and tax system seek to reduce the risk of eradicating poverty. Tax and benefit reforms can be used to increase the availability of labour, therefore, increasing the economic benefit derived from the economy and ease the general level of redundancy in the country. Changes in indirect taxes can ha ve great effects on demand patterns for goods and services. An example is the rising duty on beverages and cigarettes brands. This inconveniences the users as these products are a part of our daily needs. It’s designed to put grounds for substitution effect among users thus reducing demand for de-merits goods. On the contrary, government subsidies to the producer reduce their production cost, price in the market and encourage demand expansion. In business investments decisions, capital investment in purchasing new machinery, investing in innovation and technology, specialized skills and infrastructures leads to a shortage of funds. This leads to a shortage of monetary value in the country and forces the citizens to dig deeper in their pockets in order to maintain equilibrium in the economy and facilitate the end of the projects. A government spending on transport infrastructure increases real spending on transport though in the long term it will boost the competitiveness and productivity of the country. This leads to government borrowing and debt, which allows super powers to be a part of control in the country thus they invest in foreign land having an advantage as the government favours them. Once external forces control the market, they create monopolies thus controlling the prices of products in the market. This affects the economy and its people as standard prices are not guaranteed. Contrary a budget deficit can react positively in the long-run if used in financing extra capital and spending leading to an increase in national assets stock. For example, investing in infrastructure leads to improvement in the supply-side of the economy capacity. Increased investment in social amenities; health facilities and education institution brings optimistic effects on employment and productivity. Tax systems tend to be weak, the administration handling tax collection and accounts allow unpaid tax through practices like corruption and evasion. Most tax evaders hold businesses that earn large amounts of money and controls the economy and when they evade paying tax small and medium businesses are forced to step up by paying higher taxes. In this case, there is no equal distribution of resources in the country thus no equal income distribution of wealth and yet taxes are paid on a similar scale (Begun, Pointe and Luke, 2006). Re-pricing economic alternatives, taxation is government’

Business&Management Dissertation Example | Topics and Well Written Essays - 9000 words

Business&Management - Dissertation Example These five questions are very important as it covers all major areas for studying consumer behaviours. In order to cater to those five questions, this paper has presented and discussed important sections like literature review, primary research and secondary research. The literature review has presented important theoretical background to understand the mechanism behind consumer behaviour. The primary research has obtained important data for identifying the prevailing consumers’ behaviours and secondary research has provided the factual data to link with the primary data. The gathered primary data has disclosed major trends in consumer behaviour in car markets of the UK and on the Chinese people. These primary data are also discussed and analysed in the light of the given theoretical background and secondary data. The output of the primary data analyses has supported the consumer behavioural theories and secondary data. As per the discussions based on literature review, primar y and secondary data, this paper is able to cater to the five pre-defined research questions. The consumer behaviour in automobile industry of China and UK is influenced by a number of factors like culture, economic condition, brand, quality, price etc and these factors varies as per the national culture and system of the two countries. The successful automobile companies presented in both countries are able to differentiate and identify the multiple factors influencing the consumer buying behaviour. 1. Introduction The cultural paradigm of different markets like China and Britain reflect significant impacts on the purchasing behaviour of cars and domestic vehicles. The main aim of the paper revolves around understanding the reasons or factors which bring about cultural changes and thereby affect the demand for cars in the two markets. Chinese consumers in their activity of purchasing cars render special emphasis to the paradigm of quality and service. People of China tend to buy th e cars of those companies which tend to provide the best service available in terms of sales and customer service. Further, the Chinese consumers also entertain large amount of sales packages along with the products which help in enhancing the product attributes. The Chinese consumers in addition to enhanced quality and service parameters also desire better accessibility of the vehicles in the consumer markets. This signifies that the dealership factor with regard to the branded cars must be further enhanced to help the Chinese consumers gain easy and better accessibility to such products. Moreover, the Chinese consumers are also characterized as being effective negotiators while making a deal to purchase a new car. Thus, the car manufacturers who desire to enter

Financial Reporting and Accountability exam questions Essay

Financial Reporting and Accountability exam questions - Essay Example 6 Consolidations: Qualitative 7 Why do regulators require consolidations? 7 What is fair value and why is it an important concept in consolidation? 7 Why do regulators require inter-company profits to be removed from consolidations? 7 Corporate Governance 8 What is ‘the public interest’ and what is its relationship to accounting? 8 Do we need mandatory regulation of reporting? If so how should we regulate? Are there major problems? 8 IASB and due process – what are the stages of due process – why is convergence with the US important? 9 What is the ‘market for corporate takeovers’ and the ‘market for managers’ – and what impact have these on accounting disclosure? 10 Reporting Financial Statements Why is one of the elements of the financial statements useful to shareholders? Statement of the changes in position of equity for a company provides the movement of the holding position of the equity shareholders. This statement gen erally comprises of the net profits that can be attributed to the shareholders, the changes in the share capital reserves, the dividend that is paid to the shareholder, the effect of the accounting policy changes or the any kind of changes that has been done to correct any error in the previous period. This is an essential statement that needs to be disclosed to the shareholders because the factors that have an effect on the changes in the position can be known. This statement would be reflecting the nature of the changes that take place in the equity reserves which otherwise would not be available to the shareholders. For example the issue and redemption of the share capital can only be obtained from the statement of financial position. What is the purpose of one kind of disclosure e.g. discontinued activities, or expenses such as audit? Discontinued operations of an enterprise would entail those activities by which the company would be selling a component through any transaction o r demerger or would be disposing off the assets or liabilities of the organisation or abandoning any component of the business. It is important for a company to make the disclosures of the discontinued operations because it would help in assessing the cash flows of the enterprise, the capacity to generate earnings and to make proper segregation of the information about the discontinuing operations form that of the continuing operations. Organisations should cite the evidence of auditing process in the annual statements. Thus the fees that are paid for the auditing as well as the non auditing services need to be paid. On the other hand it is considered that the independence of the auditors is essential for a sound and fair auditing process. Hence by the payment of the fees the quality of auditing in the organisation is ensured. Earnings per Share Basic and diluted EPS Basic EPS is the earnings of the company that accrues to the shareholders of the organisation. Basic EPS is derived b y dividing the net profit of the company by the total amount of outstanding shares. The amount net profit is calculated after distribution of the dividends to the preference shareholders. This may be explained with the example of the following example. Suppose the Net Profit available for a company is $ 40000. And the number of equity shares outstanding is 2000. Then the EPS of the company would be $50. Diluted EPS on the other hand is the net profit of the company divided by the number of equ

Local, regional, or national current event or political issue Essay

Local, regional, or national current event or political issue - Essay Example Fiscal and tax policies impact the way people live directly or indirectly according to the rates they pay for their products and services. An increase in the rate of national insurance or the income tax rate will lead to a rise in direct tax, which effect reduces the net earnings of working individuals since net income is reduced for every hour spent in the workplace. This will lead to individuals working for extra hours in order to maintain their income targets to facilitate their needs. On the contrary, this effect might make people work less since the increased taxation might act as a deterrent to productive employment work due to the high taxes and low net earnings. Changes in the benefit and tax system seek to reduce the risk of eradicating poverty. Tax and benefit reforms can be used to increase the availability of labour, therefore, increasing the economic benefit derived from the economy and ease the general level of redundancy in the country. Changes in indirect taxes can ha ve great effects on demand patterns for goods and services. An example is the rising duty on beverages and cigarettes brands. This inconveniences the users as these products are a part of our daily needs. It’s designed to put grounds for substitution effect among users thus reducing demand for de-merits goods. On the contrary, government subsidies to the producer reduce their production cost, price in the market and encourage demand expansion. In business investments decisions, capital investment in purchasing new machinery, investing in innovation and technology, specialized skills and infrastructures leads to a shortage of funds. This leads to a shortage of monetary value in the country and forces the citizens to dig deeper in their pockets in order to maintain equilibrium in the economy and facilitate the end of the projects. A government spending on transport infrastructure increases real spending on transport though in the long term it will boost the competitiveness and productivity of the country. This leads to government borrowing and debt, which allows super powers to be a part of control in the country thus they invest in foreign land having an advantage as the government favours them. Once external forces control the market, they create monopolies thus controlling the prices of products in the market. This affects the economy and its people as standard prices are not guaranteed. Contrary a budget deficit can react positively in the long-run if used in financing extra capital and spending leading to an increase in national assets stock. For example, investing in infrastructure leads to improvement in the supply-side of the economy capacity. Increased investment in social amenities; health facilities and education institution brings optimistic effects on employment and productivity. Tax systems tend to be weak, the administration handling tax collection and accounts allow unpaid tax through practices like corruption and evasion. Most tax evaders hold businesses that earn large amounts of money and controls the economy and when they evade paying tax small and medium businesses are forced to step up by paying higher taxes. In this case, there is no equal distribution of resources in the country thus no equal income distribution of wealth and yet taxes are paid on a similar scale (Begun, Pointe and Luke, 2006). Re-pricing economic alternatives, taxation is government’

Financial Reporting and Accountability exam questions Essay

Financial Reporting and Accountability exam questions - Essay Example 6 Consolidations: Qualitative 7 Why do regulators require consolidations? 7 What is fair value and why is it an important concept in consolidation? 7 Why do regulators require inter-company profits to be removed from consolidations? 7 Corporate Governance 8 What is ‘the public interest’ and what is its relationship to accounting? 8 Do we need mandatory regulation of reporting? If so how should we regulate? Are there major problems? 8 IASB and due process – what are the stages of due process – why is convergence with the US important? 9 What is the ‘market for corporate takeovers’ and the ‘market for managers’ – and what impact have these on accounting disclosure? 10 Reporting Financial Statements Why is one of the elements of the financial statements useful to shareholders? Statement of the changes in position of equity for a company provides the movement of the holding position of the equity shareholders. This statement gen erally comprises of the net profits that can be attributed to the shareholders, the changes in the share capital reserves, the dividend that is paid to the shareholder, the effect of the accounting policy changes or the any kind of changes that has been done to correct any error in the previous period. This is an essential statement that needs to be disclosed to the shareholders because the factors that have an effect on the changes in the position can be known. This statement would be reflecting the nature of the changes that take place in the equity reserves which otherwise would not be available to the shareholders. For example the issue and redemption of the share capital can only be obtained from the statement of financial position. What is the purpose of one kind of disclosure e.g. discontinued activities, or expenses such as audit? Discontinued operations of an enterprise would entail those activities by which the company would be selling a component through any transaction o r demerger or would be disposing off the assets or liabilities of the organisation or abandoning any component of the business. It is important for a company to make the disclosures of the discontinued operations because it would help in assessing the cash flows of the enterprise, the capacity to generate earnings and to make proper segregation of the information about the discontinuing operations form that of the continuing operations. Organisations should cite the evidence of auditing process in the annual statements. Thus the fees that are paid for the auditing as well as the non auditing services need to be paid. On the other hand it is considered that the independence of the auditors is essential for a sound and fair auditing process. Hence by the payment of the fees the quality of auditing in the organisation is ensured. Earnings per Share Basic and diluted EPS Basic EPS is the earnings of the company that accrues to the shareholders of the organisation. Basic EPS is derived b y dividing the net profit of the company by the total amount of outstanding shares. The amount net profit is calculated after distribution of the dividends to the preference shareholders. This may be explained with the example of the following example. Suppose the Net Profit available for a company is $ 40000. And the number of equity shares outstanding is 2000. Then the EPS of the company would be $50. Diluted EPS on the other hand is the net profit of the company divided by the number of equ

International Debt Essay Example for Free

International Debt Essay a) What is meant by the problem of international debt? (6 marks) b) Discuss the main policies that a country can use to reduce the problem of international indebtedness (i) in the short run and (ii) in the long run (7 marks + 7 marks) a) The Balance of Payment account shows all monetary transactions between our country and the rest of the world over a period of time. It is made up of the current account (trade in goods and services), capital account (Investments, Saving, Borrowing) and the balancing item, which represents the total of all errors and omissions from the above values, which are estimates. When a country spends more than it earns i.e. it imports more than it exports (Current account), or it saves and invests more abroad than other countries save and invest in that country (Capital account), it is said that the country has a current account deficit and a capital account deficit respectively. The country facing a BOP deficit must take actions to rectify it. It usually borrows money from other countries or international financial institutions. The accumulation of debt from loaning from abroad because of a recurring BOP deficit is known as international debt. International debt developed into a problem for many developing countries, Third world countries, which are the poorer countries of the world. These are countries in Africa, Asia and South America and they represent the largest group of countries in the world both in area and population, but the lowest in income and wealth. The cause of the international debt in LDCs is their chronic balance of payments problems. They owe huge sums of money and they need to pay large sums in interest. As a result, in the world as a whole, there is a net transfer of funds from the poor countries to the rich. b) i) The Balance of Payment account shows all monetary transactions between our country and the rest of the world over a period of time. When a country spends more than it earns i.e. it imports more than it exports (Current account), or it saves and invests more abroad than other countries save and invest in that country (Capital account), it is said that the country has a current account deficit and a capital account deficit respectively. The government of a country may take actions to rectify this deficit. In the short run a country can borrow from financial institutions and other countries to correct its Balance of Payments deficit. An alternative would be to use its reserves (Gold and foreign currencies) to correct its deficit. These are temporary ways to correct the deficit and do not fight the source of the problem, they do not stop it from occurring the following year. ii) In the long run the country can take actions that would eliminate the problem that cause the BOP deficit. A country can use many different policies to correct and reverse the deficit. If the government increases taxes and, or, decreases public expenditure, there will be less money circulating in the economy and the aggregate demand would decrease. People will have less money to spend on imports, imports would decrease and the BOP deficit will be corrects. Nevertheless, a decrease in aggregate demand also affects the domestic industries. Less of their products would be demanded, they will produce less and as a result they will cause unemployment. The government can also decide to increase interest rates. This will attract inflows of Hot money (Short term investments of large sums of money that investors move from country to country in search for the best interest rates) into the country correcting the BOP deficit. The downside of this will be that the high interest rates will make borrowing more expensive and as a result consumers will borrow less for consumption and firms less for investment. Protectionism policies may be applied. These are policies to prevent trade between countries and decrease imports so that the BOP deficit is corrected. Unfortunately some protectionist policies such as import tariffs or imports quotas are usually not in the disposal of countries members of custom unions such as the European Union. A devaluation in the countrys currency will lower its value and make the countrys exports cheaper for foreign countries to buy and at the same time the imports into that country will be more expensive. As a result exports will increase and impost will decrease, thus the BOP deficit will be corrected. This is not possible for members of the ERM of the EU. In the long run a country may decide to improve the competitiveness of its Industries through supply side measures such as regional policies. Nevertheless, these policies are very time consuming and will take a lot of time to work. The country can also demand through the IMF a debt rescheduling and or new loans. This involves lowering the interest rates on existing loans, lengthening the repayment period and, or, canceling part of the debts. The IMF can provide additional loans or arrange so that financial institutions do it, with a guarantee from the IMF. In order for the IMF to do these it sets certain conditions and structural adjustment programmes that the country must follow. These conditions and programmes involve most of the policies discussed above. A further, policy would be to encourage commercial banks to finance private sector development. If governments spend too much they have a budget deficit and their income is less than their expenditure. This deficit is financed by borrowing large amounts from commercial banks and as a result not many funds are left to lend to the private sector. The IMF wants commercial banks to lend more money to the private sector, which is expected to make better use of the funds for development projects.

Marks and Spencer Business and Financial Performance Analysis

Marks and Spencer Business and Financial Performance Analysis Marks and Spencer is a British retail giant specialised in apparel and food industry. The company had been in its business for more than hundred years and has the biggest market capitalisation in the retail industry. This research is conducted to measure and analyse the business and financial performance of the company. Business performance is measured in this study considering the opportunities and constraints in company macroeconomic and industry circumstances. Financial performance had been measured using ratios on profitability, liquidity, efficiency and leverage. There performance of MS is then compared with the financial performance of Next Group, the next biggest player in British retail industry. The study found that, although MS has many business successes over the years, it had been performing financially poorer than Next Group and needs emergency improvement in its liquidity. The study recommends Marks and Spencer to rethink its leverage strategy and exploit the benefit of debt as like Next Group. Chapter 1 Introduction 1.1 Study Background Marks and Spencer is one of the largest retailers in UK specialised in clothes and foods with a market capitalization of more than  £6400 million1. We have over 700 stores located throughout the UK and Republic of Ireland; this includes our largest store at Marble Arch, London. In addition, the company has over 300 stores worldwide, operating in more than 40 territories2. In 2010 the companys sales revenue from general merchandise was  £4.1 billion and  £4.3 billion from foods. Its nearest competitor Next, which has a market capitalisation of around  £4100 million1, had a turnover of  £3.41 million in 2010 with a market share of 8.3% in comparison to 11% by Marks and Spencer in general merchandise segment. This study is particularly concerned with the business and financial performances of Marks and Spencer which are compared with the performances of Next. 1.2 Study Objectives The prime objective of this research is to analyse and evaluate the key business and financial performances of British retail giant Marks Spencer from year 2007 to 2010. While achieving this objective the research will try to meet the following secondary objectives 1.2.1 Analyse the major business performances of the company over last three years: The study will examine the companys performances in major business areas including its growth, market share, competitive position in the whole macro environment and major strengths over its competitors. 1.2.2 Identify and analyse the measures key financial performances: The second objective of the study is to identify the measures of companys financial performances especially in profitability, liquidity, investment and leverage performances. Besides this operational performances in other areas would be identified and anlaysed under this objective. 1.2.3 Compare the performances against Next: The third objective of the study is to compare the financial performances of M S with the performances of Next, the nearest competitor in general retail section. 1.2.4 Identify the major problems of Marks Spencer in business and financial performances and provide recommendations: Finally the study will try to identify the major weaknesses of Marks Spencers based on the measures of business and financial performances. The research will also formulate 1.3 Study Scopes and Usefulness of the Study Scope of this research work is three years (2007-2010) business and financial performances of Marks and Spencer. The scope also includes financial performance of Next for the same period. The findings of the study can be useful information for investors. The method used by the study can be a guide for the business and financial analysts. 1.4 Research Structure The research paper is structured in line with the sequence of objectives. The first chapter includes the rationale and objectives of the study. Then relevant literatures and theoretical issues are discussed in chapter two. The third chapter will present the methods of conducting this research work. Companys business performances and financial performances would be presented consecutively in chapter four and five. In chapter six Marks and Spencers performance will be compared with Nexts performance and areas of improvement for M S would be identified. Finally in chapter six recommendations would be provided with final remarks. Chapter 2 Literature Review 2.1 Introduction As discussed earlier, this research work is concerned with the business and financial performance of Marks and Spencer. This chapter will narrate an overview of the business operation of the company. This chapter will also review the techniques of measuring business and financial performance especially using qualitative and quantitative techniques along with brief interpretation of the performance measures. 2.2 Marks and Spencer: An Overview Marks and Spencer is a FTSE 100 company with the largest revenue base of more than  £8 billion as a retailer. It is headquartered in City of Westminster, London having operation in more than 40 countries. The following section provides a brief discussion on companys history, main line of business, geographical spread, summary of financial performances, its corporate social responsibility and the management. 2.2.1 Corporate History Marks and Spencer was established in 1884 by Michael Marks and Thomas Spencer3. The company had a policy of selling only British-made goods which made it popular in early 20th century. It started its apparel brand St Michael in 1928 and in 1950 St Margaret label was introduced for woman clothing. The company started its international expansion in 1970s by putting its step in central Europe and Ireland. During its hundred years of lifetime the company became the pioneer in quality management, customer relationships, health and safety and energy efficiency. The companys performance briefly slumped during the first decade of new millennium. However, the company is back to profit and growth in 2010 under the strong leadership of Marc Bolland who joined the company as CEO in May 2010. 2.2.2 Core UK Businesses M Ss core UK businesses include general merchandise and foods. It is largest clothing retailer including womenswear, lingerie and menswear and kidswear. Last year the companys turnover in general merchandise was  £4.1 billion which constituted an stunning 11% of the overall market share. Marks and Spencer is also the leading provider of high quality food, selling everything from fresh produce and groceries, to partly-prepared meals and ready meals and an award winning range of wines. Turnover from foods was  £4.3 billion in 2010 with a modest market share of 3%. 2.2.3 Sales Channel Customers shop with MS in many ways in stores, online or over the phone (MS Annual Report, 2010). The company has 690 stores across the UK. Its shops are located in convenient locations from high streets to retail parks, train stations to airports. Over the past four years the company has transformed these stores into bright and contemporary destinations with a range of hospitality options. The company also sells online which it calls MS Direct. MS Direct is a platform for improving customer convenience and service including via its website and newly launched Shop Your Way facility. The company aims to achieve £500m in sales through MS Direct by 2010/11. 2.2.4 International Business MS has 320 owned and franchised stores in 41 countries. The companys mix of ownership models and countries enabled it to perform well over the past year even when individual markets were weak. In 2010 its international turnover was  £949 million which is more than 15% of its overall revenue. 2.2.5 Recent Business and Financial Performances In 2010 the companys sales were up by 3.2% despite recessionary pressure. The overall gross margin was 41.2% with sales revenue  £9.3 billion. The company significantly improved its cost by saving  £145 million. The company reduced its capital expenditure cash outflow and generated a cash inflow of  £412m after tax and dividend. However, the companys market share was slightly down from 4.3% to 3.9%. Average visit to MS shops had been estimated around 21 million and average mystery shopper score was found to be stunning 89% in 2010. 2.2.6 About Next: The Nearest Competitor NEXT is the second largest UK based retailer offering clothing, footwear, accessories and home products. It distributes through three main channels: NEXT Retail, a chain of more than 500 stores in the UK and Eire, NEXT Directory, a home shopping catalogue and website with nearly 3 million active customers, and NEXT International, with more than 180 stores around the world. In 2010 the company had overall revenue of  £3.4 with a profit after tax of  £400 million. 2.3 Techniques of Measuring Business Performances A companys business can be analysed using various tools like PESTLE, SWOT analysis and Porters five force models. Measures of business performance might be companys expansion rate, revenue growth, development of strength, management of weaknesses and exploitation of opportunities etc. These measures can be achieved by subjective analysis and using business analysis tools. A brief discussion on these tools is presented as below. 2.3.1 PESTLE Analysis PESTLE, which is a popular macro-environmental analysis tool, stands for Political, Economic, Social, Technical, Legal, and Environmental analysis. Political factors include governments tax policy, employment and environmental law, trades and tariffs regulation, and political stability. Common Economic factors are GDP growth, nominal interest rates, exchange and the inflation rate. Key social factors are population growth, age distribution, health consciousness, religious views and career attitudes etc. Technological factors are spread and dependence on technology, innovation, research, and technological change etc. Legal factors are laws on discrimination, consumer, heath and safety law etc. Finally environmental factors include weather, climate, climate change etc. 2.3.2 Porters Five Force Model The five forces model is an industry analysis tool and provides a good idea of how a business should perform inside an industry. The model analyses five industry variables. These variables are ease of getting entry into industry, availability and potentiality of substitute products, suppliers and customers bargaining power and degree of competition in the industry. These factors determine how attractive and profitable an industry might be. 2.3.3 SWOT Analysis PESTLE and Porters models are used to analyse a companys macro and industry environment. SWOT Analysis is used for measuring a companys internal strengths and weaknesses. It also helps to identify specific opportunities and threats to company from the macro environment. 2.4 Techniques of Measuring Financial Performances Generally, financial performances are measured using the financial information of a company. Practically, ratio analyses are conducted on financial statement figures. Financial statements include companys income statement, balance sheet, statement of cash flow and statement of equity. There are several types of ratios profitability, liquidity, efficiency, gearing, and investor ratios. In following sections these groups of ratios are briefly discussed 2.4.1 Profitability Ratios These ratios are also called performance ratios where profit at different levels are compared with other figures and expressed in percentage. These ratios are (a) Gross Profit Margin: Gross profit margin is found by dividing gross profit by sales turnover and the formula looks like following The ratio can be a good indicator of companys direct cost or cost of sales. Profitability of a company in its core operation can be determined using this ratio. The higher the ratio the better it is. (b) Operating Profit Margin: Operating profit margin is found by dividing net profit by sales turnover and the formula looks like following As operating profit is found by deducting indirect expenses from gross profit, the ratio shows how much a company spends on non-direct activities. Too much cost on indirect cost might result in lower or negative operating profit margin. (c) Return on Capital: Shareholders and debt investors generally count profit on their investments. Return on capital can be calculated using the following formulas This ratio (ROCE) provides percentage return on the overall funds invested in the business. There is another ratio that provides return on stockholders equity which is called Return on Equity (ROE). The formula is as following ROE measures the profitability of the fund provided by the companys owners or shareholders. Profit margins and return on capital ratios together gives a good idea of overall profitability of the firm. A company having very good profit margin may have a poor ROCE or ROE ratio. Such cases happen when companies large investment operates in small scale or during the initial years. 2.4.2 Liquidity Ratios These are also known as solvency ratios, as they refer to the ability of the business to pay its payables in the short term. There are two main liquidity ratios. (a) Current Ratio: This is also known as the working capital ratio, as it is based on working capital or net current assets. It is calculated as: Current ratio is a measure of the liquidity of a business that compares its current assets with those payables due to be paid within 1 year of the statement of financial position date (otherwise known as current liabilities). (b) Quick Ratio: This is also known as the acid test ratio and is calculated as following This is similar to the current ratio, but takes the more prudent view that inventories may take some time to convert into cash, and therefore the true liquidity position is measured by the relationship of receivables and cash only to current liabilities. 2.4.3 Efficiency Ratios These ratios are also referred to as use of assets ratios. They measure the efficiency of the management of assets, both non-current and current. (a) Asset Turnover Ratio: These ratios compare the assets with the sales revenue (turnover) that they have earned. The end result is often expressed in money value to represent the value of sales revenue for each $1 invested in those assets. The formula is: (b) Inventory Days: Inventories may be analysed by calculating the ratio of inventories to cost of sales, and then multiplying by the number of days in a year to give inventories days. The formula is as following This figure gives the number of days that on average an item is in inventories before it is sold; this may alternatively be expressed as the number of days a firm could continue trading if the supply of goods ceased. (c) Receivable Days: This is a measure of the average time taken by customers to settle their debts. It is calculated by: As with inventories days, a slowing down in the speed of collecting debts will have a detrimental effect on cash flow. On the other hand, it may be that the business has deliberately offered extended credit in order to increase demand. (d) Payable Days: This is a measure of the average time taken to pay suppliers. Although it is not strictly a measure of asset efficiency on its own, it is part of the overall management of net current assets. It is calculated by: The result of this ratio can also be compared with the receivables days. A firm does not normally want to offer its customers more time to pay than it gets from its own suppliers, otherwise this could affect cash flow. Generally, the longer the payables payment period, the better, as the firm holds on to its cash for longer, but care must be taken not to upset suppliers by delaying payment, which could result in the loss of discounts and reliability. It is important to recognise when using these ratios that it is the trend of ratios that is important, not the individual values. Payment periods are longer in some types of organisation than in others. 2.4.4 Capital Structure Ratios Different firms have different methods of financing their activities. Some rely mainly on the issue of share capital and the retention of profits; others rely heavily on loan finance; most have a combination of the two. (a) The Gearing Ratio/Leverage Ratio: Gearing is a measure of the relationship between the amounts of finance provided by external parties (e.g. debentures) to the total capital employed. It is calculated by: The more highly geared a business, the more profits that have to be earned to pay the interest cost of the borrowing. Consequently, the higher the gearing, the more risky is the owners investment. On the other hand, a highly geared company might be more attractive to shareholders when profits are rising, because there are fewer of them to share out those profits. (b) Interest Cover: Connected to the gearing ratio is a measure of the number of times that the profit is able to cover the fixed interest due on long-term loans. It provides lenders with an idea of the level of security for the payment. The formula is: 2.5 Using Ratio Analysis Calculating the ratios is only one step in the analysis process. Once that is done, the results must be compared with other results. Comparison is commonly made between: Previous accounting periods; Other companies (perhaps in the same type of business); Budgets and expectations; Government statistics; Other ratios. 2.6 Conclusion This chapter gave brief overview of Marks and Spencer and also the tools and ratios that will be used to analyse the business and financial performances the company. The same ratios will be used to compare the performance of MS with Next. The next chapter will provide a brief overview on the research methodology and data that will be used for the research. Chapter 3 Research Methodology 3.1 Introduction Methodology may be defined as procedures that are used to conduct a function or activity. This chapter will briefly discuss on the methodology that will be used to analyse the business and financial performance of Marks and Spencer and comparing its performance with that of Next Inc. This section will also provide an overview of the data used in this study and their sources. 3.3 Required Data, Sources and Collection Methods Data required for completion of this research work are of secondary nature. Mark Spencers business related information were collected from companys website and annual reports of three years 2007, 2008 and 2009. Annual reports were collected from company website. The data required for macro-environmental analysis were collected from various articles, national statistical websites and newspapers. Financial information required for analysing financial performances are extracted from the annual reports of the company. Financial information of Next was collected in the same way. Findings of financial performance analysis are then used to identify the areas of improvement for MS. 3.4 Research Methodology Various quantitative and qualitative methods had been used to achieve the objectives these research. The nature of the methodologies are briefly discussed as following 3.4.1 Method for Analysing Business Performances: Method used for this purpose is qualitative. PESTLE analysis had been used for analysing the business performance in macro-environment. Porters model were used for analysing industry performance and position of MS. Finally, SWOT analysis was used to find out company specific opportunities and threats and companys key strengths and weaknesses. (See Chapter One to have idea of these tools). 3.4.2 Methods Used for Analysing and Comparing Financial Performances: Financial ratio analysis (discussed in chapter 1) is used to analyse the companys performance in profitability, liquidity, efficiency and leverage. The values of these ratios are compared against the ratios of Next to compare the performances of two companies. For presentation of findings different types of charts were used. 3.4.3 Methods of Identifying Improvement Areas: Areas of improvement would be identified using the findings of financial performance analysis using ratios. The areas where Next is performing better than MS would be identified as areas of improvements. After identifying areas of improvement strategy would be formulated to eliminate problem areas in companys financial performances. 3.4.4 Research and Data Analysis Tools Microsoft Excel 2007, which is a popular spreadsheet application, is used for conducting the ratio analysis and presenting findings of analysis graphically. 3.5 Conclusion This chapter provided a brief overview of the research data, methods and tools used in this research. In next, chapter the findings of the research would be presented followed analysis of findings. Chapter 4 Analysis and Findings 3.1 Introduction This research is conducted based on the information available on the Annual Reports of Marks and Spencer and Next Group as well as on the findings of professional business analysts found on reliable internet sources. In this chapter, the most important section of this study, key findings of companys business performance in light of PESTLE, Five-Forces and SWOT analysis and also the financial performance over last three would be presented. A comparison of performance with Next Group would also appear in this section. 3.2 An Analysis of MSs Business and Performance Summary Business performance of Marks and Spencer can be measured in reference to the factors available in macro-economic environment, factors in apparel and food industry and in terms of companys strengths and weaknesses. The findings of business analysis are presented as following. 3.2.1 Findings from PESTLE Analysis MSs Performance Key factors relevant to Marks and Spencers business found from PESTEL analysis can be summarised as following (table 3.1) Recent political development in United Kingdom is posing threat to many businesses in form of rise in tax rate, cut of social benefit and cap in immigration. There is also setback of recession that had injured the British economy significantly. Despite these negative elements in political and economic environment Marks Spencers revenue has grown at a steady rate over last three years (See Chart 4.1) showing no sign of recessionary impact on its business. Social environment however demonstrate goods signs for clothe and food retailers. Marks and Spencer had introduced various successful brands that meet the changing social pattern and consumer demand. The company is also successful in adopting technologies. Its ecommerce sales have increased at a sizable chunk in last few years. MS has also successfully used consumer research technologies for identifying market demands and customer needs. The retailer has proved it as one of the most energy conscious and environmentally friendly comp any in British history. Marks and Spencer is a century old company and had well adopted itself in the macroeconomic context of United Kingdom. British retail industry is run by a few very big players. In apparel retailing the popular names are Marks and Spencer, Next and Debenham. However, food retailers like Tesco and Asda are trying to get into apparel market with lower prices. However, for completely new businesses it would be very tough to challenge companies like Marks and Spencer which have grown its market share by 4% from 7% to 11% in cloth and general merchandise. The companys market share has also improved by 2% in 2010. However, MS could not maintain its image regarding its relationships with suppliers. Many international pressure groups had criticised its bargaining power on its suppliers. 3.2.2 SWOT Analysis and MSs Performance Marks and Spencer is well capitalising on its strength by adding more clothing brands and stepping foot in international markets. Last year companys international revenue was more than  £900 million with a growth of 5%. The company also have capitalised on ecommerce technology; in 2010 MS Directs revenue grew by 27%. Financial Performance Analysis In this study, Marks and Spencers financial performance have been analysed on four performance areas. These areas were profitability, liquidity, efficiency and leverage. For measuring performance in these areas eleven different ratios had been used. The findings of ratio analysis are presented as following. 3.3.1 Profitability: MS vs. Next Average operating profit of MS and Next is respectively 11% and 15%. Though revenue of both the companies grew over the period, operating profit was steady. However, according to findings Next Group is more profitable than Marks and Spencer. Nexts Return on Capital Employed and Return on Equity are also significantly higher than MS (See Figure 4.3 and 4.4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Based on the above analysis, the research concludes that Next Group is a highly profitable business by providing extra ordinary return to its equity holders. Liquidity Performances Both the companies liquidity is poor scoring far below standard value of 2:1. Marks and Spencers liquidity is at an alarming level of around 50% capability of paying off its current liabilities. Also, over the year none of the retailers could improve liquidity performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.4 Efficiency Although in profitability and liquidity M S is lagging behind Next, in case of efficiency in receivables, payables and inventory management MS had been showing excellent dexterity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The ratios (Figure 4.6) indicate that, inventories are sold in 23 days by MS and in 40 days by Next after purchase. On the other hand, MS is capable of collecting its receivable assets within eleven days of sales which Next can do in 67 days. Payable days are matched with receivable days. However, though MSs collection from customers is faster, its payment frequency to suppliers is a little slow. This might a sign of efficiency in working capital management. The reason behind MSs extra ordinary efficiency is because of its long experience in British industry. Average Asset Turnover Ratio of MS over the last fours years is below 1.5 which is above 2.0 for Next. The ratio indicates that MS can generate sales of around  £1.34 against  £1 of its assets which, though is not poor, in comparison to Next is pretty ordinary. 3.3.5 Leverage Performances Leverage indicates the use of debt in boosting of equity return. Both Marks and Spencer and Next Group use debt which is reflected in their gearing ratios (See Table 4.7). .From Figure 4.8 it can be easily understood that Next Group a highly geared company in comparison to Marks and Spencer. MSs policy seems to be keeping long-term debt less than 50% in its balance sheet. The leverage ratio better explains why Nexts Return on Equity is very high. Now question is are the companys comfortable with these levels of leverage? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In managing its leverage MS is again performing poorer than Next. While Nexts average interest cover ratio is 13.45 times, MSs one is only around 6 times. The figures indicate that, MS generate only around  £6 of operating profit for paying  £1 of debt cost. Therefore the leverage ratios indicate that MSs competitor is better managing its leverage with higher interest coverage ratio against higher leverage rate. 3.4 MS Summary of Business and Financial Performance Business Performance Summary Financial Performance Summary Marks Spencers revenue has grown at a steady rate over last three years Introduced various successful brands that meet the changing social pattern and consumer demand. Ecommerce sales have increased at a sizable chunk in last few years. Successfully used consumer research technologies for identifying market demands and customer needs. Most energy conscious and environmentally friendly company in British history. Grew its market share by 4% from 7% to 11% in cloth and general merchandise. Market share has also improved by 2% in 2010 in foods. MS could not maintain its image regarding its relationships with suppliers. International revenue was more than  £900 million with a growth of 5%. The company also have capitalised on ecommerce technology; in 2010 MS Directs revenue grew by 27%. Average operating profit margin is 11% in comparison to 15% of Next; Liquidity performance is very poor; Both current and quick ratios are less than 0.5; Average asset turnover rate is more than 1 in comparison to 1.5 of Next; Inventory, receivables and payables management is highly efficient and better than Next; Moderately levered company while Next is a highly levered one; Interest coverage ratio is healthy; but Next is doing better which shows the rationale behind using more debt by Next Overall financial performance of MS is not satisfactory against its competitor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Table 4.9: Performance Summary Chapter 5 Conclusion Recommendations 5.1 Introduction In previous section, it has been observed that Marks and Spencers financial performance is not satisfactory in comparison to Next Group. Except the efficiency areas, MS needs to improve itself in profitability, liquidity and leverage. 5.2 Improving Profitability MSs average operating profit margin was only around 11%. It is found that though companys revenue has grown in last three years its profit margin shrank because of increase costs. Marks and Spencer needs to cut its operating costs to match its profitability with the industry. 5.3 Improving Liquidity The companys liquidity is below the alert level which had been persistent over last four years. Although for very large and established companys it is not a big concern. However, in times