...American Home Products Corporation INTRODUCTION The chief executive of American Home Products (AHP), William F. Laporte, is a man who is debt averse. Mr. Laporte is a man who does not like to spend money and his management style has produced outstanding financial success. However, Mr. Laporte will be retiring soon, which could mean AHP will have a new executive who may wish to change the capital structure by adding debt in order to increase shareholder wealth. At the time, AHP had practically no debt on its balance sheet; while the most comparable company, Warner-Lambert had a debt ratio of 32% and a bond rating between AAA and AA. PROBLEM STATEMENT The inevitable retirement of AHP’s chief executive has analysts wondering what, if any, change to AHP’s capital structure might look like. Furthermore, analysts are curious to know what the size of the payoff would be with such a policy change. ENVIRONMENTAL ANALYSIS There are both advantages and disadvantages to leverage in a capital structure. If AHP chose to use leverage in their capital structure the interest expense would be tax deductible and therefore lower the cost of the loan and their tax liability. Additionally, by incorporating debt into their capital structure AHP would only have to pay back the loan principal plus interest; whereas with equity, shareholders have direct claim on future profits, if any. Conversely, the larger debt-to-equity ratio, the more risky AHP would appear to investors due to the greater possibility...
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...BACKGROUND In 1981, AHP had reached sales of more than $4 billion by producing 1,500 marketed brands in 4 different kind of business; prescription drugs, packaged drugs, food products, and housewares and households products. Moreover, AHP is known to be the largest and profitable business in prescription of drugs; however, the company has a sizable market share in antihypertensive, tranquilizers, and oral contraceptives. The company has almost debt- free balance sheet and growing cash reserves (40% of net worth in 1981). AHP was able to gain this huge success in these lines was by marketing expertise. CULTURE OF THE BUSINESS AHP's corporate culture distinctive and this culture had several components. First, the company's culture was known to be reticence. A second element, that the managerial philosophy of AHP was prudence and had a strict financial control. For example, all expenditures that are greater than $500 had to be personally approved by Mr. Laporte, who was the CEO of AHP, even if was authorized in the corporate budget. Another important component of AHP's culture was conservatism and risk aversion. Finally, The Company has a long- standing policy of centralizing, where the chief executive had complete authority. STAGES OF DEVELOPMENT AHP's managerial philosophy was proven to be successful as it produced impressive results. AHP's financial performance was stable with consistent growth and profitability. In the year 1981, the firm was able to increase sales, earnings...
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...HISTORY American Home Products Corporation was created in 1926 when a group of managers from Sterling Products and Household Products resolved on how to cheaply combine their resources in acquiring small companies as cheaply as possible. They successfully created products to have become household names such as Black Flag, Woolite, Chef Boyardee, Easy-Off, Anacin, Preparation H, Sani-Flush, Gulden’s Mustard and Ekco in the line of houseware. One the other hand, their largest and most profitable business included prescription drugs, antihypertensives, tranquilizers and oral contraceptives. The company was able to acquire Anacin, Bisodol Co. (Bisodol laxative), A.S. Boyle Co. (Old English floor wax), Kolynos Co., (Kolynos dentifrices), Wyeth Chemical Co. (Hills nose drops, Jads salts), Midway Chemical Co. (Aerowax), Preparation H hemorrhoid ointment, Three-in-1 Oil and Black Flag insecticide in the 1930s. Their marketing strategy started with a modest advertising budget in 1930 that eventually rose sharply in 1934 as it penetrated radio sponsorships with Blackett-Sample_Hummert. As 1936 entered, Advertising Age figures released that they were already ranking as number 8 advertiser in radio and they were able to maintain this for the rest of the decade. The company’s total spending in radio advertisements rose to more than 2.5 miliion in 1937 and remained as is until World War II. Come 1940s, Amercian Home Products Corporation additional products were included in their product line...
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...Study The Meredith Corporation is an American media conglomerate which based in Des Moines, Iowa, USA. The company consists of two divisions, National Media and Local Media. The Corporation has a long history that began in 1902 by Edwin Thomas Meredith when he began publishing Successful Farming magazine. After that, the company produced a lot of different magazines that are focused on housework. Since then, Meredith has introduced numerous other female-oriented consumer brands and has strategically expanded its reach, through acquisitions and strategic partnerships, to become the leading media and marketing company serving the adult female audience in the United States. In addition, the Company has extended its media and marketing platform around the Globe, through acquisitions and strategic licensing relationships. The Meredith Corporation has developed an expertise in building customer relationships through segmentation, targeting, and positioning. The uniqueness of this corporation is that they correctly identified the target audience, namely the female part of the Population. Their success lies in the fact that issuing journals and books, they were able to pinpoint the needs and desires of women. With 30 million readers Meredith has 14 magazines and more than 200 special interest publications. Among the Meredith magazines there are those for which that corporation is known. These magazines are Better Homes and Gardens, Family Circle, and Ladies’ Home Journal. By focusing...
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...Amway (short for American Way) is an American multinational direct-selling company that uses multi-level marketing to sell a variety of products, primarily in the health, beauty, and home care markets.Amway was founded in 1959 by Jay Van Andel and Richard DeVos. Based in Ada, Michigan, the company and family of companies under Alticor reported sales growth of 17%, exceeding USD$10.9 billion for the year ended December 31, 2011 - the sixth consecutive year of growth for the company.Its product lines include home care products, personal care products, jewelry, electronics, Nutrilite dietary supplements, water purifiers, air purifiers, insurance and cosmetics. Amway conducts business through a number of affiliated companies in more than a hundred countries and territories around the world. Amway was ranked No.114 among the largest global retailers by Deloitte in 2006, and No.39, 32 and 28 among the largest private companies in the U.S. by Forbes in 2009, 2010 and 2011 respectively. Jay Van Andel and Richard DeVos, friends since school days, had been business partners in various endeavors including a hamburger stand, air charter service, and a sailing business. In 1949 they were introduced by Neil Maaskant (Van Andel's second cousin) to the Nutrilite Products Corporation. Nutrilite was a California-based direct sales company founded by Dr. Carl Rehnborg, developer of the first multivitamin marketed in the United States. In August 1949, after a night-long talk, DeVos and Van Andel...
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...Amway From Wikipedia, the free encyclopedia (Redirected from AMWAY) Amway Type Private Industry Direct selling Founded 1959 Founder(s) Rich DeVos Jay Van Andel Headquarters Ada, Michigan, United States Area served Worldwide Key people Steve Van Andel (Chairman) Doug DeVos (President) Products Amway Home, glister, G&H, Nutrilite, Artistry, AmwayQueen, eSpring, ATMOSPHERE... Revenue US$ 11.3 billion (2012)[1] Employees 20,000[2] Parent Alticor Website Amway.com Headquarters in Ada, Michigan Amway (short for American Way) is an American multinational direct-selling company that sells a variety of products, primarily in the health, beauty, and home care markets to consumers and independent business owners.[3][4][5] Amway was founded in 1959 by Jay Van Andel and Richard DeVos. Based in Ada, Michigan, the company and family of companies under Alticor reported sales of USD$11.3 billion for the year ended December 31, 2012 - the seventh consecutive year of growth for the company.[1] Its product lines include home care products, personal care products, jewelry, electronics, Nutrilite dietary supplements, water purifiers, air purifiers, insurance and cosmetics. Amway conducts business through a number of affiliated companies in more than a hundred countries and territories around the world.[6] Amway was ranked No.114 among the largest global retailers by Deloitte in 2006, and No.25 among the largest private companies in the U.S. by Forbes in 2012.[7] Contents...
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...revenue by many “global” multinationals is confined to a region as opposed to the entire world, and second the similar market environment within certain region makes regionalization much more practical than globalization. First, Revenue generation in terms of geographic location is limited to specific regions or area, oftentimes geographically proximate regions. Rugman’s research uses the term home country to refer to the phenomenon that the home country diamond among countries in the same region is more similar to one another than the diamonds between a country in home country region and foreign country region. Therefore, adjacent markets are more likely to be similar to one another in in terms of business environment than home and foreign markets. More specifically, referring to the table 1 in the Rugman’s research, amongst fortune 500 firms, many have much higher intra-regional sales than foreign sales. This means that truly global, having penetrated the global market, multinationals are not common. Second, similar market environment within certain regions makes the exchange of products and services take place within a region than around the world. Based on the double diamond framework, the implication is that there are primary factors that affect a corporation’s market expansion: factor condition (resources), demand condition (customers), government condition and supporting industries (supply chains). If these primary factors share lack of commonality, it is unlikely for the...
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...The Marketing of Fast Food and the Rise in Health Problems As we know, globalization of fast-food and processed food corporations have become somewhat of a problem for various reasons. While many countries have the same choices Americans have, it is easy to see that over advertising of fast and processed foods causes Americans to be lazy in food preparation, which causes health problems, which is why large food corporations should limit their advertising. This chain of events is all too familiar in modern American culture, but not necessarily exclusive. Through research, it has been found that Americans are more susceptible to marketing and advertising of this type of food than most countries. Many ask, “Why?” While there is no precise answer everyone can agree on, we can point out 3 defining factors as to why Americans are more likely to purchase fast food rather than having a home-cooked meal. Compared to the rest of the world, Americans consume more fast food than even China which has almost as many fast-food restaurants as America does. The fad of fast-food can be explained as something that has gained momentum over the years of economic downfall, apathy towards health, and a collective divide on what we has humans should eat to stay healthy and live longer. Advertising is at an all-time high for not only fast-food corporations, but for processed-food companies such as Kraft or General Mills. The “evil genius” mentality behind their marketing is in that their target markets...
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...Origin of The Report: In this chapter we tried to describe the origin of the report, objective of the report, scope and limitations of the report. Objective of The Report: The BBA Program under the department of finance offers a course named “Management (F-108)” which requires submitting a report on a specific topic determined by the course instructor. The report under the headline ‘Whirlpool Corporation’ has been prepared towards the purpose. Objective of the report: There are several objectives to conduct the study which are: To Provide an overall information about the whirlpool company To provide the position in the BCG Matrix To analyze the SWOT of the organization To give an economical analysis. Methodology: To prepare this report we mainly depend on the primary data. But also take some help from our seniors. Process of collecting secondary data: We went to our senior to know about the procedure of making a good report. Then we ask for advices that should be followed to collect a standard data. Process of collecting primary data: Primary data are collected from the following sources: We collected our necessary primary data by the help of internet. Here the web address of Whirlpool proved to be very helpful to us. Reasons for collecting primary data: It is not possible to complete the report with the secondary data. To cross checking the secondary data couldn’t be possible without using primary data. Scope of The Report: Everything has some advantage...
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...functions can be outsourced to either a company or an individual (encyclopedia, 2012) in business. Outsourcing is a practice which involves transferring parts of a company’s business processes to outside suppliers rather than completing it internally (Investopedia, 2013). It is the process of subcontracting a process, such as product design or manufacturing to a third party company (Venture Outsourcing, 2013). Outsourcing could be sub-divided into two which is off-shoring and home-shoring (home sourcing). Off shoring is moving business processes overseas in order to leverage opportunities such as cheap labour expenses, entrance into new markets, skilled labour and availability of resources (Sourcing Mag, 2003). Home shoring (home sourcing) on the other hand, is “the transfer of business processes to companies within the same country” (Brunelli, 2013). The form of outsourcing to be analysed in this report is off shoring because it is one of the effects of Globalization. Outsourcing became popular in the United states as at 1980s when critics began to raise eyebrows about it as they felt multi-national corporations (MNCs) where exporting a large portion of American jobs to other countries (handfield, 2006). Some MNCs that were popularly known and criticized for outsourcing were Boeing, AT&T, Coca-Cola, Pfizer, Microsoft, Oracle, Quaker oats, Dell computers, Yahoo and Motorola (Steve, 2012; CNN, 2012) . Also it went wide in 2012 that Apple which is one of America’s favourite brand...
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...9. Cognizant Technology Solutions 10. CVS Caremark Corporation 11. Merck 12. Home Depot 13. Whirlpool Corporation 14. Vertex Pharmaceuticals Incorporated 15. Tata Motors 16. TreeHouse Foods 17. Amira Nature Foods 18. SAP AG 19. Infosys Sponsored American Deposit Receipt 20. Qualcomm Incorporated. * What are the weights you allocated to each stock and why? In my stategy, I said that I am going to divide my total money into 4 part, 125,000 each. One for technology stock, one for consumer stocks, one using the value investing strategy and lastly, one for investing in bond. Since the beginning of the trading period I haven’t invested in any Bonds yet because I’m still trying to figure out which one to invest in. So far my weights for ever sector is as follows: Technology stocks (0.5937), Consumer Stocks (0.0217), Value Investing strategy (0.5096). I also calculated the individual weights for every stock against the total. The weights are as follows: Apple – 0.001920. I only bought 10 shares of AAPL because, even though the stock has been doing really good in the market, I’m still quite hesitant about it and I feel like it’s a risky stock giving the fact that it’s weekly returns for the past 2 years have been going up and down and never consistent. The negative returns are almost as much as the positive returns. Intel Corporation – 0.00987. I bought 400 shares of INTC but because it’s share...
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...Our company has been contracted by the Sony Corporation to research and present a proposal that will assist their organization in becoming more innovative. Our first task is to learn who Sony Corp. is and what is this organization’s mission and values. By understanding Sony Corp’s mission and values our team can get them on the road to becoming a more innovative organization. We will then analyze how innovation, design, and creativity support Sony’s goal and objectives. Lastly, we will identify the internal and external drivers of innovation for Sony Corp. History of Sony Corporation Vision and Mission statement Sony Corporation's Mission statement is "to become a leading global provider of networked consumer electronics, entertainment and services", and their Vision is “to create exciting new digital entertainment experiences for consumers by bringing together cutting-edge products with latest generation content and services” (Sony, n.d.). Sony Corporation was created May 7, 1946 by Masaru Ibuka and Akio Morita. The company was established with a capital of 190,000 yen, which is about $ 1,600. The name of the company was originally "Tokyo Telecommunications Engineering Corporation". In 1958 the company changed its name to "Sony" which comes from a combination of two words: "SONUS", which in Latin means "sound" and "SONNY", which means a small size. In 1960 the company established its American branch, called SONAM (Sony Corporation of America). Today it is known as SCA. Sony...
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...demands. The world is one big market for companies to take advantage of. There must be marketers in each country that will help the company meet the needs and expectations of all the countries in which they sell their products. A good example of a successful global marketing company is the Coca-Cola Corporation. The soda beverage remains the same, but the can changes. The advertisements are different in each country. Instead of being intolerant to the needs of each country, they have translated their logo and brand name to suit the needs of each country in which they market. The goal of global marketing is to become like the Coca-Cola Corporation and sell the same product to everyone in the world, with perhaps just one or two small changes to the product that will suit the needs of everyone in the world. There are four simple steps a company must establish to start global marketing. First, a company needs to achieve domestic dominance. If a company is trusted at home, it is easier to integrate their focus into the global market. A company that only focuses on marketing to their own country will eventually run out of people to market to and lose its place. Some companies can remain successful domestic entities because the demand for the product on the home front is high. Second, a company...
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...know it's successful is if it changes every job at Whirlpool.1 - Nancy Snyder, Vice-president Leadership and Strategic Competency Development, Whirlpool Jeff M. Fettig succeeded David R. Whitwam, as Chairman and Chief Executive Officer of Whirlpool Corporation in 2004. The year 2005 had proved to be a year of exceptional achievements for the world’s number one home appliance brand company2. Whirlpool had achieved record net earnings of $422 million3 on record sales revenues of $14.3 billion4 (Annexure I), which had in turn, propelled the company’s share price to an all-time high of $92.645 by April 2006 (AnnexureII). Fettig attributed much of Whirlpool's performance to the new products and features introduced by the company over the past four years. The innovations were a result of the ‘innovation system’ established by Whitwam in 1999 to counter the company’s almost stagnant performance over the past decade, in everything from stock price to profit margin to market share. The company’s failure to introduce exciting products or product features had reduced Whirlpool’s machines to mere commodities and prices for its most important products were falling each year. Following the implemetation of the innovation drive, revenues from products that fitted the company's definition of ‘innovative’ increased from $10 million in 2001 to $800 million in 2005, i.e., 5 percent of the company's record total revenue of $14.3 billion6. In 2005 alone, Whirlpool had launched more than twice...
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...examine the how, and why of Schlossers’ book Fast Food Nation, where he shows how fast food developed and became the center of American image and society. In order to prove this I will attempt to illustrate how different elements factor in, for this cultural phenomenon to have become such an American cultural norm. First, look at how fast food became such a popular way of eating and living. Carl N. Karcher (owner of Carls Jr, Hardees) is one of the fast food industry’s pioneers. His life seemed at once to be a tale by Horatio Alger, a fulfillment of the American dream, and a warning about unintended consequences. This is one of the factors to its development of an American cultural norm. After World War Two people like Karcher and Ray Kroc(founder of McDonalds) had ideas to give the public a sense of home when it came to meal time, something that would be familiar not only down the street from his or her home, but also fifteen hundred miles away across the country. That let the public believe that McDonalds is like a trusted friend, said executive Ray Bergold. (Schlosser 50) One of the stories is southern California, whose cities became prototypes for the rest of the nation. After World War 2, Southern California had a rich and growing economy with high tech, and military industry jobs. With many young families, they had a need for new homes, in city and communities that would be a bastion for the fast food companies. Whose love of the automobile gave people in large...
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