...Submitted By: Group G2 ------------------------------------------------- SOUTHWEST AIRLINES 2008 ------------------------------------------------- (Case Analysis) Problem Statement: How can Southwest Airlines maintain its low cost leadership in the industry by making the strategy sustainable against the competitors that are emerging strong without compromising on the quality of customer service? External Analysis: Pest Dimensions | Effects on the case | Political | * 9/11 Attack, Ongoing war in Iraq, 2003 SARS epidemic affected the industry but Southwest was affected the least | Economical | * High Fixed Costs * Constantly changing fuel expenses | Social | * Strong commitment towards customer service * Hiring based on the attitude not on the experience | Technological | * Constantly emerging technologies has enabled frequent traveling among people * Enabled online ticket booking through website launch. | Legal | * Won legal battles against the competitors in the US courts twice * Bankruptcy protection filed by various Airlines | Environmental | * Other airlines were now out of bankruptcy with lower costs and higher efficiency. | SWOT Analysis: Strengths | * Point to point flight system * Low turnaround time of 15 min while the industry average was 45min * First movers in the online presence with a website of their own and in 2007 they accounted for 74% of their tickets booked online * Low prices * Customer centric...
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...Gita Chaudhuri By Varun Jha 08.11.2014 School Of Management And Entrepreneurship Gautam Budh Nagar, U.P., 201314 MEMO November 08, 2014 To: Alok Kumar Gupta (Chairman and Managing Director-KCPL) From: Varun Jha (Executive Assistant to Chairman KCPL) Subject: Report for APL proposal The offer by A-One Confectioneries Private Limited has been analyzed. The report contains the Situation analysis, problem identified and options available. The options available have been evaluated. Recommendation has been made considering the critical criteria of evaluation. An action plan in regard to the recommended option has also been enclosed. Situation Analysis Since the biscuit industry provides an easy setup and lucrative net profit margin, there had been a proliferation of both organized and unorganized units in this sector. With increased competition from both the sectors, KCPL has stuck in the middle. It cannot increase the price to cater the rising cost of labor and capital; nor does it have the premier image to get a higher price. For last three years, sales had been continuously declining and it had not acted diligently to identify and overcome the issue. To utilize its surplus capacity, the company contracted with PHDL (Pearson). The market response to Good Health Biscuits is not encouraging. Customers perceive A-One biscuit as health and energy providing biscuits, which is available at two-third price of Health biscuits. APL has offered KCPL to produce for...
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...Guillermo Furniture Capital Budget Recommendation Kendall Nicholson University of Phoenix Managerial Accounting and Legal Aspects of Business ACC/543 Curtis Brooks April 23, 2012 Guillermo Furniture Capital Budget Recommendation Guillermo Furniture is on the verge of making an important business decision. Increased competition and rising costs have shrunk its profits considerably. Although many of its smaller competitors are merging with larger corporation, Guillermo does not consider this a viable option. Guillermo Furniture must choose between upgrading to a high-tech computer controlled laser lathe that reduces labor costs dramatically and using its distribution channels to help a competitor to market its products. This option would result in Guillermo becoming more of a distribution network than a manufacturing company. Guillermo also has a patented process for coating its furniture. The flame retardant portion of this process is potentially profitable, but the finished coating is not as desired. Capital Budget Evaluation Techniques Several techniques are available to Guillermo to use for making a decision on which course of action is best. One technique is the net present value (NPV) technique. This technique compares the present values of future cash inflows against the initial cost and cash outflows of a capital investment. In this case, the future inflows of cash must be compared with the interest rate that Guillermo could receive on the investment...
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...Guillermo Navallez has made furniture for years near his Sonoran home in Mexico as the area had a good supply of timber for the variety of tables and chairs produced by his company; and labor was also relatively inexpensive (University of Phoenix, 2009) Unfortunately for Guillermo, in the 1990s a competitor from overseas entered the furniture market causing a large decrease in business for Guillermo. Luckily, Guillermo has a few tools at his disposal to help make the tough decisions he is now faced with. Accounting budget and performance reports can be used in decision making in a variety of ways such as; estimating the expected revenue and expenditure of a business. These reports would be helpful in Guillermo's decision of which option will be best suited for his business. Guillermo must decide whether to purchase the high tech computer controlled laser lathe, represent and sell for a manufacturer in Norway, or continue selling his hand crafted coated furniture. Budget: With the use of an account budget Guillermo can project required labor hours, product cost, and expected return. This type of income information can provide comparative figures of expected profit for the different business options. In the case of the three business options available to Guillermo, he can assess the net revenue and return on investment to help him decide which option will be more profitable for the business. Performance Report: A performance report can also help Guillermo compare his business...
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...meet customer demand at all major locations. Other pros include lowering the transportation and freight costs to diverse customer locations. Reducing the travel area when establishing multiple distribution centers and shipping locations lower transportation costs. The expectation is that multiple distribution centers will help to lower the time frame for customer servicing by meeting current customer demand. Effectively, linking demand with inventory (Fortna, n.d.). Intuitively, cons include the cost of land, buildings, labor, and equipment, for the development of multiple distribution centers and shipping locations. The rate of domestic sales for each region should increase faster than the rate of cost of operations for each regional distribution center. The benefit of having more than one international distribution center is to manage more effectively the distribution of international sales. Cons include the higher cost of labor (Blackerby, 2003). Cost of labor is reflective of the underlying exchange rate of the euro/USD or 1 euro = $1.50. The cons of an international shipping location instead shipping from the U.S. manufacturing warehouse are the increase in labor cost. Section II: Decision-Making The ability to maximize profits and minimize costs is imperative to the decision-making process. The West Coast customers are currently satisfied with paying the local freight cost of shipping. Therefore, the benefit of establishing a West Coast distribution center or combination manufacturing...
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...alternative measures to combat possible loss of business and maximize profit. Reviewing the possible pitfalls, a financial assessment seeks to eliminate those pitfalls and place GFS as a front-runner in the furniture manufacturing industry. The alternatives are for review, modification and consideration to keep this thriving business alive. Alternative one seeks to increase technologically-savvy equipment to save time and reduce labor costs. Labor cost reduction does not necessarily begin with workforce reduction. The management team suggests focusing on working smarter by eliminating waste and improving performance. Alternative two examines a shift from primarily manufacturing to primarily distribution. By vacating the familiar and converting to what is not so familiar comes with challenges and fears of the unknown. Failure to explore this alternative could give competitors a comparative and absolute advantage. Finally, adding a product is also on the table of consideration. Guillermo’s patented product will add value, but the cost of doing so has to be...
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...Under Armour STEEP Analysis Socio Cultural: Due to, the global rising trend of quality awareness, and global health conscious of athletes and customers, they are more willing to pay for the quality product, regardless of its price with more expectation in enhancing their athletic performances and lifestyle .This is perfectly matched with the company as delivering superior unique, innovative quality products Then, company has to try to tailor the products to meet the needs. Technological: With the new technology software SAP enable the company to reach effectiveness in managing inventory and shipment to distributors. But still not enough in prospect for sufficient communication between rising number of distributors, therefore, company should introduce ICT and restructure the IT system to utilize forceful customer analysis for more operational efficiency. Economic: The growth in the sport performance apparel industry, together with rising in physical active consumers seems to be promising future for Under Armour. Nowadays, the economic recession in U.S., rising labor costs and material prices affect both local economy and international economy where the company operate in like China. Weakens of Euro and an Asian recession affect in the dropping in sales. Environmental: The innovative commodities of the company still less in environmental concern,due to raw material petroleum- based is involved in production process. Thus, company should pursue on environmental friendly materials...
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...markets? 2. PESTCL Political * Low entry barriers due to Open Skies agreement with European countries * Successive wars and acts of terrorism resulting in low passenger preference to air travel Economical * High fixed cost industry with low net profit margin * Passing of Airline deregulation act of 1978 helped reduce fares and allowed many more airlines to enter US market * Economic slowdown resulting in job cuts and thus reduced passenger traffic * Airline industry debt load far greater than US Industry average Social * Threat of epidemic (like SARS) and post 9/11 aversion to air travel * Low fares encouraged air travel for price sensitive and low income group travelers * High demand for air travel Legal * Several airlines filing for Bankruptcy under Chapter 11 * Strong Labor unions * Strict aircraft safety laws 3. SWOT Listing Strengths: * Low operating costs and lowest fares * Innovative service structure * Unique Marketing campaign * Low equipment age * Innovative Customer Service experience * High safety record * No frill service * Lowest customer complaints * Lowest gate turnaround time * High employee motivation and cohesiveness * Point to point flight * Separate labor union for Southwest pilots Weakness * No international flights * Lack of future leadership after Kelleher * Freezing of salaries can create discomfort amongst employees in future * Airline image of being a business...
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...challenges in generating profitable income and meeting shareholder’s objective of annual dividends. It remains unprofitable due to rising material and labor costs, and the cyclical nature of the real estate industry. In addition, quality issues have created negative publicity that threatens the reputation of CHC. The purpose of this report is to analyze strategic and operational issues with CHC and to provide recommendations to improve the performance of the company. CHC’s external opportunities and threats that affect the company’s decision on its strategic alternatives include: increasing popularity of prefabricated housing, high demand of renovation, labor shortage, and a shortage of land available for development. In light of its internal analysis and external environment, CHC must: 1. Pursue renovation services 2. Manufacture prefabricated homes 3. Reject GH’s joint venture proposal 4. Reject rental property development proposal 5. Divest Maritimes Division To mitigate the various operational issues: 1. Declare bankruptcy for its European subsidiary 2. Implement a rating system to ensure consistent quality among performance of subcontractor’s performance 3. Establish a Board of Director (BOD) succession plan to ensure consistency in operations By implementing the new strategic direction and the recommendations outlined in this report for the company’s operational issues, CHC will have an unobstructed road to business growth and...
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...CHAPTER 1 INTRODUCTION 1.1 Introduction The property development industry is considered one of the major industries contributing significant growth to socio-economic development in Malaysia, as it constitutes an important element of Malaysian economy. The economics of Malaysia has experienced rapid growth with thousands of houses are built every year to fulfill the demand of rising population and economy activities. According to tradingseconomics.com (2011), Malaysia has been undertaking a sustainable economy growth throughout decades, with GDP (Gross Domestic Product) growth of 1.17 percent from 2000 until 2011, achieving an historical high of 5.90 percent in September 2009. Property developers found the potential in property development in Malaysia fascinating due to geographical reality of Malaysia, which provides great opportunity and potential to the housing industry. It is essential to distinguish the factors that affect housing construction costs in Malaysia with the aim of minimizing the construction costs, besides of discovering actions to reduce the high cost of housing. Various authors and the ways to develop alternative building materials to produce cheaper and durable homes have discussed the latter severally. 1 1.2 Background Real Estate and Housing Developers Association (REHDA), the main governmental body responsible in property development industry in Malaysia, has initiated on 13 October 2000. This organization plays an important role in...
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...and negative trade balance. Though in 5 years the economic situation is likely to improve comparing to today’s level, we forecast that the pace will be slower than needed. The structural reforms should be performed as soon as possible. We recommend use the supply-side policies, that concentrate on deregulation of the labor market, downsizing the government sector’ share in the economy by privatization of public enterprises and services, and lowering the tax rates. We believe these measures will help to boost the competitiveness of French companies and products in domestic and world markets, and will improve the growth of France’ economy in the medium and long term. 2. Current state of economy France continues to underperform in 2014. In October 2014 the ratings agency Standard and Poor’s lowered its outlook from “stable” to “negative,” saying its financial recovery is “elusive”. Main indicators please see in Appendix 5.1. GDP is projected to grow by only 0.4% in 2014 (0.6% planned), compared with 0.8% for the Eurozone as a whole. Fixed investment has been dropping since 2012 and in 2014 appears to be falling at an accelerating pace (1.8%), despite rising capacity utilization. Its recovery is likely to be more lackluster than in previous recovery phases. French exporters mainly compete in price-sensitive markets...
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...marketing concerns. Wilkerson is a manufacturing company specializing in manufacturing components for water purification systems; the company makes valves, pumps, and flow controllers. Wilkerson is a supplier to companies that actually manufacture the water purification equipment. The relevant officers of the organization are: * Robert Parker, President * Peggy Knight, Controller * John Scott, Manufacturing Manager According to the United States International Trade Commission, “U.S. exports of water filtration and purification equipment reached $1.8 billion in 2011, increasing by 20 percent since 2007 and by 110 percent since 2002, with Asia the leading export destination. Due to insufficient availability of water, rising incidence of extreme weather events, and increasing global demand for water resulting from demographic shifts, urbanization, and industrialization, U.S. exports of water treatment equipment are expected to remain high.” So, it is safe to assume that this is a highly competitive industry with high barriers to entry and attractive growth prospects due to the fact that this is an industry that is arguably in the Growth Phase of the industrial life cycle. The high barriers to entry can be attributed to the complex nature of the equipment, the production process, and volume. The current situation for Wilkerson is that 2 out of its 3 product lines are currently underperforming the target gross margin (according to the current accounting...
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...1.0 Introduction Foxconn Technology Group is a multinational company for electronics manufacturing where the company headquarter is located in Tucheng, New Taipei, Taiwan. During the thirty years of development, the Foxconn scope of product has expanded and has formed series of electronic products manufacturing such as Card Readers Graphics Cards, LCD Monitors, and Power Supplies. They have become one of the largest electronic contract manufacturers working with many technology companies around the world. Even though Foxconn is one of the largest manufacturers, they are not really well-known as its size. However, in the recent years, the name of company became more aware of due to their issues on labour practices. This aspect of the company will be explored for this analysis. 2.0 The company’s background Foxcoon was established in 1974, also known as Hon Hai by Terry Geo as a manufacturer to produce plastic parts for television sets. As they started to grow larger, they have started to produce console Joystick controller through receiving orders from Atari. In 1985, Hon Hai established United States offices and successfully branded “FOXCONN”. At the same year, Foxconn entered the top 1000 companies of Taiwan. (Foxconn, 2014) In 1988, Terry Gou made a significant decision, which was to establish first factory in Shanghai China. This strategy proved to be so successful that Foxconn began to grow its business at an unbelievable speed. By 2001, Foxconn became the biggest company...
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...and Bank Indonesia has succeeded admirably. In three years, inflation can be derived from 650 percent (1996) to 9 percent (1969), after 1997 inflation can also be reduced from 70 percent (1998) to only 5 percent (2003). But stability is not just for the sake of stability, but for something larger that is equitable and growth. After rising fuel prices, the prices become so high that people's purchasing power is still low. Economic growth indicate that the government has not been able to open employment opportunities to the people. Meanwhile, the business world also slows down. This is because the minimum wage increases the demand which must be fulfilled. Unemployed increased every year, in 2004 unemployment reached 10,854,254 people. Therefore, the purpose of making this paper are: 1. Knowing the concept and the relationship of inflation and unemployment. 2. determine the condition of inflation and unemployment in Indonesia 3. What the policy taken by the government to control inflation and reduce unemployment, increase employment. CHAPTER II Theory 2.1 Unemployment Unemployment is the inability of labor-force participants to find jobs. Unemployment can be caused by insufficient of jobs, lack of capability both in terms of skills and education or even because of discrimination and geographical factors. These are the kinds of unemployment: 1. Cyclical unemployment ; unemployment attributable to a lack of job vacancies, that is...
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...The glucose biscuit industry is very attractive due to growing demand in India and due to high margins as much as 25%. The process of production is very simple, requires low investment and less skilled labor, making it an easy to enter industry. Rise of unorganized sector has increased competition. Two national players, A-One Confectioneries Private Limited (APL) and International Biscuits Limited dominate the industry. APL’s average monthly sale was 200 tonnes. Being on the number two position with monthly sale of 110 tonnes in the regional market and responding to the growing demand of glucose biscuits, KCPL doubled its capacity from 120 tonne per month to 240 tonne per month in 1980-1981. But high absenteeism rate of employees, 50% and scarcity of ingredients like maida, sugar and vanaspathi led to uneven production. Current average monthly production is 120 tonnes. Costs of labor and materials are rising. 70 units in unorganized sector were able to keep their costs low as they did not pay taxes and followed unethical practices, giving a tough competition. In addition, 8 new units were setup in the organized sector in U.P. KCPL followed ethical management practices laid by its family, it paid all the taxes. It did not reduce its costs taking care of rising costs of labor nor does it had a premium image to get a higher price. As...
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