...: a direct implication to the product success in the market => The product needs to remain PROFITABLE Pricing strategy needs to reach the main objectives of a company : PROFIT – TURNOVER – VOLUME - MARKETSHARE -Price sensitivity of shoppers differs between the distribution channels Discount hypermarket : people check carefully to buy a beer-pack Bars / Pubs : ready to pay much more for a beer than in the grocery -3 Ways to determine a price : - cost pricing : based on the company expenses - competitor pricing : based on the competitors prices - value pricing : how the product is perceived by the customer ? An aggressive price increase policy - A National icon : recognized worldwide •55% of the world stout market •Market leader in 4/7 regions : •Western Europe / North America / Asia Pacific / Australia - High value of the products - Consequence of the banning of smoking in pubs: From ON-TRADE to OFF-TRADE In 2006 -> Product innovation : the « Guinness Surger » which aims to recreate the « pub experience » at home => Different pricing policy : Drinking at home, but with a « pub concept » What are the reasons ? ‐A volume decline in the...
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...Jose Martinez 8/11/14 En1230 When choosing a really good craft beer, one may look for an acquired taste. The variations of different types of craft beers can range from basic Indian Pale Ales, Stouts, Porters, Lagers, Ales, Ciders, and Wheat’s; to your more complicated drinks such as Hefeweizen’s, Imperial Stouts, German Maibock, Dopplebock, and Sweet stout. These craft beers also have their own specific combinations which make then unique in taste. In my own personal opinion, one of the types of craft beers that I find to be the best is Porters. The reason for this being the best in my own personal opinion is that to me Porters have a smooth, refined, and eloquent taste. My favorite stout beer would have to be Breckenridge Vanilla Porter. The vanilla taste makes the beer unique for other porters. Even though there are many different craft beer companies that create the craft beer, they end up adding their own little ingredient’s that make there beer different from the rest. Craft beer making is an acquired skill not just anyone can make it. It takes time, energy, and a curtain skill set. These skill set include knowing what ingredients to use other than the basic yeast, water, hops, and barley. The extra ingredients add the true taste and uniqueness of the beer. These ingredients can go from being a simple ingredient such as vanilla to specific types of barley and hops. These ingredient’s make people truly enjoy the taste of craft beers. All in all; when choosing...
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...well that he eventually ousted all imports from the Irish market. Not only that, he even began to capture a share of the English market. By 1825 Guinness Stout was being sold abroad, and by 1838 the St. James Gate Brewery had become the largest in Ireland. Its growth continued, with annual production of more than one million barrels in 1881, and by 1914 St. James's Gate was the world's largest brewery. At the milling stage the malt is crushed.The crushed malt is mixed with flaked barley Mashing and roast barley to give a substance called grist. The Copper Boiling grist is weighed and fed into a mash vessel along with hot Fermentation water and mixed thoroughly at approximately 65 degrees Maturation celsius.This process results in a porridge-like consistency, Bright Beer Tanks which is then passed through a sieve. The sugary liquid which results (called wort) is transferred to the copper kettle, while the grains which are left behind in the sieve are sold as cattle feed. Milling QUALITY IN PRODUCTION Introduction Producing a consistently high quality product is one of the key challenges facing many organisations. However that challenge becomes greater when the product is a food or drink, requiring it not only to taste and look good but also to be safe. Guinness UDV Ireland produces more than 4 million pints of its famous stout every single day. This case study looks at how Guinness UDV Ireland uses world-class manufacturing techniques and Total Quality Management...
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...1. As Exhibit 1 shown, I first calculate the predetermined overhead rate, which is $15.57 per direct labor hour. And I distributed the dollar amount to different proportion based on Direct-Labor hours to get the overhead cost. Sum the overhead and direct cost to get the total cost; this will be the total cost of producing a batch of beer label. Therefore, we need to divide them up by the bottle per batch in order to know the cost per each bottle for each label. As shown in Exhibit 2, I have determined the allocation rate of each cost driver, and that will allow me to assign them to different cost pool; base on the activities. Adding up all the number I assigned, will give me the overhead cost for each label of a batch. Sum the number up with the direct cost as I did in Exhibit 1, in order to get the cost per batch and per bottle for each beer label. 2. To find gross margin for each batch, we need to know how much they earn by selling one single beer. Use the information from Exhibit 1 and 2; we can know the total cost of each bottle of label. Take away the cost from the selling price, and it will give us the gross margin of selling one beer. Multiply the number to the “number of bottle in a batch”, to get the gross margin for a batch. 3. The benefits of using Plant-wide allocation based method are that, it is simple and easy to calculate. It doesn’t give a really terrible result, it is totally usable with a smaller size companies with smaller amount of...
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...was the group’s top- selling beverage after Smirnoff vodka, and the group’s third most profitable brand, with an estimated global value of US$ 1.2 billion. More than 10 million glasses of the world’s most popular stout were sold every day, predominantly in Guinness’ top markets: respectively, the UK, Ireland, Nigeria, the USA and Cameroon. However, the famous dark stout with the white, creamy head was causing some strategic concerns for Diageo. In 1999, for the first time in the 241-year history of Guinness, sales fell. In early 2002 Diageo CEO Paul Walsh announced to the group’s concerned shareholders that global volume growth of Guinness was down 4 per cent in the last six month of 2001 and, more alarmingly, sales were also down 4 per cent in its home markets, Ireland. How should Diageo address falling sales in the centuries- old brand shrouded in Irish mystique and tradition? The changing face of the Irish beer market The Irish were very fond of beer and even fonder of Guinness. With close to 200 liters per capita drunk each year- the equivalent of one pint per person per day- Ireland ranked top in worldwide per capita beer consumption, ahead of the Czech Republic and Germany. Beer accounted for two-thirds of all alcohol bought in Ireland in 2001. Stout led the way in volume sales and accounted for 40 per cent of all beer value sales. Guinness, first brewed in 1759 in Dublin by Arthur Guinness, enjoyed legendary Status in Ireland, a national symbol as respected...
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...[Type the company name] | Legalization of Marijuana | | | Imagine waking up every morning to morning sickness. You’re not pregnant but your stomach feels like it’s on fire and the only relief you can muster is to crawl to the bathroom and vomit up a mouthful of stomach acids. This is the life of an individual with acid reflux. Now you might say that this individual should go to the doctor and get some medication but the fact of the matter is, I have already seen several doctors and the medication they prescribed me not only didn’t help my symptoms but had added side effects such as diarrhea. Now the solution may not be visible to most but why not smoke some marijuana. Sounds like a good idea, I’d get “the munchies” as they’re called and be able to actually eat something to settle my stomach. Unfortunately marijuana is illegal in the state I live in. “Why is that so?” you might ask. After a bit of research I have not been able to come up with an answer to that question. There are many prescription drugs that can be substituted with marijuana, if taxed properly; it could generate a very substantial amount of revenue for both state and government. It has also been proven to be a medically and socially safer alternative to alcohol. First let’s take a look at the medicinal properties of marijuana. In March 1999, it was found that the cannabinoids in marijuana are potentially effective in treating pain, nausea and vomiting (Unknown. (2013, August 8). Should Marijuana...
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...Define the City A city is usually associated with big bright lights, hectic traffic, lots of busy roads and tall dark buildings- however, rarely do we look past the mere surface of a city to see what exactly constructs “the city”. To me, population has always been a significant indicator associated with cities- if the area has a large population then it is considered to be a city. Reading these articles I still believe in this connection and this large population makes the city a social institution. The best definition of a city is made by Lewis Mumford when he states that the city is not just a physical fact but rather a social institution- “where men by mutual society and companying together, do grow to alliances, commonalties, and corporations.”[1] The large population enables the formation of the “social” part of the institution and in return the institution is needed to organize, lead and support the population. The city is the economic and political centre which is created by and for the people. Every city, due to its large population will have a large work force, and this large work force will produce large economic growth. This economic gain is orchestrated by the population to increase their own standard of living. “Cities” are where the main consulates, embassies, town halls, etc can be found, which are all created by people to create order and structure to the population. Along with this the city is a “theatre of social action”[2] where people can be found everywhere...
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...CHAPTER 5: ACTIVITY-BASED COSTING AND MANAGEMENT QUESTIONS 5-1 Product costs are likely distorted when a firm uses a volume-based rate if the plant has more than one activity in its operations and not all activities consume overhead in the same proportion. The more diverse the product mixes of the plant are in volume, sizes, manufacturing processes, or product complexities, the greater the cost distortions are likely to be in using a volume-based rate. Undercosting a product may appear to have increased the reported profit the product earned (assuming the firm did not lower its selling price because of the reported lower product cost). However, the increased profit is, at best, a twist in truth. Costs of the product not charged to the product itself are borne by other products of the firm. Worse, undercosting a product may result in managers erroneously believing the product to be more profitable than other products and shifting the limited resource the firm has into manufacturing, promotion, and sales of the product when, in fact, other products are more profitable to the firm. Severe cost distortions may lead firms not to drop unprofitable products because the cost data show these products are profitable. 5-3 Overcosting does not increase revenues. A firm can increase the selling price of a product, thereby increasing the total revenue from the product only if the market allows. Increases in the selling price of a product without experiencing noticeable decrease in the sales...
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...CHAPTER 5: ACTIVITY-BASED COSTING AND MANAGEMENT QUESTIONS 5-1 Product costs are likely distorted when a firm uses a volume-based rate if the plant has more than one activity in its operations and not all activities consume overhead in the same proportion. The more diverse the product mixes of the plant are in volume, sizes, manufacturing processes, or product complexities, the greater the cost distortions are likely to be in using a volume-based rate. Undercosting a product may appear to have increased the reported profit the product earned (assuming the firm did not lower its selling price because of the reported lower product cost). However, the increased profit is, at best, a twist in truth. Costs of the product not charged to the product itself are borne by other products of the firm. Worse, undercosting a product may result in managers erroneously believing the product to be more profitable than other products and shifting the limited resource the firm has into manufacturing, promotion, and sales of the product when, in fact, other products are more profitable to the firm. Severe cost distortions may lead firms not to drop unprofitable products because the cost data show these products are profitable. 5-3 Overcosting does not increase revenues. A firm can increase the selling price of a product, thereby increasing the total revenue from the product only if the market allows. Increases in the selling price of a product without experiencing noticeable decrease in the sales...
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...The Sociopath Next Door Author: Martha Stout Book Review By: Nicole Hanks April 8, 2013 “1 in 25 ordinary Americans secretly has no conscience and can do anything at all without feeling guilty. Who is the devil you know?” “A chilling accurate portrayal of evil—the decent person’s guide to indecency.” Jonathan Kellerman If a sociopath lives next door, don't go over for coffee. In fact, don't admit to them that you drink coffee, don't talk to them, and for the love of all that's holy, don't ever ask if you can borrow a cup of sugar. Not even if you're baking a cake that is guaranteed to find you true love, a promotion, and give you the winning lotto numbers. Do not make nice with a sociopath. Or so you'll think after reading Martha Stout's book. The Sociopath Next Door is an intriguing look at these devious, tricky people who live a life without a conscience. She describes the sociopath as a person who doesn't have guilt or remorse, or a sense of conscience. Literally they have no conscience. Their minds are such that the sociopath is free to run among us in the world, doing what they like without feeling bad or upset. They don't lie awake at night, wishing they could take back a nasty remark. They don't bite back and keep from saying nasty things to the clerk at Blockbuster when asked to check their backpacks at the store. If they say something awful, they're not going to feel sorry for it. That really seems to be the gist of sociopath, the total lack of remorse or regard...
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...MidSouth Microbrewery* In 2002, two former Anheuser-Busch employees started their own brewery, MidSouth Microbrewery (MSM). Alexandra (Alex) Bennett and Pete Landgren developed a business plan and obtained a business start-up loan from a local commercial bank. The loan proceeds, combined with their own savings, were sufficient to purchase a small manufacturing facility and equipment. To save money, they purchased most of the stainless steel equipment at a dairy farm auction and then converted the equipment to suit their brewing needs. Other supplies and equipment were purchased from a brewers supply house in Tennessee. Through December 2007, MidSouth Microbrewery had grown steadily, and produced three labels of specialty beers. The company’s first profits were posted in 2005. The Brewing Process Brewing is essentially a four-stage process. Direct labor is incurred primarily in stages one, two, and four. To begin brewing a batch, malt, sugar, hops, and water are mixed and “cooked”. MSM uses a 350-liter copper kettle with a natural gas burner for this stage, which takes 4 to 7 hours, depending on the particular brew produced. This produces a mixture referred to as wort. In stage 2, the wort is siphoned through a wort chiller into one of eight fermentation tanks owned by MSM. The wort chiller is a double copper tube in which cold water is forced in one direction in the outer tube and the wort is pumped the other direction into a fermentation tank through the inner...
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...Expository Writing 101: Section EA Professor Morrone Dissociation is Normal Dissociation is when an individual mentally spaces out in order to not remember or remove themselves from a situation. The dissociation can be triggered by anything at any point in time and is often related to a traumatic experience. Individuals who dissociate intensely usually do not know that they are dissociating, and many who do seek psychiatric help. Anyone can dissociate and in her essay “When I Woke Up Tuesday Morning, It was Friday,” Martha Stout, a psychologist, speaks about her successful, ordinary, normal patients who dissociate due to traumatic experiences. Society perceives individuals who seek psychiatric assistance to be “abnormal,” but Stout challenges this concept by illustrating how her patients defy this generalization. Therapy is not just for “insane” individuals because Stout’s patients are intellectual individuals who carry through conventional lifestyles. Society labels individuals who acquire psychiatric help as irregular simply because the individuals seek the therapy. Seeking therapeutic help is the first step towards fixing personal problems that cannot be fought alone. Everyone has issues that are difficult to face on their own; in Stout’s patients’ cases, the issues are severe episodes of dissociation that hinder their everyday routines. One patient in particular, named Julia, is a successful producer of documentary films. As a child, Julia...
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...Business Society and Ethics 2/4/15 Based on the analysis required for this assignment, we are told to assume that Jack Ma has acquired the West Texas Fertilizer plant. From prior knowledge, I know that Jack Ma is a staunch “advocate for corporate social responsibility” and is a major advocate for improving the “environment”. I have also learned that Jack Ma is an individual who pays attention to social issues and works to ensure that some sort of change is brought forth to improve these issues. Based on the background information given about Jack Ma, I can assume that if Ma acquired the West Texas Fertilizer plant he would conclude that the fire in which took the lives of 35 innocent individuals is due to the irresponsible actions of the company owner. He would conclude that many alternate steps could have been taken to ensure that the fire would not occur. Ma would not only take steps to improve the infrastructure of the West Texas Fertilizer plant but would also improve the social structure of the plant because he is not concerned about maximizing profit for the benefit of the corporation but he is more concerned with making “healthy money, enabling people to enjoy their lives”. The first step that Ma would take is to “reboot and revisit the initial dream the company had while questioning what is the sole purpose of building the business”. He would then try to better educate individuals on issues relating to the plant. These educational forums may include...
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.... | Activity Based Costing | | | | | . | Executive Summary The success of any business that offers a product or service is greatly dependent on the ability of the products it offers to compete in a market. If a firm can determine its costs and the demand at each possible price offering it is likely to find the market price that maximizes profit. (Bakken, 2012). Hence, it is important that companies employ strategies that will ensure that cost allocation is accurate and gives management an accurate view of production cost. Having a full picture of every production step and their respective cost can help management make better pricing and sells decisions. This paper is aimed at exploring the process of cost allocation, specifically, the Activity Based Costing System (ABC). It examines how the ABC system diverges from the previous traditional accounting system. It highlights the advantages and disadvantages of the ABC model, and presents an alternate approach that tries to fix the loop holes that exist in the ABC system. This paper shows that the analysis of costs and resources used in the production of goods and services is the most important tool needed in determining business performance (Veres, 2011). Cost Allocation: Purpose and Process When a firm produces more than one product or provides more than one type of service, a resource may be shared. This shared resource places a financial burden on the firm. Cost allocation is the process...
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...1. According to the gross margin ratio calculations (see Exhibit 1-a, 1-b), Bismark Bock is the most profitably beer label followed by Four Heads Stout and finally Buffalo Ale. Buffalo Ale’s low profitability is due to having the lowest selling price and highest production costs. Having a gross profit margin percentage of 19.05% means that Buffalo Ale generates $0.19 of gross profit for every sales dollar. 2. When referencing the gross margin percentages of the three labels under activity based allocation (see Exhibit 2-a, 2-b, 2-c), Buffalo Ale is the most profitable followed by Four Heads Stout and finally Bismark Bock. Bismark Bock has a negative gross margin percentage, which means this product does not make profit. This loss is a result of high production costs per bottle which are not compensated by the current selling price. These results show how profitability evaluation is highly affected by cost allocation methods. For instance, in question 1, Bismark Bock was ranked as the most profitable label when the plant-wide allocation method based on direct labor hours was used. 3. In theory the two different allocation methods should have no effect on the ending net income. This is because sales prices, number of batches produced and total production costs remain unchanged. According to the calculations, the net income is $51 greater when using activity based allocation compared to using plant-wide allocation (see Exhibit 3-a, 3-b), because the rounding issue. But...
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