...McDonald’s to have stable financials over the next five years due to its weak growth potential. Cash is expected to remain stable over the next five years going from $2077.9M in 2014 to $2663.8M in 2019 Proj. Debt / Equity ratio in 2014 was 342.54% and is expected to decrease to 284.62% in 2019 Proj. EBITDA is table from 2012 of 36.61% to 2019 Proj. of 36.62% without significant variance. Price growth drivers/detractors: Price growth drivers in the future: 1) debt to equity ratio is relatively low and is expected to keep decreasing in the future; 2) positive trend in the increasing value of real estate market; 3) financing activities, since 2008, are presented as cash outflows to buy back stock and pay dividends, which is beneficial for the investors. Price growth detractors for McDonald’s: 1) the sales growth is negative (-10.60%) in current quarter and shows no signs of significant improvement in the following year of 2015; 2) although the number of franchise stores are still growing rapidly, from 32,737 by the end of...
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...Marketing strategy defined as a set of marketing goals, which target markets and describes how you will go about positioning the business to achieve advantage over your competitors (Brandly, 2002). Whether you are introducing a new product to the market or entering a new market with an existing product, a coherent market entry strategy is necessary because business needs to evaluate any barriers to entry. This essay explains market strategies would take to enter into new market system. These strategies are as follows, licensing, joint ventures, low price strategy and quality strategy, product adaptation strategy and time strategy. To begin with, licensing strategy is defined as the method of foreign operation whereby a firm in one country agrees to permit a company in another country to use the manufacturing, processing, trademark, know-how or some other skill provided by the licensor( Basche,2004 ). Coca Cola is an excellent example of licensing. In Malawi, Southern Bottlers have the licence to make Coke. Licensing involves little expense and involvement the only cost is signing the agreement and policing its implementation. Licensing gives the following advantages, good way to start in foreign operations and open the door to low risk manufacturing relationships, linkage of parent and receiving partner interests’ means both get most out of marketing effort (Brandly, 2002). However licensing is important as a strategy to penetrate into new market but it has its limitations such...
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...Chapter 9: Global Market Entry Strategies The need for a solid market entry decision is an integral part of a global market entry strategy. Entry decisions will heavily influence the firm’s other marketing-mix decisions. Global marketers have to make a multitude of decisions regarding the entry mode, which may include: * (1) The target product/market * (2) The goals of the target markets * (3) The mode of entry * (4) The time of entry * (5) A marketing-mix plan * (6) A control system to check the performance in the entered markets 1. Target Market Selection A crucial step in developing a global expansion strategy is the selection of potential target markets. A four-step procedure for the initial screening process: 1. Select indicators and collect data 2. Determine importance of country indicators 3. Rate the countries in the pool on each indicator 4. Compute overall score for each country 2. Choosing the Mode of Entry Decision Criteria for Mode of Entry: * Market Size and Growth * Risk * Government Regulations * Competitive Environment/Cultural Distance * Local Infrastructure Classification of Markets: * Platform Countries (Singapore & Hong Kong) * Emerging Countries (Vietnam & the Philippines) * Growth Countries (China & India) * Maturing and established countries (examples: South Korea, Taiwan & Japan) Key criteria for choosing entry modes: * Company Objectives ...
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...Global Marketing Management 1 Global Market Entry Strategies 2 Overview Target Market Selection Choosing the Mode of Entry Exporting Licensing Franchising Contract Manufacturing Joint Ventures Wholly Owned Subsidiaries Strategic Alliances 3 1. Target Market Selection A crucial step in developing a global expansion strategy is the selection of potential target markets. A four-step procedure for the initial screening process: 1. Select indicators and collect data 2. Determine importance of country indicators 3. Rate the countries in the pool on each indicator 4. Compute overall score for each country 4 Choosing the Mode of Entry Sample Decision Criteria: Mode of Entry Market Size and Growth Risk Regulatory Environment Competitive Environment Local Infrastructure Tax Breaks… 5 2. Choosing the Mode of Entry (contd.) • Emerging Countries (Vietnam, the Philippines) • Growth Countries (China, India) • Maturing and established Countries (South Korea, Taiwan, Japan) Company Objectives Need for Control Internal Resources, Assets and Capabilities Flexibility 6 2. Choosing the Mode of Entry (contd.) Mode of Entry Choice: A Transaction Cost Explanation Transaction Cost Analysis (TCA) Transaction-Specific Assets 7 3. Exporting Indirect Exporting Cooperative Exporting Piggyback Exporting Direct Exporting 8 4. Licensing Licensor and the licensee...
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...advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the “Act”) for forward-looking statements. This 10-K includes forward-looking statements within the meaning of the Act. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “seeks” or words of similar meaning, or future or conditional verbs, such as “will,” “should,” “could,” “may,” “aims,” “intends,” or “projects.” A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. Investors should not place undue reliance on the forward-looking statements, which speak only as of the date of this Report. These forward-looking statements are all based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. The Company’s actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed below. If any of the risks and uncertainties described in the cautionary factors described below actually occurs, Starbucks business, financial condition and results of operations could be materially and adversely affected. The factors listed below are not exhaustive. Other sections...
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...Determinants of exports CHAPTER I 1.1 INTRODUCTION There are theoretical literatures which predict the proportion of a firm's sales that is exported, i.e. a firm's export intensity. Mostly, exporting is merely regarded as an interim stage in the development of a company, preceding foreign direct investment or, in some cases, licensing and foreign direct investment. Consequently, theoretical contributions are primarily concerned with the relationship between exporting and foreign direct investment and the optimal timing for switching between these alternative market entry strategies. In contrast, there are a large number of empirical studies which investigate various determinants of export intensity. The majority of the past research, however, is recognized to be of an electic nature (Bilkey, 1978) and judged to suffer from methodological flaws (Reid, 1980). Exports have been growing much faster than GDP in most countries. For some developing countries, exports are indeed the main element of production, apart from some agricultural sector and from basic services. The aim of this paper is to explain the determinants of firms export and to combine them into a coherent econometric model. The parameters of this model are subsequently estimated for a sample of large scale Electronics companies. The Electronics Industry in India took off around 1965 with an orientation towards space and defense technologies. The period...
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...KARELIA UNIVERSITY OF APPLIED SCIENCES International Business Degree Program Swedish Clothing Industry Global Business Environment November 2013 Introduction The distance between people in the world is decreasing. In stores in Sweden we find goods from all corners of the world. We are intertwined in a world of mutual dependences and it is what we now call globalization. Economic globalization is a historic process and the result of human innovation and technological development. The economies in the world are integrating, particularly through trade and financial flows, but globalization can also involve movement of people and labor, as well as knowledge and technology across international borders. This means that countries can specialize and produce what they are best at. Countries across the world wills also have access to more capital, better technology, cheaper imports and major export markets. This does not mean that all countries have access to the benefits of globalization, in the poorest countries, the international community help with contributions. The question is that is globalization a treat or an opportunity? Some believe that the difference between the rich and poor countries only increased with globalization, while others argue that the difference in income or GDP between countries across the world has increased, but it is not the whole truth. Wider measurements of welfare that takes social conditions in the calculation shows those developing countries...
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...and lowered the ceiling by around 30% in 2011, and it has pledged to expand the list of essential drugs to more than 500 medications by 2014. Such moves pose major risks for a multinational company like Pfizer: Lower prices create disincentives for quality control, and China’s hospitals, which rely on drug sales for profits, are pushing inexpensive locally made products. Until 2008 going global seemed to make sense for just about every company in the world. Western markets were extremely competitive, population expansion had slowed and incomes had flattened, and corporate operating costs were rising. Developing nations, by contrast, boasted population growth, rising salaries, relatively low wages, and a welcoming climate for foreign January–February 2014 Harvard Business Review 103 THE GLOBE Map Your Industry The Rise of State Capitalism in Emerging Markets State capitalism, which distorts the workings of free markets and...
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...focused on one industry—grocery retailing—we found that, with a few exceptions, globalization’s benefits had not accrued to retailers. In contrast to other industries, grocery retail is still dominated by local players in most countries. International players are almost entirely absent from even the largest retail markets. And every grocery retailer that has ventured overseas has failed as often as it has succeeded. Moreover, our research shows that on average, the extent of internationalization does not have a significant effect on retailers’ revenue growth rates or their profit margins. Some industries clearly can’t travel across borders as well as others. A few grocery retailers have succeeded in globalizing by developing strategies that take into account the idiosyncrasies of their industry—and have found April 2012 Harvard Business Review 105 Retail Doesn’t Cross Borders new paths to growth at home as well....
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...that it can also gain higher margins with low labor cost. The company made it on top and recorded to have the best performance for the past 30 years due to the image of the organization’s holy superiority. Nevertheless, in 1997, declination of the company’s fortune had declined which performed a drop down of 40% to 47% in the same year and the profit also fell for 69% in the end year. Stable into negative is the result of the Standard and poor which shows that the plan had not worked. The primary reason of the declination of the company is the fact it is doing many limited editions and special runs so that they can maintain its image to be. These only show that they have brilliant marketing brand but their strategy remain to be unproven. There are also allegations on the foreign factories of the company for having the poor air quality. It has also been added on implementing child labor with minimum pay wage and lack of compensation and sick pay. In 1998, Knight came out to clean up the image of the company and says that they had walk on the fine line. This can start to improve the 350,000 workers’ conditions in the entire Asia. The plan is to restrict on working conditions which are not acceptable. Part of the plan also is the 40% wage increase and improves the quality of the air while increasing the minimum age of 18 years old. Porter’s 5 forces This model is used to identify the sources of competition, and how to gain advantage over them. Potential Entrants Other...
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...Foreign Direct Investment Learning objectives • Be familiar with current trends regarding FDI in the world economy. • Understand the different theories of foreign direct investment. • Appreciate how political ideology shapes a government’s attitudes towards FDI. • Understand the benefits and costs of FDI to home and host countries. • Be able to discuss the range of policy instruments that governments use to influence FDI. • Articulate the implications for management practice of theory and government policies associated with FDI. The focus of this chapter is foreign direct investment (FDI). The growth of foreign direct investment in the last 25 years has been phenomenal. FDI can take the form of a foreign firm buying a firm in a different country, or deciding to invest in a different country by building operations there. With FDI, a firm has a significant ownership in a foreign operation and the potential to affect managerial decisions of the operation. The goal of our coverage of FDI is to understand the pattern of FDI that occurs between countries, and why firms undertake FDI and become multinational in their operations as well as why firms undertake FDI rather than simply exporting products or licensing their know-how. The opening case describes the international growth of Starbucks. The closing case explores Cemex’s foreign investments. OUTLINE OF CHAPTER 7: FOREIGN DIRECT INVESTMENT Opening Case: Starbucks’...
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...STRATEGIES FOR COMPETING IN INTERNATIONAL MARKETS: A GLOBAL INDUSTRY PERSPECTIVE Why Companies Expand into Foreign Markets Companies opt to expand outside their domestic market for any of four major reasons: * To gain access to new customers, raw materials, capital, skills and expertise – expanding into foreign firms offers the potential for increased revenues, profits, and long term growth even more so when home markets are mature. * To achieve lower costs and enhance the firm’s competitiveness - Sales volume from one country isn’t enough to fully capture manufacturing economies of scale. * To capitalize on its core competencies - A company with a competitively valuable competency or capability might be able to leverage themselves and make this competency work in a foreign market, too. * To spread its business risk across a wider market base - Companies may move abroad to diversify their risk associated with being in a single economy (e.g. foreign exchange risk, political risk). If the economy in one area falls, the firm might be ok in different economic markets. In addition to why companies expand into foreign markets, there are four other situational considerations unique to international operations: * Country to Country Cost Variations – Differences in wage rates, workers productivity, inflations rates, energy costs, tax rates, government regulations, etc crate sizeable variations in manufacturing costs from country to country. Plants in some countries...
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...international Business Entry 4 1.4 Basic Issues an Organisation Faces 5 1.5 Strategies used by Firms 5 ENTRY STRATEGIES 6 2.0 EXPORTING 6 2.1 Advantages and Disadvantages of Exporting 7 2.2 Passive exports Vs Aggressive exports 7 2.3 Direct and Indirect Export 8 2.4 Case Study 9 3.0 PIGGYBANKING…………………………………………………………………………………….10 4.0COUNTERTRADE……………………………………………………………………………………10 4.1 Forms of Countertrade…………………………………………………………………………….10 4.2 Examples of Countertrade…………………………………………………………………………11 4.3 Disadvantages of Countertrade……………………………………………………………………11 5.0 BARTER………………………………………………………………………………………………11 5.1 Forms of Barter Trade…………………………………………………………………………….11 6.0 FOREIGN PRODUCTION……………………………………………………………………………14 6.1 Licensing…………………………………………………………………………………………..14 6.2 Joint Ventures……………………………………………………………………………………..15 6.3Ownership………………………………………………………………………………………….16 6.4 Exports Processing zones………………………………………………………………………….17 7.0 ANALYSIS AND CONCLUSION…………………………………………………………………...17 7.1 Conclusion and Recommendation………………………………………………………………..17 8.0 REFERENCES………………………………………………………………………………………...19 EXECUTIVE SUMMARY. There are a variety of ways in which a company can enter a foreign market. No one market entry strategy works for all international markets. Direct exporting may be the most appropriate strategy in one market while in another you may need to set up a joint venture and...
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...www.ccsenet.org/ijbm International Journal of Business and Management Vol. 6, No. 8; August 2011 The Influence of Knowledge Management System (KMS) on Enhancing Decision Making Process (DMP) Wafa Mohammed College of Business and Finance, Ahlia University P.O. Box 10878, 1st Floor Gosi Complex Exhibitions Road, Manama, Kingdom of Bahrain Akram Jalal Management Information System Department College of Business and Finance, Ahlia University P.O. Box 10878, 1st Floor Gosi Complex Exhibitions Road, Manama, Kingdom of Bahrain Tel: 973-3838-3411 E-mail: ajalal@ahliauniversity.edu.bh Received: February 25, 2011 Accepted: March 22, 2011 doi:10.5539/ijbm.v6n8p216 Abstract Recently, Knowledge Management System acquires high attention in all sectors, since it is a valuable instrument in improving performance. In this study, an explanatory research on evaluating knowledge management systems will be conducted for the Central Bank of Bahrain (CBB) based on a survey of decision makers working in the Central Bank of Bahrain (CBB). It is our intention to evaluate the impact of implementing the knowledge management system on decision making by evaluating the impact of the knowledge key factors which are the information technology infrastructure, human resource, knowledge sharing and the culture of the organization. The study investigates the relationship between knowledge management and decision making. It reveals that the knowledge management factors are crucial indicators which need...
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...Term Project-Nike Algernon Jones & Maria Lopez MBA 6202/6215 – Strategic Management Dr. David Epstein Nike, originally known as Blue Ribbon Sports (BRS), was founded by University of Oregon track athlete Philip Knight and his coach Bill Bowerman in January 1964. The company initially operated as a distributor for Japanese shoe maker Onitsuka Tiger (now ASICS), making most sales at track meets out of Knight's automobile. In 1966, BRS opened its first retail store, located at 3107 Pico Boulevard in Santa Monica, California. By 1971, the relationship between BRS and Onitsuka Tiger was nearing an end. BRS prepared to launch its own line of footwear, which would bear the Swoosh newly designed by Carolyn Davidson. The Swoosh was first used by Nike on June 18, 1971, and was registered with the U.S. Patent and Trademark Office on January 22, 1974. In 1976, the company hired John Brown and Partners, based in Seattle, as its first advertising agency. The following year, the agency created the first "brand ad" for Nike, called "There is no finish line," in which no Nike product was shown. By 1980, Nike had attained a 50% market share in the U.S. athletic shoe market, and the company went public in December of that year. Together, Nike and Wieden+Kennedy have created many print and television advertisements, and Wieden+Kennedy remains Nike's primary ad agency. It was agency co-founder Dan who coined the now-famous slogan "Just Do It" for a 1988 Nike ad campaign. Throughout the...
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