...attract travellers to accept their service. In addition, new entrants face competition amount other airlines as well as other substitute products for airlines. Other factors such as economic downturns and government regulations also prevent new entrant from entering the industry. Therefore new entrants are very hard to enter the industry in China. The major business in the airline industry is for passengers. However, there are a small portion of the airline are for shipping purposes. The shipping airlines are usually in a separate base and act as a subsidiary company of a big airline. There are three major airline companies that play the roles of oligopoly in the Chinese airline market. The “Big Three” are called China Eastern Airline, China Southern Airline and Air China Airline. Each of the airlines hold around 30% of the total market share in China and the remaining 10% belongs to all other small airlines. The majority of the “big three” shares are owned by the government and also some of the small airlines. There are very few private airlines in the industry. Many private and other small airlines are merged with the “big three” in the past years. Few factors had affected the Chinese airline industry in the past 10 years. The 9/11 had small impact on the airline industry around...
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...Major Motors, Inc., a publically held company, recently agreed to sell its Major Automotive Parts (MAP) operations to National Guaranteed Repairs (NGR), another publicly held company. NGR paid cash plus common stock that, after issuance, would be equal to roughly 15% of NGR’s outstanding shares, which would in turn make Major Motors the largest shareholder by a considerable margin. The question resulting from this transaction is whether or not the equity method must be applied to Major Motors’ 15% interest in NGR. After reviewing the appropriate accounting literature, we have determined that the equity method is, in fact, appropriate for Major Motors’ interest in NGR under FASB ASC 323, Investments—Equity Method and Joint Ventures. According to accounting literature, Major Motors meets the requirements for applying the equity method. If an investor holds significant influence in an investee, then using the equity method to account for the investment would be the most appropriate. FASB ASC 323-10-15-6 outlines the criteria for significant influence: a. Representation on the board of directors b. Participation in policy-making processes c. Material intra-entity transactions d. Interchange of managerial personnel e. Technological dependency f. Extent of ownership by an investor in relation to the concentration of other shareholdings. Major Motors satisfies three of the six criteria pertaining to significant influence above. Through the deal, Major Motors...
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...MBA9004 Indicative solutions to Sample Exam paper 1 Q1 General Machinery Important note: These are INDICATIVE answers only. They are written in bullet point form but in answering any similar examination question, you would need to argue your case clearly, showing • What are the key issues; Your evidence for identifying these as issues; Your reasons as to why the issue is important; Recommendations for improvement After a decline, the company’s profitability (ROI, ROCE, Operating margin) has improved recently. However, the gross margin has dropped for five consecutive years, suggesting that selling prices are not being increased to pass on purchase (or production) cost increases. This deteriorating margin is a significant risk for the company as profits have only been increased by the large reduction in overhead as a percentage of sales in 2009. If margins continue to erode and if overheads as a percentage of sales cannot be continually cut, profits may be at serious risk. The company needs to continue to increase sales growth, fix its gross margins and continue to manage overheads. Working capital has been at extremely high levels but has fallen to close to 2:1, an improvement, but with an acid test greater than 1, is probably still too high. This is demonstrated by the relatively high days’ sales outstanding (60 against 30 day terms), which even though it has improved is still too high. Inventory represents the biggest concern to working capital as at 3.3...
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...volumes and varieties. For economic manufacturing, the optimum combination of Volume – Variety exists i.e. job shop, batch production system or mass production. In this paper, we have looked at the typical production volumes and varieties and have argued that there exist very low variety and low to medium production volumes for this particular sector. This calls for investigating ways and strategies to effectively cope with this situation. By taking a case of automobile part vendors triple strategy approach is adopted. Three strategies are not mutually exclusive – a subsequent strategy assumes that the previous strategy has been executed earlier and its benefits/ results still exist when the subsequent strategy is implemented. Strategies are, Good Governance Strategy (GGS), an Automation Strategy (AS) and an Export Strategy (ES). Using real life data from automobile part manufacturers; attempt is also made to test adopted strategies. The results indicate that a major scope for using techniques likes line balancing, activity based costing and value enhancement, exists. The extent of improvement has been shown by case studies of alternative production lines i.e. comparison of a traditional production line...
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...Ingvar Kamprad in 1943. Today IKEA is one of the largest furniture chains in the world with three hundred and fifteen stores operating in twenty seven countries. IKEA has managed its Global Environment in the three major ways which has contributed to its great success. These ways are as follows: 1. Ingvar Kamprad was able to identify the changing trend in consumer wants and adapted his products to these evolving needs. Consumers wanted well designed and well-made furniture at an affordable price. IKEA was able to reduce its cost through developing internal departments to complete task which are usually outsourced by its competitors. 2. Developing and maintaining an international reputation that is synonymous with hard works and great values among all of the organizational stakeholders. 3. IKEA has increased the organization’s size and geographical reach through global franchising. 2. How would you explain the rationale behind the success of IKEA’s approach to managing its environment? As listed in Question 1 above, IKEA has attained its success in the global environment through three major strategies. From the very beginning of the establishment of IKEA, owner Ingvar Kamprad was able to identify consumers’ needs for affordable, well made furniture. To be able to satisfy these requirements, the organization had to manage not only the quality of their products but also the cost. IKEA was able to manage these factors by developing several dependencies both internally and...
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...Management Process ✓ List the six steps in the strategic management process. ✓ Describe what managers do during external and internal analyses. ✓ Explain the role of resources, capabilities, and core competencies. ✓ Define strengths, weaknesses, opportunities, and threats. The six steps in the strategic management process are: (1) identify the current mission, goals, and strategies; (2) do an external analysis; (3) do an internal analysis – steps 2 and 3 collectively are known as SWOT analysis; (4) formulate strategies; (5) implement strategies; and (6) evaluate strategies. (See Exhibit 8-1.) During an internal analysis, managers assess the organization’s resources (assets) and capabilities (how work is done). The major value-creating skills and capabilities are the organization’s core competencies. Any activities the organization does well or any unique...
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...Newsoms, VA. in environment, people, and cost of living. I. First, they differ in environment. A. Hampton 1. Variety of structure 2. Scenery 3. Atmosphere B. Newsoms 1. Variety of structures 2. Scenery 3. Atmosphere C. Conclusion sentence. II. The second comparison is the people A. Hampton 1. Occupations, recreation and leisure 2. General characteristics B. Newsoms 1. Occupations, recreation and leisure 2. General characteristics C. 1. Conclusion sentence. III. The final comparison is the cost of living A. Hampton B. Newsoms C. Conclusion sentence. EVANS 1 Living in Hampton, VA. Differs from Living in Newsoms, VA. in environment, People, and Cost of Living. There is a wide variety of housing options in the Hampton Roads area, which consists of seven major cities, numerous rural towns and several waterfront communities...
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... Global Business Plan 2 Identifying Global Business Opportunities “Water is a precious commodity without which life as we know cannot exist. National Geographic research indicates that although two thirds of the earth’s surface is covered with water, only 5% of this two thirds is safe for domestic consumption.” (www.aquatreatment.com/deep.html). This research paper examines the market for an in-home water purification system in the Philippines. Our product is the Aquasmart Double Filter Under Sink Water Purification System, which is designed for home or office use, to provide clean drinking water at a lower cost than bottled water. Our initial target market will be the growing urban middle class of Filipinos. A majority of the Filipino population live in rural regions, and are involved in the agricultural economy. However, urban centers are growing quickly as the Philippines gradually shift from an agriculturally-based economy to an urban-based modern industrial economy. Urban residence currently accounts for 45% of the Philippine population, but as migration patterns continue to favor urban centers, urban growth will continue to outpace that of the total population. Metro Manila is the economic center of the Philippines and offers the greatest potential for most imports. Manila accounts for 70% of the national consumer base-- a demographic...
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...at the University’s bookstore. A group from the University Students Organization researched textbook prices at three outlets. In general, prices of textbooks have been increasing which has become a major burden to all students of all majors. This increase makes a difficult situation for students already trying to pay university tuition and housing bills. Many students have jobs to help pay the costs, so an increase in the price of textbooks is a cause for concern. The University Bookstore is convenient for some students on campus, it can be time saving for some who are trying to get their books on time before semester classes begins. The University Bookstore may be competitive to other bookstores on campus when it comes to pricing, but it will not be as competitive as online book prices. We are going to take a look at textbook prices for ten different courses at two online outlets, and compare them to a third outlet which is the University Bookstore. Pricing Comparison New books Table 1 below is a comparison of textbook prices, the University Bookstore charges the highest price for all ten books. Half.com charges the lowest price for seven out of the ten books, while Amazon.com offers the cheapest price for the remaining three textbooks. In total, five textbooks – in this example for a student taking the courses astronomy, computer, economics, history, and English – cost $544.95 at the University Bookstore. To buy those books on Amazon.com, the total would be $393.88, a saving of...
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...Virgin Mobile USA : Pricing for the Very First Time 1) Virgin Mobile targets the 14 to 24-year olds market. The case lays out three pricing options. Which option woul you choose and why ? All three options are very interesting for Virgin Mobile to introduce the American market. Considering Virgin Mobile’s background, goals and strategy, I would have choose the option 3 « A Whole New Plan » There are few reasons that explain this choice : Firstly, Virgin Mobile’s cultural values are to be innovative, fun. It also wants to make things different from its competitors and continuously improve customers’ experience through innovation. Indeed the options 3 offer something very different than competitors. Secondly, regarding the segment target, 14–24 years old, it is known that those categories can not pass the credit check with the current carriers due to their lack of revenue. The result is that this target market has been forgotten. Moreover, it is an age where teenagers are looking for “independence” and like to do things without parents. It is why the option 3 fit well. Thirdly, I believe that the option 3 is the one that fit the best selling model that has been chose by Virgin. In fact, it does not require any salespersons...
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...some 150 company owned supermarket units operating under three supermarket chain names through 12 wholesale distribution centers.By year 2002 also,1,100 independent store also supplied by Hall distribution in Unites States. In the year, the sales were $2.3 billion. In supermarket chain owned by Hall consolidated, Superior supermarket is the smallest compared to three supermarket chain in Hall consolidated. The superior gained with sales of 192.2 million in year 2002.In trade areas with small cities and towns in South Central Unites States, the superior served them conventionally. The median size is about 44,000 square feet in United States. So the superior is considered small because the areas of the superior supermarket just cover about 20,730 square feet. Even though the size is small, the superior was the number 1 or number 2 in ranking of supermarket chain in each of its trade measured by market share. The figure 1.1 below had shown the front view of superior supermarket. Figure 1.1: The view in front of Superior Supermarket. 2. OBJECTIVES 1) To decide whether to change the pricing strategy to be lower price or to continue the current pricing strategy. 3. CONSTRAINTS 1) Competitors ( 3 major establish supermarket) The three major competitor operates in Centralia were Harrison’s, Grand American, and Missouri Mart. These major competitors have their own strength...
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...living conditions similar or worse than this is by purchasing a stove or fireplace. Upon choosing a fireplace, there are a few differences and features one must consider before finalizing their purchase. For time’s sake however, we will take a look at a few major differences one may look at, when faced with such a purchase. We will also be suggesting that this is an individual who only has the option of a free-standing stove, and due to the inconvenience of their geographic location, can only have a unit that either burns wood or propane. It must also be noted that these are actual differences that must be recognized when making the purchase of anything that has to do directly with keeping you and/or your family warm during the cold season in any mountainous location while being as price effective as possible. These differences are as follows, the cost of fuel to operate the appliance, the cost of miscellaneous parts or installation, and finally, the cost of the unit itself injunction with the cost of its maintenance. The first stove we will discuss is the free-standing, wood burning stove that is large enough to sufficiently heat a typical, 2-story, A-frame cabin. The first expense one must consider is the cost of the fuel in which it operates. For the wood burning stove, if not already previously owned by the individual, the individual must purchase enough wood to last them a full winter/cold season, about 4-5 months, equals...
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...responsibility is termed responsibility accounting. (Points : 1) | True False | 3. A decentralized business organization is one in which all major planning and operating decisions are made by top management. (Points : 1) | True False | 4. A centralized business organization is one in which all major planning and operating decisions are made by top management. (Points : 1) | True False | 5. The primary disadvantage of decentralized operations is that decisions made by one manager may affect other managers in such a way that the profitability of the entire company may suffer. (Points : 1) | True False | 6. The three common types of responsibility centers are referred to as cost centers, profit centers, and investment centers. (Points : 1) | True False | 7. One of the advantages of decentralization is that delegating authority to managers closest to the operation always results in better decisions. (Points : 1) | True False | 8. Developing and retaining quality managers is an advantage of decentralization. (Points : 1) | True False | 9. A responsibility center in which the department manager has responsibility for and authority over costs, revenues, and assets invested in the department is termed a cost center. (Points : 1) | True False | 10. Budget performance reports prepared for the vice-president of production would generally contain...
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...Period 3 Our strategy for period three was to focus on areas that we needed to see improvements in such as MF-3 “EPS” and MP-2 “New Designs with Wear Resistant Parts” and focused on initiatives that linked to them. In period three in order to achieve our customer objectives we continued to invest in C-4, C-5, and C-7. However we decided to remove C-2 “Customer Goal Sharing Initiative” because we were not seeing major improvements and decided it would be better to invest in something else which will be discussed later. Removing C-2 had a negative impact on MC-1 which is “BSC objectives shared with strategic customers” bringing it down from 9 to 7, this program helped the company understand the needs and wants of the consumers, reason being why we will add it back in a later period. We did not see a major improvement with our EPS which was one of our main objectives and focus, in order to improve that we needed to control our costs which are impacted but internal controls. We continued to invest in our internal processes P-1, P-7, P-14, and P-15. However some changes that we made to our investments in internal processes were that we removed P-2 “Assembly Line Equipment Upgrade” which was tied in with MP-6 “Assembly Throughput Rate” because we were at a 136% by the end of year 2 and decided to focus on metrics that were not growing significantly. Therefore added in P-10 “R&D Initiative: Wear-Resistant Parts” because this would increase quality of our parts by improving the...
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...To calculate the break-even volume for the dialysis unit we first assume that every patient receives three treatments a week, 156 a year. We use the numbers of last year to calculate the break-even volume as stated in exhibit 1 and 2 of the case. We assume that the allocated expenses and all other costs, except for the major equipment depreciation, stay the same. Since the 14 machines cannot be sold after four years and they are for already five years in the company, we define this as a sunk cost and the major equipment depreciation is not included in the calculation of the break-even volume. The fixed costs are the salaries and wages as stated in Exhibit 2. The supplies and purchases services are not included since they differ according to the number of treatments provided. The fixed costs are therefore 438,900 + 71,970=$510,870. However the annualized salaries have decreased by 84,000 and the fringe benefits by 8,400 and the major equipment depreciation of 26,250 is not included anymore. The fixed costs decrease to $392,220 (510,870 – 84,000 – 8,400 – 26,250 =$392,220). The allocated expenses are $277,267, which makes total fixed costs of (277,267+392,220) $669,487. Variable costs are water usage, medical supplies and purchased lab services = 539,178/5736=94 per treatment Price = $250 as stated in the text Break-even analysis BEP = Fixed costs/(price - variable costs) 669,487 / (250-94) =4292 treatments a year. This means that the breakeven volume for the dialysis unit...
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