HOMEWORK 1
NIKE FOOTWEAR
Nike sports footwear is a product that is commonly used by sportsmen and women for athletic activities
(Bass, 2014). Nike has employed different strategies is ensuring that its potential clients are satisfied
(Devine, 2017). Nike produces footwear of different varieties (running, boxing, tennis, soccer, and
skating sports footwear). These options are of a high-quality standard, and that is what drives customer
preference.
Data: 75% market compatibility (R2= 0.75), (Drake n.d).
Nike can serve a wide range of customers for open free sports such as gym and jogging. This makes its
target audience wide which increases the demand. This calls for over 75 million customers globally.
The consumer income is currently at $36.4 billion. This makes Nike the leading footwear product
company in the Footwear Industry (Drake n.d).
Nike faces close competition from Reebok, Adidas, Sketchers, and British Knights. Through economic
studies, some analyses indicate the outcome of the competitive sportswear market. Nike is the leading
sportswear product (Cho et al., 2017).
Source: Yahoo/finance
With the current economic performance and the generatively growing demand for Nike products, the
Company aims at lowering the average product price to $75.91. This is a couple of dollars below what
the price is now ($78.74). The lowering of price is believed to keep the demand for Nike products high
and steady for maximum sales (Russel, 2014).
Nike seeks to reduce the average product price as outlined. Due to the high price elasticity of demand
of 2.79, Nike products will experience more demand next year (Drake n.d).
249 words
References
Bass, B. (2014): Leadership and performance beyond expectations. New York, NY: The Free Press.
Cho, M., Choi, S.P., Choi, H.R., Park, B.K., Kim, D.H., Kim, H.S. and Lee, B.H., 2017. Footwear
Design Crowdsourcing Platform Model For Strengthening Of the Competitiveness Of The
Footwear Industry. International Journal of System Modeling and Simulation, 2(4), pp.30-33.
Devine, K., & Seaton, L. (2017). An examination of quarterly financial ratio stability: implications for
financial decision making. Journal of Applied Business Research (JABR), 11(1), 81-97.
Drake, P. (n.d.). Financial ratio analysis. Retrieved from
http://educ.jmu.edu/~drakepp/principles/module2/fin_rat.pdf
Russell, R. F., & Stone, A. G. (2014): A review of servant leadership attributes: Developing a
practical model. Leadership & Organization Development Journal, 23(3), 145-157.
HOMEWORK 2
The techniques of supply are of the essence in determining the overall performance of the
company. This is so since poor and inefficient techniques of supply will end up having a negative
impact on the company's production sector as well as its overall performance in the market. One
company that has taken note of this aspect and has strived to change its techniques of supply in recent
time in an effort to improve is Starbucks.
Why and how did the company institute the changes?
Currently, Starbuck is one of the fastest growing companies in the world. This is evident in the
number Starbucks shops it has been opening all the world (Ritson, 2007). Growth the company has
been experiencing coupled with climate change prompted Starbucks to change its techniques of supply
in 2014. This was by increasing direct financing through loans to farmers who are responsible for
supplying it with coffee beans. This was in an effort to enable them to be able to supply good quality
coffee beans in the wake of climate change (Foote, 2016).
2013
2014
2015
Farmer loans ($ millions)
11.9
16.3
21.3
Note: data from Farmer Support Centers (2018)
Did changes improve performance?
Changes Starbucks instituted most certainly improved its profits. This was by enabling the
company to be able to provide high-quality coffee products to its customers in comparison to the quality
of coffee its competitors were providing to their customers (Foote, 2016). This, in turn, resulted in the
increase in revenue and its profits year after year.
Revenue ($ billions)
Profits
2013
14.87
8.3M
2014
16.44
2.07B
Note: data from "Starbucks Corp."(2018)
Words 249
References
2015
19.15
2.76B
Farmer Support Centers. (2018). Retrieved from
https://www.starbucks.com/responsibility/community/farmer-support/farmer-support-centers
Foote. (2016). Retrieved from https://www.forbes.com/sites/willyfoote/2016/05/23/to-invest-in-thefuture-of-coffee-starbucks-turns-to-the-capital-markets/#27db2bcc1174
rams. (2016). Starbucks: Climate Change Responsibility in the Supply Chain – Technology and
Operations Management. Retrieved from https://rctom.hbs.org/submission/starbucks-climatechange-responsibility-in-the-supply-chain/
Ritson, M. (2007). Speedy Starbucks has grown too fast. Strategic Direction, 23(8). doi:
10.1108/sd.2007.05623had.006
Starbucks Corp. (2018). Retrieved from https://www.marketwatch.com/investing/stock/sbux/financials
HOMEWORK 3
Restaurant
The restaurant will be a 2,000 square feet with initial cost be as follows. The payment for the
building where the hotel will be set will be at the range of $ 5,000. Utensils will cost overeagerly $ 400.
Furniture and fitting will cost approximately $ 2,000. Finally, electronic cookers will cost roughly $ 1,
000. The variable cost is as follows: electricity and water bills will be $ 100-250. Wages and salaries for
temporally employee $ 10-20 per hour (Auty, 2002).
The maximum capacity will be serving 1500 clients per day. Once the restaurant plans to push
beyond the supreme size, then there will be the expectation of serving over 1500 customers. This will call
for superfluous entourages, augmented in the food and the furniture as well as fitting, meaning that the
fixed and variable cost will have to grow since supplementary resources will be required.
In the long run, the restaurant will be expected to serve over 2500 clients. This will then mean
that the restaurants will need a more prominent building than the initial one. Hence, additional room.
Furthermore, it will necessitate more employees cooks and machinery to make sure that consumers are
not kept waiting. In this case, the restaurant will enjoy the economies of scales like the good name as the
brand will have reached numerous individuals. Moreover, it will correspondingly enjoy the detriment of
producing and buying material in bulk which is cheaper. The diseconomies of scales will be complex in
operation (Lundberg, 2000).
(Word count 250)
References
Auty, S. (2002). Consumer choice and segmentation in the restaurant industry. Service Industries
Journal, 12(3), 324-339.
Fine, G. A. (2006). Justifying work: Occupational rhetorics as resources in restaurant kitchens.
Administrative science quarterly, 90-115.
Lundberg, D. E. (2000). The hotel and restaurant business(No. Ed. 5). Van Nostrand Reinhold.
Saad Andaleeb, S., & Conway, C. (2006). Customer satisfaction in the restaurant industry: an
examination of the transaction-specific model. Journal of services marketing, 20(1), 3-11.
Walker, J. R. (2007). The restaurant, study guide: From concept to operation. New York City,
NY: John Wiley & Sons.
HOMEWORK 4
A monopoly has been explained as a market in which one player has control over the output and the sale
of a specific product (Smidt, 2011). It does not mean that dominance translates to profitability; there must
be consideration of factors such as the demand for goods. When one comes to understand the evolution
from a competitive market to a monopoly, one needs to look at the factors which are likely to help in
creating such a situation (Coase, 2012). First, if there’s an increasing returns to scale the rate of
production. Secondly, if there is an increase in the capital investments, or large research costs necessary
for development of the industry (Peteraf, 1993). An industry can also move from being competitive to a
monopoly if it’s dependent on natural resources, which means that factors such as increased government
control, and only the investors with large cash flows are able to sustain such factors of production. A
monopoly can also be created if there are legal restrictions which limits the entry of other players in the
industry (Sharkey, 2012). For example, one just has to look at the way Medicare and Medicaid, despite
obvious fallibilities, has been able to have a tight grip on the American health insurance sector (Stiglitz,
2007). In a competitive market versus a monopoly, there is a difference on the marginal costs are always
positive, but in a competitive environment, it causes an equilibrium.
The diagram above illustrates, and in a competitive market, the demand curve is elastic, while in a
monopoly it spirals downward.
References
Coase, R. H. (2012). The firm, the market, and the law. University of Chicago press.
Peteraf, M. A. (1993). The cornerstones of competitive advantage: a resource‐based view. Strategic
management journal, 14(3), 179-191.
Sharkey, W. W. (2012). The theory of natural monopoly.
Smidt, S. (2011). Which road to an efficient stock market: free competition or regulated
monopoly?. Financial Analysts Journal, 18-69.
Stiglitz, J. E. (2007). Monopoly, non-linear pricing and imperfect information: the insurance market. The
Review of Economic Studies, 44(3), 407-430.
HOMEWORK 4, 5 and 6
HOMEWORK 4
A monopoly has been explained as a market in which one player has control over the output and the sale
of a specific product (Smidt, 2011). It does not mean that dominance translates to profitability; there must
be consideration of factors such as the demand for goods. When one comes to understand the evolution
from a competitive market to a monopoly, one needs to look at the factors which are likely to help in
creating such a situation (Coase, 2012). First, if there’s an increasing returns to scale the rate of
production. Secondly, if there is an increase in the capital investments, or large research costs necessary
for development of the industry (Peteraf, 1993). An industry can also move from being competitive to a
monopoly if it’s dependent on natural resources, which means that factors such as increased government
control, and only the investors with large cash flows are able to sustain such factors of production. A
monopoly can also be created if there are legal restrictions which limits the entry of other players in the
industry (Sharkey, 2012). For example, one just has to look at the way Medicare and Medicaid, despite
obvious fallibilities, has been able to have a tight grip on the American health insurance sector (Stiglitz,
2007). In a competitive market versus a monopoly, there is a difference on the marginal costs are always
positive, but in a competitive environment, it causes an equilibrium.
The diagram above illustrates, and in a competitive market, the demand curve is elastic, while in a
monopoly it spirals downward.
References
Coase, R. H. (2012). The firm, the market, and the law. University of Chicago press.
Peteraf, M. A. (1993). The cornerstones of competitive advantage: a resource‐based view. Strategic
management journal, 14(3), 179-191.
Sharkey, W. W. (2012). The theory of natural monopoly.
Smidt, S. (2011). Which road to an efficient stock market: free competition or regulated
monopoly?. Financial Analysts Journal, 18-69.
Stiglitz, J. E. (2007). Monopoly, non-linear pricing and imperfect information: the insurance market. The
Review of Economic Studies, 44(3), 407-430.
HOMEWORK 5
Horizontal Merger
The united states vs. Energy solution and waste control specialist. The ruling took place on June
21st, 2017 at the US district court for the district of Delaware. In this case, the departments of Justice
(DOJ), claimed that energy solutions and WCS are the only two providers of low-level radioactive waste
disposal in 36 states thus entry will be barred by regulatory barriers. Therefore, the mergers will not take
place following the obstacles of different states. Besides, WCS had not ducked their debt and that they
were operating on a lease payment rolls (Metcalf, 2004). The company had also entered some of the longterm investments to enable in future growth opportunities and that its mother company could provide
financial needs. The defendant, on the other hand, claimed that WCS is a failure and that it was not
making any profit as it had a very high fixed cost. They also claimed that the company was in financial
distress as fulfilling of some of the regulatory mandates, low level of radioactive waste and rising cost
was making it collapse.
The outcomes were that the court agreed with the DOJ on the basses that both companies
operated on inters changeable products and hence had less completion. The court, therefore, agreed with
the DOJ arguments and stated that WCS had not convinced the court that energy solution was the only
company they could merge with. This lead to the end of the deal and thus the mergers did not take place
(Shapiro, 2010).
References
Becker, G. (2015). Horizontal Merger Guidelines. Wiley Encyclopedia of Management, 1-6.
Helton, J. C. (2003). Uncertainty and sensitivity analysis techniques for use in performance assessment
for radioactive waste disposal. Reliability Engineering & System Safety, 42(2-3), 327-367.
Metcalf, T. R. (2004). Resolving the 180-degree ambiguity in vector magnetic field measurements: The
‘minimum’energy solution. Solar Physics, 155(2), 235-242.
Shapiro, C. (2010). The 2010 horizontal merger guidelines: From hedgehog to fox in forty years. Antitrust
LJ, 77, 49.
Smith, L., & Ball, P. (2012). Steps towards sustainable manufacturing through modelling material, energy
and waste flows. International Journal of Production Economics, 140(1), 227-238.
HOMEWORK 6
Scientific Discovery: Reusable Rockets
Elon Musk together with his team in Space X Company has managed to launch Falcon 7 rocket
booster. The discovery is aimed at enabling humans to take significant activities off the surface of the
planet; it was also aimed at making space travel economically viable and commercial by cutting the
overall cost of the travel (Kaplan, 2017). This achievement has been regarded as a positive step towards
space travel. Economic analysis on the viability of space travel as a business has found that it highly
depends on the provision of cheaper trips to the orbit. Market analysis of the space travel business by
Space X Company has found that its competitors charge up to a maximum of $10,000 for every kilogram
launch to space. However, with reusable rockets discovery the cost is expected to drop to less than $2,000
(Anderson, 2013).
This discovery coupled with its fare cost is expected to economically increase the possibility of
asteroid mining for minerals, lunar tourism, orbital manufacturing, and constellation visibility through
satellite (Seedhouse, 2013). According to studies, the discovery is considered as one of the revolutionary
achievements for mankind because it will make it possible for many people to travel to space. The
reusable rockets will also enable the space travel companies increase space tourism as an economic
venture. It will also increase the scientific potential of other research companies and governments to
efficiently increase their communication about other planetary explorations (Stern, 2013). The economic
importance of this discovery besides the ability to explore and tour the moon, it will enable man to obtain
most important minerals from the surface of asteroids. These minerals will use the development of special
infrastructure such as rail roads, bridges and used in the promotion of global business in the global
market. This will allow other countries to obtain the minerals for their without having to travel to space to
mine them for themselves (Horvath et al, 2017).
References
Kaplan, A. (2017). The conduct of inquiry: Methodology for behavioural science. Routledge.
Anderson, C. (2013). Rethinking public–private space travel. Space Policy, 29(4), 266-271.
Horvath, T. J., Aubuchon, V. V., Rufer, S., Campbell, C., Schwartz, R., Mercer, C. D., ... & Kennerly, S.
(2017). Advancing Supersonic Retro-Propulsion Technology Readiness: Infrared Observations of
the SpaceX Falcon 9 First Stage. In AIAA SPACE and Astronautics Forum and Exposition (p.
5294).
Stern, S. A. (2013). The low-cost ticket to space. Scientific American, 308(4), 68-73.
Seedhouse, E. (2013). SpaceX: making commercial spaceflight a reality. Springer Science & Business
Media.
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