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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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