Essay --

X can be seen as high on the openness scale. â€Å"The personality dimension that includes imagination, wit, originality, and creativity; people low on this dimension are shallow, plain and simple† (Friedman). X was very musically talented, having been acknowledged as the â€Å"King of Pop† by Elizabeth Taylor. (Interview with Oprah Part 2) In 1982, he produced the best-selling album of all time, Thriller. He is exceptionally imaginative as he wants to â€Å"bring out the child in everyone.† He constructed the Neverland Ranch which is equipped with candy, magic shows, carnival rides, and film. X worked with the Make a Wish Foundation in order to occupy terminally-ill children who would come every three weeks and he would entertain them with his child-like and spark. X was so generous and loved giving back to the world, and therefore he was also involved with the Heal the World Foundation. With regards to this foundation, the objectives for Heal LA division were f or the vaccination of children, having a mentoring big sister/ big brother program together with a teaching program on drug abuse (Interview with Oprah Part 5). X was also certainly open to experience by being a singer who toured the world. He showed his openness to different individuals through his numerous marriages and management with different performers on several albums. Being an artist, a singer and dancer, X was unsurprisingly imaginative by writing his own lyrics and designing his own dance moves. Michael seemed fairly high on openness. (Friedman, H.B., Schustack, M.W 2009). While X aimed for precision in his music he appears to be fairly low on the conscientiousness scale. â€Å"The personality dimension that includes dependability, cautiousness, organization, and responsibility; pe... ...t just by seeing the sight of his own father (Interview with Oprah Part 3). Owing to the fact of his violation as a child, X had many issues with his physical appearance, as well as sleeping problems. These factors presented him with great amounts of concern, which would position him high in neuroticism. X felt exposed and therefore had numerous amounts of plastic surgeries in order to fix his appearance according to his criteria. At the end of his life X was using potent sleeping medicines called Lorazepam and Midazolam in order to help with his insomnia by bringing about peacefulness, as well as Propofol, which was a sleep-inducing medicine used for general anaesthesia. The fact that X had use such potent medicines to help deal with his insomnia revealed how much it affected his life and indicated his emotional unsteadiness. (Friedman, H.B., Schustack, M.W 2009).

Business Model and Strategic Plan Essay

INTRODUCTION Why do businesses need innovation is simple, the world is changing at a rapid speed and no one can predict what is coming in the future. Organizations are facing many new types of vulnerabilities everyday. Innovation helps to determinate the strategic management within an organization and prepares organizations for the unforeseeable change and to make the change. Although very organization have different priorities, or balance the unique issues of their own, ignoring the innovation, or implementing the strategic plan inefficiently can bring risks of losing key employees, inefficiency of the operation, and lose competitive advantages to the competitors. This paper will create a new division for Starbucks Coffee Co. Using this division as an example to explain the importance of the innovation in company’s vision, mission, and values, and how it related to strategic management. THE NEW BUSINESS MODEL Starbucks Corporation, doing business as Starbucks Coffee, is an American global coffee company and coffeehouse chain based in Seattle, Washington. Today, with more than 21,000 stores in 65 countries, Starbucks is the premier roaster and retailer of specialty coffee in the world. And with every cup, the company strives to bring both their heritage and an exceptional experience to life. (Starbucks.com) Since the first Starbucks opened in 1971, the company has a goal to share great coffee with friends and help make the world a little better place. (Starbucks.com) To better server Starbucks Coffee’s customers, and provide quick and easy coffee for the people who have to fight the morning or anytime traffic, Starbucks coffee co. has purposed a new business model of Self Severed Coffee Machine. This new Machine will be located outside of Starbucks stores, shopping centers, and large office buildings to better server the consumers who does not have time to wait in line and get their favorite cup of coffee. COMPETITIVE ADVANTAGES In this tough economic climate, Starbucks needs to compete smart, this means to stay a step head on ensuring the best response to customers’ need and demand. It is often to see a line of customers either inside the store or in the drive through. While we appreciate the their patience to wait in line, we also share their frustration. It is our intention to ensure everyone loves his or her coffee. While we are proud that every cup is made to earn our customers’ satisfaction, we are also spending a considerable amount of time on making them. The Self Served Starbucks machine has an ability of produce majority flavors of the coffee, which our customer likes. Simply pay the cash, wipe the credit card, or scan the mobile Starbucks App on your smartphone, the machine will make a fresh brew cup of coffee in just 45 seconds. With this machine outside of store or mall, our customer can save time on waiting in line. Even more convenient, the machines outside of the office building not only can save our customer a trip to the coffee shop in the morning, also be able to enjoy a hot fresh coffee when they sat down by their desk. This new machine can ensure the competitive advantage by its product differentiation, more focused group on customer service, and operational efficiency. MISSION VISION AND VALUE Starbucks’ mission is a reason for the company’s existence. With the unique style of combining both, our vision and mission statement is â€Å"to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.† (Starbucks.com) To align with this mission statement, our new division’s mission statement is to † bring the best quality coffee and convenience to our customers on the go, one machine at the time† This mission statement reflected the company value and beliefs to show our costumers that we care, it will also guide our employees on understand and establish what the company truly does. A good mission statement inspires employees and provides a focus and direction for strategic planning. While mission statements vary from organization to organization and represent the distinctness of each one, they all share similar components. (Mission and Vision Statements, 2010) The new division’s mission statemen ts include descriptions of Starbucks’ target market, the geographic domain, and concern for survival, growth, and profitability. SWOTT ANALYSIS Being the giant leader of the coffee and snacks industry, Starbuck coffee company needs to develop a strong strategic plan through the analysis of SWOTT. SWOTT stands for strengths, weaknesses, opportunities, threats and trends. A SWOTT analysis identifies strengths and weaknesses within a company, and outside opportunities and threats. The most important parts of a SWOT analysis specify the actions that correspond to the elements the company identify. By using the results of the analysis to improve the situation of the new division, we can reduce the likelihood of developments that negatively affect the business while improving performance. (Smallbusiness.Chron.com) EXTERNAL SWOTT Starbuck is currently in the retail coffee and snacks industry. The  self-serve coffee machine will be able to satisfy customers not just a cup of coffee but also tea, water and juice, which Starbuck currently provide in the store. The loyal based reward programs provide customers with convenience, giving presents, and increasing frequency of the machine visit. Although there will not be any customer service involved, but the efficiency of leveraging technology with the capability of mobile App will still attract customers. The machine will provide extra ideas on the screen related to recycling and reducing waste; this is a great way to communicate with people about the social responsibility initiatives of the company. Due to the economic crush in 2008, this industry has experiencing a major downfall in sales. Because of the sensitivities to the macroeconomic factors, most of industry consumers have to give up extra expenses such as over priced drinks, snacks, and food. However, with economy slowly recover, consumers will start feeling the relaxation of the financial situation, it is safe to say, this industry will has a considerable amount of growth in the near future. With Starbuck having the most of market share in the industry, they have a monopolistic competition. By far the biggest threat the company face is the mature stage of the industry. Dunkin donuts, McDonalds, or Pete’s coffee are all the main pressure on Starbucks. Starbucks brand recognition and the convenience of the self-severed machines differentiates itself, the brand and the machine will draw more customers’ attention, gain competitive advantages for the company. INTERNAL SWOTT The self-served Starbucks coffee machine will be located in some of the most prime and strategic location across the city such as universities, office buildings, and grocery stores. They will primarily targeting mid-income individuals and students. This strategy will gain competence due to the customer convince factor. The Starbuck coffee-pricing factor does pose a weakness to some targeted consumers; however, the self-severed machine will be 5% cheap because there are no labor costs involved. Expansion into a global market is an opportunity for these machines. Starbucks has a great growth potential in further expanding into the emerging and developing  markets. The company can leverage their size, experience, financial prowess and efficiencies to make new market share. (Forbes.com) Starbuck has putting significant amount of time and money on training their employees. Their employees are known for highly knowledge and experienced. They are the main assets of the company and they are provided with great benefits like stock option, retirement accounts and a healthy culture. This effective human capital management translates into great customer services. It was rated 91st in the 100 best places to work for by Fortune Magazine. (CNN.com) The internal threat for Starbucks currently is the change of life style and taste choices of consumers. More and more customers are shifting towards healthy foods and drinks; this treading can hurt the coffee culture of the company, even to industry in the future. BALANCE SCORECARD The Balanced scorecard is a management system that enables organizations to clarify their vision and strategy and translate them into action. It also provides an organization with feedback of both the internal business processes and external outcomes, which allows for continuous improvement of strategic performance and results. Develop the strategic objectives for the new division of the Starbuck in the balanced scorecard format in the context of key trends, assumptions, and risks. The strategic objectives are measures of attaining the new vision and mission. Below are the three strategic objectives for each of the four balanced scorecard areas identified (Financial, Customer, Process, Learning and Growth). FINANCIAL PERSPECTIVE How to gain the market share is the objective in financial perspective. This is aggressive strategy the new division can use to power our organization and weaken the competitors. The new † Self served coffee machine† can gain market shares by: One: New technology. This market has always been a high growth market, and high growth markets has less competitors, it means they will not fight our  efforts as fiercely. Two: Innovation. This new machine is absolutely a breakthrough innovative idea once it is release into the market. Innovation can help the new division obtain large market share. Three: Strategic Alliance. The new machine can advertise other products, which is great choice when drinking coffee. If the alliance company can help with founding, we can lower our coffee price. This is efficient way to lure customers from competitors. CUSTOMER VALUE PERSPECTIVE How do we create value for our customers are the objective for the customer perspective? Customers are the key factor to an organization success. Creating value for our customers in three ways: One: New Value. This is the most challenging way to impress customers. By setting new machines by the office buildings or school parking lots will be most convenience for people do not have time to stop for coffee in the morning, or anytime during the day. Two: More value. The machine will provide the same product as in a Starbucks coffee store, but cheaper. Three: Better Value. To expend on the existing value, the customer will be able to purchase snake from the machine. The addition product provided will simply delivering more powerful impact to consumers. PROCESS OR INTERNAL OPERATIONS PERSPECTIVE How we measure the new division performance? The new division will have its own survey attached to the machine. Customers are the top choice for us to know what does the new division do to make them come back for more. Also, customers can leave feedbacks and advice via Facebook, Yelp, or preferred  social Media. Our new division will make huge impact on the organization, because it will release the busy traffic in the morning for the store location. LEARNING AND GROWTH (EMPLOYEE) PERSPECTIVE There is no employees’ turn over or retention involved with the â€Å"Self served machine† However, the mechanics are needed for the daily maintenance and refill. The new technology will notify the mechanic department if the machine needs any attention or checkups. COMMUNICATION PLAN While having a strategic plan, mission and vision Statement is crucial for the new division, but crafting and developing this plan is only the half of the battle. To have a communication plan is one of the most important factors after the plan and analysis is finalized. Although the new division will not have any human operating the machine, there are still the needs of new policies and procedures to be carried out. The effective of these policies and procedures are most likely effect the success of the plan. For example, machines maintenance schedule, or refill of the machine. Failure to take communication plan into account can cause disastrous. MONITORING AND CONTROL Our new business plan is a comprehensive document that outlines key elements of how we going to operate this new division. The plan typically includes an assessment of the market and the competition, operating budget breakdown, and short and long-term business goals. (smallbusiness.chron.com) There are three suggest way to monitor and control our new plan: CREATE PLAN REVIEW DATES Any new business plans within an organization needs to be reviewed on a regular basis, especially the expectancy of the busy traffic with the new  self-served machine. The new division management needs to set a date, this can be quarterly or annually, to review the long-term and short-term goals. Conducting the comparative analysis will help to ensure the strategic plan is on the right path. DEVELOP A TRACKING SYSTEM The management team of new division needs to develop a new tracking system to assess how the sales are doing regularly. For example, if the target sales goal is 5000 cups per month, then track the sales weekly or twice a month to monitor and control the process. Monitor key elements frequently. Key elements of the business plan include research on the market and competition as well as revenue projections. Each of these elements is subject to rapid change, and the management team should remain aware of where you stand with regard to these issues. (Smallbusiness.chorn.com) COORDINATE BUSINESS AND MARKING PLANS Our new division will have both business and marketing plans. Sometimes, they overlap in several ways. For example, if the Marketing plans calls for a major launching campaign with the media, but the business plan’s revenue prediction rejects that plan, then the managers needs to revise the plan to stay on track. ETHICS WITHIN THE NEW DIVISION Ethical behaviors and organization social responsibility is one of the key factors to bring large benefits for the business. With the new self-served coffee machine, it attracts customers with Starbucks signature products, thereby to boosting sales and revenue. It will create more jobs, therefor, help with unemployment. It will also attract more investors and keep the company’s share price high, therefor, protecting the business and employees’ benefits. CONCLUSION The fact is brutally simple: the accelerated change within the business world is unavoidable. Evidence shows in current business world, customers are changing their needs and interest each day, markets are relentlessly unstable, and competitors are more aggressively capture any chance possible at new ideas. With technology advances faster and faster, and modifying the traditional strategic management that it touches, Innovation has become what shapes the current strategic management trends, and the right strategic management is the key to business success. References: Starbuck. Retrieved from: http://www.starbucks.com/about-us/our-heritage Mission and Vision Statements. Retrieved from: http://www.referenceforbusiness.com/management/Mar-No/Mission-and-Vision-Statements.html History of Starbuck. Retrieved from: http://www.starbucks.com/about-us/our-heritage How to Monitor & Control Your Business Plan. Retrieved from: http://smallbusiness.chron.com/monitor-control-business-plan-41401.html by Lisa McQuerrey, Demand Media The new plan of the Starbuck coffee. Retrieved from: http://www.forbes.com/sites/walterloeb/2013/01/31/starbucks-global-coffee-giant-has-new- growth-plans/ Why Perform a SWOTT Analysis? Retrieved from: http://smallbusiness.chron.com/perform-swot-analysis-5050.html 100 best company to work for. Retrieved from: http://money.cnn.com/magazines/fortune/best-companies/2013/snapshots/94.html

PEST Analysis of the External Environment Essay

The paper provides an analysis of the Case Study for Westjet Airlines, Canada. The case is taken from the work done by Peter Yannoupoulus (pg 376-380) Problem Statement The following problem statements are proposed: 1. Westjet Airlines total debt is higher relative to its shareholder equity a measure that may call for external financing. The company needs a strategy to ensure its self-sufficiency. 2. Westjet has many competitors and has to come up with strategies to ensure it remains in the market and makes profits. The major questions that management of Westjet have to deal with is whether to maintain its status quo of offering low cost and low fare, whether to venture more in the third party charter segment or whether to be involved in the Trans borders segment. The management has to decide the best strategy it will use to achieve its expansion plan and decision must be made urgently. PEST Analysis of the External Environment Political/ Legal After the 9/11 attack operating in the small markets has become uneconomical due to increased costs. Legal measures by the government translated to higher costs to airlines, which were transferred to consumers. Non-profit airport authorities have also led to the increased prices that act as a disincentive to air transportation. Most customers are price sensitive and care must be taken to maintain its competitiveness. Westjet incurred added costs by providing amenities to its customers like leather seats, snacks leg rooms and television. Economic It offers quality services, empowers its employees and shares profits. This way it maintains its competitiveness. Having good relationships with employees creates good relationships with customers. Employees can make decisions and solve customer problems without the unnecessary delay of contracting the management. Employees are made to feel as if they are part of the company. By offering quality services and on job training it improves its highly motivated employees skills. It employs qualified people who also have a right attitude. Employees are motivated by the profit sharing where they get additional money from what the company makes. Through its employees share purchase plan, it encourages its employees to invest in the company’s stock. Pricing Its fares are 55% lower than air Canada fares. It offers services at a low cost so as to increase the traffic flow. It attracts passengers who would prefer other means of transport as well as those without the traveling idea but attracted by the prices. Westjet intends to expand its scope to serve the central and eastern Canada. By early 2004, it was serving 24 Canadian cities. (P. 376) Environment/ Technological In increasing its efficiency Westjet may be obliged to incur high costs but the benefits are worth it. For instance the installation of winglets that cost $ 635,000 per plane would result to $ 112,500 savings p. a per plane. (p. 379) Social and Cultural Westjet airlines provide passenger, cargo and third party charter services to Canada’s domestic market. It started its operations in 1996 with 3 aircrafts and 220 employees by 2003. It has expanded and now employs 3610 employees and 14 aircrafts. It has entered an agreement with Air transit, the leading Canadian charter airline and it rent its airplanes during off-peak seasons like in winter months. It also did its maintenance and rented some of its simulators. Competition Air Canada, the largest competitor has more resources and a higher command in the market. It accessed over 90% of Canadian airline industry, US trans border and international markets. It makes counter decisions to be at better grounds than Westjet. Other low fare competitors include Cantet, HMY airways, Zoom airlines, Tango, and Jazz and Zip air. Decisions Alternative and Solutions Alternative -1 Tran border expansion Westjet may decide to expand in Tran border operations. Venturing into this area calls for increased cost in increasing aircrafts. Tough competition from subsidiary airlines of stronger airline could threaten its low fare strategy. There is very high competition in the trans-boarder market as it includes both the Canadian as well as the US airlines. Replacing the older aircrafts would also be essential to pave way for efficient aircrafts to travel non-stop across cities in Canada as well as across the borders. Alternative -2 Offer low cost and low fare and increase Canada market Westjet can maintain its status quo. It can strengthen or empower its employees results to increase their satisfaction that is further projected to the customers. Its small size will ensures low cost structure and fewer employees. Operating in the profitable routes makes it more efficient than large airlines. It must also ensure that it offers convenient schedules. It can increase or maintain these profits by increasing its scope. Westjet can advertise its services extensively through it the advertising and new media division in its sales and marketing. Advertisements can be through magazines, outdoors advertising, radio, television, and transit messaging and web advertisement. (P. 378). It can also increase offers to act as incentives like random promotion for instance, the prime ministers day special. Westjet offers tickets less reservation system through Internet bookings that are very convenient and effective to consumers. It also eliminated unnecessary costs that go with printing distribution and tracking of tickets Alternative -3 Venture more in charter segment. Westjet can opt to expand in the third party sector or the charter services. It is appropriate as the unutilized aircrafts can be utilized during winter. It can team up with established charter flight businesses. Most Favored Alternative The strategy that best suffice Westjet expansion is to expand its operation in Canada. Westjet has only exploited 10% of its potential market share and therefore has more potential to expand. (p. 375). It can increase the number of flights made and venture into areas that have not been exploited. Profits and ROI In 2001 Westjet had $ 478 million profits that rose to $ 680 million in 2002. It can continue with this trend if it exploits the unexploited 90% of its potential. (P. 380) References: Peter Yannoupoulus. West Jet Airlines Case 4 pg 376-380

Corporate Social Responsibility and Human Rights Essay

This brings me to the system theory. A system has interconnected parts that depend on each other to develop the mutual goal, which is a successful center. The interconnected parts are the environment, the processes, and the outcomes. Each component needs the support of the other to keep the common goal. According to Bloom the system theory is, â€Å"A set of interrelated parts that is characterized by the interdependence of its parts and it differentiation from its environment, a complex network of social relationships, and its own unique culture. † (Bloom, 2005, p. ) The environment is a place where input is implemented. When I think of a childcare center environment I think of children and how they develop. I think of the atmosphere, the setting, and the conditions that can spark the chil d’s analytical thinking abilities. But that is just the internal environment. The external environments consist of the parents, sponsoring agencies, local communities, legislative bo dies, and the professional communities / teachers. â€Å"The external environment places constraints and demands on the center. † (Bloom, 2005) The external environment is the input and processing stage. This is a collaboration of people and agencies that come up with strategies to support the development of the center. The centers that have sponsors have money and agencies that develop supportive programs such as art, literacy, and technology. Columbia College sponsors the center that I work for. The center used the money Columbia gave them to developed a program for the teachers to learn the importance of art and how a person can utilize art throughout the day. Parents, sponsoring agencies, local communities, legislative bodies, and the professional communities / teachers are big factors on the input and processing stage. Parents may demand that the students have more free play and outdoor play. The sponsoring agencies might require more outcome data. The local communities may ask the center to stop the students from writing on the ground with chalk. The Legislative bodies may require the students to take shorter naps for more gross motor activities. The professional communities may ask for better wages for their degrees. (Bloom, 2005, p. 6) After the inputs of complaints or suggestions the director needs to structure and process how to develop a plan of action. Getting feedback from the sources that asked for the changes is essential. After developing a plan of action the director can stand back and observe if the changes are working or not. This system allows the director to process the changes, implement the changes, and revise the changes if needed to prefect the change. The outcome process is very important because it could either sink or sail a center. If the changes in the program are not supported by staff, and parents this may become a problem that causes low enrollment, and staff turnovers. I am experiencing these problematic issues at the center I work for. Four years ago the center hired a new director. During the four years she has made lots of changes. She changed classroom teacher teams. She closed classrooms that were bringing in the students. She put teachers in infant classrooms when they did not want to work with babies. Recently she enforced closed campus lunch. No one can go out for lunch. You have to order your lunch or bring your lunch from home. She stated that it was mandated by the state. She gave all the teachers the head-start licensing standards that stated the teacher child ratio. It said nothing about our lunch hour. We also have low enrollment. Parents are complaining about teachers’ morale and the director’s attitude. How you implement change can affect the outcome and cause staff and parents to be disgruntle. As Bloom stated, â€Å"Problems can arise when directors and boards lack adequate data and bas decisions about outcomes on inference. † (Bloom, 2005, p. 16) My director did not collaborate with her environment. She is an autocratic leader. She is a dictator. She does not give anyone an opportunity to be involved with the decision making process. As it stated in the article Leadership Styles, autocratic leaders are extremely controlling and paternalistic, where leaders have complete power over their staff. Staff and team members have little opportunities to make suggestions, even if these would be in the team’s or the organization’s best interest. (Tools) If my director managed the center in a People oriented/relation oriented approach I believe the center would not be I such a crisis. People oriented/relation oriented approach leaders are totally focused on organizing, supporting, and developing the people on their teams. They treat everyone on the team equally. They’re friendly and approachable. They pay attention to the welfare of everyone in the group, and they make themselves available whenever team members need help or advice. (Tools) Directors need to be mindful of how they lead. A director needs s to know how to coach, mentor and manage the staff. Dictating is not he way to lead. If my director collaborated with the staff, parents, and the community I believe the outcome would be different. Coaching and mentoring is not telling a person what to do.

Harvard business publishing Essay

In mid-September of 2010, Emily Harris, vice president of New Heritage Doll Company’s production division, was weighing project proposals for the company’s upcoming capital budgeting meetings in October. Two proposals stood out based on their potential to strengthen the division’s innovative product lines and drive future growth. However, due to constraints on financial and managerial resources, Harris knew it was possible that the firm’s capital budgeting committee would decline to approve both projects. She also knew that New Heritage’s licensing and retail divisions would promote compelling projects of their own. Consequently, Harris had to be prepared to recommend one of her projects over the other. The Doll Industry Revenues in the U.S. toy and game industry totaled $42 billion in 2008 and were projected to increase by 4.6% per year to $52.5 billion by 2013. The market was divided into two broad segments: video games (48%) and traditional toys and games (52%). The second segment was further divided into infant/preschool toys (14.5%), dolls (14.1%), outdoor & sports toys (12.3%), and other toys & games (59.1%) including arts and crafts, plush toys, action figures, vehicles, and youth electronics. The U.S. market for toys and games was dominated by large global enterprises that enjoyed economies of scale in design, production, and distribution. Revenues were highly seasonal; the largest selling season in the United States coincided with the winter holiday period. Within the toy and game segment, U.S. retail sales of dolls totaled $3.1 billion in 2008 and were projected to grow by 3% per year to $3.6 billion by 2013. The doll category included large, soft, and mini dolls, as well as doll clothing and other accessories. The phenomenon of â€Å"age compression†Ã¢â‚¬â€ the tendency of younger children to acquire dolls that had traditionally been designed for older girls—reduced growth in the â€Å"baby-doll† sub-segment. Competition among doll producers was vigorous, as a small number of large producers targeted similar demographics and marketed their dolls through the same media. Lasting franchise value for a branded line of dolls was rare; the enormous success of Barbie ® dolls was an obvious exception. More recently and on a much smaller ________________________________________________________________________________________________________________ HBS Professor Timothy Luehrman and HBS MBA Heide Abelli prepared this case solely as a basis for class discussion and not as an endorsement, a source of primary data, or an illustration of effective or ineffective management. Th is case, though based on real events, is fictionalized, and any resemblance to actual persons or entities is coincidental. There are occasional references to actual companies in the narration. Copyright  © 2010 Harvard Business School Publishing. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business Publishing. Harvard Business Publishing is an affiliate of Harvard Business School. Purchased for use on the MSc Business Valuation, at Imperial College London. Taught by James Sefton, from 21-Aug-2013 to 31-Dec-2013. Order ref F211857. Usage permitted only within these parameters otherwise contact info@thecasecentre.org Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F211857 New Heritage Doll Company: Capital Budgeting 4212 | New Heritage Doll Company: Capital Budgeting scale, New Heritage also had created a durable franchise for its line of heirloom dolls. But the popularity of most doll lines waned after a few years. New Heritage Dolls By 2009, New Heritage had grown to 450 employees and generated approximately $245 million of revenue1 and $27 million of operating profit from three divisions: production, retailing, and licensing. The production division, discussed further below, designed and produced dolls and doll accessories. The retailing division offered a unique â€Å"intergenerational experience† for grandmothers, mothers, and daughters, centered upon the character histories and storylines of the company’s dolls and delivered through an online website (42%), a mail-order paper catalog (33%), and a network of retail stores (25%). In fiscal 2009, the retailing division generated roughly $190 million of revenue and $4.8 million of operating profit. The licensing division was started in 1998, and represented the company’s newest and most profitable division. It sought to extend the New Heritage brand and capitalize on high levels of customer loyalty by selectively licensing the company’s doll characters and themes to a variety of media that reached the firm’s target demographic of toddler to pre-teen girls. In fiscal year 2009 the licensing division generated $24.5 million of revenue and $14.5 million in operating profit. New Heritage’s Production Division Production was New Heritage’s largest division as measured by total assets, and easily its most asset-intensive. Approximately 75% of the division’s sales were made to the company’s retailing division, with the remaining 25% comprising private label goods manufactured for other firms. Table 1 summarizes the division’s various sources of revenue and operating income. Table 1 Production Division Data: Revenue ($ millions) Operating Income ($ millions)    New Heritage’s dolls and accessories were offered under distinct brands with different price points, targeting girls between the ages of 3 and 12 years. The company’s baby dolls were generally priced from $15–$30, and were offered to younger girls in earlier stages of development. These dolls typically came with a â€Å"birth certificate† and a short personal history. Dolls in the higher-end of this category incorporated technology that produced a limited amount of speech and motion. For the 1 The division revenue figures include approximately $95 million of internal sales within divisions which are eliminated when considering consolidated revenue for the company. BRIEFCASES | HARVARD BUSINESS PUBLISHING Purchased for use on the MSc Business Valuation, at Imperial College London. Taught by James Sefton, from 21-Aug-2013 to 31-Dec-2013. Order ref F211857. Usage permitted only within these parameters otherwise contact info@thecasecentre.org Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F211857 The New Heritage Doll Company was founded in 1985 by Ingrid Beckwith, a retired psychologist specializing in child development and the grandmother of two young girls. Dr. Beckwith believed the dolls produced by the major toy companies did little to develop girls’ imagination or foster a positive self-image, so she created a line of dolls with unique storylines and wholesome themes. Dr. Beckwith’s dolls struck a chord among mothers and grandmothers who also rejected the dated, clichà ©d images portrayed by the popular dolls of the day. New Heritage Doll Company: Capital Budgeting | 4212 New Heritage outsourced much of its production to a select number of contract manufacturers in Asia. To ensure product quality and safety, the company maintained a fulltime staff to oversee material sourcing, production, and quality control on site at each of its manufacturing partners. Manufacturing activities that required precise tolerances or proprietary processes, along with all the creative elements (design and product prototyping, for example), were handled in-house at the company’s headquarters facilities in Sacramento, California. Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F211857 Capital Budgeting at New Heritage New Heritage’s capital budgeting process retained some of the informality that characterized the company’s early years as an innovative startup. As the company grew, deliberate steps were taken to decentralize some of the project approval process and increase spending authority at the division level. However, large and/or strategic spending proposals were reviewed at the corporate level by a capital budgeting committee consisting of the CEO, CFO, COO, the controller, and the division presidents. The committee examined projects for consistency with New Heritage’s business strategy and sought to balance the needs and priorities of each division against practical financial and organizational constraints. The committee also sought to understand project interdependencies and the potential for a given investment to strengthen the whole company, not solely the division proposing it. New Heritage’s capital budget was set by the board of directors in consultation with top officers, who in turn sought input from each of the divisions. The capital and operating budgets were linked; historically, the capital budget comprised approximately 15% of the company’s EBITDA. The committee had limited discretion to expand or contract the budget, according to its view of the quality of the investment opportunities, competitive dynamics, and general industry conditions. Before being considered by the committee, projects were described, analyzed, and summarized in self-contained proposal documents prepared by each division. These contained business descriptions, at least five years of operating and cash flow forecasts, spending requirements by asset category, personnel requirements, calculations of standard investment metrics, and identification of key project risks and milestones. Financial Analyses Financial analysis began with operating forecasts developed with oversight from New Heritage operating managers. Revenue projections were derived from forecasts of future prices and volumes. Fixed and variable costs were estimated separately, by expense category. Forecasts of working capital requirements were likewise vetted by line managers, who paid particular attention to a project’s requirements for various types of inventory. Forecasts for fixed assets and related depreciation charges were developed in cooperation with analysts reporting to the controller. HARVARD BUSINESS PUBLISHING | BRIEFCASES Purchased for use on the MSc Business Valuation, at Imperial College London. Taught by James Sefton, from 21-Aug-2013 to 31-Dec-2013. Order ref F211857. Usage permitted only within these parameters otherwise contact info@thecasecentre.org $75–$150 price range, New Heritage produced a line of heirloom-quality dolls and accessories. These were designed to appeal to older girls and to convey a sense of cultural and family tradition among grandmothers, mothers, and daughters. The heirloom dolls had more elaborate accessories and personal histories. Finally, the company offered a line of high-end dolls based on fictional â€Å"celebrities,† each associated with a charitable cause and embracing more contemporary fashion trends. These dolls targeted girls in the so-called â€Å"tween† age range of 8–12 years, and also were priced from $75–$150. Like the heirloom dolls, celebrity dolls also came with more elaborate stories and accessories. 4212 | New Heritage Doll Company: Capital Budgeting New Heritage assigned discount rates to projects according to a subjective assessment of each project’s risk. High-, medium-, and low-risk categories for each division were associated with a corresponding discount rate set by the capital budgeting committee in consultation with the corporate treasurer. Assessments of each project’s risk were made at the division level, but subject to review by the capital committee. Factors considered in the assessment of a project’s risk included, for example, whether it required new consumer acceptance or new technology, high levels of fixed costs and hence high breakeven production volumes, the sensitivity of price or volume to macroeconomic recession, the anticipated degree of price competition, and so forth. In 2010, â€Å"medium†-risk projects in the production division received a discount rate of 8.4%. High- and low-risk projects were assessed at 9.0% and 7.7%, respectively. Projects that created value indefinitely, given continuing investment, were treated as going concerns with a perpetual life. That is, NPV calculations included a terminal value computed as the value of a perpetuity growing at a constant rate. However, to preserve an element of conservatism, the capital committee generally insisted on relatively low perpetual growth rates – lower than New Heritage’s historical growth and lower than near-term growth forecasts for a given division. Investment Opportunities in the Production Division Emily Harris was focused on two of the production division’s most attractive current proposals. The first involved expanding the successful Match My Doll Clothing Line to include matching allseason clothing for tween girls and their favorite dolls. The second involved a new initiative, the Design Your Own Doll line, which employed web-based doll-design software to let users â€Å"customize† a doll’s features to the customer’s specifications. Match My Doll Clothing Line Expansion The Match My Doll Clothing line originally consisted of a few sets of matching doll and child clothing and accessories for warm weather. It quickly became successful after the daughters of a few celebrities were spotted and photographed wearing items from the line, and girls’ magazines included some of the line in â€Å"what’s hot to wear† sections. Given recent publicity, Marcy McAdams, the brand manager responsible for the line, believed the timing was perfect to expand. Specifically, McAdams proposed to create an â€Å"All Seasons Collection† of apparel and gear covering all four seasons of the year. She expected the new offerings to be at least as profitable as the existing line, since its current popularity would make it possible to maintain premium prices. She also hoped to take advantage of off-peak discounts offered by some suppliers and contract manufacturers as they tried to smooth their capacity utilization. In the same fashion, McAdams argued the expansion would help reduce, or at least not exacerbate, the seasonality in New Heritage’s sales and earnings. BRIEFCASES | HARVARD BUSINESS PUBLISHING Purchased for use on the MSc Business Valuation, at Imperial College London. Taught by James Sefton, from 21-Aug-2013 to 31-Dec-2013. Order ref F211857. Usage permitted only within these parameters otherwise contact info@thecasecentre.org Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F211857 Operating projections for a given project were used to develop cash flow forecasts that would underpin calculations of net present value (NPV), internal rates of return (IRR), payback period, and other investment metrics. Cash flow forecasts were intended to capture the incremental effect of a proposed project on the firm’s cash flow for each year within the forecast period. That is, each project’s cash flow forecasts excluded non-cash items, such as depreciation charges, and nonincremental items such as sunk costs (i.e., costs that would be incurred regardless of whether a given project was undertaken or not). The cash flow forecasts were computed on an after-corporate-tax basis, but excluded all financing charges. Some elements of the cash flow forecasts were prepared with assistance from treasury analysts, but most of the necessary adjustments were well understood by division staff. New Heritage Doll Company: Capital Budgeting | 4212 To exploit the current popularity of the original Match My Doll Clothing line, especially given the fickle nature of children’s fashion trends, McAdams believed the opportunity had to be exploited without delay. Her investment proposal contained relatively large outlays for R&D, market research, and marketing to maximize the probability of quick acceptance and longer-term success for the follow-on line. Upfront investment expenditures are summarized in Table 2. Table 2 Match My Doll Clothing Extension Outlays The R&D and marketing expenditures would be deductible for tax purposes at New Heritage’s 40% corporate tax rate. The property, plant and equipment was expected to have a useful life of 10 years; the associated depreciation charges, shown in Exhibit 1, were based on the modified accelerated cost recovery system (â€Å"MACRS†) allowed by the IRS. Working capital requirements, shown in Table 2 for 2010 and in Exhibit 1 for subsequent years were based largely on recent historical experience with the original Match My Doll Clothing line. Finally, given the proven success of Match My Doll Clothing, Harris believed the project entailed moderate risk—that is, about the same degree of risk as the production division’s existing business as a whole. Design Your Own Doll This initiative targeted existing New Heritage customers, many of whom owned several of the company’s heirloom dolls. The company’s research showed that, when asked what features (e.g., appearance, ethnicity, â€Å"life story,† etc.) New Heritage should give to future dolls, loyal customers’ responses had a high correlation with their own personal data. That is, girls wanted dolls like themselves. Further research suggested that many loyal customers would purchase yet another doll if they could customize the doll’s features to create a â€Å"one-of-a-kind† addition to a girl’s or family’s existing collection of dolls. It also promised to increase the girl’s pride in and identification with the doll, both because of their shared features and because of the girl’s participation in creating the doll. This in turn further cemented customer loyalty. The customization process would begin with a new section of New Heritage’s website, where proprietary design software enabled the customer to select physical attributes of the doll such as hair color, hair length & style, skin color, eye shape, eye color, and other facial features. The software could combine selected features and produce a photo-realistic image showing the finished doll with user-selected accessories. The customer could zoom in or out on the image and rotate it to see different aspects. The software made it easy to try out different combinations of features and accessories before making a purchase. Elizabeth Holtz, brand manager for heirloom dolls, was very excited about the project. She observed, â€Å"A girl’s relationship with her favorite doll is often partly mommy and partly big sister. Either way, having your doll look more like you is really powerful. And there’s excitement in the experience: exploring the website, naming the doll-to-be, selecting her first outfit†¦even the anticipation of waiting for the new doll to arrive. I really think this is big.† Holtz also believed that the dolls could command a premium price. â€Å"Customers will naturally expect to pay more [for a HARVARD BUSINESS PUBLISHING | BRIEFCASES Purchased for use on the MSc Business Valuation, at Imperial College London. Taught by James Sefton, from 21-Aug-2013 to 31-Dec-2013. Order ref F211857. Usage permitted only within these parameters otherwise contact info@thecasecentre.org Initial Expenditures ($ thousands) 4212 | New Heritage Doll Company: Capital Budgeting custom doll],† she said. Market research with focus groups revealed significant enthusiasm for the product concept and supported the notion of premium prices. The web-based software tools and order entry system required New Heritage to make significant modifications to its existing technology infrastructure, expand its webhosting capacity, and modify the terms of its third-party service agreements to ensure a higher level of service quality. The majority of the R&D expenditures shown below were related to software development, hardware upgrades, and web design. The development time involved, including product testing, was expected to be approximately 12 months. Initial outlays, some of which occurred in 2010 and some in 2011 As with Match My Doll Clothing, the required R&D and marketing costs would be tax deductible. Manufacturing equipment had to be ordered by the end of 2010 to be ready for production at the beginning of 2012. While New Heritage had the option to pay for custom equipment in quarterly installments, the firm could get a substantial discount by paying for the equipment up front, in 2010. Figures in Table 3 and Exhibit 2 reflect the discounted cost of the equipment. To support the forecasted level of sales, substantial investment in working capital (primarily work in process inventory of partially manufactured dolls) would be required beginning in 2011. And still more equipment would have to be purchased and installed no later than 2014. In years 2015 and following, investments in working capital and equipment would revert to patterns familiar from the production division’s traditional lines of dolls. To complete development work, Holtz planned to use some of the company’s existing IT staff. The majority of the work would take place during calendar 2011. The number of people and their fully loaded costs are shown Table 4. These costs were not included by Holtz in the initial outlays shown in Table 3 or in the forecasts presented in Exhibit 2. The development personnel Holtz needed were considered â€Å"corporate† resources and were almost certainly available to work on the project. Table 4 Design Your Own Doll Development Personnel, ($ 000s) Application Development Personnel Costs: Web Application Developers Database Manager Systems Integration Specialist Total Cost BRIEFCASES | HARVARD BUSINESS PUBLISHING Purchased for use on the MSc Business Valuation, at Imperial College London. Taught by James Sefton, from 21-Aug-2013 to 31-Dec-2013. Order ref F211857. Usage permitted only within these parameters otherwise contact info@thecasecentre.org However, even a limited degree of customization increased manufacturing complexity and expense. Further, because of the low production runs and volume, fixed costs on a per unit basis were expected to be relatively high. Consequently, the breakeven volume for the project was also expected to be high. New Heritage Doll Company: Capital Budgeting | 4212 Finally, Holtz needed to give Harris her assessment of the project’s riskiness. On the one hand, Design Your Own Doll had a relatively long payback period, introduced some untested elements into the manufacturing process, and depended on near-flawless operation of new customer-facing software and user interfaces. If the project stumbled for some reason, New Heritage risked damaging relationships with its best customers. On the other hand, the project had a relatively modest fixed cost ratio, and it played to the company’s key strength—creating a unique experience for its consumers. Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F211857 Emily Harris still needed to complete her review and financial analysis of the two proposals. McAdams and Holtz were in frequent touch with Harris and both had offered to respond to any questions she might have about the proposals: the business case, the financial projections, the operating details, or anything else. Harris expected that she would indeed have some follow-up questions as she worked through her financial analyses. She also knew that her final recommendation might disappoint some executives within the division, who would scrutinize it closely. It had to be well-supported.

Operation Management Essay Example | Topics and Well Written Essays - 750 words

Operation Management - Essay Example The performance of a company includes both operational and financial aspects of a company and the characteristics of the five objectives of performance management are concerned with both the aspects. The operations strategies of a company primarily focus on meeting the expectations of its customers but it can also be used to identify strengths and weaknesses of a company. The companies make strategies to improve their identified weaknesses to be competitive in the market (Al-Darrab, 2000). The five characteristics of performance objectives The five characteristics of performance objectives are: Speed: it is concerned with the delivery of product or service by the company. Quality: it is concerned with meeting the perceptions of the customers about the quality of the product or the service of the company. Cost: it is concerned with the price of the product or the service for the customers and the internal cost of production involved. Dependability: it is concerned with the stability o f the processes involved in delivering products and services on time. Flexibility: it is concerned with the ability of the company in reacting towards the changes in demand and requirement of both – the customers and the business. ... while external cost applies to price of the product to customers (Slack, 2010). McDonald’s operations strategy and five characteristics of performance objectives Since 2001, many significant changes have been introduced in operations strategy of McDonald’s and it evolved primarily around four characteristics of performance objectives - speed, dependability, cost and quality. Though it cannot be said that the flexibility was ignored by the company, it was only less preferred. Externally, McDonald’s ensured fast delivery of its quality products at affordable cost to its customers and internally it made strategies to ensure a dependable delivery system, reducing labor and operation costs to make the products cost effective without compromising with the quality. McDonald’s evaluates its performance in speed on the parameters such as the query time of customers, lead-time of orders, delivery- frequency and the time required for throughput. McDonald’s als o ensures the dependability by evaluating its performance on the parameters such as number of orders not delivered on time, average deviation time from the scheduled arrival time, the ratio of stock of products and average time of late delivery of orders. The cycle time operations strategy of the company depends on efficient HR resources and it has ensured it by adhering to the principle ‘The result is done by a man†. The company believes that strength of an organization depends on its human resources and the performance of the organization can only improve with the improved performance of its human resource (Bertrand and Fransoo, 2002). KFC’s operations strategy and five characteristics of performance objectives Being the largest chain of chicken

Culture and Morality Essay Example | Topics and Well Written Essays - 750 words

Culture and Morality - Essay Example While in the past, we were swayed to consider that â€Å"the ways of England are the ways of the world†, contemporary societies maintain that all cultures are virtuous and deserve respect. However, with the United States, the prime crusader of democracy, rising to power, the human rights and justice are emphasized to a higher degree, and instigated criticisms toward various cultures that violate their perception of morality. Unacceptable Cultures Many constitutions in this modern time propagate equality of people under the law. Although it is inevitable that an individual’s social status determines its reputation, equal opportunities are still provided amongst citizens in almost all aspects of life. Over time, practices deemed unacceptable are abolished; and acts that counter to peace and human rights are penalized. Apartheid, or the racial segregation enforced by the National Party of South Africa for almost 50 years was completely removed, granting independence to the marginalized black residents. Similarly, the American Civil War during the early 1860’s eradicated black slavery and started the struggle for egalitarianism between the two colors. These practices that many protested against and sacrificed their lives for obliteration of, were inherited from the cultures of our forefathers. These may have lessened considerably, but the state of mind is not entirely changed. Moreover, other cultures regarded as repugnant are still existent. The Indian Caste System The caste system that separates society in terms of profession is prevalent among the Hindus despite contentions that such is not compelled in the scriptures but merely directed by the religion. Birth alone decides a man’s status, and this cannot be altered by effort (Pruthi, 2004). They are not permitted to marry, associate and mingle with anyone outside their caste; and if excommunicated, live as an outcaste, utterly separate from the rest. In this modern time, however, mor e and more cities are diverting away from the system in view that such is a deterrent to unity amongst citizens (Welty 1962). As new opportunity that calls for cultural reformation presents itself to India, people will respond either out of rationality or necessity. In that sense, Indians of academic superiority are presumed more receptive to new influences compared to the rest. Terrorism and the Concept of Jihad On September 11, 2001, an American aircraft crashed into the Pentagon, another into the World Trade Center’s north and south tower, and killed approximately three hundred thousand people. The names Osama Bin Laden and al-Qaeda were heard for the first time (Katz, 2004), and intensified the long-standing antagonism between Muslims and the West. This was argued as a practice of â€Å"jihad†, which meant holy war, directed against the enemies of Islam. Sanction is given unto those who fight because they have been wronged; and Allah is indeed able to give them vic tory; those who have been driven from their homes unjustly only because they said: Our Lord is Allah (Sura 22:39). Jihad finds its origin not only in the â€Å"militancy of Muhammad but in the culture of pre-Islamic Arabia† (Ankerberg and Caner, 2009, p. 15). In the past, Arabian tribes were consented to battle against any other tribe, and war was tolerable regardless of its nature. The soldiers of the new jihad assumed the tradition and embarked on violent assaults, â€Å"