Pestle Analysis

Table of contents

PEST analysis is a convenient method for analyzing the macro environ of an enterprise. The PEST analysis methodology is often used to assess the key rialto trends of the fervor, and the results can be used in the compilation of SWOT analysis.  PESTEL analysis tool is used for long-term strategic planning. It is compiled for 3-5 years ahead, with an annual update of the data. This can be done in the form of a matrix of 4 quadrants or in a tabular form since PESTLE influences four key multipliers. The main boon of this method is as follows.  It can be used for all companies without exception, being universal.

Main Factors of PEST Disquisition

PEST parsing is an acronym for the following fervor indicators.

P (Political) are multipliers of the company’s macro environment. When analyzing them, it is recommended to answer questions regarding key changes in the field of stability and legal regulation. First, will the legislative base of the country, rialto, fervor swap in the near future? Will the alterations in the legislative base affect the company’s activities (primarily in the area of business profitability)? For example, it could be the intercalation of a law that will limit the possibility of mark-ups on the goods; swap in taxation in the fervor or the intercalation of new tariffs; the intercalation of a law restricting the advertising or distribution of goods; stricter requirements for product certification. Secondly, it is necessary to pay attention to the level of intervention in the company’s business. Is it significant? Will it swap in the near future? Thirdly, the level of corruption in the fervor and its impact on the company’s activities are also important.

E (Economical) are multipliers of the state of the rialto. During the parsing of this group of multipliers, it is necessary to determine six key parameters characterizing the state of the economy of the country/rialto.

These multipliers include:

  • The dynamics of amplification;
  • Alteration in exchange rates, cost of capital;
  • Alteration in the unemployment rate;
  • Alteration in the level of inflation;
  • Alteration in disposable income per capita;
  • Trends in the banking sector.

S (Sociocultural) are the multipliers of the social and cultural state of the rialto. In analyzing this group of multipliers with the help of PESTEL model, it is necessary to describe five key parameters:

  • Change in demographic status: movement, sex and age structure of the rialto, and swap in race;
  • The level of education, including the level of qualifications of personnel;
  • Features of mentality;
  • Change in social strata;
  • Change in tastes and preferences of the audience, myths, and prejudices.

T (Technological) are the multipliers that characterize IT progress in the fervor. This group of multipliers requires detailed parsing, since, in the era of innovations, it is the swap in IT that can fundamentally change the rialto state. During the parsing of these multipliers, it is necessary to pay attention to four parameters:

  • Possible swaps in key technologies used in the rialto (innovations in equipment, materials, business models and methods of doing business);
  • Influence of the Internet on rialto amplification;
  • The impact of mobile IT on strategic planning marketing;
  • Innovations in information technologies allow competing more effectively in the rialto.

Thus, this method allows you to assess the overall atmosphere in which the company performs its functions. There are also extended versions of this disquisition, which allow you to study all possible situations, but as a rule, for the initial preparation and drawing up of a general picture of the activity, these four points are sufficient.

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Financial Analysis Argumentative Essay

Budget a detailed plan, expressed in quantitative terms, that specifies how resources will be acquired and used during a specified period of time. A budget is a description of a financial plan. It Is a list of estimates of revenues to and expenditures by an agent for a stated period of time. Normally a budget describes a period In the future not the past Purposes of budgeting systems: Planning Facilitating Communication and Coordination Allocating Resources Controlling Profit and Operations Evaluating Performance and Providing Incentives Using a budgeting system companies can:

Improve cash flow Optimize product portfolio Minimize salary adjournment Increase the operational level Eliminate breaks In Production process Stabilize debts level Precisely determine the real financing needs In Bangladesh our fiscal year is started from 1st of July and ended 30th June of the next year. Here we wants make a comprehensive analysis of the proposed budget for the upcoming fiscal year 2014-2015. The honorable finance Minister AMA Mitch proposed this budget dated on 05. 04. 2014 in Bangladesh national assembly members for the consideration and approval of the said budget.

The annual budget t a glance Total size of the budget TX 250,506 core for 2014-15 fiscal year growth target of 7. 3% of GAP The proposed national budget and the economy (FYI), 2014-2015, provides an account of the government’s overall fiscal operations in pursuit of its declared goals and objectives to help promote “accelerated” and “inclusive” economic growth. It makes a lot of promises about improving government’s performance-related scorecard. But it does not shed enough light on why the promises of the outgoing fiscal could not be redeemed and what wrongs there were about meeting its projected broad targets.

The political turbulence or violence that was witnessed in the first half of the outgoing fiscal can not be held solely responsible for it. This is more so when the official economic growth figure for the outgoing fiscal that Finance Minister AMA Mitch has, in his budget speech, mentioned tends to defy the predictions and projections that were made by different quarters during the period of political volatility and also subsequent to it, taking in view the possible adverse knock-on effects of the turbulence on the performance of the national economy in all its major sectors.

If the official growth figure about the entry’s gross domestic product (GAP) in the outgoing fiscal portrays the real state of the economy, then there are obvious reasons to discard largely the links between the polity and the economy in the Bangladesh context. How far this is realistic to assume so, despite some clearly demonstrated inherent shock-absorbing capacity of the Bangladesh economy and also the proven resilience of its main economic actors, remains otherwise questionable.

Yet then, the figures and data that the Finance Minister has mentioned about the performance of the economy in fiscal 2013-14 do unmistakably bear out shortfalls in any areas of consequence. This is so, in terms of the targets that were set in the Sixth Five Year Plan (SPY) document. The forthcoming fiscal being the terminal year of this medium-term plan that was approved by the government during its immediate-past tenure, it does not require a pundit to state that its goals and objectives would remain largely unmet.

This will certainly further compound Bangladesh problems to fulfill its cherished national hope about reaching the status of a middle income country by 2021. If its existing situation does not change for the utter by a quantum leap, it will be well-nigh impossible to meet the whole set of Millennium Development Goals (Meds), particularly in areas like nutrition, effective health coverage etc. , that are much needed for poverty alleviation. In his budgetary proposals for the forthcoming fiscal, the Finance Minister has projected an aggregate expenditure outlay of about Take 2. 0 trillion, reflecting a rise by 15. 7 per cent over the revised budget of Take 2. 16 trillion for the outgoing one. There is no strong reason to consider the proposed size of the next fiscals national edged over-bloated, in view of the fact that overall public (government) expenditures, covering both current and development ones, will still be around 18. 7 per cent of GAP. The share of the proposed current (revenue and non-development capital) expenditures at Take 1. 7 trillion will be 12. Per cent of GAP while that of public investment (ADAPT) at Take 803. 15 billion will be 6. 0 per cent of GAP in the forthcoming fiscal. Such budgetary expenditures in comparator countries. But two critical questions still arise here: Has the government the capacity to implement the proposed national edged, particularly that part of it which concerns the Annual Development Programmer (ADAPT)? What is about the quality of overall public expenditures, to assess their impact in terms of value-for-money, to link inputs with outputs and to count costs against benefits?

These questions are of consequence because it has rather become a routine practice in Bangladesh to downsize the ADAPT in the third or last quarter of every fiscal because of implementation shortfall, on one hand, and the poor quality of overall public expenditures in terms of targeting, coverage, leakage, existing conditions of public service delivery, the nagging problem of cost over-runs of development projects due to procrastination of their execution, on the other. This is the sixth national budget that Finance Minister M.

A. Mitch has presented during two successive periods of the Miami League (AL)-led government. The main challenge for implementation of the proposed national budget for FYI 2014-15 will lie in areas of arranging financial resources for its funding, without crossing the limit of the fiscal deficit that has been projected at 5. 0 per cent of GAP. If the limit is crossed, it may destabilize the macro-economic situation and also have some crowding-out effects on the economic activities in the private sector.

The National Board of Revenue (N.B.) that collects the lion’s part of government revenues, in the form of duties and taxes, has not been able to fulfill its target in the outgoing fiscal, notwithstanding the fact that it had earlier demonstrated its commendable successes in raising the level of such revenue receipts of the government. The new fiscal measures that the Finance Minister has proposed for the forthcoming fiscal ay provide some cushions to the N.B. for augmenting its revenue collections. But the possible impact of such measures on overall economic activities merits a detailed scrutiny.

Meanwhile, the N.B. will need to put extra-ordinary emphasis on widening the tax net, winning the trust and confidence of both the existing and potential taxpayers. It needs a shot in its arm to help strengthen its capacity to do this and that, too, by ensuring transparency of actions by its field-level officials. Overburdening the existing tax-payers with additional doses of direct taxes and creating additional robbers for economic actors in different sectors by way of any irrational tax structure, are certainly no rational policy choice for the government.

Higher tax burden may otherwise lead to a greater degree of tax evasion or avoidance. Tax compliance depends, to a large extent, on the rate of tax and duty structure. So far the efforts for collection of domestic resources are concerned, there are strong reasons for the government to raise the levels of its revenue receipts from non-N.B. agencies or departments and enhance the volume of such earnings other than taxes, duties etc. , from different government agencies, autonomous and semi-autonomous bodies and all other relevant sources.

The proposed budget for the forthcoming fiscal so. Meanwhile, the availability of the projected external assistance that will be required for footing the estimated budgetary expenditure, particularly on the development (public investment) side, will be predicated upon efforts to help accelerate the pace of implementation of the aided projects. Here, the developments in the recent years do need to be further consolidated and strengthened to a large extent, if the current situation about a bulging aid pipeline is to be improved. This is another daunting challenge.

If the government fails to collect or mobiles the financial resources, both domestic and external, at the level projected in the proposed budget, it will be forced to either cut back its development spending in the second half of fiscal 2014-2015 or to borrow more from both banking and non-banking sources than what has been projected. Neither of these two is welcome. If public investments in priority areas fall short of the target, the potential of the economy to move onto a higher growth trajectory will intention to remain unrealized.

If the government’s borrowings overshoot the projected level, it will entail most unwelcome consequences. The fiscal deficit will then exceed the projected level, causing macro-economic pressures: the private sector may face resource constraints; interest payments on account of domestic public debt may swell further without enhancing the capacity of the economy to foot the related bill etc. At this stage, it would be worthwhile to draw the attention of all concerned to the imperatives for facilitating the expansion of investment activities in the private sector.

The real test of the proposed budget for fiscal 2014-15 lies in this particular area. A synergy of actions will be needed to make this happen. The national budget cannot certainly address all the issues that are badly impacting new private investments. But it has to facilitate the forging of such a synergy. If private investments do not rise, the prospects of the economy to generate new Jobs, create more income-earning opportunities and pave the way for its accelerated growth rate, along the desired lines, will continue to delude all concerned.

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PEST Analysis of Primark Stores Ltd

Table of contents

Introduction

This report will look at the macro-environmental factors affecting Primark which operates in the high-street retail clothing sector. Primark offers chic clothing on the cheap through a number of department stores throughout the UK & Ireland, Holland, and Spain. With its main target market being fashion-conscious under-35-year-olds, it is the second largest clothing retailer in the UK. The business environment is ever-changing, and it is crucial that all organizations analyse the environmental factors accurately to allow them to adapt to changes that may arise. If the environment is not analysed correctly, or if not enough attention is paid to observing environmental changes then the organisation could miss vital opportunities and fall under massive threat.

This report will focus on a PEST analysis; a PEST analysis is a detailed environmental analysis that allows organisations to implement strategies that will respond to all environmental factors that they are faced with. A PEST analysis consists of four factors; Political, Economic, Social, and Technological. Primark, like all organisations will have to deal with all these environmental factors in some way. This report will now go into detail considering how each of these factors affect the high-street retail clothing sector, in particular Primark, and how they have or could respond to such issues.

Economic Factors

The biggest economic factor that has affected Primark in recent times, as with most businesses is the recession.

This will definitely hinder Primark’s performance, as the recession means that their potential consumers will have less disposable income, and therefore will be less likely to spend vast amounts of money on clothes. However as Primark is certainly at the cheaper end of the high-street retail clothing sector it has a much more inelastic income elasticity of demand than some of its clothing competitors; meaning that it could have a huge advantage over some of its higher priced competition. This is because consumers will have less money to spend. But fashion-conscious women will still want to look good; and with Primark offering chic clothing for cheaper prices, many of these women may see Primark as an attractive option for their clothing purchases. The second economic factor to be talked about is the price of fuel.

In the summer of 2008, the price of oil reached $147 a barrel (the highest it has ever been). Primark will have noticed huge increases in their transportation costs when the price of oil was this high. Primark relies very heavily on transportation as it has only two distribution centres, one being located in Leicestershire, UK and the other being located in Naas, Holland. As it distributes to all over the UK & Ireland, Holland, and Spain it will experience heavy fuel costs, and heavy shipping costs. Therefore, the high price of oil will increase costs and cut into Primark’s profit margins. Unless it decides to pass the cost onto the consumer, in which case it would experience a decrease in sales.

Another important economic factor to look at is the lowering of interest rates by the Bank of England. ‘The interest rates have been cut five times since October at which point they were 5%, and now they stand at just 0. 5%. ’ (Monk, 2009) The extremely low interest rates will mean that most mortgage owners will be paying a lot less money back on their mortgage. This will result in them having a lot more disposable income, and could mean that they will have a lot more money to spend on clothes, and Primark could see sales increase.

On the other hand; some of these mortgage owners may already have been Primark customers as they previously had a lower disposable income. Now they have more money to spend, they may take their custom to higher priced, higher quality clothing retailers.

Technological Factors

The first technological factor to be considered is the Penneys gift card. Penneys is the trading name of Primark in the Republic of Ireland. The gift card is only available in Ireland at this current time, but Primark may wish to introduce it into its Primark stores at a later date. The gift card was made available from 3rd November 2008, and gives the user the chance to put a minimum of €5 and a maximum of €200 onto the card. To add to this each card has a unique 19 digit number; with this number the gift card holder can check their current balance on the Primark website, without even needing to go to the store.

With the knowledge that a gift card holder can check their balance online, one would assume that they must have an integrated computer system with these gift cards. This will give Primark the necessary information to see: which products are bought most frequently, when they are bought, a gift card holder’s average spend, amongst other things. Meaning that the gift card could be used as a useful tool for marketing purposes. This report has already mentioned the fact that Primark uses a website, which is also a technological factor. Primark’s website gives information on the company profile; including background, its ethical policy, and its upcoming stores. The fact that it shows upcoming stores could be seen as a good promotional tool.

For example, currently on the website it shows that Primark plans to open a store in Bremen, Germany. This is promoting to German customers who have visited Primark stores before and have been waiting for one to open in Germany. Furthermore, the website includes a store locator, giving potential customers the chance to locate the nearest store to them. This means that consumers can know the places they need to go if they want to find Primark stores. A major factor that could cause Primark to lose a lot of potential customers is the lack of online shopping available on their website. One of its biggest competitors, the Arcadia group which encompasses such stores as Topshop, Topman, Burton etc does have online shopping available on its website.

In 2006 it was suspected that UK online shoppers were expected to reach 24. 9m in 2010. This is a huge amount of potential customers that Primark could be missing out on. Primark’s target market is under-35-year-olds; these are the people who use the internet most regularly. This could lead to Primark losing market share to the Arcadia group, and Tesco who also provide cheap clothing online.

Social Factors

The biggest social factor that affects Primark is the current fashion trends that potential customers are looking for. ‘Value clothing is now at the heart of British shopping. Two in five adults are now admitting that they buy their basics at “value” shops. (Smithers, 2008). This is saying that clothing consumers are now looking to buy cheaper alternative outfits. With this now being the social fashion trend of the UK market, Primark has a big advantage over other high-street clothing retailers.

‘In 2007 Primark was nicknamed Pri-Marni in the style press for emulating fashion spin-offs, and overtook Asda as the UK’s most popular value clothing retailer. ’ (Smithers, 2008). Primark has responded to young women wanting highly fashionable clothing for cheaper prices by producing designer copies made with cheaper fabric. This is has led to massive sales, and shows an intelligent response to this social factor.

Primark has recognised that to be viewed highly in society in modern times, means that the organisation must act ethically. This is shown by their ethical strategy on their website. ‘The challenges in the global garments supply chain require the collaboration of many different types of organisations to ensure that the gains from trade are spread. ’ (Primark, 2008). This quote taken directly from their ethical strategy tries to show that they are looking for all the workers that produce their products to be paid and treated properly. However, in January 2009 the BBC found that some of Primark’s manufacturers were acting in an extremely unethical manner.

‘TNS Knitwear Ltd is one of Primark’s biggest UK suppliers of knitwear. The minimum wage is? 5. 3 an hour, however an undercover BBC reporter applying for a job at TNS Knitwear was told she would be working for 12 hours a day, 7 days a week for ? 3. 50 an hour. What is more, there was no heating and a broken toilet meant that both sexes had to use the same bathroom. ’ (Dhariwal, 2009). Stories such as these showing Primark’s manufacturers acting in hugely unethical ways could dramatically lower society’s opinion of Primark; leading to a large cut in Primark sales. Another social factor that Primark looks to implement on is the growing trend of organisations needing to be more environmentally friendly in order to succeed in current business climates.

For the majority of purchases at Primark, the customer is given a brown paper bag instead of a plastic bag. Primark plastic bags are used only for heavy items with which the paper bag handles would rip. As paper bags are more bio-degradable, they are much more environmentally friendly. This gives Primark an image that shows they care about the environment, and improves their overall image socially.

Political Factors

This report has already covered the fact that TNS Knitwear Ltd (one of Primark’s suppliers) did not pay the minimum wage of 5. 73 per hour. Due to the minimum wage act, this is breaking the law. Failure to abide by the law could result in a 5,000 fine.

Furthermore it was found that TNS Knitwear Ltd was also employing asylum seekers who were working illegally in the country. ‘Employers who take on illegal workers can face fines up to ? 10,000 per person under the Immigration, Asylum and Nationality Act. ’ (Dhariwal, 2009). Even if it is not Primark itself that is committing such acts, it should always research its potential suppliers’ records to ensure that they are not involved in criminal activities either. This is not just unlawful, meaning it is a political factor, but is also unethical and so a social factor. In December 2008, the Government reduced the Value added tax on products from 17. 5% to 15%.

This meant that Primark’s products looked 2. 5% cheaper, and could easily have led to higher sales as a result. To add to this, if it had made it known to customers that it was passing the V. A. T. reductions onto the consumer, it could be seen as a clever promotion tool, to encourage more potential customers to purchase its products. Conclusion The fact that Primark has become the UK’s most popular value clothing retailer would indicate that Primark is very aware of its trading environment. A sound knowledge of its trading environment can lead to such success. However there are a few factors which this report uncovers, in which Primark is perhaps failing to respond to correctly.

To summarise the environmental analysis, this conclusion will discuss the factors which Primark responds well to and the factors it responds to less well. Primark’s most probable biggest concern will be the social factors affecting it. This is down to the fact that fashion relies almost entirely on social opinion. If customers do not like the products Primark offers, they will not buy them, and Primark will fail as a business. Primark’s sales in 2008 prove them to be the UK’s most popular value clothing retailer. In today’s society women want designer-like clothing for next-to-nothing prices. Primark has responded to this, and delivered with great success. On the other hand Primark has failed to respond to its suppliers’ criminal activities; giving the company an unethical view in society.

If Primark can act quickly and find suppliers who act ethically, then it may not experience a big decrease in social opinion and continue with high sales. Unfortunately for Primark, ethical suppliers may not be able to produce the clothing for such low cost; and this could cut into Primark’s profits. Today’s current economic climate is not ideal for any organisation; recession meaning that consumers have far less disposable income. However, clothing is a necessity and Primark offers the cheaper end of high-street clothing. This might mean that Primark will not suffer a great deal compared to competing high-street clothing retailers. Furthermore, if it can keep providing demand to its suppliers then they should survive the recession too.

The company’s website is a great information tool; giving customers insight about the organisation, and giving them the chance to locate current and future stores. This can be seen as a good response to technological factors. However, with the growing trend in online shopping, and the company’s current choice not to sell its products online, could mean it loses large amounts of market share to competitors who currently provide such services.

The poorest response to an environmental factor is Primark’s response to political factors. Its failure to discover that its suppliers were involved in criminal activities is very poor indeed. This is something the company will need to take into greater consideration in the future.

Bibliography

  1. Dhariwal, N. 2009) Primark Linked to UK Sweatshops [Internet], BBC News. Available from: <http://news. bbc. co. uk/1/hi/uk/7824291. stm> [Accessed 7 April 2009] M2 Presswire. (2006) TelecityRedbus: Online retailing is only half the story when it comes to UK internet activity; a 35% increase in UK internet shopping sales since July 2005; Online shoppers are expected to reach 24. 9m in 2010[1];
  2. Figures from TelecityRedbus demonstrate the UK’s growing dependence on a wide variety of online services, including government services, banking, travel and bill paying as well as a range of entertainment services [Internet], M2 Presswire. Available from ;www. lexisnexis. om; [Accessed on 7 April 2009]
  3. Monk, D. (2009) Low interest rates cost Notts councils ? 7. 6m;While mortgage payers are celebrating the lowest interest rates in the history of the Bank of England, Notts councils will lose ? 7. 6m on their savings next year. Nottingham Evening Post, 17 February, p. 10. Primark Stores Ltd. (2009) Primark [Internet]. Available from: ;http://www. primark. co. uk; [Accessed 7 April 2009].
  4. Smithers, R. (2008) National: Fashion: Ethical concerns left at home as demand for cheap clothes surges: Primark and Asda lead way in reaching out to masses keen to wear latest designs. The Guardian (London), 30 January, p. 9.

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Pest Russia

Political – The political risks are the same in any emerging market and all have to be considered by the possible new organisation. ? Russia has a reputation for organised crime and corruption which has long been an issue for any investors.

? There are very strict laws in Russia to do with mode of entry and so the country usually prefers to trade with its former Soviet allies. Potential tourists could be eliminated from entering Russia due to the strict rules on visas for all tourists entering the country. ? There are a number of policies, laws, marketing and advertising, and health and safety requirements which all international organisations must adhere to – if they do not they will be punished and may not be able to expand within Russia. Economical – Economic growth, population size and income are some of the factors which affect the choice location of firms. This transitional economy is known for high rate of inflation, foreign trade deficits, high rates of unemployment and high costs of capital. ? Although the low labour costs are often what attracts organisations to this emerging market there are a number of hurdles which they must get over before they even get to that stage. ? The global economic crisis has caused the price of oil and gas to ‘dwindle’ which has caused huge fluctuations in the Rouble.

‘The EIUU forecasts 2. 5% GDP growth for 2010 and 4. 1% for 2011, which represents a stronger and quicker rebound than in Western Europe’ (Geieregger, Chawala and Veller 2009) ? ‘Russia has undergone significant changes since the collapse of the Soviet Union, moving from a globally-isolates, centrally-planned economy to a more market-based and globally-integrated economy’ (Central Intelligence Agency 2010). Social Russia has the largest land mass in the world pning over 17,000,000 square kilometres. ? Russia has a low populations growth at -0. 465% Technological ? Certain parts of Russia are improving on their infrastructure. For example Sochi are developing the local rail network as well as redeveloping one of their airport terminals in order to be able to hand the pressure from visitors at the 2014 Olympic Games

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Total Revenue and Net Income – Financial Analysis

In the graph, Total Revenue and Net Income marked the lowest in January, and oppositely it marked the highest in the third quarter. In the Third Year, it maintained the most stable rate, not showing any fall downs to minus. In August of that Third Year, it marked the highest revenue and Net Income. On February of the First Year, net income has marked lowest because of the hotel has spend lots of money to the refurbishment. 3. 2. Rooms Department revenue, and net income overall The rate of Room revenue and Net Income had a certain increase, and it marked the lowest in first quarter, and marked the highest in the third quarter.

In August of the Third Year, it marked the highest rate, revenue of $610,775 and Net Income of $438,950. Revenue and Net Income marked the lowest in January, and oppositely it marked the highest in the third quarter in rooms department. Average revenue in Rooms department was $230,779 (Year1), $327,417 (Year 2) and $435,222 (Year 3). And average net income was $165,243 (Year 1), $231,961 (Year 2) and $317,316 (Year 3). 3. 3 Food and beverage departments revenue and net income overall The graph shows that after extending the restaurant on March in third year, the Revenue had a gradual increase.

F&B Revenue and Net Income marked the lowest in January, and oppositely it marked the highest in the third quarter. Extra Services and Facility Status has influenced on the F&B department, especially, the second bar that has completed in March of the second year and the restaurant extension that has completed in April of the third year are influenced. It marked the highest rate, revenue of $583,774 and Net Income of $252,587 in August of the third year. 3. 4 Other departments revenue and net income overall After the completion of the hotel shop in April of the Second Year, revenue of the other department had increased.

Also, the graph clearly shows that in the first quarter of the third year, after the completion of the health club, revenue of other department had a sudden increase. After the completion of building a health club in the other department, am average revenue has increased over eight times ($102,494 of the maximum revenue on August). 3. 5 ROCE The graph shows that the increasing percentage of the Return on Capital Employed from year 1 to year 3. There is a 13. 80% gap from Year1 to Year2, and 15. 70% differences between Year2 and Year3. 3. 6 Occupancy and ADR

In the First Year, Room Rate had been lowered, offering a better price then other competitors. There had been a difference in occupancy due to the seasonal influence, however, it shows a gradual increase, giving a stable average room rate. 3. 7 ADR and Revpar The graph shows a gradual narrow down of ADR. It has not many differences between Year 1 and Year 3 because the hotel has not changed the product prices for maintaining lowest rate compared to other 4 star competitors’ hotel. However, the Revpar is slowly increasing each year in the graph. 3.

8 Refurbishment spending and occupancy By a continual refurbishment in the First Year, the status of all rooms, bar, restaurant and the front desk maintained to the highest standard, supporting a continual ascend of Occupancy. Especially, on February of the First Year, the hotel spent $522,380 to the refurbishment because of the hotel need to develop refurbishment status to the highest standard. 4. 0 Business Plan for Year 4 4. 1 SWOT 4. 1. 1 Strengths According to HSU and Powers (2002), strength is very advantageous resource or skill which is relative to competitors.

One Strength of Treasure Paradise Hotel relative to its competitors would be its high occupancy rate and revenue relative to its competitors. For the past three years of operation of Treasure Paradise Hotel, revenue and occupancy rate has been increasing unprecedentedly resulting to a better market position. Hotel facilities refurbishments of Treasure Paradise Hotel served as its backbones in upgrading the customer satisfaction especially with regard the improving hotel room conditions (Building Corporation, 2008).

Sales from weddings are where Treasure Paradise Hotel has a comparative advantage over its competitors since the hotel has able to dominate the said category towards the end of Year 3 due to the hotel’s cheap price for wedding occasions relatively to Teams 1,2,3 and 5. This can be utilized by the hotel management to serve as the stepping stone of Treasure Paradise Hotel in further improving its profit and revenues. Furthermore, weekday room of Treasure Hotel Paradise are relatively cheaper compared to Park and Mariner Hotel, but slightly higher compared to Palace Hotel.

In addition to this, Treasure Paradise Hotel has also a stable balance sheet that reflects the level of assets and liabilities it currently has. The said stability of Treasure Paradise Hotel on its balance sheet seconded the occurring hotel facilities extension and refurbishment that the management has been implementing to improve the services and facilities of the hotel and so with the customer satisfaction. 4. 1. 2 Weaknesses Weakness can be defined as a deficiency that seriously impedes effective performance of business operation (HSU and Powers, 2002, p.

132). One of the possible weaknesses of Treasure Paradise Hotel would be its weak action on extending their hotel rooms compared to its competitors. This is the one of the main reason why Treasure Paradise does not have the competitive advantage in terms of their hotel room facilities that oftentimes leads to the deterioration of its customers. Moreover, aside from Treasure Paradise’s weak hotel room refurbishments relative to its competitors in the market, another weakness would be its significant turnover rates of its staffs.

Though there were some programs that the management of Treasure Paradise Hotel has been implementing in order to boost the productivity and efficiency of its workforce like recruiting more workers, increasing the budget for training and payments, still the quality of Treasure Paradise Hotel remains low with less improvement from the previous years. It is therefore a must of the hotel management to review its strategies on productivity development in order to address their problem regarding high turnover rates. Another weakness of Treasure Paradise Hotel would be its weak sales on weekdays and weekends compared to its competitors.

This maybe primarily due to the low customer satisfaction of their hotel rooms and low customer service that made its target clients to turn to Teams 1, 2, 3 and 5. Though Treasure Paradise is presently upgrading its hotel facilities, including their hotel rooms, earning again the trust of those already disappointed customers is already a hard time on the part of the hotel management, and Treasure Paradise Hotel’s competitors have always excellent rating on their hotel room improvement which allows them to attract more customer.

4. 1. 3 Opportunities Looking at the external factors, the opportunity is a major favorable situation and threat is a major unfavorable situation in the environment (HSU and Powers, 2004, p. 132). One possible opportunity for Treasure Paradise would be to increase its budget allotted for the refurbishment and extension of its hotel rooms and bars since these facilities are some of the sources of weakness of the hotel compared to the rate of its competitors in the market.

By allotting more budgets into these areas, Treasure Paradise Hotel can easily attract new customers as well as improve the integrity of the hotel in terms of providing high quality hotel facilities. Furthermore Treasure Paradise Hotel could also provides new strategies of improving the skills of their employees by developing new training programs and adding significant amount of resources in order to lower down its high turnover rate.

By the time Treasure Paradise successfully lower down its turnover rate, significant improvement on its occupancy rate and customer satisfaction is being expected which later on leads to higher sales and profits. Furthermore, based from the increasing occupancy and revenue rate and considering the stability of cash flow of Treasure Paradise Hotel, its management can establish new facilities aside from the Health Club. This kind of opportunity was already proven to be effective as the newly established Health Club of the hotel is already accounted to 7 percent of Treasure Paradise Hotel’s revenue during the year 3.

4. 1. 4 Threats The main threat for Treasure Paradise would be the tight competition in the hotel industry considering the high quality services and facilities of its competitors. Teams 1, 2, 3 and 5 compete at par with Treasure Paradise Hotel. It is therefore a must of the hotel management to take deliberate action on addressing all of the above identified weaknesses of Treasure Paradise Hotel as well as the intensification of its strengths that will later on serve as the pillar and stepping stone of the hotel in acquiring better position in the hotel industry.

Another threat on the Treasure Paradise Hotel would be the high turnover rate of its employees despite of various programs and strategies that the management has been implementing since their first year of operations. Though turnover rates of Treasure Paradise improves after every programs and strategies, but the rate of improvement is still way far behind to the “optimal” turnover rate wherein the hotel can minimise its adverse effects to the entire performance on the company (The Rain Maker Group, 2008).

It is therefore important for the executives of Treasure Paradise Hotel to search for alternative means of lowering down their employee turnover rate at a faster level to prevent further losses on the part of the management and dissatisfaction of their customers. 4. 2 Objectives a. Increase training expenditure to $14 per employee to reduce the employee turnover rate to 25 percent b. Increase the occupancy rate of the hotel by 80 percent by the end of year 4 by adding recreational facilities on the hotel and launching of promotional activities during off peak season

c. Lower down cost of meals by 5 percent by searching for cheaper food supplier 4. 3 Strategies 4. 3. 1 Human Resource Management One way to lower down the turnover rate of Treasure Paradise Hotel’s employees would be to increase the training expenditure to $14. By adding and intensifying the training programs of Treasure Paradise’s employees, there is a great potential for it to reduce its employee turnover rate to 40 percent.

Furthermore, Treasure Paradise Hotel can include the launching get-togethers, especially after training sessions to boost the relationship among their employees, and so with their collaboration and teamwork (Chartered Institute of Personnel and Development, 2007). 4. 3. 2 Physical Property Condition and Marketing Strategies On the other hand, one way to increase the occupancy rate of Treasure Paradise Hotel would be to add more recreational facilities on its area. Establishing Golf Course would be a good start for the management especially in attracting corporate people to visit the hotel.

Since golf is one of the favourite sport of most corporate people, the number of corporate guest of Treasure Paradise will surely improve after its name become well known to these group of people. Furthermore, another way by which the management could further improve the occupancy rate of the Treasure Paradise Hotel would be to raise budget for advertising specifically launching of promotional activities like discount rate, 3 percent of the total bill of a customer, during off peak seasons (Advertising and the Effectiveness of Advertising Media, 2008).

This will attract more customers even during off peak season starting from October until the end of the year. 4. 3. 3 Cost Control With regards to lowering of cost of meals of Treasure Paradise, the management could search for new suppliers that can offer relatively lower food supplies to them yet still in high quality in order to protect the integrity of Treasure Paradise Hotel. This will give the management enough margins to lower down the prices of their meals which will later on attracts more customers on the side of the hotel (Dunbar, 2008). 4. 4 Budgets With regards to the raising of training expenditure of employee from $9.

2 to $14 per employee in order to reduce the employee turnover rate of Treasure Paradise Hotel, the management will also give a corresponding increase on the budget of Human Resource Department of Treasure Paradise Hotel to finance its annual objective of reducing the employee turnover rate to 40 percent. The management will increase the budget of their human resource department by 15 percent in order to finance the said raising of employee training expenses by around $5 and this is still subject to evaluation at the end of the year to determine if the management will continue the said strategy to Year 5.

On the other hand, the budget for the development of physical property condition will be increased by 25 percent until the establishment of golf course is finished. The said 25 percent will also cover the existing refurbishing activities being held by the management on its key facilities. With regards to the promotional activity of Treasure Paradise – discount rates during off peak season, the management will increase the budget of the marketing department by 10 percent considering that this strategy will only takes place from October until the end of the year.

The last but not the least, as for the cutting down the prices of Treasure Paradise restaurant’s meals, the hotel management do not have to increase their present budget of the food and beverage department considering that they only have to replace their existing supplier of food and beverage supplies to suppliers that can offer relatively cheaper food and beverage supplies to give the restaurants and bars of Treasure Paradise Hotel enough margin to cut their existing meal prices by 5 percent.

This is being expected to attract more customers to visit their restaurants and bars as well as serve as an avenue towards competing at par with Teams 1, 2, 3 and 5.

Reference List

Building Corporation (2008). Hotel Refurbishment – Cost Model. Retrieved May 30, 2008, from http://www. building. co. uk/story. asp? sectioncode=113&storycode=1019180&c=1 Chartered Institute of Personnel and Development (2007). Employee Turnover and Retention. Retrieved May 30, 2008, from http://www. cipd. co.

uk/subjects/hrpract/turnover/empturnretent. htm Dunbar, J. (2008). Menu Specials Strategy. Retrieved May 30, 2008, from http://www. hotelresource. com/modules. php? op=modload&name=trends&file=detail&sid=32149 HOTS (2008). Advertising And The Effectiveness Of Advertising Media. Oxfordshire: The Orange Group Ltd. HSU and Powers, 2002, p. 132). The Rain Maker Group (2008). The Real Cost of Employee Turnover. Retrieved May 30, 2008, from http://www. therainmakergroupinc. com/add. asp? ID=94

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Financial Analysis and Strategic Objectives

Due to a widespread economic letdown, Nike was in constant struggle in terms of sales in the U. S. while it was internationally expanding in Europe. Eventually, Nike was compelled to sell licensing rights to local distributors in Europe. The company initialized such plans in order establish its market niche in Europe, while it generates the needed funds for its business operations in the U. S. Repercussions from this move were felt by Nike; the company’s marketing control and monitoring drowned in mediocrity due to the improper way of conveying the Nike message, which caused its products to gain obscurity rather than popularity.

Phil Knight didn’t have penchant for advertising, with this in mind advertising budget for the company was inferior and under funded. Grassroots efforts by Knight seemed futile for Nike to generate revenues on a higher end. Eventually, as Nike embraced the sport of basketball, massive advertising has followed in order to stabilize the business. Nike launched a massive advertising campaign for its already popular basketball footwear line. Nike allocated an advertising budget of $5 million to $10 million from 1987 to 1988. Unfortunately, European consumers barely perceived Nike as both an expensive as well as an aggressive American brand.

The situation alleviated due to the proliferation of middle market shoes and a unique set of distribution tactics. Revenue increased along with the advertising budget due to an efficient and apt system of distribution. Advertising increased from $10 million to $50 million in 1989 to 1992. For its European advertising, the company allocated a hefty $100 million (Porter et al. , 2002). Operational and Environmental Analysis Since it penetrated the European market in 1980, Nike did not experienced major environmental ramifications. Liberal business environment has been steady. European region is regulated with apt social laws.

Bull and bear markets have been relatively stable. The region adheres to a firm intellectual property protection and contract enforcement laws. Albeit the cultural differences and eclectic language, Nike has perceived Europe as a favorable market segment to conquer and market its products. A handful of European countries like Spain, Italy, France, and Germany all account for the glut of European athletic apparel and shoe sales. The company’s profit margin was hurt by the strong foreign exchange by the U. S. dollar against European currencies, due to currency inconsistencies and sporadic fluctuations.

Even though the U. S. market letdown hampered Nike’s global expansion, sales and revenues recovered in the U. S. as Nike was still bent on global dominance. In order to initiate growth and progress, Nike generated marketing strategies to entice local consumers in Europe to perceive Nike as an expensive and aggressive American brand. Nike produced sports apparel and equipment for consumers to be widely exposed to the brand per se. In 1993, Nike revamped its marketing strategy, and decided to give emphasis on its apparel sales. Consumers perceive athletic apparel as a complementary product to shoes.

With this in mind, Nike produced non-athletic apparel for consumers to be more familiar with brand. Nike transcended its brand familiarity of performance sports and athletic footwear. The sports market apparel has been good to Nike, and has been relatively successful. It accounts for more than 50% of revenues in Europe (Porter et al. , 2002). Organizational Goals and Strategic Objectives With its roots tracing back to track and field sports, Nike saw an opportunity to penetrate the market that covers such sport. It is the second most popular sport in Europe.

Although Nike find easy way to enticed and sign up American athletes to endorse their products and bolster their sales, Nike experienced a hard time in luring European athletes to promote their products and the brand itself. Nike, being the American brand that it is, has no relative familiarity in Europe, which compelled Nike to ally itself to Europe’s largest local distributor of athletic shoe and sports apparel. Nike’s bootstrap solution only distanced itself more from potential consumers. Nike had to retrieve licenses from its distributors in order to manage and monitor its brand in Europe (Porter et al.

, 2002). Athletic shoe consumers were segmented by industry analysts: Casual wearers and Weekend Warriors. The former used athletics shoes for casual and streetwear. On the other hand, the latter used their shoes for sports but were not professional athletes. The marketing athletic shoe positioned professional athletes at a meager of segment. The pyramid of influence model suggested that weekend warriors and casual wearers are Nike’s cash cows. In the late ’80’s, the aerobics fad recently emerged in Europe and the women’s athletic shoes market remains to be tapped.

Nike saw an opportunity to overwhelm Reebok’s aerobic lead in the U. S. market by generating a counter-attack penetrating the European aerobics market. Sales were drastic. Nike’s sales of athletic footwear in the U. S. catapulted to 400 million pairs worth of footwear. Europe sold 130 million. Undoubtedly, Nike’s global integration paid off with this marketing strategy (Porter et al. , 2002). European revenues have catapulted to $150 million in 1987. It was the 5% of the entirety of the European athletic shoe market. Nike ignited its sales more by focusing in massive advertising and apt product strategies.

Nike was confident to reacquire its licenses, which European distributors made a poor selling from. In 1992, it has regained control of 90% of its European distribution. Europeans revenues grew to an estimated $1. 1 billions, which was six times revenues acquired in 1987. The centralized distribution in Europe paid off for Nike. Furthermore, it has generated a strong brand image and familiarity by employing European-flavored endorsements for both Europeans athletes and consumers. Nike personalized its shoe line and apparel for each European country (Porter et al. , 2002).

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Financial Analysis of Tesco Corporation

This paper seeks to prepare a financial analysis for Tesco Corporation. The paper includes understanding the company and the industry where it operates as well making a meaning out of the ratios generated from its financial statements. A valuation of the company’s stocks will also form part of the discussion to determine if making an evaluation of whether the company is a good investment option. 2. Analysis and Discussion 2. 1. General description of company Tesco is considered by observers as the leading retailer after it has overtaken its rival Sainsbury in 1995.

Home shopping service characterized one of its strategies, which has allowed shopping online. The company now continues to expand into convenience stores as well as international operations which include Malaysia, Poland, Taiwan, US, Taiwan and Ireland (Tesco, 2008). The company is based in Great Britain and engaged in international grocery and general merchandising retail chain. As stated earlier, it is now the largest British retailer by both global sales and domestic market share, and could be considered one of the world’s top three-largest within the group of Wal-Mart of the US and Carrefour of France (Bordon, 2008).

In the UK, Tesco controls about thirty percent (30 to 32%) of the grocery market which could be as big even if compared with combined sales of its closest rivals for 2007, which Asda and Sainsbury (Farmer Weekly Interactive, 2008). As to how the company has evolved over the years, it originally specialized in food until it eventually diversified into discount clothes, consumer electronics, consumer financial services as well as selling and renting DVD’s (Bordon, 2008). Its first brand came about in 1924 with the name derived after Jack Cohen who brought a tea shipment from T.

E. Stockwell, thus the start of the three letter of supplier’s name TES and adding the first letter of Jack’ surname to form the so called “Tesco” (Tesco, 2008). After opening a Tesco store in 1929 in Edgeware, Middlesex, the company floated its Tesco Store (Holdings) Limited in 1947 at the London Stock Exchange (Tesco, 2008). After the floating of its stocks in the stock exchange came the opening of its self service store in 1947 and its first supermarket in 1956 and subsequent organic growths and acquisitions until its number of stores had reached about more than 800.

There are other acquisitions made that have brought the company to its leadership position today in the United Kingdom (Tesco, 2008). 2. 2. Macroeconomic/industry analysis The retail industry is characterized by few players at the top where Tesco is the leader over its few competitors. The industry is also characterized by a high turnover of sales since the companies are engaged on selling everyday needs of people for grocery items which usually include food items.

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