22 Jun 2010

Sample Essay: Wal-Mart: Impact of a Retail Giant

Wal-Mart is a unique company in the sense that it has used a business model that is not new to the retail industry to make it the biggest retailer in the world. As a result, it has changed corporate business and labor practices. One of its core strengths has been its size. In 2004 it had the highest sales figures that were US $33 billion more than ExxonMobil and greater than the combined sales of the other top five US retailers. Wal-Mart’s strategy for low-cost leadership is their competitive advantage.

Another strategy that has worked from Wal-Mart has been in the selling of a variety of products at discounted prices in all their stores. The firm, unlike its competitors has not focused on providing consumers with specialized goods. According to Peter Solomon (of Peter J Solomon Company), this strategy has increased Wal-Mart’s ability to control the retail industry and in effect to be able to dictate to their suppliers with regards to lowering of their prices (Harper para. 5).

Wal-Mart had a growth strategy that was dissimilar to that of other expanding retail stores. It focused its growth around small towns with it every day lower prices strategy. However many academics and human rights groups have accused Wal-Mart’s commitment to lowering its prices on having an adverse effect on their labor practices locally and on the suppliers from abroad who have to lower their costs to lower their prices.

When it all goes down to strategy, Wal-Mart comes out as visionary in its approach.  The low-wage, low- labor, cheap imports from other nations, and lower-prices from suppliers approach has been used as a tactic by other major retailers yet it is only Wal-Mart that perfected it to its benefit. The average customer has also benefited from consistently lower prices, notwithstanding the Wal-Mart effect which has forced other retailers to also lower their prices. UBS Warburg conducted a study in 2002 and discovered that Wal-Mart centers offered prices up to 14% lower than competitors.

According to Harper Wal-Mart‘s strategic growth from its Arkansas base by constructing stores near distribution hubs and smaller towns was in stark contrast to other retailers who grew by opening stores targeting major towns. This made the retailer to be in touch with the average consumer more and as such be able to understand them and seek ways of satisfying their needs better (para.18).

Another ingenious approach applied by Wal-Mart was the use of IT to develop a sophisticated distribution system that lowered their inventory costs. Distribution centers were strategically placed so that they could serve up to 200 Wal-Mart stores in a day. A satellite network system linked stores, distribution centers and suppliers consolidated orders for goods and reduced inventory costs to a minimum. This enabled Wal-Mart to further reduce their prices.

Wal-mart also developed an aggressive productivity-driven philosophy. This it did by its building too many stores, more than was necessary so that they could compete with each other after which only the fittest would be left to survive. This made managers to improve on the efficiency of their stores. In this case study management creativity was encouraged and successful experiments were recognized and applied to other stores. Wal-Mart also introduced the use of profit sharing as a tool of improving productivity and employee sense of ownership. Employees would either receive cash or Wal-Mart stock for their share of profits accumulated at the end of their tenure.

In a nutshell, Wal-Mart has been able to maintain its competitive advantage by utilizing the following key strategies: information sharing, availability of a variety of products at low prices within its stores, prodigious infrastructure and service differentiation. Information sharing through IT has enabled efficient communication between its stores, distributors and suppliers. Availability of a variety of products has made Wal-Mart to be a customer one-stop shop. The huge infrastructure has made it easy to reach most parts of the US cost effectively among other economies of scale. Service differentiation, where customers are greeted and assisted by friendly staff has made the Wal-Mart stores to be attractive to the average consumers.

In spite of its successes, Oxfam has directly accused Wal-Mart for the continued dilapidating working conditions for women workers across the world. The firm influences its suppliers to sell their products at a lower price which can only be sustainable if the manufacturers produce the same goods at a bargain. To do so, these outsourced manufacturers offer low wages and poor working conditions to their workers. Even though Lictenstein endeavors to counter this allegation by saying that Wal-Mart has been targeted because it is seen as the epitome of arrogant corporate culture, a company of its stature must practice more corporate social responsibility (Harper para. 31).

Conclusion

A study into Wal-Marts meteoric rise and ability to stay above its competitors is recommended for any student of business. Their unique growth and innovative business strategies are at present unmatched.  From the discussion, we can see that Wal-Mart’s strategies are aimed at low-cost leadership, their competitive advantage over other retailers; however, we need to put a caution to the extent to which Wal-Mart shall go to maintain its lower prices. Wal-Mart must seek to clean its image with regards to addressing issues of low-wages and working conditions within itself and among its suppliers.

Works Cited

Harper, Liz .”Wal-Mart: Impact of a Retail Giant” Online NewsHour. 20 August 2004. 27 July             2009. <http://www.pbs.org/newshour/bb/business/wal-mart/unique.html >.

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08 Oct 2009

Sample Essay: Evaluation of Hewlett Packard's Annual Report

The Hewlett Packard Company is the world’s largest corporation, dealing in information technology. Its main head office is located in Palo Alto, California of the United States. The leading brands of HP are personal computers, notebooks, servers, blades, switches, printers, calculators, networking products, software, telephones, PDAs, digital cameras, storage, communication platforms and home media devices among other technology related products and services. Previously, it was confined to the markets of engineering and health, such as in 1999. Now, it trades as a diverse company marketing specific products to households, small to medium size businesses and enterprises. The company also has another edge of selling its products (such as printers & printer accessories, home & business PCs and industry standard servers) through online shopping, consumer-electronics office supply retailers, software partners and alliance with major software vendors such as CDW (HP Annual Report, 2006).

The HP produces high sales volume in personal computers at the global level and that is why; it has beaten back the brand of Del. The market research firms Gartener & IDC (2008) reported that HP surpassed Del by enlarging the gap between both at the end of 2007, showing an increase of 3.9 % in market share. It has also been concluded that HP comes on the fifth among the largest software developing companies (Software Top 100, 2007). William Hewlett and David Packard are the founders of this company. Both were electrical engineers, who completed their graduation from Stanford University in 1934. However, it is also considered that Frederick Terman was the person who motivated them to establish this company in the present form. He was the professor by his profession at Stanford University (Malone, 2007, p. 39-41).

As far as the financial evaluation of HP is concerned, it will be analyzed by two year annual reports. In the year of 2006, the company announced satisfying results for competing IT industry. The revenue produced in this year was $91.7 billion, which was 6 percent more than the previous outcomes. Non-GAAP EPS was increased by 47 percent to $2.38, while GAAP diluted EPS increased 166 percent to $2.18. The cash flow received from the company operations set a new record in the company’s own profile. The company also introduced Edge-line printing with an investment of $1.6 billion in its R & D department of HP inkjet technology, which caused another boom for the company in the enterprise and graphic art markets. In the fiscal year of 2006, the company’s main operations were arranged in seven business segments, which Enterprise Storage & Servers (ESS), HP Services Software (HPS), the Personal Systems Group (PSG), the Imaging & Printing Group (IPG), HP Financial Services (HPFS) and Corporate Investments. The earnings of the company from operations at the end of this year were $6,560, which was 7.2% of net revenue. The net earning was $6,198 and the net earnings per share were $2.23 as basic and $2.18 as diluted. The cash calculated at the end of this fiscal year was $16.4 billion, which was $2.5 billion more than the previous fiscal year. It was also concluded that the profit of PC sales contributed a major part in the net revenues. The net revenue growth was different in various segments of its businesses, such as 2.8 percent growth in PSG, 1.9 percent in IPG, 0.7 percent in ESS, 0.3 percent in Software, 0.1 percent in HP Services and 0.1 percent in HP financial services. Total HP growth percentage was 5.7, while it was 8.5 percent in the previous year. The net cash furnished by activities increased by $3.3 billion during the year of 2006. The rationale for this increased cash flow was the increased earnings and lower investments on pension and taxes. The net revenue collected from products was $73,557 million, while it was $17,773 million from services and $328 million from financing income. The total net revenue was $91,658 million, which was quite high as compared to that generated in the year of 2005. The statistics of cost and expenses were such like that the cost of products was $55,248 million and so on. The total operating expenses were $85,098 million, which was also more than that of previous year. The total current assets were $48,264 million per value and the total assets, including all the segments, were $81,981 million. The total current liabilities consumed $35,850 million and the long-term debt was $2,490 million. Similarly, the total stockholder’s equity was $38,144 million. As the net revenue of the company during this year was $91,658, the cost of sales, which includes costs of products, services and financing interests, was $69,427. The net revenue growth observed in PSG segment of the company was 2.8%, while 1.9% growth was seen from IPG, 0.7% from ESS, 0.3% from Software, 0.1% from HP Services, 0.1% from Financial Services and no growth was calculated in the segment of Corporate Investments. The total HP growth in all these segments was 5.7%. Similarly, the gross margins were also calculated in these segments, which were 0.4% in ESS, 0.2% in HP Services, 0.2% in HP Services, 0.2% in Software, 0.1% in PSG, 0.1% again in HP Financial Services and 0.1% in Corporate Investments. The total gross margin became 0.9%. The net revenue in consulting and integration services rose by 2% as compared to the previous fiscal year of 2005. The increased operating margin in this year of 11.1 percent was due to decreased operating expenses and increased gross margin. Furthermore, the net revenue growth in the company’s various business units also was awesome, as it was 8.4% in Notebook PCs, 0.8% in Desktop PCs, 0.6% in Workstations, 0.8% in Handhelds and 0.1% in other areas. These figures were quite high as compared to that of previous year 2005. The total net revenue growth in these business units was 9.1%, while this growth was 8.6% in the year of 2005. The company’s total cash and cash equivalents rose to $16.4 billion, which was an increase of 18% against the previous year turnover. Net earnings in the year of 2006 aided to produce $11.4 billion cash from operations, while the funded sum of investing and financial activities was $8.9 billion. The year over year debt was flat at $5.2 billion during this year. Cash flows from financing activities produced the benefits of $2.5 billion for the execution of employee stock plans. The company’s cash was too strong to satisfy the employee’s bonus payments. The outstanding debt was consistent on $5.2 billion with the interest rate of 5.1%. In this year, the short-term borrowings rose to $2.7 billion due to the phenomenon of reclassification from long-term to short-term of $2.0 billion of US Global Notes, of which $1.0 billion gained maturity in December, 2006 and the remaining $1.0 billion was expected to be matured in July, 2007. As per the calculations obtained from consolidated statement of earnings, the total operating expenses were $85,098 million and the net earnings were $6,198 million, while the net earnings per share were $2.23 million as basic and $2.18 million as diluted. The net cash provided by operating activities $11,353 and the cost of inventory for operational activities was $1,109 millions. The total net cash used in investing activities was $2,787 million. As the company’s policy towards purchasing inventory was the low cost choice, so the cost was computed on the first-in and first-out basis. The most of its products are sold through third-party distributors and resellers, which results in significant turnouts. The company decided to augment its operational activities area to ensure accountability, efficiency and speed, however, the company’s capital management endorsed the policy of cost reduction in every area. The company took the total cost envelope as revenue minus operating profit and the costs of $85.1 billion were consumed in a number of areas to optimize. The capital strategy of the company includes the open capital investment for further growth. Its IT operations state clearly its capital strategy at personal level so as to achieve reduce costs, enhanced customer services & acquisition of information for running new businesses, risk elimination and development of new IT organization (HP Annual Report, 2006).

The year of 2007 was the year of maximum growth for this company. In this year, the company managed to add new revenue of $12 billion and the non-GAAP operating profit rose to 30 percent. This massive growth became possible due to three fundamental changes in the world, which were the explosion of digital information & content, the increased demands for technology and the emerging need for information technology. It was also reported that HP in this year made 9 percent of the total market. The percentage of revenues collected from different segments of the company were diverse in nature, such as HP Financial Services and Others contributed almost 2%, HP Software contributed also 2%, HP Services contributed 16%, ESS contributed 18%, PSG contributed 35% and IPG contributed the maximum which was 27%. The company achieved maximum growth in the segment of software and that was why, the company attained the sixth rank among the leading brands of the world. The company equalized its capital strategy with its operations to maximize stockholder value. During the year of 2007, the gross cash of the company was $16.4 billion and the net cash was $11.2 billion. The total number of shares traded in this year was 42,088,679 and the average value of a share was $48.48. The net revenue generated during this year was $104,286 million and the net earnings were $7,264 million. The earnings received from operations were $8,719 million. The net earning per share was $2.76 as basic and $2.68 as diluted. The long-term debt at the end of the year was $4,997 million, while the total assets were $88,699 million. The year over year net revenue increase was 13.8 percent and the net revenue increase from operations was 8.4 percent. The cost of sales during this year was $78,887 million and the gross profit was $25,399 million. The contribution of PSG in net revenue growth was 7.9 percent, while it was 1.8 percent in IPG, 1.6 percent in ESS, 1.1 percent both in HP Software & HP Services and 0.3 percent in HP Financial Services. The HP net revenue was 14% more than that of the previous year. The gross margin ratio analyzed in HP Software was 0.6 percent, while it was 0.1 percent in HP Services, ESS & HP Financial Services, 0.2 percent in PSG and also 0.2 percent in IPG. This improvement in gross margin was due to a favorable change in revenue mix and continued focus on cost structure improvements. The net cash provided by operating activities was $9,615 million, while the net cash consumed in investing activities was $9,123 million and the net cash used in financing activities was $5,599 million. Hence, the net increase/decrease in cash and cash equivalents was $5,107 million. The total operating expenses consumed on various operations were $95,567 million, which included the cost of products and cost of services and other expenditures. HP’s total current assets were $47,402 million out of which the current assets for inventory were $8,033 million. The company planned to reduce its IT costs through modernized IT operations and consolidated data centers. The capital strategy of the company was devoted towards two priorities, which were the continued investment in its business and the cash return policy for its stockholders by repurchasing its shares. The company also augmented some of its operational departments for gaining the ultimate profits and net growth. The stocks issued during this year caused an overwhelming profit for both company and the stockholders. The increase in net growth was due to the increased demands of the new emerging markets (HP Annual Report, 2007).

Hence, it can be concluded from this financial analysis that the company was the largest brand in the whole IT industry throughout the world. The company was making 9 percent of the total IT market, which shows the massive vacuum to grow for the company. Additionally, the company’s capital strategy also caused a major shift in the net revenues and the profit margin ratios. The company continued to work with three major elements, which were targeted growth, efficiency and capital strategy. The company was quite efficient in blade servers during the year of 2007. With the increase in net revenues, the company managed to increase the value of the industry-leading market shares.

I feel myself highly motivated after reviewing such a vibrant growth in the industry and I will definitely recommend myself to invest on HP’s stock, because the company’s brands are too strong to sale out easily and the company is making tremendous growth in its every sector and segment. Another reason for this recommendation is that the availability of stock and quality of products also attracts me a lot for starting business with this company. In short, the company’s capital management is quite efficient to cope with the modern world trends by introducing innovations in the products of the company.

References

HP Investor Relations. “Annual Reports, Proxy Statements & Forms 10-K”. Retrieved Sep. 29, 2008 from http://h30261.www3.hp.com/phoenix.zhtml?c=71087&p=irol-reportsannual.

Malone, Michael (2007). Bill & Dave: How Hewlett and Packard Built the World’s Greatest Company. Portfolio Hardcover, 39-41.

04 Oct 2009

Simple Essay: Classroom Management

Rogoff et al., (1996) believes that children can develop their thinking as they participate in cultural activity with the guidance and challenge of their teachers, parents and friends. Children could benefit through learning as an apprenticeship; a social activity that is mediated by parents and peers who support and challenge their child’s understanding and skills. She argues that cognitive development involves much more than the accumulation of skills and knowledge. Cognitive development is better characterized as the growing sophistication with which a child employs cognitive processes such as thinking, remembering, and perceiving in his or her collaborations with the other children and teachers who share in the learning process at school. In other words, learning can be a process of ‘guided participation’ shared between the child and others in contexts of participation. Guided participation helps bridge the varying perspectives and thought process among the more and less experienced participants, and helps in involving every student in class activities (Rogoff et al., 1996).

Classroom management and managing students are skills which teachers acquire and hone over time. There are no short-cuts and teachers must learn to master this art through years of experience. The topic of classroom management has been researched by many and quite a few methods and ideas have been solicited. However, unless a teacher develops the ideal teaching skills in managing the myriad of tasks and situations that occur in the classroom each day, they will find teaching difficult and monotonous. Effective classroom management is central to teaching and it requires patience, common sense, consistency, a sense of fairness, dedication and courage. Since this practice mandates imparting training, teachers need to understand the psychological and developmental levels of their students. Now this may sound simple, but the fact remains that not all students have the same level of intelligence, and so teachers have to dedicate and teach their students in a manner that reaches out to them. In a classroom, teachers come face to face with varying challenges, be it intellectual or behavioral, and to manage such a situation requires them to portray a sense of amusement, understanding, caring and belonging. It is here that the qualities of consistent practice, patience, and willingness to learn from mistakes, bring effective classroom management into play. Sadly, this is often easier said than done. The problem lies not in the methodology, but in the unpredictability. No two classes are similar, and not two students are alike, and therefore there can be no standards to impart learning strategies. This presents a Herculean task for teachers as they have to adjust and implement programs that change with each situation. As mentioned above, personal experience and research has illustrated the magnanimity associated with teaching under testing times. Teachers, especially those who begin their career, have difficulty in managing their classrooms. While there are no fool-proof solutions to problems or classroom setting, the following principles may be helpful in bringing about a more controllable situation to classroom management:

Room Arrangement

Setting Expectations for Behavior

Managing Student Academic Work

Managing Inappropriate Behavior

Promoting Appropriate us of Consequences (Kizlik, 2008).

Teachers need to understand the difference between teaching and learning. Teaching is just about what all teachers do in their class, but learning is the process through which students get to know what is being taught. This is where motivation comes into play. Unless teachers can motivate their students to learn, the whole exercise in class is lost. Students need to be educated and for that, they need to develop the art of learning with pleasure and fun. Teachers can observe the students in class and recognize what actually motivates these kids to studying and behaving properly. Classroom management is not just about teaching and learning, but also about conducting oneself with dignity. When it comes to teaching, children learn best:

When they take responsibility of learning on their own

When they become actively involved in what they are learning

When learning becomes interesting and is interactive

When they see themselves as successful learners (Watkins et al., 2007, p.4)

This is why teachers must ensure that their topic is stimulating and enduring, and has enough substance to make it worth the effort. What must be understood is that teachers need to continuously evaluate their amendments, shift their strategy often, and pay more attention to a few children who are weak, or redefine their teaching procedure to make it worthwhile. But this does not mean that a teacher can abruptly terminate a subject or topic without careful consideration, the teacher must be able to create an interest in whatever he/she does to impress the students to follow. In hindsight, the move should elicit a positive response from their wards and make learning an interesting art. The following points show what may be necessary to instigate participation from students in classrooms:

creativity

contextualization

realism

flexibility

rigor

illumination

Creativity allows teachers to choose a topic which is intriguing and challenging and has scope to allow students to participate in it actively.

Contextualization allows the teacher the freedom to plan their modus operandi; allowing teachers to identify the possible plan of action wherein they are at liberty to identify the student (s) who are to be targeted, and the classroom setting to draw more interaction. This way, the classroom session becomes interactive and the teacher will have full control of the class.

Realism allows the teacher to gauge the needs of the class and plan a program accordingly to avoid pressure to perform.

Flexibility as the word says, is allowing the teacher the power to respond to unforeseen circumstances; for all said and done, there is always the possibility of a plan going haywire, which could lead to the disruption of classes. If by chance some teachers find their students tired or restless, they should see this as a sign of lack of attention or interest and push on with other activities that will generate interest.

Rigor refers to the scrutiny of the plan. Whatever the motive or result of one’s action, a teacher will have to measure his/her initiative against its reliability and validity at all stages of its implementation before making recommendations.

Illumination of the practice will allow the teacher to judge his/her theory and make changes if necessary, to make the exercise most productive (Macintyre, 2000).

References

Rogoff, Barbara, Matusov, Eugene and White, Cynthia, 1996, Models of Teaching and Learning:

Participation in a Community of Learners, Oxford, Blackwell, UK, http://java.cs.vt.edu/public/classes/communities/readings/Rogoff,Matusov-1996.pdf

Kizlik, Robert Dr., 2008, ADPRIMA: Classroom Management, Management of Student Conduct, Effective Praise Guidelines, and a Few Things to Know About ESOL Thrown in for Good Measure, http://www.adprima.com/managing.htm

Macintyre, Christine, 2000, The Art of Action Research in the Classroom, David Fulton Publishers Ltd, London

10 Aug 2009

Sample Essay: Coca Cola

Coca-Cola Company is still growing although many say that they have attained the end part of the life cycle for their products. The company is growing because, the way it carries out its advertising since its inception in 1886. Their advertisements have been going from height to height each year. They seem to have mastered the behaviours of their customers, how their attitudes are affected once an advert is rolled and how they (adverts) will make one to change motive in terms of purchasing.

Further, in terms of advertisement, they embrace the growing technology so as to produce something which will draw attention from all age groups it is intended for each time they come up with an advert. They have gone from print alone to TVs with advertisement aimed at all age groups. Their ability to set up branches when they notice an opportunity is another sure evidence that, the company is growing. The company uses survey to gauge and to monitor consumer behaviours. They hinge this on advertisements using credible information on consumer attitude towards their brands as well as their purchase intentions.

In addition, the company has been in the forefront in search for corporate credibility which many organizations yarn for. They have further been involved in social charity functions which in other words are like advertising meetings within different communities. The fact that, there are some places they have not cut a niche in, then they are still growing and the management cannot say for sure that they have reached the peak of everything.

On the other hand, Coca-Cola Company can be said to have reached the end of the lifecycle for its products since, for over 120 years, the company has been an icon in American advertising and has had the largest number of advertisements which touch on the popular culture than any other advertisement in America. This has propelled it to be the most consumed soft drink of all the time not in America, but the whole world. Also, the number of competitors who purport to be competing with the company are not worth to be called competitors since they have not in any time offered the required challenge from a worth competitor.

Also, Coca-Cola Company has been the best soft drinks company for a long time and it has become like a culture that, their products are used in almost all events in the world even in the absence of advertisements e.g. in sports, you spot people relaxing and taking their drinks in almost every sport; they are drinks for all events. This translates to them having achieved the end state in the market.

In Europe, and especially in Poland and Belgium, the company has been involved in some forms of contamination. In 1999, some brands of sodas from the company had some forms of contamination in Belgium. It was nicknamed the ‘Coke stomach ache’ since it led to vomiting and the feeling of dizziness. This led to some 39 pupils being hospitalized for consuming the contaminated sodas. However, the management did apologize for the mix-up promising that, no recurrence of the same will happen again. Also in the same year, the company had the largest recall in its history in Belgium when ministry officials said that some four people were hospitalized after consuming Coca-Cola soda.

From these scares, the management’s decision to distribute millions of free drinks is like building confidence again in the lives of the citizens. This also doubles buy being another advertising campaign were many people will want to take the drinks. The strategy cost a lot in short term but in long term, all the cost incurred will be returned once confidence is build among the citizens. All in all, the company’s operating cost will be high in the first year; after the distribution and then it will be surpassed by the benefits in the following years.

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