Mexican supermarket industry is mainly characterized by a variety of types of consumers, mainly
marked by differences in purchasing power. Mexican industry self serves the needs of different consumers
through: (i) modern formats such as supermarkets, warehouses, hypermarkets and membership clubs; (ii)
traditional formats such as small independent sundries; and (iii) informal, such as farmers' markets and local street
vendors. This paper analyzes retrospectively the acquisition of the Gigante stores by Soriana from the theory of
industry, resources and capabilities, reviewing the situation of both companies in the diamond industry by Porter,
SWOT analysis themselves that theory.
This research aims at identifying the impact of excellence in drawing up the following four marketing mix strategies (Product, Pricing, Promotion and Distribution) of the small and medium enterprises in Jordan, in terms of their marketing performance in its dimensions (Sales Growth, Profit Growth, Customer Attraction and Customer Retention).In order to reach the results of this study, A total of (187) valid questionnaire surveys were collected from companies belong to the SME Association in Jordan. The Statistical Package for the Social Sciences (SPSS) approach was used to analyze the collected data. The empirical results indicated there is a significant relationship between the building of marketing strategies of the marketing mix elements in the Jordanian SME and their marketing performance, by (sales growth, profit growth, customer attraction, and customer retention) dimensions. Consequently, decision makers in small and medium organizations need to choose strategies based on their target market to the positive impact on the mind of the consumer, which in turn could improve modern scientific methods in SME to divide their markets into sub-market sectors.
This research aims at identifying the impact of excellence in drawing up the following four marketing mix strategies (Product, Pricing, Promotion and Distribution) of the small and medium enterprises in Jordan, in terms of their marketing performance in its dimensions (Sales Growth, Profit Growth, Customer Attraction and Customer Retention).In order to reach the results of this study, A total of (187) valid questionnaire surveys were collected from companies belong to the SME Association in Jordan. The Statistical Package for the Social Sciences (SPSS) approach was used to analyze the collected data. The empirical results indicated there is a significant relationship between the building of marketing strategies of the marketing mix elements in the Jordanian SME and their marketing performance, by (sales growth, profit growth, customer attraction, and customer retention) dimensions. Consequently, decision makers in small and medium organizations need to choose strategies based on their target market to the positive impact on the mind of the consumer, which in turn could improve modern scientific methods in SME to divide their markets into sub-market sectors.
Details about the Business size, Government, Employee, Supplier, Banks, Investors, Customers, competitors and Community, Methods ,Methods of measuring business size, small businesses , large businesses, and family businesses.
International Marketing Research Assignment SampleAssignment Prime
Cross-border activities of firms have been of interest for international business
researchers for a long time, and still it is an expanding field of research. Business which want to compete in 21st century must confronted with the task of crafting strategies that anticipate and respond to the rapid pace of change in global market, and that’s why their information needs are changing and becoming more and more complex and diverse. Every company performs the task of marketing research to provide the relevant, accurate, reliable, valid and current information of market to management. The major objectives of this essay is to research emerging market so that opportunities for internationalisation can be found, to understand the primary functions and mark the problems in market research. Maintaining objective in marketing research is essential if marketing management is to have sufficient confidence in its result to be prepared to take risky decisions based upon those results.
The purpose of this study is to investigate The effects of Marketing Strategies on Organizational Performance; A Study of Nigeria Bottling Company Kaduna, including Production strategy, pricing strategy, promotion strategy and place strategy, that eventually influences Marketing strategies on performance. Marketing strategy has been a focus of organizations and a tool for attaining overall firm performance. Our study contributes to the existing study of marketing strategy by supporting
Anyone can become a ClickBank affiliate — it’s free. When you find a product that you wish to promote, either by searching the ClickBank marketplace or at a vendor’s website, you will be provided with a unique link which you can use to direct customers to the product page
Assignment 3 Case StudyE-Business Strategy and Models in B.docxbraycarissa250
Assignment 3: Case Study
E-Business Strategy and Models in Banks: Case of Citibank
Bank is an institution that deals with money as well as credit. It accepts deposits from the public, makes funds available to those who need then and helps in remittance of money from one place to another (Macesich, George, 2000, p-42). Modern banks today perform a wide range of functions that makes it difficult to give an apt and precise definition of it. One of the famous economists, Crowther had said, a bank “collects money from those who have it to spare or who are saving it out of their incomes, and lends this money to those who require it”. In short, the term bank in modern times refers to an institution that deals with money i.e. accepts deposits and advances loans; has the ability to create credit which basically implies expanding its liabilities as a multiple of its reserves; creates demand deposits and it is a commercial institution that aims at securing profits.
Citibank is a subsidiary of Citigroup. Citibank was founded as City Bank of New York in the year 1918. According to the latest statistics, it is now the third largest bank holding company in the United States by the total assets after Bank of America and JP Morgan Chase. The bank has its retail banking operations spread over more than 100 countries and territories around the world (Harold, Cleveland & Huertas, 1985). Apart from the standard banking transactions, Citibank offers credit cards, insurance and other investment products. Their online services have earned them appreciation from every nook and corner, making them the most successful in the field. The 15 million online users bear testimony to the stated fact. The key people involved in the management of the bank are: Vikram Pandit (CEO), John Gerspach (CFO), Douglas Peterson (COO) and Willliam R. Rhodes, the Chairman.
Strategy literally means the way an action is planned to achieve the desired results. Every company has certain aims that it hopes to conquer. It has a vivid description of what it desires to achieve. The vision statement that company has is an idealized picture which inspires it, energizes its efforts towards directing its actions towards the expected goals (Hambrick and Chen, 2007, p 935-955). Strategic Decision Making, in context of a firm or an organization, is the framing of long term plan of action that aims at resulting in success and profits for the products and services marketed by the company, for instance (Triantaphyllou, 2000, p 320). Strategic decision making is important to outperform the various other competitors in the market. The process of determining appropriate courses of action for achieving organizational objectives and thereby accomplishing organizational purpose is known as Strategy formulation. In today’s era of cut-throat competition in the business environment budget-oriented planning or forecast-based planning methods are insufficient for a large corporation to survive and prosper. The firm ...
Details about the Business size, Government, Employee, Supplier, Banks, Investors, Customers, competitors and Community, Methods ,Methods of measuring business size, small businesses , large businesses, and family businesses.
International Marketing Research Assignment SampleAssignment Prime
Cross-border activities of firms have been of interest for international business
researchers for a long time, and still it is an expanding field of research. Business which want to compete in 21st century must confronted with the task of crafting strategies that anticipate and respond to the rapid pace of change in global market, and that’s why their information needs are changing and becoming more and more complex and diverse. Every company performs the task of marketing research to provide the relevant, accurate, reliable, valid and current information of market to management. The major objectives of this essay is to research emerging market so that opportunities for internationalisation can be found, to understand the primary functions and mark the problems in market research. Maintaining objective in marketing research is essential if marketing management is to have sufficient confidence in its result to be prepared to take risky decisions based upon those results.
The purpose of this study is to investigate The effects of Marketing Strategies on Organizational Performance; A Study of Nigeria Bottling Company Kaduna, including Production strategy, pricing strategy, promotion strategy and place strategy, that eventually influences Marketing strategies on performance. Marketing strategy has been a focus of organizations and a tool for attaining overall firm performance. Our study contributes to the existing study of marketing strategy by supporting
Anyone can become a ClickBank affiliate — it’s free. When you find a product that you wish to promote, either by searching the ClickBank marketplace or at a vendor’s website, you will be provided with a unique link which you can use to direct customers to the product page
Assignment 3 Case StudyE-Business Strategy and Models in B.docxbraycarissa250
Assignment 3: Case Study
E-Business Strategy and Models in Banks: Case of Citibank
Bank is an institution that deals with money as well as credit. It accepts deposits from the public, makes funds available to those who need then and helps in remittance of money from one place to another (Macesich, George, 2000, p-42). Modern banks today perform a wide range of functions that makes it difficult to give an apt and precise definition of it. One of the famous economists, Crowther had said, a bank “collects money from those who have it to spare or who are saving it out of their incomes, and lends this money to those who require it”. In short, the term bank in modern times refers to an institution that deals with money i.e. accepts deposits and advances loans; has the ability to create credit which basically implies expanding its liabilities as a multiple of its reserves; creates demand deposits and it is a commercial institution that aims at securing profits.
Citibank is a subsidiary of Citigroup. Citibank was founded as City Bank of New York in the year 1918. According to the latest statistics, it is now the third largest bank holding company in the United States by the total assets after Bank of America and JP Morgan Chase. The bank has its retail banking operations spread over more than 100 countries and territories around the world (Harold, Cleveland & Huertas, 1985). Apart from the standard banking transactions, Citibank offers credit cards, insurance and other investment products. Their online services have earned them appreciation from every nook and corner, making them the most successful in the field. The 15 million online users bear testimony to the stated fact. The key people involved in the management of the bank are: Vikram Pandit (CEO), John Gerspach (CFO), Douglas Peterson (COO) and Willliam R. Rhodes, the Chairman.
Strategy literally means the way an action is planned to achieve the desired results. Every company has certain aims that it hopes to conquer. It has a vivid description of what it desires to achieve. The vision statement that company has is an idealized picture which inspires it, energizes its efforts towards directing its actions towards the expected goals (Hambrick and Chen, 2007, p 935-955). Strategic Decision Making, in context of a firm or an organization, is the framing of long term plan of action that aims at resulting in success and profits for the products and services marketed by the company, for instance (Triantaphyllou, 2000, p 320). Strategic decision making is important to outperform the various other competitors in the market. The process of determining appropriate courses of action for achieving organizational objectives and thereby accomplishing organizational purpose is known as Strategy formulation. In today’s era of cut-throat competition in the business environment budget-oriented planning or forecast-based planning methods are insufficient for a large corporation to survive and prosper. The firm ...
Before 1900, despite its weaknesses in effective management of worke.pdfarishaenterprises12
Before 1900, despite its weaknesses in effective management of workers, manufacturing
leadership was well provided by top management. They were technological entrepreneurs,
archictects of productive systems, veritable lions of industry. But when they delegated their
production responsibilities to a second-level department, the factory institution never recovered
its vitality. The lion was tamed. It\'s management systems became protective and generally were
neither enterpreneual nor strategic. Production managers since then have typically had little to do
with initiating substantially new process technology-in contrast to their predecessors before 1900
(skinner 1985).
D) how is Japan (or Germany) different from (or the same as) America with regards to this trend
in manufacturing leadership?
E) taking the structural charestaristics of manufacturing enterprises (e.g., scale, complexity, pace
of technological change) as given, what can be done to revitalize manufacturing leadership?
Solution
Strategic Windows: their nature.
The nature and purpose of strategy and how it is formulated. The nature of marketing strategy
and how this should take account of the interests of various stakeholders when involving such
things as, product/service development and delivery, promotional mix, support services,
manufacturing and production processes, R&D, and material purchasing affect the stakeholders.
Other factors in the business environment that influence marketing strategy: political, economic,
socio-cultural and technological (PEST).
Marketing and competitors: how a firm must be able to position itself competitively in the minds
of its customers so that its products and services stand out very favourably in important respects
in relationship to competitors.
Matching the firm’s products / services with opportunities and threats in the market place. The
limited periods during which the fit between the key requirements of a market and the particular
competencies of a firm competing in that market are at an optimum. Investment in a product line
or a market area should be timed to coincide with periods during which a strategic window is
open. Correspondingly, withdrawal should be considered where something which was a good fit,
is no longer a good fit. Ways in which a market can evolve and how firms might develop a
competitive strategy to take advantage of Strategic Windows.
Portfolio Analysis
How organisations create their own environments rather than simply adapt to existing ones. How
they select the strategic windows of opportunities and threats through which they want to look
out into the world and develop and market product and services to meet the needs of what they
observe to be required in the face of environmental turbulence.
How well the fit between an organization’s products/services meet the needs presented by the
windows of opportunities and threats is a fitting start for exploring the subject of strategic
marketing. It introduces the many factors t.
There are a multitude of risks and issues for corporations and.docxssusera34210
There are a multitude of risks and issues for corporations and industries
operating in the international environment. No doubt, issues such as
inferior quality of products manufactured by companies that engage in
outsourced production, or the use of chemicals in the manufacturing
process of edible products imported back to the U.S., which our regulatory
system considers toxic and which are regulated against within our own
borders. These types of issues can result in a tremendous impact to a
corporation's bottom line, from the financial impact to sales to brand
damage that diminishes their reputation in the marketplace.
Why does a company need to grow?
Suppose you started a company using an innovative product idea you
designed and your corporation was the first one to market and sell this
exciting new product in your home country. Sales immediately took off and
your company found itself growing and branching out in cities all across
your nation. Soon, competitors followed your leadership position, chasing
your market and successfully absorbing some of your sales. In order for
your firm to remain the leader, or to even continue to survive, you would
need to develop strategies that allowed your firm to continue to grow its
market share. If you failed to maintain your market position, over time you
could lose enough of your customer base so as to become unable to
financially continue to stay in business. Not only would you close your
doors, but your employees would lose their jobs.
Corporations spend a large amount of time developing strategies that allow
them to remain competitive in the marketplace, earning profits and re-
investing them into the business in order to grow. When a firm reaches a
saturation point in its home market, one strategy it can deploy to remain
profitable is to move into the global marketplace. The key to remaining
competitive is to constantly, and continually, innovate. For global firms,
innovation is exponentially more challenging.
Profit and Loss - What are they and how do
they impact global strategies?
In order to develop sound global strategies, it is critical to understand
profitability. Simply put, profitability means the degree to which a
corporation has been successful at earning revenues and managing
expenses. The difference between its revenue and its expenses is called
the net profit and the ratio of net profit to revenue is called a net profit
margin. Net profits and net margins are tracked and monitored carefully by
a firm's finance department, along with all other financial data Net margins
reflect how much of each dollar earned by the company has been
translated into profits and is determined by dividing the net profit by
revenue.
While some industries operate on very low, or thin, margins, others operate
on much higher margins. Understanding a firm's finances and industry
profitability norms, assists financial experts in assessing the health of the
firm, a ...
GBS Sample 1Name_ID_GBS Task 1.pdf1 P a g e .docxshericehewat
GBS Sample 1/Name_ID_GBS Task 1.pdf
1 | P a g e
Global Business Strategy
Level 7 - Unit 7.2
International Business
Environment Analysis.
Report – Activity 1
Revised 18 Sept 2015
2 | P a g e
Contents
Section Details Page
Activity 1
Introduction Company profile 4
1a International business environment Analysis Techniques 4 – 7
1b Analysis of the micro and macro of Marks & Spencer‟s PLC 7 – 8
1c The impact of international business environment on Marks & Spencer‟s 8 – 9
1d What does globalization mean for Marks & Spencer‟s? 9 – 10
1a (2) What is the extent of globalization on organizations? 10
3 | P a g e
1b (2) Operating structures different organizations in international markets. 10 – 11
References 12
Introduction
Marks & Spencer PLC was founded in 1884.It has grown from a single market stall to an
international multi-channel retailer. They sell stylish, high quality value clothing and home
products as well as food, responsibly sourced from around 3,000 suppliers globally. Their
portfolio covers general merchandise, food, international and multi-channel across 54
international territories with nearly 86,000 employees.(Marks and Spencer, 2014).
International business environment Analysis Techniques
Business environment is the combination of internal and external factors that influence a
company‟s operating situation and the overall business. It is both Micro and Macro in nature.
Micro or internal factors are controllable and could include management style, organizational
culture, mission and value statement. Whereas Macro or external factors are uncontrollable these
http://www.businessdictionary.com/definition/combination.html
4 | P a g e
factors are often both dynamic & complex. Business environment factors can include new
policies, procedures, government changes, improvements in technology, social and economic
trends(Nonaka, I., and Takeuchi, H, 1995).The reason for analyzing the business environment is
to highlight opportunities and threats. Knowing the opportunities and threats to the business
allows the company to set a strong business strategy and understand better where to invest,
expand, diversify and downscale. There are a number of different tools we can use to analyse
both the Micro & Marco factors within a business.
Micro can be analysed with Porters 5 forces model.Porter identified that there are 5 key
forces that influence business that needed to be analysed in order to develop a competitive
advantage (Porter, 1985). These forces are supplier power, buyer power, competitive rivalry,
threat of substitution &threat of new entryand are used for strategic industry analysis. The
positives of using this technique to analyze is that it looks at a wider range of competitors and it
forces the business to look externally. However this is a relatively old model that may not be
suitable ...
Running head: BRAND PROMOTION 1
Brand Marketing 12
Preliminary International Marketing Report: Brand Promotion
BUS433 | International Marketing
Marquita Watkins
Argosy University – Online
August 8, 2018
Introduction
I am currently the consultant for Trukfit Clothing Enterprises who are responsible for the distribution of specialized/work-based clothing to various markets. The company itself specializes in manufacturing clothes suited for a particular profession or task. For instance, the company supplies to factory workers who are in need of specialized overalls and boots, additionally, the company also construction clothes to construction workers and so forth. The company is currently contemplating the possibility of expanding to the U.S market. As the consultant, I need to undergo intense research on the factors that need to be wholly considered when expanding into a foreign market. Proper analysis of the factors in question will be crucial if the company is to successfully penetrate the market. Failure is by all means, not an option.
Relevant and Applicable Theories
Thorough research into the market has revealed that the company needs to take into consideration some prominent marketing concepts, which are crucial for success. The following is a compilation of some of the most important marketing concepts that need to be taken into great consideration.
Market segmentation, as the term suggests, refers to the complete specialization of market demand based on the different tastes and requirements sported by specified individuals (Heakal, 2017). For instance, as per the clothing market, there are some groups who prefer sporting attire and clothes while there is a group, which prefers official wear in the likes of suits, ties and such. In such a scenario, the individual market is segmented into two groups, those that prefer sporting clothes and those, which prefer official wear. Additionally, it is important to note that overlapping across different segments often happens. For example, a person might prefer both sports clothes and official wear. In some scenarios, overlapping is not common or is even unheard of, for instance, men, in most cases, do not prefer women’s clothing. In light of the above, segmentation is often based on a number of factors including, income, age, sex, occupation, social styles and even lifestyles to some extent (Heakal, 2017). Overall consumer behavior is the main indicator of segmentation within a particular market. For Trukfit to be able to expand into the U.S market, it needs to learn about the consumer behavior that is present at the region. The company needs to know the overall tastes and preferences of workers and organizations within the region.
Segmentation will help the organization to identify ...
Marketing represents the boundary between the marketplace and the company, and knowledge of current & emerging happenings in the marketplace is extremely important in any strategic planning exercise.
Running header Competitive advantage of CSR Company in the global.docxagnesdcarey33086
Running header: Competitive advantage of CSR Company in the global market 1
Competitive advantage of CSR Company in the global market 20
Competitive advantage of CSR Company in the global market
Name of the student
Institutional affiliation
2.1 Title of the project
Competitive advantages of export orientated railway products of CSR in global marketplace.
2.2 Objectives of the study
1. Identifying the key success factors in CSR’s product and service.
2. Explain the marketing strategy of CSR in developing countries by marketing theories.
3. Explore the opportunities for future development in global competition
2.3 Background of the study
2.3.1 Literature review
With the current trends of the global market, fresh strategies are required by business organizations to adjust and fit the dynamic business morphology ( Birkinshaw, 2004). The adjustment process should be geared towards enhancing the growth and development of the company centred on its strategic mission and plans within a defined framework. In institution of such business strategies for the growth of the business, the franchise must focus on the basic four facets of business growth and development (Marketing, n.d).
Broadening of the revenue base: Any business organisation keen on accelerating its growth must identify the growth indices of the company (Sadler, 2003). In widening the revenue base, it is required that the organisation shall embark on very intensive marketing strategy to improve sales of the product while keeping the costs of operation at relatively invariant levels (World watch, n.d). This shall involve business forecasting skills to be able to identify which pointers of growth should be strengthened in the organisation in order to broaden the revenue base. Sadler (2003) asserts that the goal of any business must be to increase the avenues of inletting revenue because this automatically increases the profitability of the organisation. This is also affirmed by Chalmin, in his dispositions, The Global Markets “…Business strategy must channel its focus on shielding the market it has already but more significantly, enhancing the revenue base.” (2008).
Competitive advantage: competitive advantage should be the next driving force of the business venture. To increase the revenue base, Sadler (2003) admits that wading off the competition from similar ventures must be pursued in earnest. The current business environment calls for customization of products in such a way that the venture gets an edge in terms of competition. Analysis of consumer behaviour is fundamental to staying ahead in the race towards getting an edge in the sale of products. Drucker & Joseph, in their theory of marketing and strategy (2008), has provided very basic institutes of cutting a niche of the market and getting ahead of the competitors in business. These, according to Feig (1999), includes the under listed:
Branding: how well the v.
Running head: RETAIL BUSINESS CHARTER 1
RETAIL BUSINESS CHARTER 9
Retail Business Charter
Introduction:
The Intech Company produces and sells mobile technology. The company is situated in the United States but seeks to expand its boarder. Gradually, the company has developed to a bigger corporation such that they can extend into the international market. The target is a country in Asia such as India. The target market for the company includes the middle-upper class. Also, their focus is on the elements that attract more customers to buy the products. It is the primary aim of the current state market as well as the Asian market.
Objectives:
They also need to establish the suppliers who will market the products in the market. The Intech Company shows a perfect competition kind of market structure. Evidently, the company operates in an environment that has more than one similar service providers. Additionally, the company continually competes on its prices about their competitors. The company has placed marketing strategies that can demonstrate the product’s and build an efficient marketing plan around the competitors. They also consider the pressure from other market dynamics that alter their strategies. On the other hand, overlooking these factors could often lead to disasters. As a result, the company should remain true to its products and control the factors that will keep them successfully in the market.
Intech Company has a good position in the market that is the strength of the company. In addition, there are diverse opportunities that the company can utilize to promote its product hence improve their revenues. However, the company needs to set reasonable goals and marketing strategies that will enhance their competition in the market. In addition, the launch of the new branch has a great potential in the market because it is at a growth process and the prospects are high. Consequently, the company can expand its market in areas where they identify high potential. The company should also tailor products that will alleviate competition in the market. As a result, the company has the potential to grow due to the huge market that readily waits to purchase the product (Wymer, 2011). In summary, Intech Company should identify the right goals and marketing strategies to increase their sales in the new market.
Assumptions:
· Intech Company has unique products hence attract a wide interest in the customers. After the analysis, the market strategy in the promotion of the products involves passionate clients and sustainable marketing strategies.
· There are competitors who have diverse competitiveness hence pose a threat to the company. For this reason, the company needs to evaluate its product’s price cost of it to remain competitive in the market. In addition, Intech nee.
With increasing globalization and related advantages, most of the present firms are trying to go international. This is all due to maximizing the potential benefits available in different countries. With this, firms are trying to increase their presence throughout the world. Today, different countries have different advantages as some country is good in some specific industries, whereas some in others. Therefore, firms operating in an industry look for other nations doing well in the similar industries and have huge potential so that, they could take advantage of it.
The chart is a guide rather than an absolute – feel free to modify.docxmattinsonjanel
The chart is a guide rather than an absolute – feel free to modify or adjust it as need to fit the specific ideas that you are developing.
Area: SALES
Specific Change Plans for Functional Areas
Capability Being Addressed
This can be pulled from the strategic proposal recommended in Part 2B
How do the recommended changes (details provided below) help improve the capability?
This is a logic "double check". Be sure you can show how the changes recommended below improve the capability and help address the product and market focus and add to accomplishment of the value proposition
Details of Specific Changes:
Proposed Changes in Resources
Proposed Changes to Management
Preferences
Proposed Changes to Organizational
Processes
Detailed Change Plans
(Lay out here the specifics of all recommended changes for this area. Modify the layout as necessary to account for the changes being recommended)
Proposed Change
Timing
Costs
On going impact on budget
On going impact on revenue
Wiki
Template
Part-‐2:
Gaps,
Issues
and
New
Strategy
BUSI
4940
–
Business
Policy
1
THE ENVIRONMENT/INDUSTRY
1. Drivers of change
Key drivers of change begin with the availability of substitute products. Many
other
companies can easily provide a substitute and the firm will have to find a way to
stand
out among them. Next would be the ability to differentiate yourself among other
firms
that pose a threat in the industry. Last, the political sector. The the federal, state,
and local governments could all shape the way healthcare is everywhere.
2. Key survival factors
Key survival factors would include making the firm stand out above the rest in the
industry and creating a name for itself. Second would be making sure there is a
broad
network of providers available for the customers. Giving the customer options
will
make the customer happy. Providing excellent customer service is key to any
firm in
the industry.
3. Product/Market and Value Proposition possibilities
Maintaining the use of heavy discounts will keep Careington in the competitive
market. They also concentrate on constantly innovating technology to make
sure that
they have the latest devices to offer their customers. To have high value proposition, Careington
will need to show their costumers that they can believe in them and trust them to
do the right thing. Showing the customers that they can always be on top of the
latest
technology and new age products will help build trust with the customers.
STRATEGY OF THE FIRM
1. Goals
Striving to promote the health and well being of their clients by continuing to
provide
low cost health care solutions. A lot of this concentration is on clients that cannot
afford health care very easily or that a ...
Presents frameworks and methodology for building those segments of a company which are vital to long term sustainability. The systematic process of identifying business strategy, marketing, and a mission statements which articulates the developed value proposition. This framework enables companies to build a brand that helps target the identified market.
Although performance appraisal is concerned with the evaluation of workers job performance, it at the same time serves to highlight the specific objectives of an organization. As the employee is being evaluated the organization is also evaluating itself by comparing objectives and standards of performance, reviews the whole appraisal framework and design as well as organizational values and culture. Performance appraisal is a veritable tool for organizations to evaluate and increase the quality of education and training of their workforce with a view to developing lifelong learning patterns and strategies to sustain productivity throughout longer working periods. Motivation as it relates to employee productivity is often behind the drive for performance and self-actualization and provides opportunities for higher productivity. Productivity is an important measure of goal achievement because getting more done with less resources increases organizational profitability. Using the exploratory research design and 109 participants the result of the study indicates a strong positive correlation between performance appraisal and employee productivity. It suggests that the issue of performance appraisal in charitable organizations should be addressed. In view of the result of the study, the paper recommends that performance appraisal should carefully review employee’s strengths and weaknesses against requirements for possible future higher responsibilities.
The integration between innovation and business is a key factor in competitiveness between organizations. That is, innovation applied to a business makes no sense if not considered as an integral tool for the processes of the organization. Companies should therefore adopt a policy where innovation plays a strategic role in the design of business models to become lean, effective and competitive entities (Moraleda, 2004). The objective of this paper is to show the importance of innovation within companies, identifying the concept, the various models that different entities might adopt in order to develop better processes of innovation, as well as indicators that represent innovation at global and national levels in order to develop strategies that lead to an increase in competitiveness. For this work the method used was a bibliographical review of relevant articles from a range of authors was conducted.
The practitioners and academicians in the business arena are highly concern about the enhancement of employee performance in this competitive age for achievement of business goals. Considering the issue, this study aimed to measure the influence of Human Resource Management (HRM) practices on the performance of employees. The data of this study have been collected from 392 on-the-job operational level employees using survey method who are working at different garment factories in Bangladesh. The collected data are analyzed through structural equation modeling to partial least square method. The study empirically proves that employee training and development, promotion opportunity, and job security has significant influence on the employees’ performance. Theoretically, this study proves that training and development, job security and promotion opportunity together influence on the performance of employees in the developing economy. The practitioners and policy makers of the organizations are expected to make necessary adjustments in their existing HRM practices based on the findings of this study in the context of Bangladesh for enhancing the employees’ performance level so that their whole-hearted efforts can be gained for the achievement of business goals.
Child labor is one of the issues receiving much attention from researchers and scholars around the world. Child labor still occurs in most countries around the world. Viet Nam is also one of the countries with relatively high child labor and increasing trend. This article is based on critical discourse analysis and data from the General Statistics Office of Vietnam to analyze some fundamental issues of child labor in Vietnam, thereby giving policy suggestions to the Vietnam government in minimizing the current child labor situation.
The rapid trend of changes and social issues in managing the global workforce has forced organizations to look for innovative ways of enhancing the job satisfaction of employees. Among these innovative approaches is the provision of Flexible Working Arrangements (FWAs). The purpose of this exploratory research was to identify the effects of FWAs, i.e., flextime schedule, compressed workweek, and telecommuting on job satisfaction from the perspective of the Ethiopian national employees of the United Nations Economic Commission for Africa (ECA) in Addis Ababa. To achieve this objective both descriptive and inferential statistics were conducted. The total population of the study was 250; out of which, 71% of responses were collected. A primary data collection method was implemented using a structured questionnaire. The analysis showed that there is significant positive effect of flextime schedule (R = .39, R2 = .264, p = .001) and compressed workweek (R = .39, R2 = .159, p = .039). This means that increase in the use of flextime schedules and compressed workweek enhances job satisfaction for employees of the ECA in Addis Ababa. The independent variables reported R = .39 and R2 = .15 which means that 15% of corresponding variations in employee job satisfaction can be explained by flexible working arrangements. Nevertheless, this study found out that there are no significant relationship of telecommuting (R = .39, R2 = .065, p = .398) on job satisfaction. Therefore, since the provision of FWAs is at the nascent stage, further studies on the effect of telecommuting on job satisfaction from Ethiopian employees context are highly recommended.
This study evaluates the impacts of urban road investment and operation in China, especially the spillover effect attributable to the investment of urban road projects. Using the synthetic control method and difference-in-differences technique and taking the opening of Jiaozhou Bay Bridge and its Subsea Tunnel in China on 30 June 2011 as a natural experiment, this paper investigates the causal effect between urban road investment and its economic impacts. Results show that the project has a positive externality in terms of its contribution to the output and employment: taken the industrial relative output as outcome variable, no matter whether the covariates are controlled or not, the parameters of the interactive terms are positive; taken the industrial relative employment rate as outcome variable, the gap between the treated unit and its counterpart indicates a direct program effect for the treated city as well as a spillover effect across the cities within the sample province. Furthermore, the permutation test ascertains that the probability of achieving a spillover effect as large as the treated city is around 5.88 per cent. Overall, the investment and operation of urban road transportation infrastructure has a noticeable spillover effect. Our results are robust across a series of placebo tests.
Poor public management defined by corruption and lack of prudence in public life continues to hold Nigeria hostage and makes good governance difficult. Since the 1980s government has been using many methods including the processes of privatization and commercialization as means of re-engineering the public sector for total quality management, and to increase the share of the public sector’s contribution to the gross domestic product. The experiment never achieved the desired level of success partly due to lack of political will on the part of government to wedge a total war against corruption, and also partly because the public sector is a large scale administration that has many entry and revolving doors which government finds difficult to close. These limitations provide the incentives for widespread public corruption that is recognized as one of the greatest challenges of government in carrying out its mandate. 110 respondents participated in this study conducted through the exploratory research design. The participants provided useful data that were triangulated with data from secondary sources for the purpose of the study. To achieve the objective of the investigation, data were analyzed through statistical techniques and the result showed significant positive correlation between good governance and good management. It was recommended that appointments in the public sector should feature a combination of people from private and public sectors of the economy to enhance competence with the aim of reducing public sector corruption. Further study should examine the reasons behind rising budget deficits as a way of reducing cost of governance in Nigeria.
In this article, we analyze in the Malian context the link between the structure of the shareholding and the sustainability of companies based on data from the census of industrial enterprises of the Ministry of Trade and Industry, 2015. The results show that Mali’s economic opening option in the 1980s, strengthened in the 1990s following the implementation of the Structural Adjustment Programs, resulting in the state’s withdrawal from the management of enterprises, have enabled the emergence of private enterprises in almost all sectors of economic activity. However, shareholding in industrial enterprises has suffered from poor governance. It also shows that the number of women entrepreneurs is close to that of men. Between 2010 and 2014, the majority of shareholders are in the agri-food sector. The majority of the investment is in the metal and metallurgical sector.
This paper’s objective is to present the importance of the strategic planning in business management. Speaking of strategic planning is always speaking in general terms and how to fix paths of behavior will necessarily affect deeply and significantly in the future evolution of the company or organization that adopts it. Today we think of the organization as part of an environment and in terms of options or choices based on what you have, of its surroundings and the opportunities or pathways that can lead to achieving the objective, (Garrido, 2009). For this work the method used was a bibliographical review of relevant articles from a range of authors was conducted. The conclusions were that the be properly analyzed and adapted to the precise conditions and characteristics of the small business or, more generally, to any type of business for which the planning is intended. Strategic planning brings multiple benefits (which exceed its disadvantages) if applied in the right way, however, there are inherent risks, which can be overcome with proper monitoring and control.
The study examined the relationship between non-financial incentives and workers’ motivation in Akwa Ibom State Civil Service exploring five key variables of continuing professional development, performance feedback, employee employment, employee participation in decision-making and task autonomy. Survey research design was adopted involving the use of questionnaire to gather data from 392 respondents drawn from a population of 20465 civil servants in state using Taro Yamene Sample Size Determination Table. The sample was drawn across all ministries and departments through stratified and convenience sampling techniques. Data collected were analysed using descriptive and inferential statistics. Hypotheses were tested at 0.05 level of significance. The five dimensions of non-financial incentives were positively correlated with workers’ motivation from the results of the analysis. Continuing Professional Development (CPD) had the highest correlation value (r = 0.33, P<0.01). Also, the five null hypotheses were rejected implying that the variables of study influence workers’ motivation in Akwa Ibom State Civil Service, Nigeria with beta coefficients and t-values of CPD (0.29;4.313); PF (0.117; 3.500); EE (0.2.141); PDM (0.182; 2.935), and TA (0.231;2.817). It was concluded that since workers’ motivation is a vital tool to organizational effectiveness and growth, employers should explore more of non-financial incentives in formulating and implementing employee benefits related policies.
This literature review is organized in five sections. Firstly, we begin with general ideas and continue with the origin of the fraudulent. Secondly, we discuss the struggle of the phenomena, insisting on the available mechanisms. Finally, we’ll discuss the link between audit and fraud.
Accounting function aims at providing accurate and sufficient accounting information to facilitate proper financial reporting and management performance. Accounting information is usually in the form of periodic or annual financial statements which are products of costing, financial and management accounting prepared for the benefit of a number of external interest groups. Accounting has its roots in the stewardship approach and as a management performance tool to guide the agent and the principal over the exact status of the going concern. Accounting function also involves financial statement analysis, interpreting the accounts by computing and evaluating ratios which relate pairs of financial information or items with one another. This analysis of ratios can be cross-sectional comparing the results of one company with another or trend. In doing so close attention is usually paid to profitability ratio to help keep pace with effective management performance. The exploratory research design was adopted for the study and result showed positive correlation between accounting function and management performance. The study was not exhaustive, therefore, further study should examine the relationship between audit failure and business failure as a matter of finding a solution to the problem. It was recommended that management should always carefully study audit reports to enhance decision making and management performance.
This study examines the effect of the trademark on consumer behavior of consumers of air conditioners in Sudan, in order to know the dimensions of the trademark that affect consumer behavior in Sudan, and provide information to companies on the dimensions of the trademark that affect the purchasing decision of the customer and contribute to customer satisfaction. The study adopted descriptive analytical method using a sample of 230 individuals who consume air conditioners in Sudan. The results showed that there is a positive significant relationship between the trademark of air conditioning and consumer behavior as well as a positive significant relationship between the trademark name of air conditioning and consumer behavior and finally there is a positive significant relationship between the trademark logo and consumer behavior.
In recent years, retired workers eligible for social security receive their emoluments from the appropriate regulatory agency and this provides more realistic evidence on the better living standard of the aged (retirees) under the scheme. Empirically, this paper examines the impact of social security on economic growth in Ghana using time series secondary (monthly) data ranging from 2000 – 2018. The author answers in two questions: 1) how significant are pensioners benefit payments dependent on economic growth and also, 2) how business environmental policy is contributing to economic performance as far as pensioners well-being are concerned. Using STATA analytical software, the findings show a positive significant relationship between social security and economic growth. The study concludes by outlining appropriate policy measures to help strengthen the current social security scheme in Ghana.
This research begins by showing the different meanings attributed to the term cluster by different currents and authors, which suggests definitions that are found around its spatial framework. Next, the factors that intervene in the competitiveness of a region and its growth are shown, for the development of these, Porter’s model of competitiveness which was taken as reference, and the contexts: geographical and economic. Therefore, the methodology was used based on a qualitative design, with descriptive and correlational scope since it will analyze differences of each cluster, with respect to the factors of dimensions, establishments, growth, economic impact and policies. To do this, the information-gathering tool was two semi-structured interviews with cluster leaders in both countries, because the approach is based on data collection methods that are not completely standardized or predetermined. And finally, the results of the comparison of the Mexican Bajío automotive cluster with the German cluster located in Baden-Württemberg are presented.
The study investigates the impact of team building on organisational productivity. The objective of this study is to evaluate the impact of team building among the members of the selected case study and to assess the effect of training and retraining of team members on organisational productivity. The study also x-rayed the absence of team building in a workplace which led to low levels of turnover and productivity. the total population of the study was 750 while researcher employed Yaro Yamane sampling technique to select sample size of 261 because of the large population and hypothesis were tested using Pearson correlation. The finding revealed that if members of the team can work in synergy without considering the differences in the likes of level of educational background and others, the expected productivity will be very high. It was also observed that capabilities of team leader in carrying out the assigned task determined its output especially if the team leader understands the technical knowhow of job and he is friendly with co-team members with a lot of motivation, that this would definitely enhance employees’ efficiencies and productivities. The study recommends that team members should trust, support and respect one another individual differences in order to accomplish group common goals and tasks.
Compared with general commercial reverse logistics operators, the recovery and treatment of expired drugs and medical waste is a complex and highly technically difficult project. The qualifications required by the relevant service providers are also more stringent. For medical institutions, the selection of reverse logistics operators is always a critical issue. On the perspective of sustainability, this paper aims to investigate and explore the critical factors of selecting a medical reverse logistics service provider. Through the process of the Delphi method, the experts’ assessments were collected, and 24 factors affecting the selection of medical reverse logistics service provider were screened and summarized. Then, Decision-Making Trial and Evaluation Laboratory (DEMATEL) was employed to calculate the total influence values and net influence values between factors that could be used to draw the visual causal map. Referring the causal map, “Green process operation level” and “Recycling process greening degree” are significantly higher than other factors in terms of total influence value and net influence value. Therefore, they can be regarded as crucial factors. This finding implies that medical reverse logistics providers must have the ability to improve the greening of facilities, as well as equipment, integrating existing processes to make it greener and environmentally friendly.
The major objective of any firm is to maximize the shareholders wealth. This is evidence through dividend yield and payout ratio and this encapsulate into the dividend policy of a company. The research purpose aimed at examining the influence that dividend policy has on the volatility of share prices among the listed insurance corporations in Kenya. Research design, approach and method: Data was collected from listed insurance corporations over a 10-year period with a total of 49 data points. The Pearson correlation and ordinary regression analysis were employed. The results reveal the existence of a positive link among the study variables. The correlations were found to be substantial at ninety-five percent confidence level. It is worth noting that the model summary shows forty-three-point one percent of changes in the volatility of stock price are explicated by dividend yield and payout ratio. ANOVA statistics which examines whether the analytical model as set out in the study explains variations in the dependent variable concluded that the model is analytically substantial. The outcome revealed a statistically significant positive link between stock price variations and the ratio of dividend payout. Research also established a statistically substantial negative interrelation between volatility of stock prices and dividend return. Results therefore recommend that companies should have dividend policies which are mapped to shareholders wealth maximization objective. The study suggests further studies be undertaken to determine whether there exists an analytically substantial difference between the dividend policies of various sectors in the economy.
This study is about the impact of selected macroeconomic variables on economic growth of Bangladesh. Economic growth of Bangladesh is measured in terms of annual nominal GDP growth rate. Least squared regression model has been employed considering exchange rate, export, import and inflation rate as independent variables and gross domestic product as the dependent variable in this study. The results reveal that export and import have significant positive impact on GDP growth rate. The other variables (exchange rate and inflation) are not significant, indicating that there exists no significant relationship among the variables. The findings will help the policy makers to make policies concerning the country’s economic growth to remain robust in the near future.
The Research aims on Human Resource Management and innovation has to date relied on a theoretical assumption that there exists an identifiable set of HR practices which organizations seeking to be innovative should adopt. However, analysis of the various prescriptions of HR practices for innovation reveals a high level of internal inconsistency, leading to conflicting advice for practitioners. Furthermore, a review of empirical research on the topic indicates that HR practices within innovative organizations are remarkably similar to those found in the best practice literature This raises questions about the link between strategy and HRM, and about the theoretical foundations of research on HRM and innovation. Drawing on recent research on HRM and firm performance, I suggest that research on HRM and innovation can benefit from incorporating elements from both contingency theory and best practice approaches into the existing configuration theory approach. A change in direction for both theoretical and empirical research on HRM and innovation is proposed. This paper is laid out as follows. In part one, I ask what a strategy of innovation is, and consider what employee behaviors are believed to be consistent with such a strategy. The second section compares and contrasts different authors’ prescriptions of HR practices for innovation, and also compares the findings of research on HRM and innovation with the findings of the best practice approach. In the final part I consider the implications of MY review for future research on this topic. I propose a broadening of the theoretical base on which research on HRM and innovation is founded, and discuss the particular challenges involved in conducting empirical research on HR systems for innovation.
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Auto Service Stores Industry in Mexico, Theory of Industry Applied to the Acquisition of Giant Stores
1. Business, Management and Economics
Research
ISSN(e): 2412-1770, ISSN(p): 2413-855X
Vol. 2, No. 6, pp: 104-113, 2016
URL: http://arpgweb.com/?ic=journal&journal=8&info=aims
*Corresponding Author
104
Academic Research Publishing Group
Auto Service Stores Industry in Mexico, Theory of Industry
Applied to the Acquisition of Giant Stores
José G. Vargas-Hernández* University Center for Economic and Managerial Sciences, University of Guadalajara, Periférico Norte
799 Edif. G201-7, Núcleo Universitario Los Belenes, Zapopan, Jalisco, 45100, México
Carlos Daniel University Center for Economic and Managerial Sciences, University of Guadalajara, Periférico Norte
799 Edif. G201-7, Núcleo Universitario Los Belenes, Zapopan, Jalisco, 45100, México
Ávila Zepeda University Center for Economic and Managerial Sciences, University of Guadalajara, Periférico Norte
799 Edif. G201-7, Núcleo Universitario Los Belenes, Zapopan, Jalisco, 45100, México
1. Introduction
An industry is a group of companies or companies with similar goods or engaged in the same business twist.
The industry can be a monopoly, oligopoly, perfect competition or duopoly this by the number of companies that
compete in it (Peng, 2012). Companies also are distinguished by being more cost-effective than others because from
the beginning what is sought is that, profitability, the industry will demand many companies as product support. A
product being new can exercise monopoly power in consumers as the demand curve slopes downward remains.
However, as are generated products like, more firms enter the industry and demand will be more elastic and profits
tend to zero (Varian, 2010). The capacity and influence of the industry and its effects on society will be influenced
largely by the agreements of the firms in the economic sector (Spulber, 2005).
Companies are set in a competitive market in which to obtain benefits and survive require adapting and
implement strategies which according Learned, Christensen, Andrews and Guth (LCAG), defined as the essential
concept of how companies interact in their environment (Learned et al., 1969). A company is part of an industry
which to interact with other companies that make the sector, use strategies to ideally develop economic and
operational areas of the firm.
Joe Brian says that the behavior of the firm depends on the structure of the industry, as it is the collective
behavior of the companies that form that determine how the firm will act (Bain, 1968). The firm according to LCAG
has its tools to make decisions about the strategies to follow which can be internal factors of the company, such as
the strengths and weaknesses, and external opportunities and threats. Porter (1983) notes that there are several tools
which can be used to measure and predict the impact of the strategies followed and that should be considered before
taking any course of action.
2. Diamond of Porter
The experience curve is a strategy of analysis that should be applied carefully and that does not consider the
experience curve of competitors, as there are various factors affecting the market, not only experience. Porter (1980)
suggests that not all industries can be analyzed by the experience curves, but resort to this only when information
among competitors is complete and reliable, i.e. in cases where information asymmetry is not a relevant or as
marked factor could be resorted to this type of analysis.
Porter states that any analysis of the industry must take into consideration the social and the economic aspects.
The industry structure highly influences in setting the rules of the game in which are designed the strategies to be
Abstract: Mexican supermarket industry is mainly characterized by a variety of types of consumers, mainly
marked by differences in purchasing power. Mexican industry self serves the needs of different consumers
through: (i) modern formats such as supermarkets, warehouses, hypermarkets and membership clubs; (ii)
traditional formats such as small independent sundries; and (iii) informal, such as farmers' markets and local street
vendors. This paper analyzes retrospectively the acquisition of the Gigante stores by Soriana from the theory of
industry, resources and capabilities, reviewing the situation of both companies in the diamond industry by Porter,
SWOT analysis themselves that theory.
Keywords: SWOT; Gigante; Soriana; Industry based theory.
2. Business, Management and Economics Research, 2016, 2(6): 104-113
105
raised, and it should pay special attention to the external factors of the company and those are the really determining
which are skills and competence and with what will confront the company.
2.1. Intensity of Rivalry among Competitors
The supermarket industry is on a high degree of rivalry, although companies that make up the industry self-
service stores (supermarkets) are only seven, Wal-Mart de Mexico, Soriana, Grupo Gigante, Casa Ley, Controller
Commercial Mexicana, Chedraui and Costco Wholesale Group Corporation. These are the leading companies and
major market holders. These are only a few competing in the market and are constantly generated in non-cooperative
games, and price wars with big advertising campaigns, besides that the 7 companies competing in the industry are
large companies with large resources
2.2. Threat of Potential Entries
This point is almost nonexistent because it requires a large investment to enter and compete in the industry.
Besides, the amount of the investment companies that are currently in the controlled market and entry barriers, with
costs below of what the average consumer could get, also the companies have exclusive contracts with certain
suppliers and its own brands of products.
2.3. Bargaining Power of Suppliers
Suppliers have a little power. Self-service companies usually handle very rigid policies towards their suppliers.
They are "tied" to payments of goods handled as credits for the purchase of goods, long-term between 60 and 90
days. Also, the contracts of purchase-sale with suppliers usually is a very strict procedure and in which suppliers
often invest a significant amount of time and money as they commonly must be adapted to the requirements of self-
service stores.
2.4. Bargaining Power of Buyers
Consumers have a relatively high bargaining power, given how competitive the market is, which leads to have
strong price wars, and advertising campaigns in order to attract a larger segment of the market. Suppliers
continuously place bids in which they compared prices between them and provide payment of the difference plus a
bonus which makes consumers choose among those that generate higher profits.
2.5. Threat of Substitutes
As for self-service industry, the threat of substitutes is great as companies that compete in it tend to have similar
products and price promotions. In order to stand out and excel in the service sector Organization Soriana implement
services that generate a value added, such as the agreement with Banamex that provides financial products through
SoriBan, optical services, medical clinics, private label generic drugs, etc.
3. SWOT Analysis of Grupo Gigante
Porter dynamics usually is considered static and impractical for future planning, and does not consider the risk
factor which is clearly a less controllable and measurable variable (White, 2004).
The firm has LCAG as tools to make decisions about the strategies to follow which can be internal factors of the
company, such as the strengths and weaknesses, and external opportunities and threats, as shown in figure 1.
Figure-1. Factors of decision making.
Source: Industrial Organization and the Evolution of Concepts for Strategic Planning: The New Learning (Porter, 1983)
3.1. Weaknesses
The company Grupo Gigante (Giant Group) began a campaign of remodeling and opening of accelerated and
excessive branches in which it invested about 48% of the assets of the company to carry out. Likewise, there was the
opening of branches which generated 37,200 m2 of new floor of sales. Additional to it, the company faces a debt of
nearly 45% to end 2006.
3. Business, Management and Economics Research, 2016, 2(6): 104-113
106
According to the annual financial report 2006 sales and administration of the company have resulted in low
profits of 3.1% (Grupo, 2007). These results depend heavily on its key members, senior executives and directors
which may represent major risk factor in the time when these cease to provide their services to the company, in
addition to credits for financing that the company is supporting on payment and compliance with the commitment to
mortgage of real property. Such loans are amounting to 2,700 million pesos.
3.2. Opportunities
The growth of self-service companies like Wal-Mart, Grupo Gigante and Comercial Mexicana, Casa Ley, is
encouraging some investment funds to put their money in real estate. Grupo Gigante analyzes the idea of dealing
with the Secretaría de Hacienda y Crédito Público (Ministry of Finance and Public Credit) authorization to open a
separate bank thus further diversify the areas in which her company has presence. The company has achieved
success so the implementation of the system SAP in all companies can provide greater control and access to
company information. Also, it has national coverage with presence in 90 cities, in 32 states, plus has begun a process
of internationalization with 7 outlets in Los Angeles, California (Grupo, 2007).
3.3. Strengths
Redefinition of formats, the company has remained in constant innovation to maintain VRIO within their stores,
and has invested significantly more efficient in promotional campaigns. Also, it is committed to expanding the scope
of pricing strategy and gets more market share and involvement. It has sought lower prices in order to attract more
buyers. There has been a minor decline that the industry average in 2006 and has invested in the development of
private label products with greater quality control, in addition to the procedures for trademarks and patents to ensure
the inimitability of these products.
Similarly, another strength that the group has is the fact that it takes much to pay and little to regain the
customer portfolio base, which gives it sufficient liquidity to meet its financial commitments and liquidity ratio is
1.11 / 1 is that for each dollar of debt there is $ 1.11 of assets to pay which is good although low, the optimum would
be 2/1.
3.4. Threats
Soriana has a lower borrowing than Gigante and has higher working capital which enables it to generate more
profits and pay additional taxes. Additional to this, the ANTAD member stores reported a 0.3% drop in April and
1.3% in May 2006; the US chain Wal-Mart de Mexico reported an increase of 4.1% and 3.4% in the same months.
Supermarkets self-service industry has a high level of competition at the level of prices basically where the most
common is a war of prices and offers, where the main competitors such as Soriana, SA de C.V., Wal-Mart de
Mexico S. de RL de C.V. and Controladora Comercial Mexica S.A. de C.V. (Mexican Commercial Controller), have
kept strategies of the price war which increases the pressure on operating margins of the company.
In 2006, Wal-Mart launched an aggressive expansion plan, opening 120 stores in the country in a single year, in
addition to market share decreased from 16.5% in 2001 to 9.7 in 2006, according to the companies listed on the
Stock Exchange.
4. SWOT Soriana
4.1. Strengths
Presence in almost the entire country, the company Organization Soriana has 234 stores in 112 cities and 29
states. The company has maintained a steady increase in profits. In 2006 increased 14.8% and from 2006 to 2007,
increased 12.38%. It is also implemented a marketing program, which resulted in a growth of 14.7% of customers.
The company has a policy of reinvesting most of the profits generated.
In 2006, Soriana had an investment of 4,517 million pesos from equity which is reflected in the debt ratio of
44% for 2006 and 55% in 2007. The company has diversified its products by offering a range of services that give
added value, solid financial ratios and give favorable results for the company, in 2006, with suitable and stable levels
of solvency.
4.2. Opportunities
The company has developed a chain of services that generate added value and diversified its operations and
making inroads into several new markets, including financial advice in coalition with Banamex. Among other
strategic alliances that allow it to compete on the market with Wal-Mart, and Grupo Gigante (Giant Group) among
others, it has invested significantly in the development and growth of sales floor. So that to end 2007 achieved an
increase by 20% to a total of 337,041 square meters of sales floor. Soriana Company has a good rate of return on the
capital paying significantly to its shareholders.
4.3. Weaknesses
The working capital of the company has a short range of positive difference in 2006 and in 2007 becomes
negative where the liability of the company is much larger than the assets. Besides having a slow-moving inventory,
4. Business, Management and Economics Research, 2016, 2(6): 104-113
107
which is 6 times on average every 53 days. This being a company that handles perishable products including a
temporary too high for the market, in addition to its indexes in this acid test are low having only .52 of 1 indicating
that it is unable to meet their obligations with respect to assets held in 2006 as in 2007, however in 2007 has clearly
diminished its ability to pay.
4.4. Threats
The expansion policy of the company is in a very aggressive point. The company is not in the best financial
situations to generate the acquisition of the Gigante stores. It has shortcomings in information technology because it
is still in the process of standardizing computer systems which puts it at a distinct disadvantage with competitors.
Like Grupo Gigante (Giant Group), Soriana Organization faces a market with a high level of competitiveness. In
2006 the US chain Wal-Mart of Mexico reported an increase of 4.1% and 3.4% of market share. Industry of self-
service stores has a high degree of competence basically at price level where the most common is a war of prices and
where the main competitors such as Grupo Gigante SAB de variable capital (C.V), Wal-Mart de Mexico Society of
limited responsibility (S. R.L of C.V.) and Mexican Commercial Controller, Anonymous Society of Variable Capital
(S.A. of C.V.) strategies have kept the price war which increases the pressure on operating margins of the company.
In 2006, Wal-Mart launched an aggressive expansion plan, opening 120 stores in the country in a single year, in
addition to the market share of Organization Soriana decreased from 16.5% in 2001 to 9.7 in 2006 according to the
listed companies.
5. Organization Soriana SA De C.V. and the Assumption of Arrogance
The hypothesis of arrogance tells of how a company can generate an overestimation of another and offer over
the real cost, paying a price exceeded in the acquisition thereof, (Roll, 1986) which can be reflected in the Tiendas
Gigante (Giant Stores) acquisition by Organization Soriana (Organization Soriana).
The December 5, 2007, Soriana held a purchase agreement with Gigante in the amount of 1, 351 million dollars.
This includes the transfer of, among other things, the rights of the leases that the Company has made with third
parties to lease the properties where it operates some of its stores of supermarkets that have celebrated Gigante, S. A.
of C. V. with the real estate group of the Company. This converts Soriana on the landlord of two hundred five stores
(198 in Mexico and 7 in the United States), five distribution centers, two meat processing plants, furniture and
equipment stores and distribution centers.
The purchase also includes the transfer of all fixed assets of the Company used to operate grocery stores,
furniture and equipment of stores and distribution centers, as well as technology transfer of SAP system
implemented in the company; the sale of two properties (Durango and Torreon); the use of the trademark "Gigante"
by the purchaser during the first four months of 2008; a covenant not to compete for the Company for 5 years; and
the transfer of all employees of the company involved in the operation of the supermarket stores, so that from
January 1, 2008 Soriana will be the replacement of the same pattern.
Organization Soriana as shown in Table 1 and 2 was not in the best position to make this acquisition.
Table-1. Financial reasons Gigante
2006 2007 Comments
Liquidity Working Capital (AC-PC) 8’961,729-
6’852,731 =
2’108,998
16’458,236-
8’889,674 =
7’568,562
Following the
divestment of the
self-service sector
you can see a
clear improvement
Liquidity Ratio (AC / PC) 8’961,729/
6’852,731 = 1.31
16’458,236/
8’889,674 = 1.85
Increased liquidity
ratio after the
divestment
Acid Test (AC-Inventory /
PC)
(8’961,729 –
1’189,562 /
6’852,731 = 1.13
16’458,236 -
1’345,693 /
8’889,674 = 1.70
The index of the
acid test is higher
in 2007
2006 2007 Comments
Activity Inventory turnover (cost of
sales / inventory)
24,582,400 /
1’189,562 =
20.66
31,864,963 /
1’345,693 =
23.68
Decreased
inventory turnover
Period inventory (inventory /
cost of sales * day period)
(1’189,562 /
24,582,400)*360
=
17
(1’345,693
31,864,963)*360
=
15
They have a good
inventory turnover
period although
many of these
were bought by
Soriana in the
divestment
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108
process
Average customer collection
period (accounts receivable /
sales * day period)
(125,338 /
31’876,300)*360=
1.42
(114,921 /
34’932,998)*360=
1.18
The collection
tells us q clients
most purchases
are made in cash
Debt Debt ratio (total liabilities /
total assets)
25010063 /
11155094 =
0.4460
30200333 /
11761467 =
0.3894
Acceptable debt
levels
2006 2007 Comments
Profitability Gross profit margin (Gross
Profit / Sales)
7,888,600 /
31,876,300 =
0.25
3,333,212 /
34,932,998 =
0.10
The company has
higher cost of sales
after the
divestment
Net Profit Margin (Net
Income / Sales)
306,500 /
31,876,300 =
0.10
4,729,711 /
34,932,998 =
0.14
The company
generates a higher
margin of profit
subsequent to the
divestiture
Return on assets (net income
/ total assets)
306,500 /
25,010,063 =
0.01
4,729,711 /
30,200,333 =
0.16
The company
generates a higher
margin of profit
subsequent to the
divestiture
Return on equity (net profit /
equity)
306,500 /
13,854,969 =
0.02
4,729,711 /
18,438,866 =
0.26
The company
generates a higher
margin of profit
subsequent to the
divestiture
Table-2. Financial reasons Soriana
2006 2007 Comments
Liquidity Working Capital (AC-PC) 12,997,011 –
11,468,945 =
1,528,066
16,849,982 –
26,163,752 =
-9,313,770
Buying giant
Soriana stores left
with a marked
loss of working
capital
Liquidity Ratio (AC / PC) 12,997,011 /
11,468,945 =
1.13
16,849,982 /
26,163,752 =
0.64
The company had
a considerable
deterioration in
terms of liquidity
Acid Test (AC-Inventory /
PC)
(12,997,011 –
7,080,286)
/11,468,945 =
0.52
(16,849,982 –
7,847,221)
/26,163,752 =
0.34
The obligations
acquired in the
purchase of giant
stores had a clear
impact.
Activity Inventory turnover (cost of
sales / inventory)
47,718,414 /
7,080,286=
6.73
51,796,467/
7,847,221 =
6.60
Slight increase in
inventory turns
Period inventory (inventory
/ cost of sales * day period)
(7,080,286/
47,718,414)
*360= 53.41
(7,847,221/
51,796,467)
*360 = 54.54
It has a very high
inventory
turnover period
Average customer collection
period (accounts receivable
/ sales * day period)
(611,501 /
60,554,446) *360 =
3.64
(639,878/
65,190,659) *360=
3.53
The company has
a high collection
period to
customers for the
market
Debt Debt ratio (total liabilities /
total assets)
18,283,232/
43,110,568=
0.4241
33,746,600/
61,154,338= 0.5518
Acceptable debt
levels
2006 2007 Comments
Profitability Gross profit margin (Gross 12,836,032 / 13,394,192 / The profit margin
6. Business, Management and Economics Research, 2016, 2(6): 104-113
109
Profit / Sales) 60,554,446=0.21 65,190,659= 0.21 is minimal
variations
Net Profit Margin (Net
Income / Sales)
2,789,262 /
60,554,446=
0.05
3,134,651/
65,190,659= 0.05
The profit margin
is minimal
variations
Return on assets (net
income / total assets)
2,789,262 /
43,110,568=
0.06
3,134,651/
61,154,338=
0.05
The profit margin
is minimal
variations
Return on equity (net profit
/ equity)
2,789,262 /
24,826,807=
0.11
3,134,651/
27,407,738=
0.10
The profit margin
is minimal
variations
Source: Own creation with data annual financial reports of Grupo Gigante S.A. de C.V. (Grupo, 2007;2008; Organizacion, 2007;2008).
It may have been the arrogance and / or inexperience of the main investors in the company and vendor
management that take them to make a decision that apparently not generated the best results in terms of short-term
concerns, (Ketelhöhn, 2009). The acquisition meant for Soriana acquiring debt for 9,790.998 million pesos. As a
result Soriana 2007 saw a considerable decrease in its solvency and liquidity being unable to meet its total
obligations with the assets held. (Walter and Barney, 1990) presented 20 possible targets that could pursue
acquisitions. For purposes of this work will take only those that apply to the case study:
A. To enhance the competitiveness inherent generating or absorbing a significant market share, the acquisition
of 205 stores, in addition to its distribution centers helped to that Soriana has a greater market share.
B. Penetrate new markets through the company's capabilities. Seven giant stores in Los Angeles, California
open the doors of the US market.
C. Improving economies of scale thanks to an absorption capacity of the acquired company. In this case, it
could be interpreted as such technology transfer capabilities of the SAP system and as the program logistics
and distribution centers.
D. Amplification of capacity at lower cost than the installation of new facilities, Soriana acquired the physical
space as well as furniture and all the equipment required for its operation. This means that it takes longer
than only investing in change image, as the staff was also hired and therefore training expenses and
management regarding the hiring of new staff was minimized by acquiring the company.
6. Conclusions
Self-service industry in Mexico in late 2007 approached a duopoly, after the acquisition of Tiendas Gigante
(Giant Stores) by Organization Soriana. The market was redistributed being Wal-Mart of Mexico at the lead and
Soriana the second competitor at the market. The purchase of the Gigante stores impacted in the short term
negatively on Soriana, and positively in Gigante, although the divestment will generate a lower income. Also it was
provided greater stability to maintain the operations of other companies in the group.
It can be said that Soriana fell on the assumption of arrogance because it bought at high cost the shops and
Gigante earned a good profit by disintegration. But even if Soriana obtained negative results, it was considered a
good strategy because as mentioned under Porter´s framework. The industry has few but very large companies
competing all the time and to have let Wal-Mart to absorb market share, it would have taken the market monopoly
by acquiring most of this.
References
Bain, J. S. (1968). Industrial Organization. New York.
Grupo, G. S. D. C. (2007). Reporte anual 2006. http://www.gigante.com.mx/pdfz/informes/Inf07.pdf
Grupo, G. S. D. C. (2008). Reporte financiero anual 2007.
http://www.grupogigante.com.mx/GG/pdfz/financieros/Reporte%20Anual.pdf
Ketelhöhn, N. M. J. (2009). Determinantes de éxito en fusiones y adquiesisiones. INCAE Business Review, 17: 16-
23.
Learned, E. P., Christensen, C. R., Andrews, K. R. and Guth, W. (1969). Business policy. Homewood.
Organizacion, S. S. D. C. (2007). Reporte anual 2006.
http://recursos.soriana.com/recursos/resources/infoFin/InformeAnual_08_Esp.pdf
Organizacion, S. S. D. C. (2008). Reporte anual 2007.
http://recursos.soriana.com/recursos/resources/infoFin/InformeAnual_07_Esp.pdf
Peng, M. (2012). Global Strategy. Cincinnati.
Porter, M. E. (1980). Competitive Strategy: Tecniques for analyzing Industries and Competitors.
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Porter, M. E. (1983). Industrial organization and the evolution of concepts for strategic planning: The new learning.
Managerial and Decision Economics, 4(3): 172-80.
Roll, R. (1986). The hubris hypothesis of corporate takeover. The Journal of Business, 59(2): 197-216.
Spulber, D. (2005). Management strategy. Blackwell: Mac Graw Hill.
Varian, H. R. (2010). Intermediate microeconomics, A moderm aproach. Barcelona España.
Walter, G. A. and Barney, J. B. (1990). Managment objetives in mergers and aquisitions. Strategic Managment
Journal, 11(1): 79-86.
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Managment: Palgrace Macmillan Edition.
Appendix
FINANCIAL STATEMENT 2006-2007 GRUPO GIGANTE SAB de C.V.
Results statement % integrals YEAR 2006 YEAR 2007
$ $
Income
Net sales 31,876,300 100.00% 34,932,998 100.00%
Other income 594,700 1.87% 265,177 0.76%
32,471,000 101.87% 35,198,175 100.76%
Costs and expenses
Sales costs 24,582,400 77.12% 31,864,963 91.22%
Operating expenses 6,882,300 21.59% 2,485,966 7.12%
31,464,700 98.71% 34,350,929 98.33%
Operating profits 1,006,300 3.16% 847,246 2.43%
Comprehensive financing cost 184,800 0.58% 51,498 0.15%
Other expenses 206,100 0.65% -6,086,415 -17.42%
Not ordinary account 0 0.00% 49,038 0.14%
Income before income 615,400 1.93% 6,931,201 19.84%
ISR 308,900 0.97% 2,201,490 6.30%
PTU 0 0.00% 0 0.00%
Consolidated net income $306,500 0.96% $4,729,711 13.54%
Majority net income $295,700 0.93% $4,712,476 13.49%
Income (loss) Net minority 10,800 0.03% 17,235 0.05%
Consolidated net income $306,500 0.96% $4,729,711 13.54%
Basic earnings per common share $0.34 $4.78
Basic earnings per diluted share $0.34 $4.78
BALANCE SHEET GRUPO GIGANTE 2006-2007
Grupo Gigante S.A.B. de C.V.
General balance sheet % integrals 2006 2007
miles de pesos
ASSETS $
Cash 414,647 1.66% 634,823 2.10%
Customers 125,338 0.50% 114,921 0.38%
Estimate doubtful debts -16,134 -0.06% -8,882 -0.03%
Taxes to recover 200,469 0.80% 586,136 1.94%
Stores Soriana 0 0.00% 7,138,607 23.64%
Others 16,138 0.06% 76,975 0.25%
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111
Accounts Receivable 325,811 1.30% 7,907,757 26.18%
Inventories 1,189,562 4.76% 1,345,693 4.46%
Prepayments 72,902 0.29% 93,991 0.31%
Derivative financial instruments 529 0.00% 0 0.00%
TOTAL ASSETS 6,958,278 27.82% 6,475,972 21.44%
TOTAL ASSETS flows 8,961,729 35.83% 16,458,236 54.50%
Buildings 5,826,677 23.30% 5,544,882 18.36%
Adaptations to buildings 1,322,430 5.29% 1,403,253 4.65%
Store equipment 705,513 2.82% 769,307 2.55%
Furniture and equipment 174,771 0.70% 233,376 0.77%
Transport equipment 102,311 0.41% 108,224 0.36%
8,131,702 32.51% 8,059,042 26.69%
Cumulative depreciation and Amort -1,211,097 -4.84% -1,102,107 -3.65%
6,920,605 27.67% 6,956,935 23.04%
Construction in progress 77,770 0.31% 127,100 0.42%
Land 5,648,472 22.58% 5,858,364 19.40%
EQ estate and net 12,646,847 50.57% 12,942,399 42.86%
investment in shares 216,779 0.87% 213,538 0.71%
Goodwill and other 553,336 2.21% 548,301 1.82%
Discontinued operations 2,631,372 10.52% 37,859 0.13%
SUM OF ASSETS 25,010,063 100.00% 30,200,333 100.00%
2006 2007
thousands of
dollars
LIABILITIES $
Bank loans 31,680 0.13% 50,000 0.17%
Portion of long-term liabilities 13,487 0.05% 61,001 0.20%
Documents to pay 985,846 3.94% 983,507 3.26%
Accounts payable 79,125 0.32% 122,270 0.40%
Taxes and accrued expenses 760,906 3.04% 2,113,627 7.00%
Discontinued operations 4,981,687 19.92% 5,559,269 18.41%
TOTAL LIABILITIES 6,852,731 27.40% 8,889,674 29.44%
Long-term loans 48,764 0.19% 39,000 0.13%
Employee retirement obligations 44,085 0.18% 48,307 0.16%
ISR AND PTU (ESPS) 647,531 2.59% 2,206,160 7.31%
Discontinued operations 3,561,983 14.24% 578,326 1.91%
SUM OF LIABILITIES 11,155,094 44.60% 11,761,467 38.94%
CAPITAL
Social Capital 2,688,168 10.75% 2,689,090 8.90%
Share premium 7,523,747 30.08% 7,648,149 25.32%
Retained earnings 17,716,760 70.84% 22,476,480 74.42%
Failure to update -12,870,774 -51.46% -13,188,431 -43.67%
Cumulative effect of deferred income tax -1,312,925 -5.25% -1,312,925 -4.35%
Majority stockholders' equity 13,744,976 54.96% 18,312,363 60.64%
Minority interest 109,993 0.44% 126,503 0.42%
S.C. TOTAL 13,854,969 55.40% 18,438,866 61.06%
SUM LIABILITIES AND CAPITAL 25,010,063 100.00% 30,200,333 100.00%
Organization Soriana S.A. de C.V.
% comprehensive income
statement Year 2006 Year 2007
$ $
Income
Net sales 60,554,446 100.00% 65,190,659 100.00%
9. Business, Management and Economics Research, 2016, 2(6): 104-113
112
Other incomes 0 0.00% 0 0.00%
60,554,446 100.00% 65,190,659 100.00%
Costs and expenses
Cost of sales 47,718,414 78.80% 51,796,467 79.45%
gastos de operación 8,966,500 14.81% 9,090,800 13.94%
Operating expenses 56,684,914 93.61% 60,887,267 93.40%
Operating income 3,869,532 6.39% 4,303,392 6.60%
Comprehensive financing cost -420,832 -0.69% -460,246 -0.71%
Other expenses 163,530 0.27% 194,121 0.30%
No ordinary game 0 0.00% 0 0.00%
Income before income tax and
employee profit sharing ISR and
PTU 4,126,834 6.82% 4,569,517 7.01%
ISR 1,337,572 2.21% 1,434,866 2.20%
PTU 0 0.00% 0 0.00%
Consolidated net income $2,789,262 4.61% $3,134,651 4.81%
Majority net income $0 0.00% $0 0.00%
Income (loss) Net minority 0 0.00% 0 0.00%
Consolidated net income $0 0.00% $0 0.00%
Basic earnings per common share $0.34 $4.78
Basic earnings per diluted share $0.34 $4.78
Organización Soriana S.A. de C.V. At December 31 of
General balance sheet. % integrals 2006 2007
Thousands
of dollars
ASSETS $
Cash 3,359,814 7.79% 4,571,113 7.47%
Customer 611,501 1.42% 639,878 1.05%
Estimate doubtful 0 0.00% 0 0.00%
Recover taxes 0 0.00% 0 0.00%
Others 0 0.00% 0 0.00%
Accounts receivable 611,501 1.42% 639,878 1.05%
Inventories 7,080,286 16.42% 7,847,221 12.83%
Prepayments 1,944,881 4.51% 3,791,770 6.20%
Derivative financial instruments 529 0.00% 0 0.00%
Discontinued operations 0 0.00% 0 0.00%
TOTAL ASSETS 12,997,011 30.15% 16,849,982 27.55%
Accounts Receivable at long term 120,035 0.28% 115,685 0.19%
Investment in shares 175,533 0.41% 172,012 0.28%
Buildings 17,629,665 40.89% 19,345,058 31.63%
Adaptations to buildings 0 0.00% 0 0.00%
Store equipment 0 0.00% 0 0.00%
10. Business, Management and Economics Research, 2016, 2(6): 104-113
113
Furniture and equipment 10,391,186 24.10% 11,597,251 18.96%
Transportation equipment 0 0.00% 0 0.00%
28,020,851 65.00% 30,942,309 50.60%
Cumulative depreciation and Amort -6,840,187 -15.87% -7,698,213 -12.59%
21,180,664 49.13% 23,244,096 38.01%
Construction in progress 99,416 0.23% 315,188 0.52%
Lands 8,409,594 19.51% 8,988,031 14.70%
Estate and EQ net 29,689,674 68.87% 32,547,315 53.22%
Redeemable investment 0 0.00% 11,401,983 18.64%
Goodwill and other 101,464 0.24% 36,935 0.06%
Other assets 26,851 0.06% 30,426 0.05%
SUM OF ASSETS 43,110,568 100.00% 61,154,338 100.00%
2006 2007
thousands
of dollars
LIABILITIES $
Suppliers 10,226,124 23.72% 11,799,584 19.29%
Bank loans 0 0.00% 3,309,888 5.41%
Documents to pay 1,242,821 2.88% 11,054,280 18.08%
Accounts payable 0 0.00% 0 0.00%
Taxes and accrued expenses 0 0.00% 0 0.00%
Discontinued operations 0 0.00% 0 0.00%
TOTAL LIABILITIES 11,468,945 26.60% 26,163,752 42.78%
Other liabilities 205,683 0.48% 167,537 0.27%
Employee retirement obligations 102,128 0.24% 44,377 0.07%
ISR and PTU ESPS 6,506,476 15.09% 7,370,934 12.05%
Discontinued operations 0 0.00% 0 0.00%
SUM OF LIABILITIES 18,283,232 42.41% 33,746,600 55.18%
CAPITAL
Social capital 2,067,442 4.80% 2,067,442 3.38%
Share premium 1,608,645 3.73% 1,608,645 2.63%
Reserve for the repurchase 550,201 1.28% 550,201 0.90%
Retained earnings 24,113,981 55.94% 26,594,868 43.49%
Consolidated net income for the year 2,789,262 6.47% 3,134,651 5.13%
Failure to update -6,302,724 -14.62% -6,548,069 -10.71%
Majority stockholders' equity 0 0.00% 0 0.00%
Minority interest 0 0.00% 0 0.00%
S.C. TOTAL 24,826,807 57.59% 27,407,738 44.82%
SUM LIABILITIES
AND CAPITAL 43,110,039 100.00% 61,154,338 100.00%