(The answer to this question must be atleast 2 pages long and must not be copy and pasted from previous answers)

Case Study:

Nike's Core Competency: The Risky Business of Creating Heroes

DURING THE LAST DECADE, Nike's annual revenues doubled and by 2018 attained some $35 billion. With its globally recognized brand, Nike is the undisputed leader in the athletic shoe and apparel industry. Number two adidas has some $22 billion in sales, while recent entrant Under Armour reports revenues of $5 billion. Nike is tremendously successful, holding close to a 60 percent market share in running shoes and nearly a 90 percent market share in basketball shoes and apparel. Yet one of its greatest strengths can also be seen as one of its greatest vulnerabilities. Before we introduce that strength, it helps to know how Nike started.

Nike Co-founders:

Bill Bowerman and Phil Knight

The Beaverton, Oregon, company has come a long way from its humble beginnings. It was founded by University of Oregon track and field coach Bill Bowerman and middle-distance runner Phil Knight in 1964 and was first called Blue Ribbon Sports. In 1971, the company changed its name to Nike (Greek mythology's goddess of victory) with the now iconic "swoosh" designed by a Portland State University student.

BOWERMAN'S ROLE. Coach Bowerman was a true innovator because he constantly sought ways to give his athletes a competitive edge. He experimented with many factors affecting running performance, from different track surfaces to rehydration drinks. Bowerman's biggest focus, however, was on providing a better running shoe for his athletes. While sitting at the breakfast table one Sunday morning and absentmindedly looking at his waffle iron, Bowerman had an epiphany. He poured hot, liquid urethane into the waffle iron—ruining it in the process but coming up with the now famous waffle-type sole that not only provided better traction but was also lighter than traditional running shoes.

ENTER KNIGHT. After completing his undergraduate degree at the University of Oregon and serving in the U.S. Army, Phil Knight entered the MBA program at Stanford. One entrepreneurship class required him to come up with a business idea. He wrote a term paper on how to disrupt the leading athletic shoemaker, adidas. The research question he came up with was, "Can

Japanese sports shoes do to German sports shoes what Japanese cameras have done to German cameras?"

At that time, adidas athletic shoes were the gold standard. They were also expensive and hard to find in the United States. After several failed attempts to interest Japanese sneaker makers, Knight struck a distribution agreement with Tiger Shoes. After his first shipment arrived in the United States, Phil Knight sent some of the running shoes to his former coach, Bill Bowerman, hoping to make a sale. To his surprise,

Bowerman replied that he was interested in becoming a business partner and contributing his innovative ideas on how to improve running shoes, including the waffle design. With an investment of $500 each and a handshake, the venture commenced.

Creating Heroes

Nike had already reached a level of success by the late 1970s. Based on a highly successful string of innovations including Nike Air, by 1979 the company had captured more than a 50 percent market share for running shoes in the United States. A year later, Nike went public. Even so, the company had yet to establish one of its most effective marketing tactics.

In 1984, Nike signed Michael Jordan—still early in his career, before he was hailed by many as the greatest basketball player of all time—with an unprecedented multimillion-dollar endorsement deal. Rather than spreading its marketing budget more widely as was common in the sports industry at that time, Nike made the unorthodox move to spend basically its entire budget for a specific sport on a single star athlete. Nike sought to sponsor future superstars that embodied an unlikely success story. Michael Jordan did not make the varsity team as a junior in high school, and yet he became the greatest basketball player ever. Nike's Air Jordan basketball shoes are all-time classics that remain popular to this day.

In the 1990s and 2000s, Nike continued to sponsor track and field stars such as Marion Jones as well as Kobe Bryant in basketball. With the help of major celebrity endorsements, Nike was also able to move on to different sports and their superstars, including golf with Tiger Woods, cycling with Lance Armstrong, soccer with Wayne Rooney, and football with Michael Vick. If some of those names trigger memories of scandals as well as athletic achievements, you see the problems that Nike risks with its endorsement program. Before going into the negatives, let's examine the powerful message behind such endorsements.

Nike is less about running shoes or sports apparel than about unlocking human potential. This is captured in Nike's mission to bring inspiration and innovation to every athlete in the world (and if you have a body, you are an athlete). ² Nike uses its heroes to tell a story whose moral is that through sheer will, tenacity, and hard work, anyone can unlock the hero within and achieve amazing things. Nike will help everyone become a hero. Just Do It! This type of mythical brand image has allowed Nike to not only enter but also often

Oscar Pistorius (left) and Lance Armstrong (right), some of Nike's past celebrity endorsements.

dominate one sport after another, from running to ice hockey. It spends more than $1 billion a year sponsoring athletes. Nike picks athletes that succeeded against the odds—cancer survivor Lance Armstrong, double amputee "blade runner" Oscar Pistorius, and other athletes hailing from disadvantaged backgrounds.

Nike astutely focuses on its core competency in athlete sponsorship and design, while it outsources noncore activities such as manufacturing and much of retailing. To create heroes, Nike has to engage in a number of activities: Find athletes that succeed against the odds; identify them before they are wellknown superstars; sign the athletes; create products that are closely linked with the athlete; promote the athletes or teams and Nike products through TV ads and social media to create the desired image; and so on. Each activity contributes to the relative value of the product and service offering in the eyes of potential customers and the firm's relative cost position vis-å-vis its rivals. Over time, Nike developed a deep expertise in creating heroes. More importantly, having consistently better expectations of the future value of resources allows Nike not only to shape the desired image of the athlete, but also to capture some of the value these athletes create.

When Heroes Fall

Although this core competency made Nike highly successful, it has not been without considerable risks. Repeatedly, Nike's "heroes" have become unmasked as cheaters, frauds, and criminals, some of whom have committed serious felonies, such as (culpable) homicide. Long-time CEO and Chairman Phil Knight long ago declared that scandals surrounding its superstar endorsement athletes are "part of the game."3 So Nike appears to be comfortable in tolerating those risks, at least in some cases.

Sometimes Nike continued to sponsor its athletes involved in various scandals; other times it terminated its lucrative endorsement contracts. Nike continued to sponsor NBA star Kobe Bryant who was cleared of alleged rape charges. After Tiger Woods was engulfed in an infidelity scandal, Nike continued to sponsor the golf superstar. In 2007, Nike ended its endorsement contract with NFL quarterback Michael Vick after a public outcry and his subsequent felony conviction of running a dog-fighting ring and engaging in animal cruelty. In 2011, after serving a prison sentence and restarting his career at the Philadelphia Eagles, Nike signed a new endorsement deal with Vick. In 2012, Nike terminated its long-term relationship with disgraced cyclist Lance Armstrong. Just before Armstrong's public admission to doping in an interview with Oprah Winfrey, Knight answered, "Never say never," when asked if Nike would sponsor Armstrong again in the future. In 2013, Nike removed its ads with Oscar Pistorius and the unfortunate tagline "I am the bullet in the chamber," after the South African track and field athlete was charged with homicide.

In 2014, Nike got entangled in the FIFA (the world governing body of soccer) bribery scandal. It began 20 years earlier when Nike decided to gain a stronger presence in soccer after the 1994 World Cup was held in the United States. In 1996, Nike signed a long-term sponsorship agreement with the Brazilian national team worth hundreds of millions of dollars. This was a huge win for Nike because soccer has been the basis of adidas' success, much like running and basketball has been for Nike. Moreover, Brazil won the tournament five times (more than any other nation) and is the only team to have played in every tournament, which is only held every four years.

Nike is now alleged to have paid some $30 million to a middleman, who used that money for bribing

soccer officials and politicians in Brazil. This middleman—Jose Hawilla—has admitted a number of crimes including fraud, money laundering, and extortion related to the FIFA soccer investigation by U.S. prosecutors.

Time and time again Nike's heroes have fallen from grace, and the company itself has fallen under suspicion of wrongdoing. Clearly, Nike's approach in building its core competency of creating heroes is not without risks. Too many of these public relations disasters combined with too severe shortcomings of some of Nike's most celebrated heroes could damage the company's reputation and lead to a loss of competitive advantage. As Nike veers from one public relations disaster to the next, disappointment with the brand and its promise may eventually set in, causing customers to go elsewhere.

DISCUSSION QUESTIONS

1.     The MiniCase indicates that Nike's core competency is to create heroes. What does this mean? How did Nike build its core competency? Does it, for example, identify and leverage the potential identified in a VRIO analysis (are its competencies valuable, rare, inimitable, and organized to capture value) in a resource-based view of the firm?

2.     What would it take for Nike's approach to turn from a strength into a weakness? Did this tipping point already occur? Why or why not?

3.     What recommendations would you have for Nike? Can you identify a way to reframe the competency of creating heroes? Or a new way to think of heroes, teams, or sports that would continue to build the brand?

4.     If you are a competitor of Nike (such as adidas, Under Armour, New Balance, or Li-Ning), how could you exploit Nike's apparent vulnerability?

Provide a set of concrete recommendations.

Amy Dyken, controller at Sheridan Pharmaceutical Industries, a public company, is currently preparing the calculation for basic and diluted earnings per share and the related disclosure for Sheridan’s financial statements. Below is selected financial information for the fiscal year ended June 30, 2020. Sheridan Pharmaceutical Industries Selected Balance Sheet Information June 30, 2020 Long-term debt Notes payable, 10% $1,010,000 9% convertible bonds payable 5,090,000 10% bonds payable 6,060,000 Total long-term debt $12,160,000 Shareholders’ equity Preferred stock, 6% cumulative, $50 par value, 93,000 shares authorized, 23,250 shares issued and outstanding $1,162,500 Common stock, $1 par, 9,900,000 shares authorized, 990,000 shares issued and outstanding 990,000 Additional paid-in capital 3,930,000 Retained earnings 6,020,000 Total shareholders’ equity $12,102,500 The following transactions have also occurred at Sheridan. 1. Options were granted on July 1, 2019, to purchase 190,000 shares at $16 per share. Although no options were exercised during fiscal year 2020, the average price per common share during fiscal year 2020 was $20 per share. 2. Each bond was issued at face value. The 9% convertible bonds will convert into common stock at 50 shares per $1,000 bond. The bonds are exercisable after 5 years and were issued in fiscal year 2019. 3. The preferred stock was issued in 2019. 4. There are no preferred dividends in arrears; however, preferred dividends were not declared in fiscal year 2020. 5. The 990,000 shares of common stock were outstanding for the entire 2020 fiscal year. 6. Net income for fiscal year 2020 was $1,520,000, and the average income tax rate is 20%. For the fiscal year ended June 30, 2020, calculate the following for Sheridan Pharmaceutical Industries. (Round answers to 2 decimal places, e.g. $2.45.) (a) Basic earnings per share. Basic earnings per share $ 1.46 (b) Diluted earnings per share. Diluted earnings per share $ Amy Dyken, controller at Sheridan Pharmaceutical Industries, a public company, is currently preparing the calculation for basic and diluted earnings per share and the related disclosure for Sheridan’s financial statements. Below is selected financial information for the fiscal year ended June 30, 2020. Sheridan Pharmaceutical Industries Selected Balance Sheet Information June 30, 2020 Long-term debt Notes payable, 10% $1,010,000 9% convertible bonds payable 5,090,000 10% bonds payable 6,060,000 Total long-term debt $12,160,000 Shareholders’ equity Preferred stock, 6% cumulative, $50 par value, 93,000 shares authorized, 23,250 shares issued and outstanding $1,162,500 Common stock, $1 par, 9,900,000 shares authorized, 990,000 shares issued and outstanding 990,000 Additional paid-in capital 3,930,000 Retained earnings 6,020,000 Total shareholders’ equity $12,102,500 The following transactions have also occurred at Sheridan. 1. Options were granted on July 1, 2019, to purchase 190,000 shares at $16 per share. Although no options were exercised during fiscal year 2020, the average price per common share during fiscal year 2020 was $20 per share. 2. Each bond was issued at face value. The 9% convertible bonds will convert into common stock at 50 shares per $1,000 bond. The bonds are exercisable after 5 years and were issued in fiscal year 2019. 3. The preferred stock was issued in 2019. 4. There are no preferred dividends in arrears; however, preferred dividends were not declared in fiscal year 2020. 5. The 990,000 shares of common stock were outstanding for the entire 2020 fiscal year. 6. Net income for fiscal year 2020 was $1,520,000, and the average income tax rate is 20%. For the fiscal year ended June 30, 2020, calculate the following for Sheridan Pharmaceutical Industries. (Round answers to 2 decimal places, e.g. $2.45.) (a) Basic earnings per share. Basic earnings per share $ 1.46 (b) Diluted earnings per share. Diluted earnings per share $

The purpose of this lab is to introduce some of the available tools used to prepare a weather forecast. Surface Analysis – http://weather.rap.ucar.edu/surface/sfc_alb.gif Satellite Imagery- http://www.goes.noaa.gov/ Radar - http://radar.weather.gov/radar.php?rid=box&product=N0R&overlay=11101111&loop=no Models – http://mag.ncep.noaa.gov/NCOMAGWEB/appcontroller?prevpage=index&MainPage=index&ca t=MODEL+GUIDANCE&page=MODEL+GUIDANCE SURFACE ANALYSIS: The surface analysis map shows the current meteorological conditions for the Northeast US. Note the symbols used on the map. These symbols are explained in Appendix B. Once you learn how to read the symbols you can “see” the weather on this map. SATELLITE IMAGERY: When you look at this page you can see that we have imagery for the Eastern Contiguous United State (East CONUS) along with the Western US., Puerto Rico, Alaska and Hawaii. Note we can see images in the infrared (so we can see the weather at night); the visible (only see those areas during the daylight); and water vapor show geographically where the water is in the atmosphere. Note: When we look at the visible and infrared images the brighter the clouds the higher they are in the atmosphere (which is an indication of lift, convection, and possible instability). RADAR: Radar shows us precipitation type, intensity, and geography. When you go to this page click on Doppler University and read through the tutorial to gain an understanding of how radar works. MODELS: When you arrive at this site you will see that you can select the geographic location to investigate (select North America) and Model Type (select GFS). This will bring to a page of more selection criteria. Review the page and select precipitation parameters precip_p12. This will again open a new page and select Loop All. A map will appear showing High and Low pressure systems along with precipitation shields. Note along the top of the map you will see the time stamp as the model progresses. CLOUDS: Clouds are the visible manifestations of the atmospheric physics. Cloud types can tell us about what weather to expect. There is an excellent cloud guide in the back of your text. Note all of these site where navigated to from the Boston National Weather Service Site: http://www.erh.noaa.gov/er/box/ I suggest you take a good look at his site as it has a vast amount of information. Now using the four tools noted above (surface analysis, satellites, radar, and models) prepare a weather forecast (Maximum and Minimum Temperature for the day and Precipitation amount and type) for 24 hours AFTER your lab submission date. Write a one page paper (12 pt type, single space, 1 inch margins) detailing your forecast and how you used the tools to arrive at your weather prediction. Also within the forty eight hour period before your forecast list the type of clouds you observed and the time of day for your observations

Sarasota Limited has two classes of shares outstanding: preferred ($5 dividend) and common. At December 31, 2019, the following accounts and balances were included in shareholders’ equity:

The contributed surplus accounts arose from net excess of proceeds over cost on previous cancellations of shares of each respective class. The following transactions affected shareholders’ equity during 2020:

Assume that Sarasota follows IFRS.

1. Prepare the statement of changes in shareholders’ equity for the company at December 31, 2020. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round intermediate calculations to 2 decimal places, e.g. 52.75 and all other answers to 0 decimal places, e.g. 5,275.)

2. Prepare the shareholders’ equity section of the SFP for the company at December 31, 2020.

3.Prepare the journal entry for the repurchase of 27,000 common shares on July 1, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round intermediate calculations to 2 decimal places, e.g. 52.75 and all other answers to 0 decimal places, e.g. 5,275.)

4. Prepare the journal entry for the repurchase of 27,000 common shares assuming instead that the repurchase took place on May 31 at the same repurchase price of $14. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round intermediate calculations to 2 decimal places, e.g. 52.75 and all other answers to 0 decimal places, e.g. 5,275.)

in each of the following scenario use 2 diagram for the market of cell phones in US to find the effects on their wage employment and real GDPin 2017 a) consumers are buying more cell phones made in US b)workers decided to retire earlier from the cell phones sector c) new technology bought by firms in the cell phones industry d) a decrease of employment tax for firms producing cell phones

Assume the following information about a company:

Past dividends

2015                $1.32                           Required return = 11%

2016                $1.44                          

2017                $1.54                          

2018                $1.66

2019                $1.76

Use the appropriate dividend model to place a value on this stock for 2020.

How do I set this up in excel?

Consider two bonds, one issued in euros in Germany, and one issued in dollars in the US.

Assume that both government securities are one-year bonds – paying the face value of the bond

one year from now. The exchange rate, E, stands at 0.75 euros per dollar.

The face values and prices on the two bonds are given by:

US:
Face Value: $10,000 Price: $9,615.38

Germany:
Face Value: $10,000 euros : 9,433.96 euros

a.Compute the nominal interest rate on the bonds.

b. Compute the expected exchange rate next year consistent with uncovered interest parity.

c. If you expect the dollar to depreciate relative to the euro, which bond should you buy?

d. Assume that you are a US investor and you exchange dollars for euros and purchase the

German bond today. One year from now, it turns out that the exchange rate, E, is actually

0.72 (.72 euros buys one dollar). What is your realized rate of return in dollars compared to

the realized rate of return you would have made had you held the US bond?

The T-accounts below summarize transactions of Dansko Integrated from February 22 to February 25, 2020:

Cash

Balance
9,900

90

16

65

10

4

49

PP&E, Net

Balance
16,800

49

Accounts Payable

4

Balance
2,700

17

Other Liabilities

Balance
1,000

Accounts Receivable

Balance
4,500

10

Other Assets

Balance
1,600

Debt

Balance
3,500

65

Paid-In Capital

Balance
8,000

90

Inventory

Balance
3,800

17

13

Retained Earnings

Balance
21,400

3

What is the final amount in Total Equity?

Use T-accounts to record the transactions below, which occur on March 12, 2020, close the T-accounts, and construct a balance sheet to answer the question.

1. Purchase equipment for $50,000 in cash
2. Borrow $67,000 from a bank
3. Issue $80,000 in stock
4. Buy $16,000 worth of manufacturing supplies on credit
5. Pay $7,000 owed to a supplier

What is the final amount in Total Equity?

Use T-accounts to record the transactions below, which occur on March 12, 2020, close the T-accounts, and construct a balance sheet to answer the question.

1. Sell, deliver, and receive payment of $20,000 for service
2. Consume good or service and pay expense of $3,000
3. Sell product for $25,000 in cash with historical cost of $20,000

What is the final amount in Total Assets?

On July 31, 2020, Crane Company paid $2,950,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a reporting unit) of Crane. Conchita reported the following balance sheet at the time of the acquisition.

It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,650,000. Over the next 6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2020, Conchita reports the following balance sheet information.

Finally, it is determined that the fair value of the Conchita Division is $1,850,000.

Compute the amount of goodwill recognized, if any, on July 31, 2020. (If answer is zero, do not leave answer field blank. Enter 0 for the amount.)

Determine the impairment loss, if any, to be recorded on December 31, 2020. (If answer is zero, do not leave answer field blank. Enter 0 for the amount.)

Assume that fair value of the Conchita Division is $1,590,000 instead of $1,850,000. Determine the impairment loss, if any, to be recorded on December 31, 2020. (If answer is zero, do not leave answer field blank. Enter 0 for the amount.)

Prepare the journal entry to record the impairment loss, if any, and indicate where the loss would be reported in the income statement. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)