"Business Law"

Dr. A quits her job at ABC University because she got a better job at XYZ University. Can ABC University get an injunction prohibiting her from teaching at XYZ University?

Drinkeverywhere is an American retailer located in Seattle, WA. The company president is Sam Cooper, who inherited the company. When the company was founded over 60 years ago, it originally focuses on retailing high-end beverage, wines, and finer foods to more than 30 states in the US. Over the years, the company still maintains its main business, which accounts for about 50 percent of its total revenue. Faced with stiff competition, the company also expanded into the business of manufacturing its own beverages. You and your team, the Carson College of Business graduates, are hired by the company's finance department to evaluate a new project for the company. One of the major revenue-producing items of Drinkeverywhere’s manufacture division is a sparkling soft drink. Drinkeverywhere currently has one flavor of this beverage, with size of 12 FL OZ each, and sales have been excellent. Drinkeverywhere’s main competitor on the beverage market is the Coca-Cola Company (KO). Drinkeverywhere’s drink is healthier but has similar taste to Coke. However, Drinkeverywhere wants to incorporate a new flavor into their products. Drinkeverywhere spent $100,000 to develop a new technology for its beverage that has all the features of the existing one but adds a new flavor, which can balance the original taste while having some new and exotic flavor to it. The new product also has much lower calories. The company has spent a further $25,000 for a marketing study to determine the expected sales figures for the new flavor. Drinkeverywhere can manufacture the new beverage for $0.5 per can in variable costs. Fixed costs for the operation are estimated to run $2.5 million per year. The estimated sales volume is 3,400,000, 2,550,000, 2,950,000, 2,680,000 and 1,978,000 cans per year for the next five years, respectively. The unit price of the new beverage will be $2.5 per can. The necessary equipment can be purchased for $12 million and will be depreciated on a seven-year MACRS schedule. It is believed the value of the equipment in five years will be $2 million. As previously stated, Drinkeverywhere currently manufactures a beverage product. Production of the existing product is expecting to be terminated in three years. If Drinkeverywhere does not introduce the new beverage product, sales of the existing product will be 2,000,000, 1,990,000 and 187,000 cans per year for the next three years, respectively. The price of the existing drink is 2 $1.5 per can, with variable costs of $0.3 each and fixed costs of $0.8 million per year. If Drinkeverywhere does introduce the new beverage, sales of the existing one will fall by 5,000 cans per year, and the price of the existing drinks will have to be lowered to $1.2 each can. Net working capital for the beverage will be 20 percent of sales and will occur with the timing of the cash flows for the year; for example, there is no initial outlay for NWC, but changes in NWC will first occur in Year 1 with the first year's sales. Drinkeverywhere has a 25 percent corporate tax rate. The company has a target debt to equity ratio of .55 and is currently A+ rated (according to S&P 500 ratings). The overall cost of capital of the company is 12 percent. The finance department of the company has asked your team to prepare a report to Sam, the company’s CEO, and the report should answer the following questions.

QUESTIONS 1. Can you and your team prepare the income statement table, the operating cash flow (OCF) table, and the total cash flow from assets (CFFA) table for this project?

2. Can you use these tables to help explain to Sam the relevant incremental cash flows of this project?

3. James, a newly graduated MBA in the company’s finance department suggested that you should use 12% as the discount rate for the discounted cash flow (DCF) analysis for this new project. Do you and your team agree with James?

a) If Yes, can you explain to Sam, the president of the company, why you should use 12%?

b) If Not, please find the cost of capital for this project, and explain in details how your team comes up with this number and why it is proper for this DCF analysis?

4. What are the NPV and IRR of the project?

5. Should Sam take the new project? Why or why not?

>> IKEA

IKEA was founded in 1943 by a 17-year-old Swede named Ingvar Kamprad who sold pens, Christmas cards, and seeds out of a shed on his family’s farm. The name IKEA was derived from Kamprad’s initials (IK) and the first letters of the Elmtaryd farm and the village of Agunnaryd where he grew up (EA). Over the years, the company grew into

a retail titan in home furnishings and a global cultural phe- nomenon, inspiring BusinessWeek to call it a “one-stop sanctuary for coolness” and “the quintessential cult brand.”

IKEA inspires remarkable levels of interest and devo- tion from its customers. Each year more than 650 million visitors walk through its stores all over the world. Most need to drive 50 miles round-trip but happily make the effort in order to experience IKEA’s unique value proposi- tion: leading-edge design and functional home furnish- ings at extremely low prices

IKEA’s Scandinavian-designed products are well made and appeal to the masses. To stay relevant and fashionable, the company replaces approximately one- third of its product lines each year. Most have Swedish names, such as HEKTAR lamps, BILLY bookcases, and LACK side tables. Kamprad, who was dyslexic, believed it was easier to remember product names rather than codes or numbers.

Besides featuring fashionable and good-quality prod- ucts, IKEA stands out in the industry because of its bar- gain prices. The company’s vision is and always has been “to create a better everyday life for the many people.” As Kamprad said, “People have very thin wallets. We should take care of their interests.” A high percentage of its cus- tomers are college students and families with children.

IKEA continuously seeks out new ways to run its businesses more efficiently and pass those cost savings on to the customer. In fact, it reduces prices across its products by 1 percent to 3 percent annually. How can it do so? For starters, IKEA engages the consumer on many levels, including having the customer do all the shopping, shipping, and assembly.

IKEA’s floor plan is designed in a winding, one- way format featuring different inspirational room settings, so consumers experience the entire store. Next, they can grab a shopping cart, pay for the items, visit the warehouse, and pick up their purchases in flat boxes. Consumers load the items in their car, take them home, and completely assemble the products themselves. This strategy makes storage and transportation easier and cheaper for the store.

IKEA has also implemented several company-wide strategies to keep operational costs low. The company buys in bulk, controls the supply chain, uses lighter pack- aging materials, and saves on electricity through solar panels, low-wattage light bulbs, and energy from its own wind farms in six different countries. Its stores are located a good distance from most city centers, which helps keep land costs down and taxes low.

When IKEA develops new products, its designers and product developers start with a low price tag first and then work with one of their 1,350 suppliers around the world to develop the product within that price range. Designs are efficient, and waste is kept to a minimum. Most stores resemble a large box with few windows and doors and are painted bright yellow and blue—Sweden’s national colors.

Many of IKEA’s products are sold uniformly through- out the world, but the company also caters to local and regional tastes. For example, stores in China stock specific items for each New Year. During the Chinese Year of the Rooster, IKEA stocked 250,000 plastic place- mats with rooster themes, which quickly sold out. When employees realized U.S. shoppers were buying vases as drinking glasses because they considered IKEA’s regular glasses too small, the company developed larger glasses for the U.S. market. After IKEA managers vis- ited European and U.S. consumers in their homes, they learned that Europeans generally hang their clothes, whereas U.S. shoppers prefer to store them folded. As a result, IKEA designed wardrobes for the U.S. market with deeper drawers.

Showrooms in each country or region vary as well. For example, managers learned that many U.S. con- sumers thought IKEA sold only European-size beds. Beds are very important to U.S. consumers, so IKEA quickly changed its U.S. showrooms to feature king beds and a wide range of styles. After visiting Hispanic households in California, IKEA added more seating and dining space to its California stores, as well as brighter color palettes and more picture frames on the show- room walls. In China, IKEA set up its showrooms in small spaces to accurately reflect the small size of apartments in that country.

As the company expands globally, it is learning that attitudes towards its core DIY (do it yourself) delivery and assembly business model vary. In China, for ex- ample, consumers do not want to assemble products themselves and will pay a significant amount for home delivery and assembly. As a result, IKEA has added these services, and sales in Asia have taken off. The company plans to implement the same strategy in India, where DIY is also less common.

IKEA is known for its quirky marketing campaigns, which help generate excitement and awareness of its stores and brand. It ran a campaign inviting customers to be the “Ambassador of Kul” (Swedish for “fun”), but in order to collect the prize, the contestants had to live in an IKEA store for three full days before it opened, which they happily did.

Thousands of people will line up for a chance to win prizes and IKEA furniture. In Sweden, IKEA launched a Facebook page for the manager of a new store. Anyone who could tag his or her name to an IKEA product on the profile page won that item. The promotion generated thousands of tags.

IKEA has evolved into the largest furniture retailer in the world, with approximately 350 stores in 43 countries and revenues topping €27.9 billion, or $36 billion, in 2013. The majority of sales still come from Europe, but the company has aggressive plans to expand the $11 bil- lion brand further into Asia, India, and the United States.

1. Write the position statement for IKEA? Write the purchase of parity ? write the Write the purchase of parity ?
2. Into which consumer product classification dose the IKEA belongs to and write the implication 4ps marketing strategy?
3. What is the branding strategy of IKEA ? what is the product line ?
4. Write five product level ?
5. Which pricing strategy is appropriate for this case ?
6. Draw and explain the channel flow and which distribution strategy is used?
7. Develop a promotional campaign steps in developing effective communication ?

EverGlad Bodycare was recently co-founded by two Australian siblings who share a passion for
protecting our planet and being ethical consumers.
Ann and Oliver Jones, while pursuing their vocational education, realised that people the world over
desire products that are not only good for them but also for the Earth. They wanted to create a line of
skin and hair care products that used all-natural and organic ingredients and were cruelty-free and
ethically sourced.
The brother-sister duo spent months reaching out to local producers to understand which ingredients
could be locally sourced with ease. After much experimentation with the various ingredients, they locked
in their formulae for five product lines: shampoo & conditioner bars; hair masks; soap bars; body oils and
body scrubs. As Ann and Oliver want to use only the best and safest natural ingredients, they realise that
their prices will be high initially, at least until they started manufacturing on a much larger scale. Currently,
they expect to just sell in their home state of South Australia.
As they have no prior business or marketing experience, they approach you to be their marketing
consultant

Which targeting strategy would suit this brand the best? Why? (approx. 150 words)

EverGlad Bodycare was recently co-founded by two Australian siblings who share a passion for
protecting our planet and being ethical consumers.
Ann and Oliver Jones, while pursuing their vocational education, realised that people the world over
desire products that are not only good for them but also for the Earth. They wanted to create a line of
skin and hair care products that used all-natural and organic ingredients and were cruelty-free and
ethically sourced.
The brother-sister duo spent months reaching out to local producers to understand which ingredients
could be locally sourced with ease. After much experimentation with the various ingredients, they locked
in their formulae for five product lines: shampoo & conditioner bars; hair masks; soap bars; body oils and
body scrubs. As Ann and Oliver want to use only the best and safest natural ingredients, they realise that
their prices will be high initially, at least until they started manufacturing on a much larger scale. Currently,
they expect to just sell in their home state of South Australia.
As they have no prior business or marketing experience, they approach you to be their marketing
consultant.

Create a perceptual map for EverGlad Bodycare. Apart from showing its positioning, use external
research to plot two other actual companies on the same perceptual map. Include a short write up
to explain your logic. (approx. 100 words)

Tesco Exits South Korea

Tesco was founded in 1919 by Jack Cohen (Cohen), who invested his serviceman’s gratuity of £30 in a grocery stall. The first private label product introduced by Cohen was Tesco Tea. The name Tesco was a combination of the initials of the tea supplier TE Stockwell, and the first two letters of Cohen’s name. Tesco opened its first store in 1929 in Edgware, London. In 1947, Tesco Stores (Holdings) Limited was floated on the Stock Exchange with a share price of 25 pence and the first supermarket was opened in 1956 in Maldon, Essex, England. The first superstore was opened in 1968 in Crawley, West Sussex. In the 1960s, Tesco went on an expansion spree and acquired several store chains. The Retail Price Maintenance (RPM) Act in Britain prohibited large retailers from pricing goods below a price agreed upon by the suppliers. To overcome this obstacle to price reduction, Tesco introduced trading stamps. These were given to customers when they purchased products and could be traded for cash or other gifts. RPM was abolished in 1964, and from then on, Tesco was able to offer competitively priced products to its customers in a more direct manner. The first Tesco superstore, with an area of 90,000 square feet, was opened in 1967.

TESCO’S GLOBAL EXPANSION
Tesco’s global expansion began in 1979, when it entered Ireland by acquiring a 51% equity stake in ‘3 Guys stores’. In 1986, Tesco divested itself of the stores after it found that it could not sustain its operations in the country as customers were rejecting the British products that it sold. During the late 1980s and the early 1990s, Tesco examined the options available in the US and European countries after the British government introduced new regulations on ‘out-of-town’ stores. In December 1992, Tesco entered France by acquiring an 85% equity holding in Catteau supermarkets, which operated under the Cedico brand with 72 superstores, 7 hypermarkets, and 24 small stores. However, Tesco failed to sustain itself in the market due to competition from French retailers like Carrefour and Promodès. In 1995, a law was passed in France which prohibited the opening of new large retail stores. Moreover, the company failed to adapt its products to suit local tastes and lost market share. In 1996, in spite of investing an additional £ 300 million in France, sales in the country grew by a mere 1%. In the year 1997, Tesco sold its operations in France to Prom odes.

TESCO IN SOUTH KOREA
In the early 1990s, there was a growing demand from consumers in South Korea for a modern shopping experience owing to rapid economic growth and increasing disposable incomes. The government had adopted protectionist policies and the retail sector was not open for foreign direct investment (FDI). Tesco

entered South Korea in 1999 through a joint venture with Homeplus, a unit of the country’s biggest business group Samsung Corporation (Samsung) . In the next few years, Tesco became the most successful international retailer in the country. Its success was attributed to its ability to localize its products and stores to appeal to the South Korean consumers; its operating through local management; and its strong presence through different store formats. South Korea went on to become Tesco’s most successful international business in terms of revenue. As of 2014, it operated d 140 hypermarkets, 609 supermarkets, and 326 convenience stores.

TESCO’S STRATEGIES IN SOUTH KOREA
Immediately after entering into the joint venture, Tesco went about upgrading the store layouts. The stores were modified to resemble department stores, which were spacious and clean. Tesco’s stores in Korea did not resemble its stores in the UK or in other European locations like Hungary, Poland, the Czech Republic, and Ireland.

CHANGES IN THE OPERATING ENVIRONMENT
In October 2012, when Tesco posted its first fall in profits in 20 years, the company also announced that its profits in South Korea would take a £ 100 million hit due to the "retail market development bill” that had been passed by the government in November 2010. However, changes in the operating environment in South Korea due to new laws that were enforced beginning 2010 to protect small retailers and merchants started to impact Tesco and other large retailers. These laws placed restrictions on the locations where supermarkets could be opened. The Distribution Industry Development Act passed in 2012 imposed restrictions on the time for which the stores could remain open and also specified that on two weekends every month the large retail stores should be closed. As most Koreans shopped during the weekends, these restrictions started to impact Tesco, which made losses in 2015. Under the impact of the global recession, the private spending in South Korea fell. Another factor that impacted Tesco in South Korea was its UK business, which was not doing well.

TESCO’S EXIT FROM SOUTH KOREA
On September 07, 2015, Tesco PLC (Tesco), a British multinational grocery and general merchandise retailer, announced that it had sold its South Korean business, operated under the name Homeplus, for £4.2 billion to a consortium of companies led by MBK Partners, a South Korean buyout firm. The consortium included Canada Pension Plan Investment Board, Public Sector Pension Investment Board, and Temasek Holdings (Private) Limited

Question - Case study

Use the case study above to answer the question

What do you think did not work well for Tesco?

Using the Tesco Case discuss the need for companies to consider push and pull factors for international expansion.

Tesco Exits South Korea

Tesco was founded in 1919 by Jack Cohen (Cohen), who invested his serviceman’s gratuity of £30 in a grocery stall. The first private label product introduced by Cohen was Tesco Tea. The name Tesco was a combination of the initials of the tea supplier TE Stockwell, and the first two letters of Cohen’s name. Tesco opened its first store in 1929 in Edgware, London. In 1947, Tesco Stores (Holdings) Limited was floated on the Stock Exchange with a share price of 25 pence and the first supermarket was opened in 1956 in Maldon, Essex, England. The first superstore was opened in 1968 in Crawley, West Sussex. In the 1960s, Tesco went on an expansion spree and acquired several store chains. The Retail Price Maintenance (RPM) Act in Britain prohibited large retailers from pricing goods below a price agreed upon by the suppliers. To overcome this obstacle to price reduction, Tesco introduced trading stamps. These were given to customers when they purchased products and could be traded for cash or other gifts. RPM was abolished in 1964, and from then on, Tesco was able to offer competitively priced products to its customers in a more direct manner. The first Tesco superstore, with an area of 90,000 square feet, was opened in 1967.

TESCO’S GLOBAL EXPANSION
Tesco’s global expansion began in 1979, when it entered Ireland by acquiring a 51% equity stake in ‘3 Guys stores’. In 1986, Tesco divested itself of the stores after it found that it could not sustain its operations in the country as customers were rejecting the British products that it sold. During the late 1980s and the early 1990s, Tesco examined the options available in the US and European countries after the British government introduced new regulations on ‘out-of-town’ stores. In December 1992, Tesco entered France by acquiring an 85% equity holding in Catteau supermarkets, which operated under the Cedico brand with 72 superstores, 7 hypermarkets, and 24 small stores. However, Tesco failed to sustain itself in the market due to competition from French retailers like Carrefour and Promodès. In 1995, a law was passed in France which prohibited the opening of new large retail stores. Moreover, the company failed to adapt its products to suit local tastes and lost market share. In 1996, in spite of investing an additional £ 300 million in France, sales in the country grew by a mere 1%. In the year 1997, Tesco sold its operations in France to Prom odes.

TESCO IN SOUTH KOREA
In the early 1990s, there was a growing demand from consumers in South Korea for a modern shopping experience owing to rapid economic growth and increasing disposable incomes. The government had adopted protectionist policies and the retail sector was not open for foreign direct investment (FDI). Tesco

entered South Korea in 1999 through a joint venture with Homeplus, a unit of the country’s biggest business group Samsung Corporation (Samsung). In the next few years, Tesco became the most successful international retailer in the country. Its success was attributed to its ability to localize its products and stores to appeal to the South Korean consumers; its operating through local management; and its strong presence through different store formats. South Korea went on to become Tesco’s most successful international business in terms of revenue. As of 2014, it operated d 140 hypermarkets, 609 supermarkets, and 326 convenience stores.

TESCO’S STRATEGIES IN SOUTH KOREA
Immediately after entering into the joint venture, Tesco went about upgrading the store layouts. The stores were modified to resemble department stores, which were spacious and clean. Tesco’s stores in Korea did not resemble its stores in the UK or in other European locations like Hungary, Poland, the Czech Republic, and Ireland.

CHANGES IN THE OPERATING ENVIRONMENT
In October 2012, when Tesco posted its first fall in profits in 20 years, the company also announced that its profits in South Korea would take a £ 100 million hit due to the "retail market development bill” that had been passed by the government in November 2010. However, changes in the operating environment in South Korea due to new laws that were enforced beginning 2010 to protect small retailers and merchants started to impact Tesco and other large retailers. These laws placed restrictions on the locations where supermarkets could be opened. The Distribution Industry Development Act passed in 2012 imposed restrictions on the time for which the stores could remain open and also specified that on two weekends every month the large retail stores should be closed. As most Koreans shopped during the weekends, these restrictions started to impact Tesco, which made losses in 2015. Under the impact of the global recession, the private spending in South Korea fell. Another factor that impacted Tesco in South Korea was its UK business, which was not doing well.

TESCO’S EXIT FROM SOUTH KOREA
After several months of speculation, Tesco sold its South Korean stores to Asian private equity firm MBK Partners for £4.2 billion on September 07, 2015. On September 07, 2015, Tesco PLC (Tesco), a British multinational grocery and general merchandise retailer, announced that it had sold its South Korean business, operated under the name Homeplus, for £4.2 billion to a consortium of companies led by MBK Partners, a South Korean buyout firm. The consortium included Canada Pension Plan Investment Board, Public Sector Pension Investment Board, and Temasek Holdings (Private) Limited.

Case study question
The extract above mentions changes in operating environment in which Tesco functions.

Discuss in this context, the nuances of a Task environment.

Discuss the benefits and challenges of franchising: ​ (a) to the franchisee (i.e., for the individual who buys a franchise), and (b) the franchiser (i.e., the firm that grants the right and license to sell a product or provide the service to another individual or firm).

I need recommendations, comments for project proposal of my MBA Capstone project, is it right topic which i chose, description, problem to be addressed?  I begin my graduate capstone project i need just opinion of experts if I am on the right way. This was requirements from my professor:

Week 1: Project Proposal

Describe in 2-3 sentences (a short paragraph) the project proposal that contains the following:

1.Introduction and description of your selected business environment

2.Problem to be Addressed

And this is my answer:

The impact of health issues on the US economy

Introduction And Description Of Your Selected Business Environment
The economy of the United States is mixed and highly developed. It is currently considered the
largest economy in the world in terms of nominal GDP and net worth and is also the second-
largest by purchasing power parity (PPP). The US economy has improved tremendously in the
last ten years, with the unemployment rate shifting to its lowest in 50 years, and this is attributed
to multi-sectoral factors that have an unmeasured and unregulated influence on the economy.
Problem to be addressed
Health care issues such as the current global health pandemic are a great threat to the economy of
the United States, where consumers and businesses have now radically curtailed the operations
and changed their consumption habits leading to the closure of some companies and sacking of
employees.

Keiser University has warrants in the market that allows people who own it to be authorized to buy 1 share of the university at the price of $ 25.

a) Calculate the execution value of the organization's warrants if the common shares are sold each at the following prices: (1) $ 20, (2) $ 25, (3) $ 30), (4) $ 100. (The warrant's execution value is the difference between the price of the shares and the purchase price specified by the warrant if the authorization is executed.)