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10 MARKETING 1 Running Head; MARKETING Quality carpets marketing strategies and dynamics

10

MARKETING

1

Running Head; MARKETING

Quality carpets marketing strategies and dynamics

Name

Professor’s name

Course

Date

Quality carpets marketing strategies and dynamics

Business whether small, medium-sized or large scales endeavor in enlarging their territories in term of market share and production volume. Many factors necessitate this need, can only be archived through market diversification and penetration in new markets. Quality craft carpets, for example, are interested in penetrating the American market, this will be successful if only there is a well laid down strategy of entering the market and remaining there. Both short, medium and long-term strategies should be harmonized and organized in a manner that they overlap and proceed each other efficiently.

The figure shows the overall strategy of quality carpets

For a startup, quality craft carpets should ensure that all legalities of venturing into the market are meet, and means of the entry selected, whether joint venture, direct investment or acquisition of equity is in line with the target market. This first move will assist the company to establish grounds in the American market and selection of the mode of entry will determine how fast and how much resources will be used. After selection of entry model, quality carpet should focus on getting the experience of the market which will assist in market details. Market details to be acquired are size and structure of the market and general characteristics of the market. This will help the company to grasp the overall dynamics of the market and thereof plan accordingly on the following moves to capture the market and retain it (Lusch, & Vargo, 2014)..

Medium- term strategies will involve technical activities of developing a budget for market statistical figures representing the exact representation of the market. This will assist in setting market targets as they will have the full representation of the market. Additionally, quality carpets will devise tactics of enforcing the market share. This will be done through market companies, promotions, and advertisement. This will assist to enlarge the market share and create needs for long-term strategies to be developed.

In the long-run, the organization should focus on consistent campaign and product promotion. This will assist in retaining the captured market share. Also, quality carpets should set target goals in profit and production there must e followed strictly to ensure that sale is in line with the target. At this point, the company should have a recorded follow-up of the clients, full understanding of the market and organize itself by any emerging trends or future expectations of the market.

Entry into the market

Entry into the market will determine the success of the diversification. Therefore, there exist a need to scrutinize the method of entry. There exist some methods of entries and all exhibit different advantages depending on the expectation of the company. The best entry method will be guided by the cost of setting up the entity, legalities involved cost of maintaining the entity, expected market rip and profit expectations. Quality carpet should assess the entry existing advantages.

Establishment of a subsidiary exhibits some but not all advances. Subsidiary requires setting up or acquiring another firm and fully owning it up. This requires massive investment as there a lot of legalities involved (Shankar & Carpenter, 2012). Licensing and registration of the subsidiary involve a complex process especially when it is a cross-national subsidiary. Also, subsidiaries represent another independent firm all together which limits the entry of an already known international brand. In this regard, a subsidiary is not the best entry into American market as there is allot of complexities involved. Considering that quality carpet does not operate nor is it interested in large scale investment, there will be a huge amount of energy, and material resources put to waste. Quality carpet should, therefore, digress from entering the American market through the establishment of a subsidiary.

An assessment of the available entry methods, joint venture proves to be the best since it is in line with quality carpets requirements. A joint venture is an entry whereby one company partners with another to form a joint entity. This is done through a consensus of the two or though companies. In this kind of entry, parties in the venture have an individual interest that is home is to bring forth a business entity with minimal constraints. A joint venture ensures that cost of setting the venture is shared, they both take part in managing and marketing the products of the venture. Quality carpets should consider entering into a joint venture since it reduces the cost of investment and reinforces the management and marketing team. It consequently reduces wasteful competition especially if the venturing companies are within the same industry. Quality carpet should, therefore, select the best company to venture with since ease of entering the market will be reduced. Additionally, this will reduce the complexities arise in setting up new entities in a foreign country (Markman & Phan, 2011).

Change of tactic with rising in exporting opportunities

There exist some unforeseen uncertainties in business leadership, and the rise of new challenges and opportunities acquire new strategies to mitigate of embrace. In the case of a promising opportunity arising, clear and concise decisions should be made to ensure that the opportunity is not left to waste and neither does the current business activities and plans left over. If Japan and the Middle East market open up and create marketing opportunities, management of quality carpet should assess some factors before making a decision.

One, quality carpet should establish that the export opportunity is feasible for a foreseeable future. An analysis to assess this aspect will assist to shape the decision of the management. To assess the feasibility of the opportunity, there should be proof of higher returns in comparison with current production and marketing structure (Papadopoulos & Heslop, (2014). If the opportunity proves to retain enough and finance all cost of production and commercialization, then quality carpets should go by the export opportunity. Secondly, quality carpet should ascertain that the opportunity is sustainable. If the rising market shows a tendency of consistency, the quality carpets should make arrangement to produce enough carpets for export.

After scrutinizing that the export opportunity is feasible, quality carpet should make an arrangement of entering the market. This will either be through relocating or establishment of an entity in the oversea countries. If the market in the oversea countries is high, the organization should engage in setting up a distribution center in one of the countries. Also, an assessment should be done to ascertain whether the establishment of joint ventures or subsidiaries is better, to meet the market requirements.

Another arrangement will be to develop a strategy to increase the level of production in either American entity, or the parent company in quality carpets headquarters or setting a new one in the destined countries. Also, there should be an assessment of the best country to set up an entity if the need arises or if assessment measures that creating a new entity is a smart move. Consideration of these factors should enable quality carpets to make a decision that will be sustainable and fruitful in the overall plan. There will not need to change strategies except to reinforce the current marketing and production strategies.

Marketing communication strategy

A marketing communication and product promotion strategy details the features of a brand. A good marketing communication ensures that promotion strategy used is well and fully grasped by the audience and the target market. Communication in this context means the establishment of a good and clearly understood messages that grasps the attention of the audience. Selection of communication media is a key factor in marketing communication.

One of the primary strategies to be established in marketing in America is the use development of Marcom success measure. A metrics will assist in assessing the effectiveness of the marketing communication campaign. This will be done through welcoming feedback from consumers to know how they perceive the commodity. This will assist in providing room and gap for developing the carpets according to consumer requirements. A metrics will also assist to know the effectiveness of the promotion.

Secondly, there will be a harmonized database storing all information about the clients and potential consumers of the product. The database will contain all relevant information about the clients and hence reaching them and knowing the easiest means of communication to them. Finally, there will be a formulated proposition that will capture the main and unique features of the commodity. The proposition will be formulated in a manner in that carpets from quality carpet solve a specific problem the United States.

After assessing the report about the commodity of our competitors, there was a realization that manufactured carpets are of low quality since they do not specify their production, unlike quality carpet. This realization will assist in the formulation of the proposition which will be as follows.

A carpet expresses the beauty of a room! The type of carpet one acquires shows the respect paid to his/her room. It is, for this reason, we as quality carpet ensure that disgrace in our rooms is eliminated. We manufacture high-quality carpets, long lasting, strong, beautiful and elegant for esteemed individuals. Our manufacturing experience can be traced as far as 1960 as our founders were the first developers of the famous high quality woven carpets of the 1900s. This has positions as the only number one quality producers of carpet. Buy quality carpet from quality carpets and grace your room with respect and honor!!

There is no discrimination of the media as all media. Both verbal, visual and written both electronic and none-electronic will be used to broadcast the promotion message. This will assist in covering as many audiences as possible with no limit of who and where and when.

Need for further market research in the United State

If research was done was not conclusive, then the strategies arranged will be restructured. Strategy restructuring is the segmentation and reporting of all organized plan and directing them into other avenues of product promotion and marketing. When this occurrence arises, resources allocated for market penetration will be relocated in other areas of marketing and product development. There will be other locations selected for research and testing as the research for the American market is in progress.

One of the key strategies that will be embraced in the advent of this scenario is the evolving of the marketing team to be more customer centric (Shimp, & Andrews, 2012). This will shift their attention to concentrating to consumers available in the market. This will ensure that there more sensitization to the client and feedback on the feel of the product is sought. Additionally, crirtical areas that will be addressed by the consumer will be amended to their specification.

Secondly. Allocated resources will be used to find new possible markets. There will no be relenting in finding other markets as the research is being conducted. Finally, there will need to redesign the process of marketingder to abolish lack of integration in the marketing system. This will lead to renewing and reshaping of the team players to new locations and position (Hackley, 2014).

Quality carpets should have a strong marketing team and a good management team to formulate and develop policies and strategies in marketing and promotion. This team will form the backbone of the marketing process as it through their determination that success will be achieved. Additionally, more resources should be allocated to the research team to find new possibilities in marketing. There should be a rigorous assessment of opportunities as they arise before making a decision. This will reduce chances of venturing into a business activity that is not feasible or sustainable.

References

Hackley, C. E. (2014). Advertising and promotion: An integrated marketing communications approach

Lusch, R. F., & Vargo, S. L. (2014). The service-dominant logic of marketing: Dialog, debate, and directions. Routledge.

Markman, G., & Phan, P. H. (2011). The Competitive Dynamics of Entrepreneurial Market Entry. Cheltenham: Edward Elgar Pub.

Papadopoulos, N., & Heslop, L. A. (2014). Product-country images: Impact and role in international marketing. Routledge.

Shankar, V., & Carpenter, G. S. (2012). Handbook of marketing strategy. Cheltenham, UK: Edward Elgar Pub

Shimp, T. A., & Andrews, J. C. (2012). Advertising promotion and other aspects of integrated marketing communications. Cengage Learning.

Shimp, T. A., & Andrews, J. C. (2013). Advertising, promotion, and other aspects of integrated marketing communications. Mason, Ohio: South-Western Cengage Learning

INTERNET BULLYING 7 Running head: INTERNET BULLYING Internet Bullying Name Institution Internet

Please keep the Concept map and the word doc separate, the textbook source is noted at the bottom. You Computer Science Assignment Help INTERNET BULLYING 7

Running head: INTERNET BULLYING

Internet Bullying

Name

Institution

Internet Bullying

To many, teasing in a school environment is considered a typical experience in the process of growing up. However, when this aspect threatens the well-being and safety of others, it is considered as bullying. Although bullying is not a new phenomenon, it has shifted from learning institutions to social networking platforms such as mobile phone texts, Facebook and emails (Willard, 2006). Internet bullying, also commonly referred to as cyberbullying is the use of electronic technology and communication tools to intimidate and harass others. This vice poses great challenges to schools, parents, students and society. This paper will critically explore an important aspect in curbing internet bullying; what are the legal consequences of internet bullying?

Internet bullying includes stalking, online bias, threatening, felonious assault, defamation, spreading rumor, and deliberate infliction of psychological and emotional distress. Internet bullying is mainly a problem associated with children and teens, and as Kowalski et al., (2012) explains, one out of five middle school learners have been affected on online platforms. A wide range of laws already permits criminal prosecution for any form of online harassment, including stalking and identity theft. The Missouri legislature expanded the existing regulation to criminalize any form of electronic harassment in 2008 (Kowalski et al., 2012). Although there is an absence of physical or audible abuse, internet bullying is a serious problem associated with fear, embarrassment, retaliation, suicide, low self-esteem, depression, school drop outs, reduced morale, and anxiety (Langos, 2012).

Over a decade ago, few states had comprehensive rules regarding cyber harassment. Currently, almost all countries have laid-out regulations on this issue. Additionally, a relevant federal law can be applied in some incidents, especially when an individual’s rights are violated or a student’s freedom of speech is restricted. Almost half of the U.S states have incorporated cyber harassment in their existing laws under bullying category (Willard, 2006). The countrywide trend is aimed at achieving a greater overall responsibility for bullying. Due to lack of clear consensus regarding fundamental civil and constitutional rights, learning institutions struggle to solve online harassment while at the same time evading any civil liability. Although there is a huge variation of regulations in different countries, cyberbullying legislation mandates learning facilities to have policies that address all forms of internet harassment.

Learning facilities face a dilemma when solving internet bullying. While tutors can manage bullying issues in the school setting, they are unable to mitigate some harassment such as stalking which mainly happens from home environment. Nonetheless, school authorities discipline perpetrators, and in some incidences, they provide counseling to both the victims and the bullies (Diamanduros, Downs and Jenkins, 2008). Some legislatures assist in defining school responsibilities. For example, in 2008, Florida modified the legislations to permit school authorities to punish off-campus cases that were associated with internet bullying. In California, the education directive recommends that any perpetrator is expelled for any school activity that relates to electronic demeaning of another student. The Same case applies in Arkansas and Iowa States (Hinduja and Patchin, 2012).

The few countries which officially criminalize internet harassment adopt sanctions such as jail terms and fines. Additionally, the majority of these behaviors fall under prevailing civil and criminal legislation. Hinduja and Patchin (2010) analyses in more depth the set legal measures within the school environment in Slovenia. The elementary school act states that all individual elementary schools should be responsible for all education standards and procedures. The legislation also offers tools for fighting against cyberbullying. Depending on facts, a victim can file a lawsuit against a bully, school, family or even the school district.

Donegan (2012) admit that there is a huge dilemma in lawmaking institutions on the issue of cyberbullying. The history of U.S is characterized by freedom of expressing individual opinions, and as a result, the violation of student’s 1st amendment rights raised controversies regarding schools limitation on students’ activities (Shariff, and Patchin, 2009). However, with the increased number of school ground internet harassment, lawmakers had to mold laws that dealt with such issues. The authorities appear to have structured well the issue of defining cyberbullying since the United States has been in the limelight of fighting the vice while still observing the constitutional rights (Donegan, 2012). The federal government authorizes the school to regulate any cyber harassment act that disrupts the education process. In many cases, the court has a responsibility of determining whether the law is a representative of a threat to a school activity.

Local and state authorities have taken initiatives to end cyberbullying through enforcements of single and multiple codes, policies, and laws. In some cases, bullying is addressed through a criminal code in charge of juveniles. No specific federal law addresses internet harassment. The recent rise in suicide cases among teenagers as a result of internet harassment in Canada has compelled the legal institutions to change policies and laws to protect children (Langos, 2012).

Under civil law, three approaches are applied in dealing with cyber crimes.

Defamation is an act of spreading false information with the intention of tarnishing the victim’s reputation. Also commonly known as a slander, defamation is addressed as a legal offense when it clearly causes harm to the complainant (Feinberg and Robey, 2009). In libel cases, the accused, upon being charged as an offender, pays for damages. However, the defendant is given an opportunity to defend himself or herself.

A perpetrator may induce fear and inferiority by intimidating the victim so that the latter perceives the environment as dangerous; hence he or she fails to attend school/ work. In this situation, the school administrators expel or suspend the offender for making hard for other students to attend classes. In Ontario, Canada, safe schools act has been altered to accommodate online behavior (Kiriakidis and Kavoura, 2010).

Any perpetrator is held responsible for any consequences that arise from his or her acts. In an example, it is wrong to incite a depressed student to commit suicide through the internet forum and in the case of such an incidence, the inciter is held liable.

In summary, bullying has been a common problem, but with the advancement and popularity of new technologies, in particular on the past decade, this harassment has become more rampant, facilitating bullying even beyond the classroom environment. Until recently, there were no regulations that directly addressed internet bullying. Law that has sprung has been more perceived as more civil rather criminal in nature and most in instances, being left under the execution by school heads. However, the law enforcers are now aware of the increased incidents and tragic consequences that are associated with a tarnished publicity. Prosecutors are now using existing regulations to sentence perpetrators. Additionally, recently formulated statutes in some states provide a criterion for charging bullies. Penalties for internet bullying may include school interference, civil penalties, felonies and even jail terms, primarily depending on the state and relevant regulations. Cyber bullying is currently a global problem, and hence it is crucial for schools and communities to limit student’s speech and online activities when off school grounds. However, most viable and lasting solution to prevent cyber bullying is by promoting healthy relationships with everyone as well as maintaining dignity and respect for each other.

References

Diamanduros, T., Downs, E., & Jenkins, S. J. (2008). The role of school psychologists in the assessment, prevention, and intervention of cyberbullying. Psychology in the Schools, 45(8), 693-704.

Donegan, R. (2012). Bullying and cyberbullying: History, statistics, law, prevention and analysis. The Elon Journal of Undergraduate Research in Communications, 3(1), 33-42.

Feinberg, T., & Robey, N. (2009). Cyberbullying. The Education Digest, 74(7), 26.

Hinduja, S., & Patchin, J. W. (2010). Cyberbullying fact sheet: Identification, prevention, and response. Cyberbullying Research Center. Retrieved January, 30, 2011.

Kiriakidis, S. P., & Kavoura, A. (2010). Cyberbullying: A review of the literature on harassment through the internet and other electronic means. Family & community health, 33(2), 82-93.

Kowalski, R. M., Limber, S. P., Limber, S., & Agatston, P. W. (2012). Cyberbullying: Bullying in the digital age. John Wiley & Sons.

Langos, C. (2012). Cyberbullying: The challenge to define. Cyberpsychology, Behavior, and Social Networking, 15(6), 285-289.

Patchin, J. W., & Hinduja, S. (Eds.). (2012). Cyberbullying prevention and response: Expert perspectives. Routledge.

Shariff, S., & Patchin, J. W. (2009). Confronting cyber-bullying. Cambridge University Press.

Willard, N. (2006). Cyberbullying and cyberthreats. Eugene, OR: Center for Safe and Responsible Internet Use.

FINANCIAL STATEMENTS ANALYSIS 8 Running head: FINANCIAL STATEMENTS ANALYSIS 0 Burberry &

FINANCIAL STATEMENTS ANALYSIS 8

Running head: FINANCIAL STATEMENTS ANALYSIS 0

Burberry & Rolls-Royce Financial Statements Analysis

Institution

Instructor

Course

Name

Submission Date

Introduction

The report in the term paper is about accounting analysis. Accounting analysis is also referred to as ratio or financial statements analysis. The report involves two UK companies, that is, Rolls-Royce and Burberry (Burberry, 2016). Accounting analysis is of paramount importance as it is used in the evaluation of financial stability, viability, as well as the profitability of a firm. Financial analysts conduct this analysis and give a recommendation on critical areas that need improvement or the effective parts (Magalhães, 2014). Financial analysts use financial statements such as cash flows, income statements, and balance sheets for the financial evaluation (Alin-Eliodor, 2014). One area in which this analysis is critical include evaluating and measuring bankruptcy or survival of a company through the Altman’s Z-Score. Besides, it facilitates in the extrapolation of the past performance of a firm, estimates future performance, as well as make a comparison with other firms in the market (Wahlen, 2014). Variety if ratios are used in evaluating the financial health of a firm to facilitate in decision-making (Magalhães, 2014). For example, ROA, ROI, and ROI among others are common ratios for evaluation and determination of the effectiveness of a firm in utilization its resources towards its major goal of the firm of stockholders wealth optimization. Such ratios measure the profitability of an investment and gauge the viability of the Company (Wahlen, 2014).

The report discusses two case studies about Burberry and Rolls-Royce, which entails analysis of their financial statements. The two Companies operate in different industries (Stephen, 2016). For example, Burberry engages in production and distribution of luxurious products such as clothing, jewelry, footwear among others (Burberry, 2016). On the other hand, Rolls-Royce engages in the manufacture of types of machinery such as military propulsion engines and provision of such equipment to customers such as the government (Stephen, 2016). The report entails financial results over the last year. Moreover, it implies comparison of the ratios of the two Companies to measure as in which either Company is better or worse. The report highlights the two firms’ key areas of strengths or weaknesses. Such analysis is significant to a variety of users in making decisions (Wahlen, 2014). For instance, it helps the managers in making decisions after identification of keys areas of strengths and weaknesses. Besides, the investors evaluate the Company’s position and the safeness of their invested funds. Likewise, the information is useful to the creditors to assess the ability of a firm to meet its obligations through payment of its dues (Wahlen, 2014).

Burberry

Thomas Burberry founded the Company over 150 years ago. Burberry engages in production and distribution of luxurious products such as clothing, jewelry, footwear, and other lifestyle materials for men, women, and children (Kolb, 2014). The Company’s head offices are located in Edinburgh- England. Through the Company’s operations, it engages in designing, sourcing, marketing, licensing, and distribution of apparel products and accessories (Kolb, 2014). The Burberry story serves as a portrait of a perfectly restructured firm that strives to meet effectiveness in the dynamic world such as changing tastes and preferences. The Company produces and distributes a broad range of the above-stated products hence increasing its market outreach. The Firm manages its operations as well as their strategy in the EU enlargement context (Kolb, 2014). The Company requires innovative and creative strategies for growth and survival (Alin-Eliodor, 2014). Currently, the Firm is amongst the largest exporter of clothing and other luxurious products across the globe. Thus, comparative performance is entailed in the report.

Rolls-Royce

The Company is a provider of integrated power as well as propulsion solutions. Rolls-Royce operates in two segments (Rolls Royce, 2015). The segments involve the aerospace that comprises of civil plus defense businesses, as well as the land and sea that includes the power systems, marine plus nuclear operations. The civil aerospace is involved in development, designing, manufacture, marketing, as well as sales of airplane engines (Stephen, 2016). The Company manufactures and distributes military aircraft (Rolls Royce, 2015). The marine division involves design, development, and distribution of systems for marine propulsion as well as aftermarket service operations. Additionally, the nuclear activities entail designing, manufacturing, as well as the distribution of marine engines, and sales of nuclear devices to the UK government (Stephen, 2016).

Rolls-Royce Financial Ratios Analysis

The section evaluates major financial ratios of the Company to evaluate the financial health of a firm.

Ratio

Ratio

Formula

2012

2013

2014

2015

2016

Gross Margin Ratio

Gross Profit/Sales

–

–

–

–

19.40

Operating Margin

Operating Income/Sales

–

–

–

–

-31.79

EPS (Basic)

Shareholders’ Earnings/Total Share Held

–

41.56%

-105.01%

222.50%

-4979.82%

Current Ratio

Current Assets/current Liabilities

1.11

1.11

1.11

1.10

1.35

Gross Profit Margin

The gross margin is one of the profitability ratios with paramount significance (Magalhães, 2014). The Ratio shows the percentage of revenue that the company retains after incurring the direct costs such as COS associated with the production of commodities as well as services (Alin-Eliodor, 2014). Higher ratios highlight higher retention of revenue after the direct costs and hence the better the financial performance (Wahlen, 2014). According to the historical analysis of Rolls-Royce, the Company experienced losses hence did not make any profit. However, in 2016, it appears that the Company was on a recovery path as the Gross profit margin (GPR) improved to 19.40%.

Operating Profit Margin

GPR indicated an impressive financial performance. However, the OMR stated otherwise. According to the ratio, the financial performance is poor since the ratio is negative. The ratio serves a fundamental purpose for measurement of pricing strategy as well as operational efficiencies (Wahlen, 2014). Higher ratios signify better financial performance and vice versa (Alin-Eliodor, 2014). The ratio measures the percentage of revenue left after the company meets its variable overheads hence it indicates the income that is left after deduction of operating expenses such as COS, depreciation, wages and commissions among others (Alin-Eliodor, 2014). The ratio is also referred to as return on revenue or sales. According to the computed ratio above, the Company is trending on a dangerous track thus; it means it total revenue cannot meet its overall expenses (Alin-Eliodor, 2014).

Earnings Per Share (EPS)

The ratio is expressed as the income attributable to ordinary investors and the gross number of ordinary stocks held by the company in a given financial period (Wahlen, 2014). According to the computed figures, Rolls-Royce is not in a position of paying its shareholders since the Company was operating on losses during the 5-year period. Therefore, such issues reveal management ineffectively towards meeting optimization of the Company’s resources to optimize the stockholders’ wealth (Alin-Eliodor, 2014).

Current Ratio

The ratio is expressed as the rate between the current assets and current liabilities. The ratio measures the ability of an enterprise to meet its current obligations (Wahlen, 2014). Thus, it measures the firm’s liquidity position. The recommended ratio is usually 2.0. According to the computed figures of Rolls-Royce, the Company maintained its liquidity position in meeting its current obligations in the fours yeas begging from 2012. However, it liquidity slightly improved in 2016 as revealed by the ratio.

http://www.marketwatch.com/investing/stock/rycey/financials/balance-sheet

Burberry Accounting Ratios Analysis and Comparative Analysis with Rolls-Royce

Ratio

Formula

2012

2013

2014

2015

2016

Gross Margin Ratio

Gross Profit/Sales

–

–

–

–

64.31%

Operating Margin

Operating Income/Sales

–

–

–

–

16.53%

EPS (Basic)

Shareholders’ Earnings/Total Share Held

0.60

0.58

0.74

0.76

0.70

Current Ratio

Current Assets/current Liabilities

1.71

1.72

1.92

2.29

2.76

http://www.marketwatch.com/investing/stock/rycey/financials/balance-sheet

Gross Profit Margin

According to the computed ratio, the Company performance in 2016 was impressive. In fact, its GPR was 64.31 meaning that the income generated from sales was above half of the sales costs. The Company is in a position to meet its direct costs and be left with a significant proportion to meet other overheads as well as net income attributable to investors (Wahlen, 2014). The Burberry’s GPR in 2016 was above thrice that of Rolls-Royce hence revealing Rolls-Royce performance was below the market average.

Operating Profit Ratio

Burberry still had an impressive performance. The Company’s ratio in 2016 was 16.53% meaning that it was in a position to meet all its operating expenses and be left with a significant proportion to be shared by stockholders. Higher ratios reveal better or improvement in performance and vice versa. On the other hand, Rolls-Royce was unprofitable in 2016 since it operating under losses. The ratio shows that it is not in a position for paying its debts (Alin-Eliodor, 2014). Thus, its liquidity position needs significant improvement.

Earnings Per Share

The Company earnings per share declined in 2013 from o.60 in 2012 to 0.58 in 2013. However, this significantly improved to 0.74 in 2014 hence revealing the attractiveness of business operations. Moreover, an improvement was recorded in 2015 although it slightly declines to 0.70 from 0.76 in 2016. Rolls-Royce performance was not impressive at all in the five years. Apparently, it recorded a negative EPS for both financial periods meaning that it was not in a position to make dividends to shareholders (Alin-Eliodor, 2014).

Current Ratio

Current ratio evaluates the effectiveness of a firm in meeting its current obligations such as paying creditors (Wahlen, 2014). Burberry liquidity improved tremendously in the five-year period. However, its current ratio was slightly below the recommended ratio of 2.0 in the four years starting from 2012. However, in 2012, the current ratio was 2.76 meaning that its liquidity position was significantly above the recommended ratio. Thus, the Company was in a position to pay its current debts in 2016. On the other hand, Rolls-Royce liquidity was not impressive at all in the five-year period.

Conclusion on Ratio Analysis on the Burberry and Rolls-Royce

The ratio analysis in the above discussion reveals a healthy corporate performance of Burberry. Conversely, Rolls-Royce had negative or poor performance in the five-year period. Apparently, the analysis shows the healthiness of Burberry operations. Such instances reveal management ineffectively and other inadequacies that exist within the Company to meet the goal of stockholders wealth optimization (Wahlen, 2014). Apparently, Rolls-Royce needs evaluation and revision of their business models and corporate strategy since its survival in is threatened. The Companies may consider using PESTLE and SWOT tools for evaluation of the internal and external environments after which they identify the critical factors that influence success. The Company may use their strengths for tapping opportunities, reduction of weaknesses as well as mitigation of risks (Wahlen, 2014).

References

Rolls-Royce Holdings PLC ADR. (2017). Marketwatch.com. Retrieved 10 March 2017, from http://www.marketwatch.com/investing/stock/rycey/financials/balance-sheet

Burberry Group PLC ADR. (2017). Marketwatch.com. Retrieved 10 March 2017, from http://www.marketwatch.com/investing/stock/burby/financials/balance-sheet

Kolb, A. (2014). Burberry, The Most Digitally Advanced Company in the World

Burberry, M. S., & Cok, R. S. (2016). U.S. Patent No. 9,510,591. Washington, DC: U.S. Patent and Trademark Office.

Stephen, J., & Chong, E. F. (2016). U.S. Patent No. 9,397,543. Washington, DC: U.S. Patent and Trademark Office

Rolls Royce. (2015). The jet engine. John Wiley & Sons.

Wahlen, J., Baginski, S., & Bradshaw, M. (2014). Financial reporting, financial statement analysis and valuation. Nelson Education.

Alin-Eliodor, T. (2014). Financial Statements Analysis.

Magalhães, M. M. C. (2014). Value investing and financial statement analysis (Doctoral dissertation

Economics Essay Name: Course: Instructor: Date: Introduction The purpose of this research

Economics Essay

Name:

Course:

Instructor:

Date:

Introduction

The purpose of this research paper is to address the needs of the research paper which require the student to identify the strategy used by the government to address the issue of unemployment. In answering the research question the researcher shall identify an economic policy used in reducing employment and how they are used by the government. The strategy to be used in this research paper is fiscal policy. The government being referred to in this case is the Australian Government and the various policies implemented with the aim of minimising unemployment. This research paper is has been divided into three parts namely the introduction, main body and conclusion. However the main points in the research paper will be discussed in the main body.

The effectiveness of Fiscal Policy in reducing unemployment

The use of fiscal policy in minimising unemployment entails the stimulation of aggregate demand in an economy through the reduction of taxes and increment in expenditure. Fiscal policy often affects aggregate demand, savings and investment and income distribution within an economy. The difference between fiscal policy and monetary policy is that while fiscal policy deals with taxation and government spending and is often controlled by the executive, monetary policy deals with the supply of money, lending and interest rates within an economy and is controlled by the central bank (Easterly 7 Robelo, 1993).

The use of fiscal policy in decreasing unemployment functions through an expansionary fiscal policy. An expansionary fiscal policy entails a reduction of taxes and an increase in government spending. A reduction in taxation increases the disposable income amongst the citizens of a country which translates to increased levels of consumption and subsequent higher levels of aggregate demand. An increase in the aggregate demand will lead to a subsequent increase in the real Gross domestic product since businesses will produce more in a bid to meet this demand resulting in increased levels of the GDP. An increase in demand means that businesses will also require additional inputs to increase their production. Additional inputs will be in the form of land, labour capital and entrepreneurship. An increase in the labour requirement due to higher aggregate demands in the economy will result in increased levels of employment within an economy since more workers will be required to meet higher levels of production capacities dictated by the demand. Through the application of fiscal policy, unemployment will be reduced through a reduction in demand-deficient type of unemployment. An effective fiscal policy often results in higher levels of aggregate demand which when coupled by strong economic growth results in an efficient economy hence fewer firms will go bankrupt and result in closure which means that there will be fewer job losses from the economy (Hansen, 2013). The expansionary fiscal policy was advocated for by Keynes who argues that in the event of prolonged recession, resources which include labour and capital are often left idle which translates to unemployment and lower rates of economic growth. However, the government can improve economic growth and minimise unemployment through the introduction of expansionary fiscal policy. Expansionary fiscal policy would improve economic growth by stimulating the utilisation of both labour and capital through increased aggregate demand which translates to reduced employment rates and increased real gross domestic product (GDP) (Chari & Kehoe, 1999).

The Effectiveness of Fiscal Policy in Australia

Australia as a country has an unemployment rate of 5.7% of the total population which translates to approximately 55, 000 unemployed people. Australia has severally utilised neutral policy in reducing unemployment and inducing economic growth. The use of neutral fiscal policy is attributed to the fact that the Australian economy is often in equilibrium hence government expenditure is fully funded by revenue derived from taxation thus the overall budget outcome has a neutral effect on the economic activity (Anderson, 2017). Although most countries advocate for the use of an expansionary fiscal policy, this is not applicable to Australia due to an equilibrium budget and an economy that is near capacity. In such like an economy, an increase in aggregate demand will result in inflation. This is because an increase in aggregate demand will result in higher prices for commodities in the market due to the forces of demand and supply which results in inflation in the economy. However, the application of neutral fiscal policy would result in reduced employment rates and no inflation. In addition, the use of neutral fiscal policy doesn’t result in overcrowding as would be expected in expansionary fiscal policy due to borrowing from the private sector while spending hence having less to spend. This is because neutral fiscal policy doesn’t rely on borrowing but the government’s budgetary estimates (Chari & Kehoe, 1999).

In comparison to other methods of stimulating employment rates in the economy such as monetary policy, it is clear the application of monetary policy for instance would result in inflation since the people’s propensity to spend would increase due to availability of cash and increased demand for commodities in the market. The integration of demand and supply forces in the market would increase the price of commodities in the market resulting in the depreciation of the value of the Australian dollar. The application of monetary policies will be aimed at enhancing demand to stimulate businesses into producing more. However, the demand may fail to be stimulated if the price of commodities increases resulting in the reduction of demand deficient employment but failing to reduce supply deficient unemployment (Merten & Ravn, 2014). Supply deficient unemployment would be attributed to the fact that businesses wouldn’t be able to increase productivity due to a subsequent increase in the price of production factors such as raw materials, labour and capital among others. The high cost of production increases the price of commodities since businesses will have to incur higher costs of production to remain in business hence the aggregate demand wouldn’t be increased (Arrow & Kruz, 2013).

Conclusion

From the above research findings, it is evident that the application of fiscal policy is more effective in minimising the rate of unemployment in Australia in comparison to the use of the monetary policy. However, the effective type of fiscal policy to be applied should be neutral.

References

Anderson, K. (2017). Sectoral Trends and Shocks in Australia’s Economic Growth. Australian Economic History Review, 57(1), 2-21.

Arrow, K. J., & Kruz, M. (2013). Public investment, the rate of return, and optimal fiscal policy (Vol. 1). Routledge.

Chari, V. V., & Kehoe, P. J. (1999). Optimal fiscal and monetary policy. Handbook of macroeconomics, 1, 1671-1745.

Easterly, W., & Rebelo, S. (1993). Fiscal policy and economic growth. Journal of monetary economics, 32(3), 417-458.

Hansen, A. H. (2013). Fiscal policy & business cycles. Routledge.

Mertens, K. R., & Ravn, M. O. (2014). Fiscal policy in an expectations-driven liquidity trap. The Review of Economic Studies, rdu016.