Corporations are making extremely high profits. So, why is it that corporations are laying-off and firing people by the hundreds? The reason is corporate downsizing. The main objective of a corporation is to be profitable and survive in the ever changing times and economy. Corporate downsizing plays a big role in the profitability and survival techniques of a company.
But the disadvantage of this is that it might confuse our customers, because the products we purchase from other companies have their own logos. It might become an opportunity for our competitors to get free advertisement on their products through our market chain. We can also begin placing big orders to our supplier to prevent future shortage. However, downside of this is the risk for overstock inventory. The price of copper fitting is very hard for us to foresee, if the price of fitting drops due to other companies¡¦ new wave of promotions or other macroeconomic influences, then it will slow our sales down as well as our cash flow.
In addition, at the time, the economy was doing great, therefore, using the push system to stock pile inventory was acceptable. However, during the dot-com bust of the 2000’s, its sales and the demand for its products greatly decreased. Unfortunately, during this time, Cisco discovered that it possessed an abundance of inventory, and, wrote off more than $1 billion in inventory. Consequently, the company learned that acquiring inventory in anticipation of market demand, and not factoring in the human element of its business increased its risks of failure. Obviously, Cisco wanted to meet its customer’s demands, however, the problem was that it held more inventory than what the customers were demanding.
Strong competition is the biggest reason for tiny profit margins in this industry. Both companies use strategy that they think is the right for the given moment. We will analyze strategic moves that both companies made recently or are still making. Overview of HP’s strategy For a few years HP tried to make strategic changes that will reposition the company on the market and give driving force to keep distance between them and competitors. Until 2011 when Meg Whitman took CEO role, HP struggled with problems such as too many employees, spiraling debt, poorly executed and expensive acquisitions and declines in every one of its lines of business.
However, the constant innovation on the products of the company is cutting their ability to gain more profit out of the new products as it would bring the product from the “Star” level to a cash cow immediately. Therefore a company needs to low down presenting their innovat... ... middle of paper ... ...ny industries, oral care technology has advanced tremendously since its inception. The introduction of the nylon bristled toothbrush in 1938 represents one of the latest quantum improvements for the industry, however it was not the last. The introduction of electronic toothbrushes and water picks are threatening to traditional oral care product’s market share. One of the factors causing buyers’ bargaining power to grow is when the switching costs for buyers are low.
People in general are loyal to these types of businesses. GC has lots to accomplish and success is insight if business tools are used to gain insights on which strategies will benefit their ease into foreign markets while increasing market share in the US. The problems facing GC have many different solutions, the goal is to find the best practices and implement them successfully. Situation Analysis Issue and Opportunity Identification In the last few years Global Communications (GC) has been losing market share and revenue as evidenced by its falling stock price.
Future Outlook For the past many years, the American automotive companies rode the economic booms and success that was built by them long ago. They also knew that the American governments employ the “Too Big to Fail” philosophy, believing companies that are too large and too interconnected to the economy are too valuable to be allowed to fail. It was this lack of incentives that lead to their demise. Apart from ford, the other two big players in the American Automotive industry failed to become competitive and they paid a heavy price. Now that they had their wake up call, consumers can only expect better things in store.
Upholding the profits that they had earned before, businesses had to switch how they ran their business. They had to expand their output which only drove down prices more than they previously were. Parenti then concludes by saying “there was too much capital looking for profitable investment outlets, and not enough profitable investment opportunities”
The consumers don’t pay close enough attention to where the products are made. Therefore, consumers are spending extra money and are causing outsourcing to thrive. The lack of knowledge Americans have on the subject of consumers affecting outsourcing is leading our country to economic stress but if we begin to recognize the issue, the jobs we could potentially save may be our own. First, we will look at an example of how consumers inadvertently continue to assist companies with outsourcing. The problem consumers do not realize is that by paying for some name brand products, we are allowing outsourcing to take place.
The suppliers bargaining power is generally strong because of the big monopolies and the high importance of purchasing components and operating system, therefore it decreases the profitability of the market players. Threat of substitute goods Substitute goods are different on for different market segments see (4.1) For most of the customers these substitute products cannot satisfy the needs covered by PC computers. The lack of suitable substitutes raises the industry profitability. Complimentary products product market is rapidly growing and therefore it raises the industry profitability. Rivalry among established firms is fierce.