Global Operations and Policies Research Paper Example | Topics and Well Written Essays - 1500 words

Global Operations and Policies - Research Paper Example Table of Contents Introduction 4 Sony: A brief overview 5 Global Operations of Sony 6 Political activity 7 Strategies of Sony 8 References 10 Introduction With the sluggish growth of economy, international expansion of business and investment in foreign soil has become the most essential strategy for the survival and growth of a company. There are many companies that have witnessed faster growth in the international market. However for most of the companies international presence acts as the value accelerator for the company. The brand name and brand value of a company gets hugely augmented. Some of the other benefits of international presence are overall rapid growth, diversification of the income stream, higher return on investment and also the reinvestment rate gets increased. The companies with international presence can be segmented into 4 groups. They are International companies, Multinational companies, Global companies, transnational companies. However in the context of the p roject only the company which belongs to transnational segment will be chosen. Among the mentioned category Sony has been chosen as the organization. Sony has all the characteristics of a transnational corporation and also has a global presence. Now in order to begin the project a brief introduction of Sony is presented below. Sony: A brief overview The origin of Sony dates back to 1946 when Masaru Ibuka started the first electronics outlet in a damaged departmental store in Tokyo. Sony Corporation or what is commonly known as Sony is a Japanese electronics company which was renamed in the year 1958 (Yahoo Finance, n.d.). The company is presently headquartered at Konan Minato, Tokyo, Japan. The company was founded by Masaru Ibuka Akio Morita in the year 1946. Sony Corporation is indulged in the electronics segment and also the parent company of the Sony group. The group has four main operating groups namely Sony music, Sony pictures, Sony electronics, online business and other finan cial services (Bloomberg, n.d.). However each of the individual group focuses on different products and services. For example the electronic segment mainly focuses on the products which are related to audio-video outputs, and also products related to information technology. However the most important products of the company include video games (play station), semiconductors, consumer electronics (sound box, television, and music system), computer hardware (DVD writer), telecom equipment and media and entertainment (Company Database, n.d.). Apart from this some of the visible brands of the company are Sony VAIO, Sony Cyber shot, Sony BRAVIA, Sony Play Station and various other brands. From the time of its incorporation the company has successfully achieved new heights in the business market. The company is presently ranked at 73rd position in the global fortune 500 edition of 2011. Currently the company has an overall turnover of $ 6.39 trillion. The global slogan of the company is à ¢â‚¬ËœLike no other’. And ‘Make Believe’. The company mainly faces competition from the established players of the market. Hence the major competitors of the company are LG, Samsung, Sharp, Philips, Mutsushita and some other local established player. However the competitors can also be classified according to the business category. The next half of the project will highlight on the global operation of the

The role of slavery the global economy today Essay

The role of slavery the global economy today - Essay Example ng labor at really low cost or free of service in some cases and incur little expenses simply in the form of food which is not even provided daily and in most cases provided to them only once in a day despite the excess work they are being forced to carry out. Slavery in the Middle East countries for example is in the form of domestic work at home. These individuals who are rich because of oil money mistreat these domestic workers by making them work unfairly long hours from early morning even before day break to late at night. They have extensive homes with very few workers to provide care for cleaning, washing, doing dishes, ironing, cooking and feeding their pets in addition to taking care of their children. Very many people live in one house and they are also very fond of entertaining guests. All this work which should in the real sense be provided by over six workers with the aid of machines is left for one individual and they are not given food. The usage of expense money for the masters is therefore reduced as they do not have to purchase the machines to make work easier or pay excessive electricity bills or provide monetary payment for the domestic worker (Pattisson, 2015). Forced labor is an eminent issue in some of the European nations such as France, Netherlands, Germany, Italy, Poland and Spain among others and the government has contributed greatly to it and is doing nothing to stop it. The tough immigration and labor laws have made many immigrants lack better employment opportunities making them become slaves through being forced into labor. They are exploited with little pay while the owners of the industries and factories where they work in (as that are where majority work), enjoys the increased productivity with minimal expenses of wages and salaries being incurred (Kelly, 2013). Many work also for long hours without any extra pay once their official shifts end which is illegal but the law does not take that into consideration. The fact that the

UCCs Effect On International Commerce Essay Example | Topics and Well Written Essays - 750 words

UCCs Effect On International Commerce - Essay Example The third article provides for the transactions in commercial papers such as negotiable instruments and promissory notes (Hinkelman & Shippey, 2004). The other provisions are also important in trade since they provide guidelines on issues such as bulk transfers, secured transactions and dealings in investment securities such as stocks and bonds. The UCC applies to national trade, but would have positive effects if applied to international commerce. The UCC is designed for quick references on laws regarding formation of business contracts, expert analysis of the impact of various commercial transactions and easy handling of court decisions regarding disputes emanating from trade (Hinkelman & Shippey, 2004). The first effect of UCC on international commerce is facilitation of international transactions in the sale of goods. UCC will ensure that cross-border merchants have faith in sale of goods contracts due to the uniformity in the regulatory laws. The increase in foreign direct inves tments and growth in technology has led to emergency of new type of business transactions that require a uniform form of contractual agreements and legal protection (Hinkelman & Shippey, 2004). For instance, technology has allowed companies to sell digital products across national borders and multinational companies to list their stocks in different national stock exchange markets. In this case, uniform commercial code would be helpful in fostering international commerce (Hinkelman & Shippey, 2004). Uniform commercial code in the international commerce would be useful in curbing instances of international economic crimes such as money laundering and dumping. The UCC would be capable of offering legal guidelines that address issues relating to diversion of cargo in the high seas, counterfeiting and fraudulent insurance claims that are common in maritime trade. UCC will be useful in global tendering processes (Hinkelman & Shippey, 2004). The provisions will be important in ensuring un iformity of global tenders such as government tenders. This will ensure that contracting parties receive high quality services due to good faith requirements and transparency of the process (Hinkelman & Shippey, 2004). UCC will ease the international transfer of funds through creating uniform requirements in bank collections, settlements of financial securities and fund transfers among the international trade participants. UCC will create legal performance obligation to transactions involving a secured party. The code of business will guide the transfers of dematerialized securities. In this case, the final investors in the investment securities will have adequate security entitlement and right to receive any dividends accruing from their ownership of the security. Article 8 decomposes the security rights thus creditors are protected from the possibility of the investor of transferring such stake without informing the creditor who has some interest in the concerned security (Hinkelm an & Shippey, 2004). The impact of securing the transactions is to provide a relief to the lender through a security interest in the collateral and an assurance in the default by the borrowing party. In most states, the secured transactions use personal property, fixtures and intangible property as the collateral in the case of default. This code will facilitate bankruptcy settlements thus facilitating international trade transactions (Hinkelman & Shippey, 2004). Articles 5 of the UCC provide guidelines on the issuance of letters of credit by financial institutions. The letters of credit

Finance Essay Example | Topics and Well Written Essays - 2250 words - 4

Finance - Essay Example ralian dollar, as well as the interest rates as apparent in the situation of the housing market, and the unemployment situation in the mining industry. Lastly, this paper looks at the current efforts to regulate the financial markets. The sources of data include article from online versions of major newspapers such as the Australian, as well as articles from global financial institutions such as the World Bank and Overseas Development Institute. Other legitimate sources such as the website of the Australian government have been utilized. The bulk of the sources include academic journals such as Financial Management, McKinsey Quarterly, Cambridge Journal of Economics, etc., that tackle the issue of global financial crisis, from databases such as Business Source Premier, Oxford Journals and ABI Inform. The invisible hand view of the economy, as explored in the book â€Å"Economics† by Samuelson and Nordhaus, will fail to exist under two conditions: when there is imperfect competition and imperfect information, and when there are market externalities. The failure in major financial markets exists because of either of these conditions. Prior to the financial crisis, the financial markets such as stocks, bonds and mutual funds markets are considered markets where the invisible hand operates. The stock market has always been referred to as an efficient market by economists. According to Brealey, Myers and Marcus, â€Å"the competition [in this market] to find misvalued stocks is intense. So when new information comes out, investors rush to take advantage of it and thereby eliminate any profit opportunities (2004, 165).† An efficient market, according to Samuelson and Nordhaus in their book â€Å"Economics† is defined as â€Å"one where all new information is quickly understood by market participants and becomes immediately incorporated into the market prices (2004, 534).† This characteristic of the stock market as an efficient market is attributed to the availability of

Planning Lessons and Assessment in Schools Essay

Planning Lessons and Assessment in Schools - Essay Example The teacher then introduced the lesson of the day by mentioning that it would be a buildup of the previous lesson. The lesson of that day involved learning how to balance basic chemistry equations. The teacher began by introducing basic, acidic, and neutral compound. He then gave basic examples of a base, acid, and a neutral compound. Interestingly, he had an example of each of the compounds in class. A lemon represented an acidic compound, ash represented basic compound whereas water represented a neutral compound. Students were asked to name other similar compounds and at least a quarter of the class responded with accurate results. The teacher then went ahead to demonstrate on the blackboard how to balance the equations. Once he gave five simple examples, he asked the students to volunteer to go to the board and balance an equation. Each student who was able to balance the equations was given an orange. It was interesting to note the profound interest in which the students were re sponding to learning. The interest was actually boosted by the gifts for the students who got the equations correct. Near the end of the lesson, the teacher divided the class into four groups of five students each. He then requested the students to discuss what they had learned in class concerning balancing of equations as well as further examples of each compound. Each group was required to come up with three examples of each compound as well as three examples of balanced equations. The teacher collected the results and told them that the results would be discussed in the next lesson. Lesson planning is one of the fundamental aspect of any teacher. This is because the structure of the lesson determines the effectiveness of the learning process. When making such a plan, it is imperative for the teacher to understand the lesson objectives and most importantly, the strengths and weaknesses of the students. This way, it will be possible to articulate the lesson to benefit the students maximally. It is also important to understand each student so that the needs of every student can be incorporated in the lesson plan (Satterly, 1989). However, it is particularly necessary to classify the student depending on their learning abilities. This is because the bright students are more often than not sidelined in the learning process at the expense of the slow learners. For example, I realized that the teacher was concentrating more on the slow learners in the hope that they will catch up with the rest of the class. Assessment in Schools   A lesson is not complete with the full assessment of the realization of the objectives of the lesson. During the lesson, I noted that the teacher used various teaching and assessments methods. Most importantly, she ensured that the assessment activities are explicitly related to the stated learning objectives. Once the students had completed the given assessment activity, she took some time to reflect upon the results. When the learnin g objectives were not adequately achieved, the teacher revisited the lesson in a different manner. This allowed those students who had not comprehended adequately to gain more understanding of the topic discussed. In order to achieve this, the teacher used various assessment methods. One of them was quizzes. The teacher ordered the pupils to close their books and asked them some questions on what she had taught that day. Most pupils who had

Infectious Disease and Health Protection Agency Essay Example for Free

Infectious Disease and Health Protection Agency Essay The guidance is divided into sections as follows: Section 1Introduces infection control and explains notification; Section 2deals with general infection control procedures; Section 3gives guidance on the management of outbreaks; Section 4describes specific infectious diseases; Section 5contact numbers and sources of information; Section 6contains additional detailed information and a table of diseases; Section 7contains risk assessments relevant to infection control; Section 8 research sources, references and useful web sites Further information is available from the Food Safety Adviser at Leicestershire County Council and from the Health Protection Agency – East Midlands South. Contact numbers are listed in Section 5. The aim of this document is to provide simple advice on the actions needed in the majority of situations likely to be encountered in social care settings. It is written in everyday language and presented so that individual subject areas can be easily copied for use as a single sheet. 1. 1 HOW ARE INFECTIONS TRANSMITTED? 1. 2 INFECTION CONTROL GUIDANCE Infection control forms part of our everyday lives, usually in the form of common sense and basic hygiene procedures. Where large numbers of people come in contact with each other, the risk of spreading infection increases. This is particularly so where people are in close contact and share eating and living accommodation. It is important to have guidelines to protect service users, staff and visitors. Adopting these guidelines and standard infection control practices will minimise the spread of infectious diseases to everyone. External Factors If you or someone in your immediate family has a â€Å"Notifiable Disease† such as Measles (see 1. 3) or infection such as Impetigo, diarrhoea, vomiting or Scabies, please inform your line manager before coming to work. If you regularly visit people in hospital please be aware of the potential risk of cross infection to yourself and the person you are visiting. Above all when dealing with service users and their families we must all remember we are dealing with people. There will be personal issues of privacy and sensitivity, which we must handle with tact and discretion at all times. What are Infection Control Practices? Infection control practices are ways that everyone (staff, service users volunteers) can prevent the transmission of infection from one person to another. They are practices which should be routinely adopted, at all times with every individual, on every occasion, regardless of whether or not that person is known to have an infection. 1. 2 INFECTION CONTROL GUIDANCE – cont. include: 1. 3 NOTIFICATION OF INFECTIOUS DISEASES A number of infectious diseases are statutorily notifiable under The Public Health (Control of Disease) Act 1984 and The Public Health (Infectious Diseases) Regulations 1988. There are three main reasons for such notification. So that control measures can be taken To monitor preventative programmes For surveillance of infectious diseases in order to monitor levels of infectious diseases and to detect outbreaks so that effective control measures can be taken. All doctors diagnosing or suspecting a case of any of the infectious diseases listed overleaf have a legal duty to report it to the Proper Officer of the Local Authority, who is usually the Consultant in Communicable Disease Control based at the Health Protection Agency. Notification should be made at the time of clinical diagnosis and should not be delayed until laboratory confirmation is received. Infections marked (T) should be notified by telephone to the Consultant in Communicable Disease Control (see Section 5) and confirmed by completion of a written notification form. 1. 3 NOTIFICATION OF INFECTIOUS DISEASES – cont. Notifiable Diseases Acute encephalitis Paratyphoid(T) Acute poliomyelitisPlague(T) AnthraxRabies(T) Cholera(T)Relapsing Fever(T) Diphtheria(T)Rubella Dysentry(T)Scarlet Fever Food poisoning orSmall Pox suspected food poisoning LeprosyTetanus LeptospirosisTuberculosis MalariaTyphoid fever(T) MeaslesTyphus fever(T) Meningitis * (T)Viral haemorrhagic fever(T) Meningococcal septicaemia(T)Viral hepatitis ** (without meningitis) MumpsWhooping cough Opthalmia neonatorumYellow fever * meningococcal, pneumococcal, haemophilus influenzae, viral, other specified, unspecified ** Hepatitis A, Hepatitis B Hepatitis C, other (T)Please notify the Consultant in Communicable Disease Control or person on call for the Health Protection Agency by telephone. Other specific diseases are designated by the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995 as â€Å"Reportable Occupational Diseases† e. g. Legionellosis. Please contact the Health Safety Team for further information (see section 5 for details). 1. 3 NOTIFICATION OF INFECTIOUS DISEASES – cont. Notification of suspected outbreaks An outbreak is defined as two or more cases of a condition related in time and location with suspicion of transmission. Prompt investigation of an outbreak and introduction of control measures depends upon early communication. Suspicion of any association between cases should prompt contact with the Health Protection Agency. 1. 4 IMMUNISATION COSHH requires that if a risk assessment shows there to be a risk of exposure to biological agents for which vaccines exist, then these should be offered if the employee is not already immune. In practice, with Social Care Services, this generally amounts to care staff within the Mental Health and Learning Disabilities Services being offered Hepatitis B vaccination. Care home managers, after assessing risks, may also offer ‘flu vaccination to staff and individual cases may indicate the need for immunisation in certain circumstances. The pros and cons of immunisation/non-immunisation should be explained when making the offer of immunisation. The Health Safety at Work Act 1974 requires that employees are not charged for protective measures such as immunisation. A few GPs will make vaccinations available free to Social Care workers but they are not obliged to do so and can charge at their discretion. Departmental funding for the provision of vaccine, through Occupational Health, is restricted and so it is vital that only those to whom it is essential to provide immunisation are offered this service. The majority of staff will have received immunisation from childhood and have received the appropriate booster doses e. g. Tetanus, Rubella, Measles and Polio. However, it is important for the immunisation state of staff to be checked e. g. women of childbearing age should be protected against Rubella. Good practice and common sense should indicate that the immunisation state of staff is checked and appropriate action taken. If there is a potential risk of infection, change of work rotas or areas of responsibility can sometimes avoid the risk of contamination. Vaccination is not always the only course of action and in some cases staff may not agree to be vaccinated. 1. 4. 1 IMMUNISATION SCHEDULE Vaccine Age Notes D/T/P and Hib Polio 1st dose at 2 months 2nd dose at 3 months 3rd dose at 4 months Primary Course Measles / Mumps / Rubella (MMR) 12 – 15 months Can be given at any age over 12 months Booster DT and Polio, MMR second dose 3 – 5 years Three years after completion of primary course BCG 10 – 14 years or infancy Only offered to certain high risk groups after an initial risk assessment Booster Tetanus, Diphtheria and Polio 13 – 18 years Children should therefore have received the following vaccines: By 6 months:3 doses of DTP, Hib and Polio By 15 months:Measles / Mumps / Rubella By school entry:4th DT and Polio; second dose of Measles / Mumps / Rubella Between 10 14 years:BCG (certain high risk groups only) Before leaving school:5th Polio and Tetanus Diphtheria (Td) Adults should receive the following vaccines: Women sero-negative Rubella For Rubella: Previously un-immunisedPolio, Tetanus, Diphtheria Individuals: Individuals in high Hepatitis B, Hepatitis A, Influenza risk groups:Pneumonococcal vaccine 1. 5 EXCLUSION FROM WORK The following table gives advice on the minimum period of exclusions from work for staff members suffering from infectious disease (cases) or in contact with a case of infection in their own homes (home contacts). Advice on work exclusions can be sought from CCDC (Consultant in Communicable Disease Control) / HPN (Health Protection Nurse) / CICN (Community Infection Control Nurse) / EHO (Environmental Health Officer) or GP (General Practitioner) Minimum exclusion period Disease Period of Infectivity Case Home contact Chickenpox Infectious for 1-2 days before the onset of symptoms and 6 days after rash appears or until lesions are crusted (if longer) 6 days from onset of rash None. Non-immune pregnant women should seek medical advice Conjunctivitis Until 48 hours after treatment Until discharge stops None Erythema infectiosum (slapped cheek syndrome) 4 days before and until 4 days after the onset of the rash Until clinically well None. Pregnant women should seek medical advice Gastroenteritis (including salmonellosis and shigellosis) As long as organism is present in stools, but mainly while diarrhoea lasts Until clinically well and 48 hours without diarrhoea or vomiting. CCDC or EHO may advise a longer period of exclusion CCDC or EHO will advise on local policy Glandular fever When symptomatic Until clinically well None Giardia lamblia While diarrhoea is present Until 48 hours after first normal stool None Hand, foot and mouth disease As long as active ulcers are present 1 week or until open lesions are healed None Hepatitis A The incubation period is 15-50 days, average 28-30 days. Maximum infectivity occurs during the latter half of the incubation period and continues until 7 days after jaundice appears 1 week after onset of jaundice None – immunisation may be advised (through GP) HIV/AIDS For life None None 1. 5 EXCLUSION FROM WORK – cont. Minimum exclusion period Disease Period of infectivity Case Home contact Measles Up to 4 days before and until 4 days after the rash appears 4 days from the onset of the rash None Meningitis Varies with organism Until clinical recovery None Mumps Greatest infectivity from 2 days before the onset of symptoms to 4 days after symptoms appear 4 days from the onset of the rash None Rubella (German measles) 1 week before and until 5 days after the onset of the rash 4 days from the onset of the rash None Streptococcal sore throat and Scarlet fever As long as the organism is present in the throat, usually up to 48 hours after antibiotic is started Until clinically improved (usually 48 hours after antibiotic is started) None Shingles Until after the last of the lesions are dry Until all lesions are dry – minimum 6 days from the onset of the rash None Tuberculosis Depends on part infected. Patients with open TB usually become non-infectious after 2 weeks of treatment In the case of open TB, until cleared by TB clinic. No exclusion necessary in other situations Will require medical follow-up Threadworm As long as eggs present on perianal skin None but requires treatment Treatment is necessary Typhoid fever As long as case harbours the organism Seek advice from CCDC Seek advice from CCDC Whooping cough 1 week before and until 3 weeks after onset of cough (or 5 days after the start of antibiotic treatment) Until clinically well, but check with CCDC None 1. 5 EXCLUSION FROM WORK – cont. SKIN CONDITIONS Minimum exclusion period Disease Period of infectivity Case Home contact Impetigo As long as purulent lesions are present Until skin has healed or 48 hours after treatment started None. Avoid sharing towels Head lice As long as lice or live eggs are present Exclude until treated Exclude until treated Ringworm 1. Tinea capitis (head) 2. Tinea corporis (body) 3. Tinea pedis (athlete’s foot) As long as active lesions are present As long as active lesions are present As long as active lesions are present Exclusion not always necessary until an epidemic is suspected None None None None None Scabies Until mites and eggs have been destroyed Until day after treatment is given None (GP should treat family) Verrucae (plantar warts) As long as wart is present None (warts should be covered with waterproof dressing for swimming and barefoot activities) None

Marks and Spencer Business and Financial Performance Analysis

Marks and Spencer Business and Financial Performance Analysis Marks and Spencer is a British retail giant specialised in apparel and food industry. The company had been in its business for more than hundred years and has the biggest market capitalisation in the retail industry. This research is conducted to measure and analyse the business and financial performance of the company. Business performance is measured in this study considering the opportunities and constraints in company macroeconomic and industry circumstances. Financial performance had been measured using ratios on profitability, liquidity, efficiency and leverage. There performance of MS is then compared with the financial performance of Next Group, the next biggest player in British retail industry. The study found that, although MS has many business successes over the years, it had been performing financially poorer than Next Group and needs emergency improvement in its liquidity. The study recommends Marks and Spencer to rethink its leverage strategy and exploit the benefit of debt as like Next Group. Chapter 1 Introduction 1.1 Study Background Marks and Spencer is one of the largest retailers in UK specialised in clothes and foods with a market capitalization of more than  £6400 million1. We have over 700 stores located throughout the UK and Republic of Ireland; this includes our largest store at Marble Arch, London. In addition, the company has over 300 stores worldwide, operating in more than 40 territories2. In 2010 the companys sales revenue from general merchandise was  £4.1 billion and  £4.3 billion from foods. Its nearest competitor Next, which has a market capitalisation of around  £4100 million1, had a turnover of  £3.41 million in 2010 with a market share of 8.3% in comparison to 11% by Marks and Spencer in general merchandise segment. This study is particularly concerned with the business and financial performances of Marks and Spencer which are compared with the performances of Next. 1.2 Study Objectives The prime objective of this research is to analyse and evaluate the key business and financial performances of British retail giant Marks Spencer from year 2007 to 2010. While achieving this objective the research will try to meet the following secondary objectives 1.2.1 Analyse the major business performances of the company over last three years: The study will examine the companys performances in major business areas including its growth, market share, competitive position in the whole macro environment and major strengths over its competitors. 1.2.2 Identify and analyse the measures key financial performances: The second objective of the study is to identify the measures of companys financial performances especially in profitability, liquidity, investment and leverage performances. Besides this operational performances in other areas would be identified and anlaysed under this objective. 1.2.3 Compare the performances against Next: The third objective of the study is to compare the financial performances of M S with the performances of Next, the nearest competitor in general retail section. 1.2.4 Identify the major problems of Marks Spencer in business and financial performances and provide recommendations: Finally the study will try to identify the major weaknesses of Marks Spencers based on the measures of business and financial performances. The research will also formulate 1.3 Study Scopes and Usefulness of the Study Scope of this research work is three years (2007-2010) business and financial performances of Marks and Spencer. The scope also includes financial performance of Next for the same period. The findings of the study can be useful information for investors. The method used by the study can be a guide for the business and financial analysts. 1.4 Research Structure The research paper is structured in line with the sequence of objectives. The first chapter includes the rationale and objectives of the study. Then relevant literatures and theoretical issues are discussed in chapter two. The third chapter will present the methods of conducting this research work. Companys business performances and financial performances would be presented consecutively in chapter four and five. In chapter six Marks and Spencers performance will be compared with Nexts performance and areas of improvement for M S would be identified. Finally in chapter six recommendations would be provided with final remarks. Chapter 2 Literature Review 2.1 Introduction As discussed earlier, this research work is concerned with the business and financial performance of Marks and Spencer. This chapter will narrate an overview of the business operation of the company. This chapter will also review the techniques of measuring business and financial performance especially using qualitative and quantitative techniques along with brief interpretation of the performance measures. 2.2 Marks and Spencer: An Overview Marks and Spencer is a FTSE 100 company with the largest revenue base of more than  £8 billion as a retailer. It is headquartered in City of Westminster, London having operation in more than 40 countries. The following section provides a brief discussion on companys history, main line of business, geographical spread, summary of financial performances, its corporate social responsibility and the management. 2.2.1 Corporate History Marks and Spencer was established in 1884 by Michael Marks and Thomas Spencer3. The company had a policy of selling only British-made goods which made it popular in early 20th century. It started its apparel brand St Michael in 1928 and in 1950 St Margaret label was introduced for woman clothing. The company started its international expansion in 1970s by putting its step in central Europe and Ireland. During its hundred years of lifetime the company became the pioneer in quality management, customer relationships, health and safety and energy efficiency. The companys performance briefly slumped during the first decade of new millennium. However, the company is back to profit and growth in 2010 under the strong leadership of Marc Bolland who joined the company as CEO in May 2010. 2.2.2 Core UK Businesses M Ss core UK businesses include general merchandise and foods. It is largest clothing retailer including womenswear, lingerie and menswear and kidswear. Last year the companys turnover in general merchandise was  £4.1 billion which constituted an stunning 11% of the overall market share. Marks and Spencer is also the leading provider of high quality food, selling everything from fresh produce and groceries, to partly-prepared meals and ready meals and an award winning range of wines. Turnover from foods was  £4.3 billion in 2010 with a modest market share of 3%. 2.2.3 Sales Channel Customers shop with MS in many ways in stores, online or over the phone (MS Annual Report, 2010). The company has 690 stores across the UK. Its shops are located in convenient locations from high streets to retail parks, train stations to airports. Over the past four years the company has transformed these stores into bright and contemporary destinations with a range of hospitality options. The company also sells online which it calls MS Direct. MS Direct is a platform for improving customer convenience and service including via its website and newly launched Shop Your Way facility. The company aims to achieve £500m in sales through MS Direct by 2010/11. 2.2.4 International Business MS has 320 owned and franchised stores in 41 countries. The companys mix of ownership models and countries enabled it to perform well over the past year even when individual markets were weak. In 2010 its international turnover was  £949 million which is more than 15% of its overall revenue. 2.2.5 Recent Business and Financial Performances In 2010 the companys sales were up by 3.2% despite recessionary pressure. The overall gross margin was 41.2% with sales revenue  £9.3 billion. The company significantly improved its cost by saving  £145 million. The company reduced its capital expenditure cash outflow and generated a cash inflow of  £412m after tax and dividend. However, the companys market share was slightly down from 4.3% to 3.9%. Average visit to MS shops had been estimated around 21 million and average mystery shopper score was found to be stunning 89% in 2010. 2.2.6 About Next: The Nearest Competitor NEXT is the second largest UK based retailer offering clothing, footwear, accessories and home products. It distributes through three main channels: NEXT Retail, a chain of more than 500 stores in the UK and Eire, NEXT Directory, a home shopping catalogue and website with nearly 3 million active customers, and NEXT International, with more than 180 stores around the world. In 2010 the company had overall revenue of  £3.4 with a profit after tax of  £400 million. 2.3 Techniques of Measuring Business Performances A companys business can be analysed using various tools like PESTLE, SWOT analysis and Porters five force models. Measures of business performance might be companys expansion rate, revenue growth, development of strength, management of weaknesses and exploitation of opportunities etc. These measures can be achieved by subjective analysis and using business analysis tools. A brief discussion on these tools is presented as below. 2.3.1 PESTLE Analysis PESTLE, which is a popular macro-environmental analysis tool, stands for Political, Economic, Social, Technical, Legal, and Environmental analysis. Political factors include governments tax policy, employment and environmental law, trades and tariffs regulation, and political stability. Common Economic factors are GDP growth, nominal interest rates, exchange and the inflation rate. Key social factors are population growth, age distribution, health consciousness, religious views and career attitudes etc. Technological factors are spread and dependence on technology, innovation, research, and technological change etc. Legal factors are laws on discrimination, consumer, heath and safety law etc. Finally environmental factors include weather, climate, climate change etc. 2.3.2 Porters Five Force Model The five forces model is an industry analysis tool and provides a good idea of how a business should perform inside an industry. The model analyses five industry variables. These variables are ease of getting entry into industry, availability and potentiality of substitute products, suppliers and customers bargaining power and degree of competition in the industry. These factors determine how attractive and profitable an industry might be. 2.3.3 SWOT Analysis PESTLE and Porters models are used to analyse a companys macro and industry environment. SWOT Analysis is used for measuring a companys internal strengths and weaknesses. It also helps to identify specific opportunities and threats to company from the macro environment. 2.4 Techniques of Measuring Financial Performances Generally, financial performances are measured using the financial information of a company. Practically, ratio analyses are conducted on financial statement figures. Financial statements include companys income statement, balance sheet, statement of cash flow and statement of equity. There are several types of ratios profitability, liquidity, efficiency, gearing, and investor ratios. In following sections these groups of ratios are briefly discussed 2.4.1 Profitability Ratios These ratios are also called performance ratios where profit at different levels are compared with other figures and expressed in percentage. These ratios are (a) Gross Profit Margin: Gross profit margin is found by dividing gross profit by sales turnover and the formula looks like following The ratio can be a good indicator of companys direct cost or cost of sales. Profitability of a company in its core operation can be determined using this ratio. The higher the ratio the better it is. (b) Operating Profit Margin: Operating profit margin is found by dividing net profit by sales turnover and the formula looks like following As operating profit is found by deducting indirect expenses from gross profit, the ratio shows how much a company spends on non-direct activities. Too much cost on indirect cost might result in lower or negative operating profit margin. (c) Return on Capital: Shareholders and debt investors generally count profit on their investments. Return on capital can be calculated using the following formulas This ratio (ROCE) provides percentage return on the overall funds invested in the business. There is another ratio that provides return on stockholders equity which is called Return on Equity (ROE). The formula is as following ROE measures the profitability of the fund provided by the companys owners or shareholders. Profit margins and return on capital ratios together gives a good idea of overall profitability of the firm. A company having very good profit margin may have a poor ROCE or ROE ratio. Such cases happen when companies large investment operates in small scale or during the initial years. 2.4.2 Liquidity Ratios These are also known as solvency ratios, as they refer to the ability of the business to pay its payables in the short term. There are two main liquidity ratios. (a) Current Ratio: This is also known as the working capital ratio, as it is based on working capital or net current assets. It is calculated as: Current ratio is a measure of the liquidity of a business that compares its current assets with those payables due to be paid within 1 year of the statement of financial position date (otherwise known as current liabilities). (b) Quick Ratio: This is also known as the acid test ratio and is calculated as following This is similar to the current ratio, but takes the more prudent view that inventories may take some time to convert into cash, and therefore the true liquidity position is measured by the relationship of receivables and cash only to current liabilities. 2.4.3 Efficiency Ratios These ratios are also referred to as use of assets ratios. They measure the efficiency of the management of assets, both non-current and current. (a) Asset Turnover Ratio: These ratios compare the assets with the sales revenue (turnover) that they have earned. The end result is often expressed in money value to represent the value of sales revenue for each $1 invested in those assets. The formula is: (b) Inventory Days: Inventories may be analysed by calculating the ratio of inventories to cost of sales, and then multiplying by the number of days in a year to give inventories days. The formula is as following This figure gives the number of days that on average an item is in inventories before it is sold; this may alternatively be expressed as the number of days a firm could continue trading if the supply of goods ceased. (c) Receivable Days: This is a measure of the average time taken by customers to settle their debts. It is calculated by: As with inventories days, a slowing down in the speed of collecting debts will have a detrimental effect on cash flow. On the other hand, it may be that the business has deliberately offered extended credit in order to increase demand. (d) Payable Days: This is a measure of the average time taken to pay suppliers. Although it is not strictly a measure of asset efficiency on its own, it is part of the overall management of net current assets. It is calculated by: The result of this ratio can also be compared with the receivables days. A firm does not normally want to offer its customers more time to pay than it gets from its own suppliers, otherwise this could affect cash flow. Generally, the longer the payables payment period, the better, as the firm holds on to its cash for longer, but care must be taken not to upset suppliers by delaying payment, which could result in the loss of discounts and reliability. It is important to recognise when using these ratios that it is the trend of ratios that is important, not the individual values. Payment periods are longer in some types of organisation than in others. 2.4.4 Capital Structure Ratios Different firms have different methods of financing their activities. Some rely mainly on the issue of share capital and the retention of profits; others rely heavily on loan finance; most have a combination of the two. (a) The Gearing Ratio/Leverage Ratio: Gearing is a measure of the relationship between the amounts of finance provided by external parties (e.g. debentures) to the total capital employed. It is calculated by: The more highly geared a business, the more profits that have to be earned to pay the interest cost of the borrowing. Consequently, the higher the gearing, the more risky is the owners investment. On the other hand, a highly geared company might be more attractive to shareholders when profits are rising, because there are fewer of them to share out those profits. (b) Interest Cover: Connected to the gearing ratio is a measure of the number of times that the profit is able to cover the fixed interest due on long-term loans. It provides lenders with an idea of the level of security for the payment. The formula is: 2.5 Using Ratio Analysis Calculating the ratios is only one step in the analysis process. Once that is done, the results must be compared with other results. Comparison is commonly made between: Previous accounting periods; Other companies (perhaps in the same type of business); Budgets and expectations; Government statistics; Other ratios. 2.6 Conclusion This chapter gave brief overview of Marks and Spencer and also the tools and ratios that will be used to analyse the business and financial performances the company. The same ratios will be used to compare the performance of MS with Next. The next chapter will provide a brief overview on the research methodology and data that will be used for the research. Chapter 3 Research Methodology 3.1 Introduction Methodology may be defined as procedures that are used to conduct a function or activity. This chapter will briefly discuss on the methodology that will be used to analyse the business and financial performance of Marks and Spencer and comparing its performance with that of Next Inc. This section will also provide an overview of the data used in this study and their sources. 3.3 Required Data, Sources and Collection Methods Data required for completion of this research work are of secondary nature. Mark Spencers business related information were collected from companys website and annual reports of three years 2007, 2008 and 2009. Annual reports were collected from company website. The data required for macro-environmental analysis were collected from various articles, national statistical websites and newspapers. Financial information required for analysing financial performances are extracted from the annual reports of the company. Financial information of Next was collected in the same way. Findings of financial performance analysis are then used to identify the areas of improvement for MS. 3.4 Research Methodology Various quantitative and qualitative methods had been used to achieve the objectives these research. The nature of the methodologies are briefly discussed as following 3.4.1 Method for Analysing Business Performances: Method used for this purpose is qualitative. PESTLE analysis had been used for analysing the business performance in macro-environment. Porters model were used for analysing industry performance and position of MS. Finally, SWOT analysis was used to find out company specific opportunities and threats and companys key strengths and weaknesses. (See Chapter One to have idea of these tools). 3.4.2 Methods Used for Analysing and Comparing Financial Performances: Financial ratio analysis (discussed in chapter 1) is used to analyse the companys performance in profitability, liquidity, efficiency and leverage. The values of these ratios are compared against the ratios of Next to compare the performances of two companies. For presentation of findings different types of charts were used. 3.4.3 Methods of Identifying Improvement Areas: Areas of improvement would be identified using the findings of financial performance analysis using ratios. The areas where Next is performing better than MS would be identified as areas of improvements. After identifying areas of improvement strategy would be formulated to eliminate problem areas in companys financial performances. 3.4.4 Research and Data Analysis Tools Microsoft Excel 2007, which is a popular spreadsheet application, is used for conducting the ratio analysis and presenting findings of analysis graphically. 3.5 Conclusion This chapter provided a brief overview of the research data, methods and tools used in this research. In next, chapter the findings of the research would be presented followed analysis of findings. Chapter 4 Analysis and Findings 3.1 Introduction This research is conducted based on the information available on the Annual Reports of Marks and Spencer and Next Group as well as on the findings of professional business analysts found on reliable internet sources. In this chapter, the most important section of this study, key findings of companys business performance in light of PESTLE, Five-Forces and SWOT analysis and also the financial performance over last three would be presented. A comparison of performance with Next Group would also appear in this section. 3.2 An Analysis of MSs Business and Performance Summary Business performance of Marks and Spencer can be measured in reference to the factors available in macro-economic environment, factors in apparel and food industry and in terms of companys strengths and weaknesses. The findings of business analysis are presented as following. 3.2.1 Findings from PESTLE Analysis MSs Performance Key factors relevant to Marks and Spencers business found from PESTEL analysis can be summarised as following (table 3.1) Recent political development in United Kingdom is posing threat to many businesses in form of rise in tax rate, cut of social benefit and cap in immigration. There is also setback of recession that had injured the British economy significantly. Despite these negative elements in political and economic environment Marks Spencers revenue has grown at a steady rate over last three years (See Chart 4.1) showing no sign of recessionary impact on its business. Social environment however demonstrate goods signs for clothe and food retailers. Marks and Spencer had introduced various successful brands that meet the changing social pattern and consumer demand. The company is also successful in adopting technologies. Its ecommerce sales have increased at a sizable chunk in last few years. MS has also successfully used consumer research technologies for identifying market demands and customer needs. The retailer has proved it as one of the most energy conscious and environmentally friendly comp any in British history. Marks and Spencer is a century old company and had well adopted itself in the macroeconomic context of United Kingdom. British retail industry is run by a few very big players. In apparel retailing the popular names are Marks and Spencer, Next and Debenham. However, food retailers like Tesco and Asda are trying to get into apparel market with lower prices. However, for completely new businesses it would be very tough to challenge companies like Marks and Spencer which have grown its market share by 4% from 7% to 11% in cloth and general merchandise. The companys market share has also improved by 2% in 2010. However, MS could not maintain its image regarding its relationships with suppliers. Many international pressure groups had criticised its bargaining power on its suppliers. 3.2.2 SWOT Analysis and MSs Performance Marks and Spencer is well capitalising on its strength by adding more clothing brands and stepping foot in international markets. Last year companys international revenue was more than  £900 million with a growth of 5%. The company also have capitalised on ecommerce technology; in 2010 MS Directs revenue grew by 27%. Financial Performance Analysis In this study, Marks and Spencers financial performance have been analysed on four performance areas. These areas were profitability, liquidity, efficiency and leverage. For measuring performance in these areas eleven different ratios had been used. The findings of ratio analysis are presented as following. 3.3.1 Profitability: MS vs. Next Average operating profit of MS and Next is respectively 11% and 15%. Though revenue of both the companies grew over the period, operating profit was steady. However, according to findings Next Group is more profitable than Marks and Spencer. Nexts Return on Capital Employed and Return on Equity are also significantly higher than MS (See Figure 4.3 and 4.4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Based on the above analysis, the research concludes that Next Group is a highly profitable business by providing extra ordinary return to its equity holders. Liquidity Performances Both the companies liquidity is poor scoring far below standard value of 2:1. Marks and Spencers liquidity is at an alarming level of around 50% capability of paying off its current liabilities. Also, over the year none of the retailers could improve liquidity performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.4 Efficiency Although in profitability and liquidity M S is lagging behind Next, in case of efficiency in receivables, payables and inventory management MS had been showing excellent dexterity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The ratios (Figure 4.6) indicate that, inventories are sold in 23 days by MS and in 40 days by Next after purchase. On the other hand, MS is capable of collecting its receivable assets within eleven days of sales which Next can do in 67 days. Payable days are matched with receivable days. However, though MSs collection from customers is faster, its payment frequency to suppliers is a little slow. This might a sign of efficiency in working capital management. The reason behind MSs extra ordinary efficiency is because of its long experience in British industry. Average Asset Turnover Ratio of MS over the last fours years is below 1.5 which is above 2.0 for Next. The ratio indicates that MS can generate sales of around  £1.34 against  £1 of its assets which, though is not poor, in comparison to Next is pretty ordinary. 3.3.5 Leverage Performances Leverage indicates the use of debt in boosting of equity return. Both Marks and Spencer and Next Group use debt which is reflected in their gearing ratios (See Table 4.7). .From Figure 4.8 it can be easily understood that Next Group a highly geared company in comparison to Marks and Spencer. MSs policy seems to be keeping long-term debt less than 50% in its balance sheet. The leverage ratio better explains why Nexts Return on Equity is very high. Now question is are the companys comfortable with these levels of leverage? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In managing its leverage MS is again performing poorer than Next. While Nexts average interest cover ratio is 13.45 times, MSs one is only around 6 times. The figures indicate that, MS generate only around  £6 of operating profit for paying  £1 of debt cost. Therefore the leverage ratios indicate that MSs competitor is better managing its leverage with higher interest coverage ratio against higher leverage rate. 3.4 MS Summary of Business and Financial Performance Business Performance Summary Financial Performance Summary Marks Spencers revenue has grown at a steady rate over last three years Introduced various successful brands that meet the changing social pattern and consumer demand. Ecommerce sales have increased at a sizable chunk in last few years. Successfully used consumer research technologies for identifying market demands and customer needs. Most energy conscious and environmentally friendly company in British history. Grew its market share by 4% from 7% to 11% in cloth and general merchandise. Market share has also improved by 2% in 2010 in foods. MS could not maintain its image regarding its relationships with suppliers. International revenue was more than  £900 million with a growth of 5%. The company also have capitalised on ecommerce technology; in 2010 MS Directs revenue grew by 27%. Average operating profit margin is 11% in comparison to 15% of Next; Liquidity performance is very poor; Both current and quick ratios are less than 0.5; Average asset turnover rate is more than 1 in comparison to 1.5 of Next; Inventory, receivables and payables management is highly efficient and better than Next; Moderately levered company while Next is a highly levered one; Interest coverage ratio is healthy; but Next is doing better which shows the rationale behind using more debt by Next Overall financial performance of MS is not satisfactory against its competitor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Table 4.9: Performance Summary Chapter 5 Conclusion Recommendations 5.1 Introduction In previous section, it has been observed that Marks and Spencers financial performance is not satisfactory in comparison to Next Group. Except the efficiency areas, MS needs to improve itself in profitability, liquidity and leverage. 5.2 Improving Profitability MSs average operating profit margin was only around 11%. It is found that though companys revenue has grown in last three years its profit margin shrank because of increase costs. Marks and Spencer needs to cut its operating costs to match its profitability with the industry. 5.3 Improving Liquidity The companys liquidity is below the alert level which had been persistent over last four years. Although for very large and established companys it is not a big concern. However, in times