The Case Of The Shrinking Margins

The gross profit margin for CC is right around the industry average. Although the numbers seems to be decent, the costs of goods sold are too high. Next, looking at the operating profit margin, the numbers don’t look as great as they should. The numbers are low compared to the industry average in years 2001, 2004, and 2005. This may indicate that CC should look into their prices and costs. In 2001 the net profit margin was very low compared to the industry average. I am assuming this is due to the major expansion. It is also important to look more deeply into the numbers though because the net profit margin is lower compared to the industry average in all of the years. Once again CC should look into their costs and how efficient they are converting sales into actual profit.

Places have the ability to trigger memories from one’s childhood and experiences. In the excerpt, “In Praise of Margins,” by Ian Frazier, the author argues that marginal places and activities are necessary for our lives because they grant us the opportunity to use our imaginations to have fun without fearing judgment from others. According to Fraizer, these places lack a purpose and don’t need to have an economic value nor need to be productive to be considered valuable. Marginal places are simply a place for you and/or your friends to reminisce all of your memories and reflect back on who you were and how you’ve become who you are now. These marginals are considered to be any place or activity that serve an unintentional purpose. Typically, they originate from childhood adventures such as running around the woods, providing an unintended consequence of a sense of exploration. Through my personal experiences, all of our marginal places and activities change as we age throughout our lives due to societal expectations, but they remain significant because they inspire creativity and allow us to be ourselves.

Strategic Issue: Throughout the case, it becomes clear that competition may be hindering your product from leading the market. A limited amount of compact company resources and the constant technological advancements may prevent the company from performing to the best of its capabilities. In order to address this issue, we recommend that you investigate our recommendations to increase market share by implementing the strategies that will be discussed in this memorandum.

It is late spring and time for the DMC management team to begin the planning cycle for the next fiscal year. While CEO Tom Grant has always preferred the tried and true business strategies from Michael Porter (cost leadership, differentiation and market focus), he knows the executive team needs to be creative to set the path for the future of the company during the new planning cycle. In this highly competitive global market, DMC will face many challenges in choosing a strategic plan for the next five years. The current strategic plan includes a goal of increasing electronic component sales while establishing a more stable sales pattern and margins, but this goal is not going well. Grant

Best Buy, like many other companies caught in the global downturn, has all the signs of a small slowdown in both Net Income and Earnings per Share. Although still slight, over the past three years coming down from a high of in 2010, the steady decline in income and the increasing rise of Operating Expenses denote an area that needs to be addressed. (Best Buy Financials)

DMC really needs to take direct sales to the end user customer into consideration. Even though the Business-to-consumer (B2C) is not common in the electronic components industry, it is well worth the try. After an informal meeting with VP of IT, CEO Grant understands the possibility of moving into B2C without a large capital outlay if they could allocate some dedicated programming time to the project. There are still some concerns over the fact that the sales team would have to be heavily involved in any project like this and smaller orders would not be cost effective and would require too much support for product selection. However, the IT team’s view of sales on the web was that it could a relatively automated process, with a built-in digital configurator tool to help customers choose the right parts with minimal human intervention overall.

In round two, our team’s profits increased to $ 3,785,859, contribution margin increased to 35%, stock price increased to $16.46 per share and had an S&P rating of “A”. After round two results, we realized that our competitors were focusing on either low-tech market or both markets (low-tech as well as high tech) as in the final round low-tech products have the largest market among all market segments with comparatively low growth rate. Additionally we found out that the Broad Differentiator strategy incurred high second shift costs, low asset turnovers and new products had to be introduced which was a time consuming and expensive process as aging products no longer met the requirement of customers. After an in-depth analysis of all the six basic strategies and understanding the needs of the target customers, our team operated under the Broad Cost strategy from the third round which had good profit margins on sales while keeping low prices for high and low tech products. Broad Cost strategy helped our team gain market share by providing upscale product attributes at a lower cost. Our new strategy was to focus on forecasting and customer satisfaction by forecasting the worst scenario of demand and producing the best to increase sales as well as improve market share, increasing profits by revising products efficiently, return on equity (ROE), stock price & market cap. Our specific goal was to reduce R&D and marketing costs and increase automation

Starting 2004, there has been a major change in the board, as well as management. Since then company has taken several large and aggressive approach. This can be summarised as renovating/ ex-panding retail space, re-engineering of supply chain, and improvement in IT system. Also there has been focus on brand repositioning through quality improvement, cost reduction

1. Context: In early September’08 Giant consumer Products, Inc. (GCP) realized that Frozen food division, which had been growing at 2.8% (compounded annual growth) rate since 2003 to 2007 and accounted for almost 33% of GCP’s overall business volume, is not doing well now. The sales as well revenue volume is around 3.9% behind the target. Most specifically marketing margin (key parameter for GCP business) was also under plan by 4.1%. GCP had been doing well in wall-street but performance of past couple of quarters has increased the worries of GCP i.e. whether GCP will able to maintain its profitable growth.

An unfavorably decreasing net profit margin (NPM) highlights management 's lack of effective cost control and service pricing. Management should carefully examine NPM, looking for ways to favorably adjust net income and total revenues, possibly by decreasing costs and restructuring SSB 's pricing of services.

Premier Investment’s Gross Profit Margin has increased slightly from 59.09% in 2010 to 59.51% in 2011. The increase is not huge, but the margin is pretty good, and it reflects that the company keeps the cost under control. On the other hand, the Gross Profit Margin for David Jones has decreased from 39.73% in 2010 to 39.11% in 2011. This decrease is not very huge, but the overall figure reflects not a very profitable condition. These margins are well below the profitability of Premier Investments. This means that David Jones has a relatively poor cost control.

The industries worst records are the debtors due to the 30.43 outstanding days’ worth of sales. This means that revenues are not being collected effectively and efficiently. (Reserved, 2015)

transformed the division 's ability to create "16 productized solutions" and to engage new and old

New products are the lifeblood of any company, fueling its survival and growth in the long run. But the development and introduction of new products that will ultimately be profitable is fraught with the risks of heavy up-front expenditures and uncertain future payoffs. A daunting combination of stagnating sales in mature markets, rising costs, and a focus on short term earnings leaves management in a very uneasy position.

�� The markets for consumer electronics products and household appliances are highly competitive and the Company has experienced pressure on its prices and margins. The Company expects that technological advances