Nike's Case Study Example | Topics and Well Written Essays - 250 words

Nike's - Case Study Example The company lacked the diversification on its products and produced products for only some specific consumers. It shunned sports like soccer, rollerblading and golf and focused more efforts on making shoes for basketball and track market. This lead to falling of the sales in the market and the company realized that it had to increase its sales. As a result, the company took its designs and marketing competencies and crafted new lines of shoes for its consumers. It lined a new line of soccer shoes and started winning a big market share from the soccer market. The company lacked competences in marketing and design. To improve on it design it purchased other foot wear companies that were complimenting its products. The company lacked a marketing design of convincing its customers that its products were the best. Nike is now searching for new market acquisitions to improve its market share (Henderson et al, 2). The focus of developing new products for new market segments has proved to be a

The Advantages And Disadvantages Of Traditional Absorption Costing And Activity Based Costing

The Advantages And Disadvantages Of Traditional Absorption Costing And Activity Based Costing The major distinguishing features of ABC compared with traditional costing system are that ABC systems assign costs to activity cost centres rather than departments. (Drury, 2008) Although traditional absorption techniques may apparently seem to less complicated or tedious as opposed to ABC, the report will show why, ABC is the best most accurate technique. The traditional technique used to determine which technique is better of the two will be absorbing indirect costs on a labour hour basis. Why does the company need either absorption costing or ABC? There are two main reasons why the company needs to employ either technique these include; To identify product costs for pricing and/or cost control purposes Its necessary for manufacturers to ascertain the cost of closing stock in order to measure and report profits to the shareholders, plus in the UK SSAP 9 IN 1975 has requires all companies to include manufacturing overheads in the cost of closing stock. (Drury, 2008) Differences between Traditional Absorption Costing and ABC There are three major differences between absorption costing and ABC: In traditional cost accounting it is assumed that cost objects consume resources whereas in ABC it is assumed that cost objects consume activities. Traditional cost accounting mostly utilizes volume related allocation bases while ABC uses drivers at various levels. Traditional cost accounting is structure-oriented whereas ABC is process-oriented. (Emblemsvag, 2008) This is further illustrated in the figure below (Emblemsvag, 2008) ABC brings detailed information from the processes up to assess costs and manage capacity on many levels whereas traditional cost accounting methods simply allocate costs, or capacity to be correct, down onto the cost objects without considering any cause and effect relations (Emblemsvag, 2008). Further differences include; (James D. Tarr, 2004) Traditional cost models apply resources to products in two ways. So called direct costs like material and direct labour are attributed directly to the product and other resources are arbitrarily allocated to the product, typically through the mechanism of direct labour hours, labour dollars or machine hours. Sales, marketing and administrative costs are not included in product costs. Activity Based Costing (ABC) does not change the way material and direct labour are attributed to manufactured products with the exception that direct labour loses its special place as a surrogate application method for overhead resources. Direct labour is considered another cost pool to be assigned to processes and products in a meaningful manner, no different than any other resource. The primary task of activity based costing is to break out indirect activities into meaningful pools which can then be assigned to processes in a manner which better reflects the way costs are actually incurred. The system must recognize that resources are consumed by processes or products in different proportions for each activity. With ABC, all costs reside in resources, which are such things as material, labour, space, equipment and services. Resources are consumed by activities which have no inherent cost. The cost associated with activities represents the amount of resource they consume per unit of activity. Resources and activities are then applied to cost objects, that is, the purpose for which the resource is consumed and the activity is performed. Each resource and activity has a unit of measure which defines the amount of the resource consumed or activity required by a unit of demand for it. Resources can be consumed by resources (e.g. office space resource is consumed by an employee resource), by activities (e.g. telephone resource is consumed by a customer service call activity) or by cost objects (e.g. material resource is consumed by a product cost object). Activities can be performed in support of another activity (e.g. invoice printing activity supports the billing activity) or in response to a cost object (e.g. purchase orders are issued to support the material acquisition process). A cost object can be a process or product and either an interim cost object or an end user (customer) cost object. For example, hiring personnel may be a cost object of Human Resources Department utilizing space, utility, telephone, supply and labour resources and performing advertising, calling, interviewing and orientation activities. That cost object may be a resource used by other departments to secure labour resource for their department. Building a network of resources, activities and cost objects defines the operational flow of the process or processes to be costed. Each resource and activity has a unit of measure which converts them at a unit of demand rate. If a cost model is to be useful and effective in determining process and product costs, it is imperative that the business process be identified and understood first. Only then can costs be attached to determine the cost of the defined process.  (James D. Tarr, 2004) Advantages and Disadvantages of Traditional absorption costing techniques Advantages: (College Accounting Coach, 2006) It recognizes the importance of fixed costs in production. This method is accepted by Inland Revenue as stock is not undervalued This method is always used to prepare financial accounts; When production remains constant but sales fluctuate absorption costing will show less fluctuation in net profit and Unlike marginal costing where fixed costs are agreed to change into variable cost, it is cost into the stock value hence distorting stock valuation. Disadvantages: Ignores the fact that different products make different demands on factory support services. (Drury, 2008) As absorption costing emphasized on total cost namely both variable and fixed, it is not so useful for management to use to make decision, planning and control. (College Accounting Coach, 2006) As the managers emphasis is on total cost, the cost volume profit relationship is ignored. The manager needs to use his intuition to make the decision. (College Accounting Coach, 2006) Lucey, lists the following Advantages and Disadvantages of Activity Based Costing (ABC) (Lucey, 2002) Advantages: More realistic product costs are provided especially in, industries where support overheads are a significant proportion of total costs. More overheads can be traced to the product. ABC is concerned with all activities so takes product costing beyond the traditional factory floor basis. It recognises activities which cause cost, not products and it is products which consume activities. Focuses attention on the real nature of cost behaviour and helps in reducing costs and identifying activities which do not add value to the product. ABC recognises the complexity and diversity of modern production by the use of multiple cost drivers, many of which are transaction based rather than based solely on production volume. ABC provides a reliable indication of long run variable product cost which is relevant to strategic making. ABC is flexible enough to trace costs to processes, customers, areas of managerial responsibility, as well as product costs. ABC provides useful financial measures (e.g. cost driver rates) and non-financial measures (e.g. transactions volume) Disadvantages: Even though ABC removes most the problems with traditional absorption techniques its faced with the following criticism The choice of cost drivers. It is a simplistic assumption that a chosen cost driver is an adequate summary measure of complex activities The assumption of a direct, linear relationship between the usage of a cost driver and the amount of overheads. Very few costs indeed are truly variable in this sense whether in the short or long term. The problem of common costs. It is often difficult to attribute costs to single activities; some costs support several activities. Tracing difficulties. It is not always apparent which product should carry the traced overhead. Complexity. A full ABC system having numerous cost pools and cost drivers is more complex and consequently more expensive to operate. (Lucey, 2002) Definitions: An allocation: where discrete items of cost can be allotted to cost centres An apportionment: this is where the cost has to be spread or shared over several cost centres Absorption rates: Is the rate determined in advance for all cost centres for allocating fixed costs and variable costs (together or separately) to the output, in an accounting period. Recommendation: I suggest that the company consider adopting the ABC technique as this is much more suitable way to monitor costs especially in a company in where direct costs are a declining proportion of total cost and support overheads are a major proportion of costs in this company and is therefore of considerable importance that these support overheads are traced to product costs in a more realistic manner.

Mental Retardation Essay -- Papers

Mental Retardation Mental retardation is defined as, an individual with limitations in cognitive ability and adaptive behaviors that interfere with learning. Individuals with mental retardation learn at a slower pace, have low IQs, and may reach a level where learning stops. There are no exact causes for mental retardation but some things are associated with the disability. Prenatal development problems, childbirth difficulties, and a childhood brain injury can all lead to mental retardation. An individual with mental retardation might have problems in learning and social skills. Learning problems can include: difficulty making decisions, short attention spans, and limited strategies for dealing with changes. Problems they face with social skills are being to friendly, difficulty labeling emotions, and being wary of new places. Despite the setbacks and individual with mental retardation can receive an education and lead a productive role in society. "I Am Sam" is about a mentally retarded man named Sam (Sean Penn). In...

Complete monopoly Essay

Today, many firms are enjoying a monopoly of their products/services in the market. Monopoly may be defined as the complete control over a commodity enjoyed by a particular company in the market. There will be only a solo manufacturer or provider of the commodity and customers have to depend on them whenever there is a demand since there are no substitutes available. As a result, such a manufacturer can have an absolute control over the price as well as quantity available in the market. Another benefit enjoyed by the monopolies are that they do not face any risk of an opponent entering the market. In order to establish complete monopoly, usually companies take care of the following things: 1. They acquire the complete control over the key raw materials required for manufacturing the product. 2. They may acquire a patent in order to be the solo manufacturers or providers of the product or service. 3. They acquire the technical and productive efficiency to meet the market demand for their commodity. Usually a commodity produced by the monopolies will be manufactured in fewer quantities only and their cost may be higher. Since there is no market competition, the advantages are mostly enjoyed by the manufacturers. Little are the benefits obtained by the consumers, since they have no choice when a demand arises. FEATURES OF MONOPOLY The following are the main features of a monopoly market: 1. In a monopoly, there is a solo manufacturer or provider of a commodity. So all the demands in the market are to be met by this single vendor. 2. Highest benefits are enjoyed by the solo manufacturer. 3. The price, quantity as well as the quality of the commodity is the absolute decision of the manufacturer. Normally, commodities available in a monopoly market will have a higher price. 4. There is no competition or substitutes in a monopoly market. Even if a competitor wants to enter a market, it is a very difficult task. TYPES OF MONOPOLY There are various types of monopoly prevailing in the market. Various classifications have been made based on different criteria. This section checks in detail the classifications: 1. Based on ownership a. Public Monopoly: In a public monopoly, the product/service is provided and controlled by the Government of the country. Unlike other monopolies, public monopoly does not depend upon maximizing profit theory. Rather it is concentrated on the benefits of the people. For example, the Oil Industry in Abudhabi is the monopoly of ADNOC. There are no competitors to ADNOC and still gasoline is provided to the residents at a reasonable price. b. Private Monopoly: In strong contrast to public monopoly, in the case of private monopoly, the product/service is provided and controlled by private firm or an individual. Their main concentration will be on maximizing the profit and hence such commodities will have a higher price. For example, the diamond manufacturers De Beers enjoyed a complete monopoly over the market for about 100 years. In a drive to achieve maximum profits, they created a false impression that the diamond supply was becoming limited and hence increased the rates which mounted up their profits. 2. Based on the price a. Simple Monopoly: In the case of simple monopoly, the price of a product/commodity is the same regardless of the customers. Usually it has control in a particular market only. For example, the water supply in Abu-Dhabi is taken care of by ADWEA. The price charged is the same across the emirate indicating a simple monopoly. b. Discriminating Monopoly: In the case of a discriminating monopoly, the price is discriminated according to the customers. Such a commodity will have different prices in different regions. Normally, such a firm has control in various markets. For example, the cost of Mercedes Benz car is different in different countries of the world. In Germany, where it is manufactured, it is usually sold at a relatively lower price. In UAE, the price is higher than that in Germany. In India, the price is higher than that in UAE. 3. Based on competition level a. Perfect Monopoly: In perfect monopoly, there is absolutely no threat from any competitors. Such firms enjoy complete control without the fear of any competitor entering the market. This is the most ideal case and is difficult to be established in realty. b. Imperfect Monopoly: In imperfect monopoly, there is no competitor in appearance. But the company may be in the fear of an opponent entering the market in the near future. As the name indicates, the seller do not enjoy the complete features of an ideal monopoly because there is a threat of competition. For example, until recently Etisalat enjoyed the monopoly of telecommunications and internet services in the UAE. But with the entry of du, Etisalat is facing an imperfect monopoly as du is widening its service to all the realms of Etisalat. 4. Based on how the monopoly is achieved. a. Legal Monopoly: Legal monopoly is usually the monopoly acquired by a firm by legal procedures with the sanction from the Government. Copyrights, trademarks, patents etc are legal tools for obtaining monopoly over a product or service. For example, the company Telstra acquired a legal monopoly over providing telecommunications service in Australia. b. Natural Monopoly: Natural Monopoly is the monopoly obtained naturally without any legal procedures. Such a monopoly is obtained due to the advantage of good-will, plentiful resources, good site etc. For example, Middle East enjoys a natural monopoly over the gasoline resources in the area. CONCLUSION Although many firms enjoy a monopoly over their products, seldom do such regulations benefit the customers, except for the case of public monopoly. Since there no competitions, the competitive advantage is also denied to the customers and mostly they are forced to buy the product despite their hesitation. However, monopoly is most enjoyed by the firms exercising it. REFERENCES 1. Goodwin, Nelson, Ackerman, Weissskopf. (2009). ‘Microeconomics’, 2nd edition.

Funeral Cosmetic Surgery

Cynthia Grosse,Kunkel English 11 Beauty is your funeral Cosmetic surgery is defined as, â€Å"surgery performed to improve the appearance, rather than for medical reasons† (Collins English Dictionary). Cosmetic surgery is a dangerous procedure because some people acquire lifelong scars not only that, death could be in the equation. On the other hand, many women get cosmetic surgery due to physical deformation or certain birth defects in efforts to cover up their embarrassing scars.Even though some cosmetic surgery can be beneficial, the fact that death could be involved, is it worth it? Cosmetic surgery should be illegal because the number of death and deformation in the person’s character are too great to risk any possible enhancements. We should not be allowed to get plastic surgery, implants, and liposuction because these things cause a person to become sick and then eventually die. Therefore we should warn the person about the harm of cosmetic surgery is. According to Dr.Darshan Shah, a Mayo Clinic-trained board certified surgeon, â€Å"Cosmetic Surgery itself actually carries very minimal risk if you put yourself in the hands of a qualified, certified cosmetic surgery specialist – someone who has trained and devoted [his or his] career to the misrepresentation and inexperience of certain surgeons†. (California Health and Beauty) This article is saying that people are dying because there not looking up facts and information about the surgeon, but how much is of this idea is true?I believe no matter who performs the surgery; it’s always dangerous and has many life threatening consequences. Whether or not the surgeon is ‘’good’’ or ‘’bad’’ the procedures should not be done and are unethical. First of all, cosmetic surgery costs a great deal of money. Breast augmentations are 3,797$, Tummy Tucks are,332$, Butt Lifts are $7,904, Collagen Injections are $673 and Eyelid surge ry is $2,912, To me no amount of money is worth risking your life for. Not only that, I believe that people are beautiful the way they are, and that they don’t need surgery to boost their self esteem.Individuals seek to conform to the social norm, and it’s apparent that they will go to any cost to make that happen. When comes to unethical issues such as transgender cosmetic surgery, no it should not be allowed. In Fact, when they get these procedures they can die from anesthesia. In conclusion, when come to cosmetic surgery its dangerous overall even though you’re getting medical reasons or even though you get Butt Lift or Tummy Tuck or Collagen injection , Overall cosmetic surgery is a dangerous ,harmful procedure that should be banned.