Microeconomics Solutions Essay Example

Microeconomics Solutions Paper Suppose the price Of regular-octane gasoline were 20 cents per gallon higher in New Jersey than in Oklahoma. Do you think there would be an opportunity for arbitrage (i. E. , that firms could buy gas in Oklahoma and then sell it at a profit in New Jersey)? Why or why not? Oklahoma and New Jersey represent separate geographic markets for gasoline because of high transportation costs. There would be an opportunity for arbitrage if transportation costs were less than 20 cents per gallon. Then arbitrageurs could make a profit by purchasing gasoline in Oklahoma, paying to transport it to New Jersey and selling it in New Jersey. If the transportation costs were 20 cents or higher, however, no arbitrage would take place. 4. In Example 1. 3, what economic forces explain why the real price of eggs has fallen while the real price of a college education has increased? How have these changes affected consumer choices? Copyright C 2013 Pearson Education. Inc. Publishing as Prentice Hall, Pinprick/Refined, Microeconomics, Eighth Edition The price and quantity Of goods (e. G. , eggs) and services (e. G. , a college education) are determined by the interaction of supply and demand. The real price of eggs ell from 1970 to 2010 because Of either a reduction in demand (e. . , consumers switched to lower-cholesterol food), an increase in supply due perhaps to a reduction in production costs (e. G. , improvements in egg production technology), or both. In response, the price of eggs relative to other foods decreased. The real price of a college education rose because of either an increase in demand (e. G. The perceived value of a college education increased, population increased, etc. ), a decrease in supply due to an increase in the cost of education (e. G. , increase in faculty and staff salaries), or both. 5. Suppose that the Japanese yen rises against the U. S. Liar-?that is, it will take more dollars to buy a given amount of Japanese yen. Explain why this increase simultaneously increases the real price of Japanese cars for U. S. Consumers and lowers the real price of IS. S, automobiles for Japanese consumers. We will write a custom essay sample on Microeconomics Solutions specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Microeconomics Solutions specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Microeconomics Solutions specifically for you FOR ONLY $16.38 $13.9/page Hire Writer As the value of the yen grows relative to the dollar, it takes more dollars to purchase a yen, and it takes fewer yen to purchase a dollar, Assume that the costs of production for both Japanese and LIST. Automobiles remain unchanged Then using the new exchange rate, the purchase of a Japanese automobile priced n yen requires more dollars, so for U. S. Nonusers the real price of Japanese cars in dollars increases. Similarly, the purchase Of a LIE_S. Automobile priced in dollars requires fewer, and thus for Japanese consumers the real price of a U. S. Automobile in yen decreases. 6. The price Of long-distance telephone service fell from 40 cents per minute in 1996 to 22 cents per minute in 1999, a 45% (18 cents/ 40 cents) decrease. The Consumer Price Index increased by 10% over this period. What happened to the real price of telephone service? Let the ICP for 1996 equal 00 and the ICP for 1999 equal 110, which reflects a increase in the overall price level. Now lets find the real price of telephone service (in 1996 dollars) in each year. The real price in 1996 is 40 cents. To find the real price in 1999, divide CHIP 996 by CHIP 999 and multiply the result by the nominal price in 1999. The result is (100/110) CLC 22 C] 20 cents. The real price therefore fell from 40 to 20 cents, a decline. Exercises I _ Decide whether each of the following statements is true or false and explain why: a. Fast food chains like McDonalds, Burger King, and Wendy operate all ever the United States. Therefore the market for fast food is a national market. This statement is false People generally buy fast food locally and do not travel large distances across the united States just to buy a cheaper fast food meal. Because there is little potential for arbitrage between fast food restaurants that are located some distance from each other, there are likely to be multiple fast food markets across the country. B. People generally buy clothing in the city in which they live. Therefore there is a clothing market in, say, Atlanta that is distinct from the clothing market in Los Angels. This statement is false. Although consumers are unlikely to travel across the country to buy clothing, they can purchase many items online. In this way, clothing retailers in different cities compete with each other and with online stores such as L. L. Bean. Also, suppliers can easily move clothing from one part of the country to another. Thus, if clothing is more expensive in Atlanta than Los Angels, clothing companies can shift supplies to Atlanta, which would reduce the price in Atlanta, Occasionally, there may be a market for a specific clothing item in a faraway Copyright @ 2013 Pearson Education. Inc. Publishing as Prentice Hall. Market that results in a great opportunity for arbitrage, such as the market for blue jeans in the old Soviet Union. C. Some consumers strongly prefer Pepsi and some strongly prefer Coke. Therefore there is no single market for colas. This statement is false. Although some people have strong preferences for a particular brand of cola, the different brands are similar enough that they constitute one market There are consumers who do not have strong preferences for One type Of cola, and there are consumers who may have a preference, but who will also be influenced by price. Given these possibilities, the price of cola drinks Will not tend to differ by very much, particularly for Coke and Pepsi. 2. The following table shows the average retail price of butter and the Consumer Price Index from 1980 to 2010, scaled so that the ICP 100 in 1980. 1980 2000 2010 100 208. 98 218. 06 51. 88 51 . Egg 52. 52 5288 Retail price of butter (salted, grade AAA, per lb. ) a. Calculate the real price of butter in 1980 dollars. Has the real price increased/ decreased/ stayed the same from 1980 to 2000? From 1980 to 2010? Real price of butter in year t CP11980 CIA nominal price of butter in year, ICP t Real price of butter (1980 f) 1 go 51. 26 $121 $1. 32 The real price of butter decreased from $1. 88 in 1980 to $1. 21 in 2000, and it increased from SSL . 88 in 1980 to . 32 in 2010, although it did increase between 2000 and 2010. B. What is the percentage change in the real price (1980 dollars) from 1980 to 2000? From 1980 to 2010? Real price decreased by $0. 67 (1. 88 0 1. 21 C 0. 67) between 1980 and 2000. The percentage change in real price from 1980 to 2000 was therefore (CIO_67/I ,88) 100% 0 035. 6%. The decrease was $0. 56 between 1980 and 2000 which, in percentage terms, is (MO 56 I . 88) CIA 100% CIA c. Convert the ICP into 1990 Ã'Å¡ 100 and determine the real price of butter in 1990 dollars To convert the ICP into 1990 100, divide the ICP for each year by the ICP for 1990 and multiply that result by 100. Use the formula from part a and the new ICP numbers below to find the real price of milk in 1990 dollars. New ICP Real price of butter (1990 $) 1990 63. 07 $2. 98 131. 80 $1. 31 137. 53 52. 09 d. What is the percentage change in the real price (1990 dollars) from 1980 to 2000? Compare this with your answer in (b). What do you notice? Explain. Copyright C 2013 Pearson Education. Inc. Publishing as Prentice Hall. Fingerprinted, Microeconomics, Eighth Edition Real price decreased by $1. 07 (2. 98 C] 1. 91 C 1. 07). The percentage change in real price from 1980 to 2000 was therefore 0 100% C 035. 9%. This answer is the same (except for rounding error) as in part b. It does not matter which year is chosen as the base year when calculating percentage changes in real prices. 3. At the time this book went to print, the minimum wage was S? ,25. To find the current value tooth ICP, go to http://WIN. Bless. Gob/Cop/home. HTML. Click on ICP Tables, which is found on the left side of the web page, Then, click on *Table Containing History of ICP-U U. S. All Items Indexes and Annual Percent Changes from 1913 to Present? This will give you the ICP from 1913 to the present. A. With these values, calculate the current real minimum wage in 1990 dollars. The last year of data available when these answers were prepared was 201 D Thus, all calculations are as of 2010. You should update these values for the current year, 130 CP11930 CIA minimum wage in 2010 LIE $7. 25 0 $4. 35. 218 . 056 CP12010 so, as Of 2010, the real minimum wage in 1990 dollars was 54. 35. Real minimum wage in 2010 D b.

Western Canada Concept Essays - Western Canada, Canada, Free Essays

Western Canada Concept Essays - Western Canada, Canada, Free Essays Western Canada Concept The Western Canada Concept The Western Canada Concept is a separatist party led by Alberta lawyer Doug Christie. The party is devoted to a peaceful secession of the four Western provinces and the two territories from Canada. By means of four referenda held in each respective western province, the Western Canada Concept would establish an independent nation. A wide spectrum of reasons, encompassing political, economic, and cultural issues, fuels the groups drive for a sovereign, united, West. The Western Canada Concept, through referenda and economic stability, insists that a sovereign West would better serve the needs of Western Canadians, which have been ignored by governments of the recent past. Reasons for Western Independence According to David Christie, leader of the Western Canada Concept, reasons for western separation abound, touching each area of Western Canadians lives. Many of these stem from a deep-rooted feeling of western alienation. During the Trudeau era, the majority of Liberal seats in the House of Commons was heavily concentrated east of the Manitoba border. Through unpopular government decisions, such as the management of Albertas petroleum industry, some westerners began to feel that the government did not serve their needs. Manipulating a famous Abraham Lincoln quote illustrates this belief perfectly - since the government was elected by Central Canada, it must be a government of Central Canada, for Central Canada. This distribution of power in the House of Commons, a primary reason for Western Independence, has become a platform for many western politicians. One concern is that there is little or no checks on the Prime Ministers agenda where regional equality is concerned. The Prime Minister is from one province, can be elected into power with only the support of a single region, and can run the entire country accordingly. Christie believes that the only way to keep Central Canada, the primary source of power for most recent governments, in check is to amend the Senate. The system by which Canada should model their Senate is the American system, in which the President is kept in check by equally distributed Senators. Such wishes for Senate reform have long been embraced by western parties of the past such as the Progressives, Social Credit, the CCF, the United Farmers of Alberta, and most recently, the Reform Party of Canada. Since the Reform Party merged with splinter Conservatives to form th e Canadian Alliance Party, its agenda, according to Christie, has become more national. If the Alliance, once a defender of western ideals, wishes to come to power, support from Central Canada is necessary. Thus, they seemingly have abandoned their fight for Senate reforms to appear more palatable to Ontario voters. If Western Canadians want these reforms, they cannot expect a national party desperate for Central Canadian support to act on their behalf. Rather, secession is seen as the only way to draw attention to our concerns. As Christie put it, The major reason the political power of Ontario and Quebec has never been challenged is simply because the West has never considered the option of independence. In addition to the aforementioned political reasons, the Western Canada Concept has put forward economic reasons for Western Independence. In light of the fact that the West produces 52% of the Gross National Product in primary sector industries such as fishery, forestry, mining, and agriculture, and 90% of the petroleum production with only 27% of the population, the West should be able to sustain itself economically. Furthermore, the West fares well on the international market. Of the provinces, only British Columbia, Alberta, and Saskatchewan export more than they import. Although the West seems to make a profit internationally, it is, according to Christie, being robbed from home. A colonial economy, where Central Canada produces 80% of the countrys manufactured goods, and where tariffs prevent the other provinces from buying elsewhere, is preventing the West from flourishing economically. Again, since national parties with an interest in staying in power cannot effect any change in policy that might anger Central Canadians, the only answer is independence. The most difficult to defend, but most important reasons for independence, according to Christie, are cultural reasons. It is tricky for Western Canadian Concept members to air their views on culture as they

Dock Line Terms and Best Practices for Securing Your Boat

Dock Line Terms and Best Practices for Securing Your Boat Plenty of poorly secured boats have floated away from the dock after a shift in weather or tide. It happens to everyone once, but after the first time, youll want to learn the basics. To understand how to tie a boat up securely, you need to understand basic boat architecture and terms. These are quite basic, so most of you may already know many of these terms. However, it never hurts to review them. Lets start with the two basic lines that hold each boat to the tying fixtures on the dock. If you are tying to a buoy then you want to review mooring basics since our current discussion is about tying to docks. Bow Line The bow line runs from a cleat or chock and over the forward gunwale, where the line should be fitted with a chafe guard. The line is then finally secured to the tying fixture on the dockside which could be a cleat, bollard, post, or ring. The knot required will vary according to the tie point. Stern Line The stern line is attached to the stern tying fixture that is closest to the dock. Securing the stern from the outboard tying fixture or a central bit is not recommended since it will be more difficult to retain tension. A chafe guard can also be used here, but the stern line moves over the gunwale much less than at the bow. In situations where the boat is in a slip or berth, then the second set of lines is attached to hold the boat in a central position. Lines should be tied tightly unless a spring line is used. Spring Lines A single spring line makes a boat much more secure, so its highly recommended. There are two types of spring lines: forward springs and aft springs. The name of a spring line refers to which direction it is traveling when leaving the boat. So a forward spring travels from the stern forward from one-half to one-third of the vessel length before being secured to the dock. The forward spring brings the stern of the boat close to the face wall by pulling forward. An aft spring line travels from the bow or forward gunwale back to the dock with a length about half the length of the vessel. An aft spring is best rigged after a forward spring to keep tension even throughout all lines. Spring lines are useful to keep winds that are parallel to the dock from pulling the vessel away from its position. Tides and Tying There are plenty of devices of various qualities made to secure boats against tidal forces, but your regular dock lines will do the job if you know how to rig them correctly. Bow and stern lines need to be long enough to slack and keep the vessel from pulling the tying fixtures free. In some cases, boats can sink from poor tidal planning, so be careful and check the tide charts for your area. Spring lines will keep the vessel in position horizontally as long as they are set to the correct length, which should be barely tight at low tide.

Critique 2 Essay Example | Topics and Well Written Essays - 750 words - 2

Critique 2 - Essay Example The theater also had a set stage where piano presentations were well orchestrated. Seok-Min having had the exposure and years of training on the piano. He got the opportunity to present his skills to the audience. The Sonata in C Major was a very slow and subtle piece written and composed by Joseph Haydn in the 17th and 18th century. There was also another piece B Minor composed by Franz Liszt and written in 1811 to 1886. The piece was long and well separated with hype and the mid and a slag finish. Although the piece was no interactive as then, performers had a fixed position as they keyed their way in the performance. In the recital hall, a number of musical pieces such as the piece by Claude Debussy, Etudes (1915). The piano presentation was primarily a senior grounds on which, I had the opportunity to get in touch with the other professional artist such as on ever. The piano presentation hall lacked proper organizations as the viewers were a section the performance was not as wel l orchestrated. The coordination and rhyme of the pattern lines as Seok-Min played were not in line with the other beats from the backup singers. The soprano presentation was very well planned but at the begin the lack time conscious meant that the piece had to be fast passed in order to appear like it was perfectly matched with the real thing. Seok-Min performance, on the other hand, was perfect as the support his musical pieces came through swiftly in the end. Their dressing also made the event look well organized as they marched to suit the theme they were reflecting in their musical pieces. The piano performers Seok-Min on the piano was also able to make his piece Sonata in B minor a success as his esteemed practice showed perfections as his confidence on the piano was visible although the theater. His mode and sample piece were different from the other one before him as it allowed for a chance in the treble. He incorporated major

Mining water management Essay Example | Topics and Well Written Essays - 250 words

Mining water management - Essay Example It is also designed for safety after the mine is no longer in used and is rehabilitated back to nature, or to its previous condition (Mining Fact, 2014; Mining Facts, 2014a). Mine Water refers to the surface or groundwater that occurs in its natural state. Best practices in managing surface water resources are: Diverting natural water sources away from the mining site and its process lines; Using diversion channels above ground that provide a constant flow of natural water to inhabitants in the region; Isolating mining water discharges to controlled areas for monitoring, cleaning, and recycling again in some mining processes; Ensuring that mining process water lines will not leach into the soil and make its way back into natural water resources. The last consideration is one of the most important parts of closing down a mine, in that contaminants of any sort, will not absorb into soils and eventually integrate with naturally running underground aquifers (Watson & Furey, 2013). Watson, A., & Furey, R. (2013). Water Management: Life of Mine and Beyond. Mining Magazine Online. [December 2013]. Retrieved from

Tales of Angola Essay Example for Free

Tales of Angola Essay Jackson, David H., and Canter Brown. Tale of Angola: Free Blacks, Red Stick Creeks, and International Intrigue in Spanish Southwest Florida, 1812-1821. Go Sound the Trumpet!: Selections in Floridas African American History. Tampa, FL: University of Tampa for the Florida A M University Dept. of History, Political Science/Public Administration, Geography, and African American Studies, 2005. 5-18. Print. In David H. Jackson and Canter Brown’s book, Go Sound the Trumpet: Tale of Angola, these men talk about the marooning black men and women and their interaction with the Creek Indians and European powers. This particular chapter sheds light on the role of the Red Stick Creek Indians in helping to sustain the freedom of the marooning blacks in Florida. Their coalition along with aid from Spanish and English powers allowed them to ward of the attacks of the United States on their freed black establishments. In a sense this group of warriors were successful. Throughout the paper we will try to point of the origin, purpose, value and limitations of this particular chapter in order to rate the credibility of the information. First, This chapter was written around the theme of free blacks and Indians in the early 19th century. Majority of the accounts that are taken and documented within this exert were extracted from the memories as well as recordings of past marooners or ancestors of those who were either allies of the free blacks and/or the Red Stick Creeks. Other information is taken from authors such as Joshua Giddings who wrote the classic, The Exiles of Florida and Kenneth W. Porter’s essays, which later compiled into a book, The Black Seminoles: Freedom-Seeking People. Still our knowledge is very lacking regarding the subject of free blacks but these authors gave much needed insight into this vague area. This document is considered a secondary document since it is not an actual diary of the accounts of maroons or Red Stick Creeks. Many books are written as narrative for the entertainment but this particular book or directly this chapter was meant for distributing education. What the purpose of this particular chapter is is to illuminate the lives of marooning African Americans which is actually harder than it  sounds. Due to the circumstance in which many of these blacks were freed, much information about their lives was not and in many cases could not be released. For instance, â€Å"the government granted freedom to runaway slaves from Carolina, regardless of race, so long as the runaways agreed to convert to Roman Catholicism†(6). Other African Americans were armed â€Å"through the authorization of the colony’s first free black and mulatto militia companies† (6). This meant that many United Statesmen, in the south especially, were angry and bitter towards the new undisputed emancipation of their slaves. The value of such an article is the fact that such information is not necessarily publicly preached. Many didn’t know about the marooning blacks in the south especially because the usual notion is that blacks ran north for freedom instead of this new revelation of retreat towards the south. This particular chapter also takes quotes and accounts from those who experienced the eradication of the maroon safe havens and forts such as the Negro Fort, Fort Mose, and most importantly Angola. The limitations of this chapter are that it was not written in the time of the actual events. Even though the authors include accounts from those who were witnesses to this period, this is still not as valuable as a primary source like a diary or a testimonial. In the end, even though this particular exert is a secondary source, it still contains enough evidence like quotes from witnesses and documented oral accounts to deem this information beneficial and most importantly credible.

Free Narrative Essays - Beauty is Only Skin Deep :: Personal Narrative Essays

Beauty is Only Skin Deep, Ugly Goes to the Bone I am not easily recognized, or rather, I am easily ignored. My style of dress is a cardigan and jeans, or when it's warmer, a T-shirt and jeans. Occasionally I'll wear khakis. I am a very unnoticeable 5'3'' and have eaten just enough chocolate to have a round face and figure. With all of this in mind, when I tapped the shoulder of the up-to-the-minute girl lip-locked with her boyfriend-of-the-day, I was not greeted with a warm smile. I frequently disturbed this couple, since my locker was in Make-Outville. It is interesting, however, that I am the first (technically third, I suppose) to find out what new couple has gotten together. As I was pondering why our lockers are neon orange when our school colors are red and black, I exaggerated the act of dropping each book into the metal box to enjoy the humor of the "you-only-wish-you-could-have-what-I-have" look from the heavily outlined eyes behind me. The irony is - I don't want that. No, I am not a nerd in denial; that is just not what I want. Exchanging saliva with a different guy every week and making sure I look just like Jennifer Love Hewitt or any other three-name girl is not my top priority. Sorry to disappoint you Miss "I can't believe I had to buy a size 3," but you're a little conceited to think everyone wants to be just like you. I'll tell you what I want: I want to go to college. I want to get good grades. I want everyone to be nice. I want a cure for Alzheimer's so my grandmother and my family can have Grandfather back. I want to get to my locker without being scrutinized. Oh my goodness, what an outcast I am. What a nerd! Whatever is the matter with me? I like boys. Simply because I choose to search for someone who makes me happy (and that just happens to take a while) does not automatically prove that I live an "alternate lifestyle." Sorry to disappoint you; I apologize for taking away today's lunchtime conversation. I will tell you what I want in a boy. I want him to open doors for me. Old-fashioned or not, I appreciate that greatly. I want him to be my best friend. I want to be able to go to him with anything and for him to care about what I say.

Carnival Case Issues

SPRING 2013 – GLOBAL STRATEGY AND POLICY MAN4720009_2013S_11202: , Schwartz: Tuesday and Thursday 9:30 to 10:50 AM – LA 331 GLOBAL STRATEGY AND POLICY MAN4720009_2013S_11202 Spring, 2013 Prepared for Professor Harry Schwartz, March 14, 2013 by the following students: Robert OndercikZ8384Finance Ron AbrahamZ4458Accounting Jenna FranzoneZ3483Business Management Tabitha Palmisano Z0857Marketing Jeffrey VonZ7035Accounting Aaron SchneiderZ0653Business Management Sabine BorgesZ7510Accounting 1. Current Situation: CRITICAL CASE ISSUES Human Relations (CI #1) Employee and Labor LawsuitsEmployees of Carnival are claiming unfair working conditions with poor compensation. (CI #2) Succession Mr. Arison stepping down in the future, who will run company, third generation Arison or someone else. Operation/Logistics (CI #3) The Costa Concordia Cruise Ship lawsuit Cruise ship laying on side, environmental risk, and lawsuits from crash. (CI #4) The Carnival Triumph dead at Gulf of Mexico Pending lawsuits from this event, leading to more negative publicity (CI #5) US Corporate Tax Congress continues to try to charge Corporate taxes on Carnival, but has failed recently. This could change soon. Marketing CI #6) Serving on 20 % of Americans It becomes expensive for customers to get to ports to cruise, discouraging some customers from cruising. Carnival Corporation & plc is currently the largest cruise company in the world and is among the most profitable and financially strong leisure travel companies in the world. Carnival Corporation & PLC’s portfolio of cruise brands in North America, Europe, Australia and Asia are comprised of Carnival Cruise Lines, Holland America Line, Princess Cruises, Seabourn, AIDA Cruises, Costa Cruises, Cunard, Ibero Cruises, P&O Cruises (Australia) and P&O Cruises (UK).Collected, these brands operate 100 ships totaling 203,000 lower berths with nine new ships scheduled to be delivered between March 2013 and March 2016. Carnival Corpo ration & PLC is the only group in the world to be included in both the S&P 500 and the FTSE 100 indices. A. CURRENT PERFORMANCE Carnival reported net income for the year 2012 decreased to $1. 3 billion compared to $1. 9 billion for the prior year due primarily to a combination of lower revenues and higher fuel prices.Revenues declined $410 million primarily as a result of the Costa Concordia incident. Net revenue yields declined 2. 5 percent due primarily to lower cruise ticket prices and occupancies for the Costa brand. Excluding Costa, Carnival was able to maintain year 2012 net revenue yields in line with the prior year. Even with the many challenges faced in 2012, Carnival generated $3 billion of cash from operations, more than enough to fund our net capital investments of $1. 8 billion.All of the subsequent free cash flow was then returned to shareholders. Carnivals regular quarterly dividend of $0. 25 per share, combined with a special year-end dividend of $0. 50 per share, re sulted in $1. 2 billion of distributions to their shareholders. Carnival also purchased 2. 6 million of the company’s shares in the open market at a cost of $90 million during 2012. B. STRATEGIC POSTURE * Carnival remains dedicated to profitably growing our cruise business and driving returns on capital higher. Carnival will continue to increase their fleet through a measured pace of two to three new ship introductions each year. Some of these vessels are expected to replace existing capacity from the possible sales of older, less-efficient ships * Currently, Carnival has nine cruise ships scheduled for delivery through March 2016. * In addition, Carnival is focused on the growth of developing cruise regions. During the previous five years, Carnival has doubled their guest sourcing from up-and-coming markets, a trend Carnival expects will continue in the future. CI #6) * Carnival and its Operating Lines place the uppermost importance on guest health, safety and security. Carn ivals objective is to maintain an exceptional health, safety and security record. As well as constantly strive to better our health, safety and security standards and procedures. (CI #3 and 4) 1. Mission â€Å"Carnival Corporation & plc mission is to take the world on vacation and deliver exceptional experiences that appeal to a large variety of consumers, all at an outstanding value. † 2. ObjectivesTo our stakeholders, this mean: Consumers | Take the world on vacation and deliver exceptional experiences that appeal to a large variety of consumers, all at an outstanding value| Employees | Recruiting and Retaining Qualified Employees. Carnival considers their employee and union relations generally to be good| Business Partners | Carnival shall communicate with our business partners frequently to ensure that we receive high-quality products and services and that our ships receive the goods and services that they need to operate sustainably. Shareholders| The strength of their p eople, values, culture and mission has driven superior returns for their shareholders. A dollar invested in Carnival stock 25 years ago would be worth 19 times that today, representing a total return almost twice that of the S&P 500 over the same period. | Communities | Carnival strives each and every year to make a difference in their homeports and various regions around the world in need.During the past year Carnival Corporation & plc gave nearly $10 million to charitable organizations, including a $2 million donation to support Hurricane Sandy relief efforts. | 3. Strategies * Carnival now has its ships in ports that are within reasonable driving range for a good portion of the country. Galveston, San Diego, Mobile, New Orleans, Charleston, Baltimore and New York all have Carnival ships sailing from their ports, making it cheaper and easier for more Americans to cruise. CI #6) * Identify those managers responsible for implementing health, environmental, safety and security perfor mance and ensure that there are clear lines of accountability. (CI #3 and 4) * Promptly report and properly investigate all incident and take appropriate action to prevent recurrence (CI #3 and 4) * Establish and act upon goals and objectives to continually improve our performance * Continue to publicly report to and maintain open dialogue and cooperation with key stakeholders (CI #3 and 4) * Carnival operates Under Section 883 of the Internal Revenue Code; certain non-U.S. corporations (such as our North American cruise ship businesses) are not subject to U. S. federal income tax or branch profits tax on U. S. source income derived from, or incidental to, the international operation of a ship or ships. (CI #5) * Since defueling on Costa Concordia began until 7 a. m. Feb. 17, a total of 251,492 gallons of fuel have been pumped out of 4 tanks located on the ship. (CI #3) * According to Costa Cruise, a total of 377,237 gallons of fuel is still onboard in 13 tanks.Following the schedul e drawn up by the Neri/Smit Salvage experts, if sea and weather conditions remain favorable, all of the fuel still on board the vessel should be removed within three weeks. (CI #3) * Carnival has several defined contribution plans available to most of their employees. Carnival also has single-employer defined benefit pension plans, which cover some of their shipboard and shore side employees. (CI #1) 4. Policies Protecting the health, safety and security of Carnivals passengers, guests, employees and all others working on behalf of the Company * Protecting the environment, including the marine environment in which Carnivals vessels sail and the communities in which we operate * Continue to follow Carnivals Corporate Standards which go considerably beyond the requirements of current environmental law and regulations. * Carnival is primarily a foreign corporations engaged in the business of operating cruise ships in international transportation. (CI #5) Key Executives:Mickey Arison: C hairman and CEO of Carnival Corporations David Bernstein: CFO and senior Vice President of Carnival Corporations Howard S. Frank: Vice Chairman and Chief operating officer Alan B. Buckelew: CEO and President of Princess cruises Gerald R. Cahill: CEO and President of Carnival Cruise lines Larry Freedman: Chief Accounting Officer and Vice President-Controller Michael Thamm: CEO of Costa Crociere, S. p. A. Arnaldo Perez: Senior Vice President, General Counsel and Secretary Stein Kruse: President and CEO of Holland America Line David Dingle: CEO of Carnival UKMichael Ungerer: President of AIDA Cruises Board Members: Mickey Arison: (Internal) President since 1979 and CEO since 1990 Howard Frank: (Internal) Vice Chairman of the board of directors of Carnival Corporations since 1993, and Chief Operating Officer since 2003. Pier Foschi: (Internal) on the board of directors for Carnival Corporation since 2003. Chairman and CEO of costa crociene SpA. A vice chairman of confitama, the federati on of Italian ship owners. Robert Dickinson: (Internal) Director of Carnival Corporation since 1987 and of carnival plc. since 2003.He served as president from 1993-2007 and CEO of Carnival cruise lines from 2003-2007. Jonathon Band: (External) Director of Carnival Corporation and Carnival plc. Since 2010. Stuart Subotnick: (External) Director of Carnival Corporation since 1987 and of carnival plc. Since 2003. Richard Glasier: (External) Director at carnival corporation and carnival plc. since 2004. From 1995-2002 he was executive vice president and CFO of royal Caribbean cruises. Arnold Donald: (External) Director of carnival corporation since 2001 and a director of carnival plc. ince 2003. Modesto Maidique Ph. D: (External) Director of Carnival Corporation since 1994 and of carnival plc. since 2003. He also served as FIUs president from 1986-2009. John Parker: (External) Director of Carnival Corporation since 2003 and of Carnival plc. since 2000. He served as Deputy Chairman of Ca rnival plc. from 2002-2003 Laura Weil: (External) Director of Carnival Corporation and carnival plc. since 2007 Peter Ratcliffe: (External) Director of Carnival Corporation since 2003 and director of Carnival plc. since 2000. 003 to 2007 he served as the CEO of P&O Princess cruises. Randall Weisenburger: (External) Director of Carnival Corporation and Carnival plc. since 2007 Debra Kelly- Ennis: (External) Elected to the committee of the carnival Corporation and carnival plc. in January 2012. Conflicts of Interest: Richard Glasier was once the CEO of Argosy gaming and although no longer the CEO he still is a chairman and major shareholder of the company. Argosy gaming mostly deals with casinos but also operates riverboat gambling cruises.There is a definite conflict of interest because he is not only concerned with the success of Carnival Corporation but also Argosy gaming success as well. Even though he is not the CEO anymore he still converses with the top management of Argosy and is up to date about what’s going on within the company as well as knowing about what’s going on in Carnival too. This means he might have information on the companies such as release dates for new ships or new specials that he cannot share with the board members of the other company and if he did it would be ethically wrong.Therein lies the conflict of interest, if he was not on both board then there would be no conflict. Being on both boards is a conflict of interest because he is not only concerned with the success of Carnival but also Argosy gaming as well. Since 2010, Start Subotnick has been the president and CEO of Metromedia. Metromedia is a holding company that has many subsidiaries that operate in various activities such as restaurants, internet, software technology, and more. The main conflict of interest for Subotnick is that Metromedia develops software for the hospitality industry.Since Carnival uses hospitality software to perform most tasks such as when you get checked at the port to the server on the cruise ship placing your dinner order, it would be in Subotnicks best interest to try to get Carnival to use Metromedia’s software. This is a conflict of interest because it might not be what’s best for the Carnival but it what’s best for Metromedia. Mickey Arison: Mickey Arison, CEO and chairman of Carnival Corporation is #64 on Forbes billionaire list in the United States. His father ted Arison founded carnival cruises in 1972. Mickey started working for the company in sales.He quickly moved up the ranks not just because of who his father was but because he was hard working and had great ideas. In 1979 he became president and finally in 1990 he became the CEO and he currently still holds that position. He turned carnival into what it is today, which is the world’s largest and most successful cruise ship company. Mickey said the best lessoned he learned from his father was to â€Å"hire good people to ru n your businesses, give them the support they need to be successful, and let them do the job you hired them to do. He is known for his â€Å"hands-on† or â€Å"open door management style. He lets his employees’ do their own thing because he knows that they will do it right and he doesn’t have to be watching over them in order for things to get done because he hired the right people. Micky Arison goes above and beyond what a manager does. He is to say the least a competent manager. His company has been the most successful and recognizable cruise line in the world for over two decades. Arison learned the basics of the company from the bottom so he could really understand the company and make better decision for the company as a whole down the road.He directed his company to make many acquisitions, including their most important, the acquisition of the P&O princess cruises. Royal Caribbean also wanted to acquire the line so it was not an easy fight. Luckily for Ar ison they got it and with the acquisition it made them a clear industry leader. David Bernstein: David Bernstein Started with carnival in 2003 as vice president and treasurer. He was then promoted in 2007 to senior vice president and CFO. AS CFO and VP of carnival he overlooks all finance, treasury, insurance, accounting, tax, and investor relations. Howard Frank:Howard frank has been Vice Chairman of the board of directors of Carnival Corporations since 1993, and Chief Operating Officer since 2003. He is responsible for the corporate-wide business strategies. He works closely with all carnival corporation management, especially with Mickey Arison. He provides oversight to Mr. Arison of the companies many worldwide ventures. He also serves as a chairman of the executive committee of the cruise line international association. (CLIA) Partnership Management: Based on the information gathered the Carnival Corporation shows a partnership management model. They have many characteristics o f this model. There is a high degree of involvement by top management and an equally high degree of involvement from its board members especially since their CEO is also their chairman and they also have a few other top guys on the board. * This enables the top management and board members’ to work more closely with each other to develop strategies and to converse on a daily basis about the many things going on in the company. * Howard frank who is the vice chairman of the board is known for working closely with all management of Carnival Corporation& plc, As well as with Micky Arison himself, the CEO and chairman of carnival.When disaster strikes the company’s senior management team and board members take on the responsibility for what’s going on and work together to come up with the best strategy to fix the problem. * Also the board creates committees by matching certain members’ functions to their expertise. For instance, David Bernstein was promoted t o senior vice president and Chief financial officer in 2007 because of his expertise in finances. He was the CFO of Cunard line and Seabourn cruise line for five years and before that he held various financial positions at royal Caribbean for seven years. Carnivals board consists of 15 members. 3-A. External Environment: Opportunities and Threats A. Natural Physical Environment: Sustainability Issues 1A. Opportunities a. The climate could be a benefactor since nice weather usually attracts tourism and cruising. 1B. Threats a. When the weather is not pleasant on the coasts of the United States, there may be a negative impact on the number of cruise ships sailing since the shipping ports are located in these areas. For example, during the hurricane season, cruises along the Atlantic and Gulf coast do not set sail due to danger the storm may bring. . The weather in places like Europe, is not as threatening when it comes down to storms compared to the United States. This lessens the deg ree of one threat in the European market for Carnival cruise lines. B. SOCIAL ENVIRONMENT 1. Opportunities Economic: * | Potentially expand their luxury liners which can cause an increase in revenue. (CI#2)| * | Increase their capacity of their cruises by 30-40%. (CI#2) | * | Offer more travel destinations that they currently do not offer, such as China, India, and various countries in South America (CI#2) | Technological: | Improvement of the technology on the cruise. | * | Working on their home web page since millions of people visit this site daily. They can improve their format so that it would be better understood and easier to navigate by people in foreign countries. | * | Using more technological machines for the cleaning staff; for example, to check off each room that was cleaned or is in need for something, such as towels, toiletries, blankets, etc. (C#1)| Political-legal: * | Avoiding paying some of the taxes that other companies in the same industry pay for. CI#5)Ship was te disposal is highly unregulated; waste is dumped off shore without any consequences from a legal point of view. (CI#5)| Sociocultural: * | The diversity of customers that are traveling with Carnival Cruise Lines for their vacation get-away is very large. (#CI2)| * | Brand name is well known among the society. | * | Reached an agreement with Italy's Fincantieri shipyard to build a 2,660-passenger vessel for Holland America and a 4,000-passenger vessel for Carnival. Ships should be delivered by 2015. This will generate more revenue in the future. CI#2)Some people take a cruise with carnival just to gamble in the casino because some states do not have any casinos at all. | 2. Threats Economic: * | Prices of fuel constantly increase. (CI#6)| * | One of the biggest weaknesses that the company and the industry itself are facing is hurricanes and bad weather during specific seasons. Revenues go down, refunds go up. | Technological: * | Technological problems on-board which can be a big t hreat for Carnival. For example, the latest incidence was last month. Carnival ship was stuck at sea for almost a week because of technological mishaps.This caused many lawsuits, refunds, and a bad reputation for the brand. (CI#1)| | | Political-legal: * | Progressive accumulation in water waste caused the cruise line to pay millions in fines. | * | More regulators are trying to force Carnival and other cruise line companies to pay more taxes. (CI#5)Major law-suits of the sinking Costa Concordia. (CI#3)| | | Sociocultural: * | Seasick; some people can’t take a cruise because they get seasick after a while. People that suffer from this generally do not board lengthy cruises. | * | Most people do not eat at the higher class restaurants because the dining room is complementary.Most passengers are generally not looking to spend more money on a cruise that was already paid for and clearly states that it is â€Å"all inclusive†. (CI#6)| * | For some people cruises can be ver y pricy. (CI#6)| | | 2. Some of these opportunities and threats are different in other parts of the world because of different climate, economical issues, and different regulations. III. Internal Environment: Strengths and Weaknesses A. Corporate structure 1. Carnival Corporation and Carnival plc operate under a dual listed corporation structure with primary stock listings in the United States and the United Kingdom.Carnival corporate structure is based on the concept of â€Å"profit center. † a. The decision making authority is decentralized. b. The corporation is a fleet organization worldwide. For the most part, most of Carnival business runs in North America and Europe. 2. Carnival keeps telling its employees this phrase: â€Å"do one thing and do it better than anyone else†. Well that could sound very promising, but from a personal experience I enjoyed royal Caribbean a lot more than I did with carnival. Whatever the CEO preaches to the employees does not really j ustify the truth.To clarify, Micky Arison the CEO of the company quotes: â€Å"Carnival doesn’t view a cruise the way Procter & Gamble would view toothpaste or Dial would view soap. Each of Carnival’s lines has its own personality and corporate focus. † (CI#2) 3. The current structure of the company is pretty much consistent with all of its objectives, strategies, policies and programs, as shown and seen in their financial report their profit keeps increasing. (CI#2) 4. The structure of Carnival cruise is very similar to the other cruise companies that strive to succeed and make money.B. Corporate culture 1. Carnival Corporation maintains a friendly, family-like atmosphere on all of its ships. I agree to this based on my previous experience on their ships. ( CI#1) 2. In my opinion, the corporate culture is consistent with current situations of objectives, strategies, policies and programs. They have an â€Å"open door† policy where each and every employee can communicate with upper division managers and let their voice to be heard, and the reason for that is to benefit the employee and potentially even benefit the company. CI#1) 3. â€Å"Unique to the cruising industry is its promotion to protect the environment. The core values include preserving the marine environment and, in particular, the pristine condition of the waters upon which our vessels sail. † This statement is posted on the Carnival website and is the biggest flaw that I have noticed with the company. They are constantly polluting the water, dumping trash into the water, and they contribute a great deal to air pollution. Therefore the statement above is not accurate. (CI#4) 4.Carnival employs a variety of different kinds of people from various different cultural backgrounds. Many employees that work for Carnival have different ethnic backgrounds but are all being treated equally(CI#1) 5. The company does take into consideration the value of cultures of each nati on the company operates in. This is shown in the diversity of Carnival employees and their cultural backgrounds from all around the world. (CI#1) 3-B. Corporate Resources – Finance IV. All numbers in millions except for ratios | 2012| | 2011| | 2010| | | Carnival| RC| Carnival| RC| Carnival| RC|Revenues| 15,382| 7,688| 15,793| 7,537| 14,469| 6,753| Operating Income| 1,642| 403| 2,255| 932| 2,347| 803| Net Income| 1,298| 18| 1,912| 607| 1,978| 515| Net Profit Margin| 8. 4%| 0. 2%| 12. 1%| 8. 1%| 13. 7%| 7. 6%| EPS| 1. 67| 0. 08| 2. 42| 2. 80| 2. 47 | 2. 4| OperatingCash Flows| 2,999| 1,382| 3,766| 1,456| 3,818| 1,663| Debt to AssetRatio| 39%| 58%| 38%| 58%| 39%| 60%| V. Financial Analysis The chart above displays a list of relevant figures and ratios for the Carnival Corporation. It is important to highlight that some of these numbers show increasingly negative results each year.If this negative trend continues it would represent a significant problem for the company, as it wo uld become unprofitable. But how does Carnival compare to others in the industry? Two key players dominate the cruise industry. According to a report by Cruise Market Watch, Carnival Corporation controls 48% of the market share, Royal Caribbean controls 23%, while the rest is controlled in small portions by over 30 other companies (Cruise Market Watch). By generating double the revenues of Royal Caribbean, Carnival is clearly the leader in this industry.For the purpose of this section of the paper, we analyzed the financial statements of Carnival Corporation to measure the health of the company. We will also use financial ratios which best allow us to compare Carnival side by side to its smaller but closest competitor, Royal Caribbean. A notable decline can be seen in the operating income. This figure is considered by analysts to be one of the most important on financial statements because it reflects to a great extend the strength of the company and success of its core business ope rations (Kennon).Operating income is arrived at by subtracting operating costs and expenses from gross revenues. It is the profit that is left to invest, expand, pay debt, distribute to shareholders, and achieve other objectives that a company may have (Kennon). For Carnival Corporation, Operating income declined 27% from 2011 to 2012. Let’s see why. Carnival mainly generates its revenue from the sale of cruise tickets and onboard items and services (Carnival). Although revenue has remained stable in the past years, operating income has been declining which indicates that the company is making less and less profit of the revenue it generates.This could be due to several reasons, but in the case of Carnival Corporation, there are two major factors. One is the rising price of fuel. Cruise companies are heavily dependent on fuel and any change in its price has a significant impact on the company’s financials (Carnival). From 2011 to 2012, the carnival’s fuel expens e increased 7% or $188 million. Another factor that has affected profits for the company is accidents. In its annual report for fiscal year ending 2011, Carnival Corporation included a note to its shareholders regarding the tragic event of the Costa Ship (Carnival).It states that the company takes careful measures to prevent accidents such as the Costa cruise incident (Carnival). In the 2012 Income Statement, Carnival Corporation reported $28 million for â€Å"ship incident-related expenses that were not covered by insurance, including a $10 million insurance deductible related to third party personal injury liabilities (Carnival) CI#3. It is safe to expect that in the 2013 financial statements, Carnival Corporation will again report incident expenses not covered by insurance and possibly higher ones due to the â€Å"Triumph† ship incident CI#4.Although Carnival’s decline in operating income is significant, Royal Caribbean’s 56% decline truly is worrying. Even though Royal Caribbean had nothing to do with the Costa ship incident, there were indirect consequences that affected the company. Royal Caribbean had to report a $413. 9 million impairment loss because â€Å"booking volumes and pricing are down substantially in Spain due to the impact of additional austerity measures there, the lingering impact of the Costa Concordia tragedy and other factors†(Royal Caribbean).Now let’s compare the two companies in terms of efficiency generating profit. The profit margin ratio shows how much after-tax profits are generated by each dollar of sales (Kennon). It is a good indicator of how efficiently a company manages its resources and how well it keeps costs under control. Carnival Corporation has an 8% profit margin. In other words, of every dollar that the company receives from sales, only eight cents represent profit. With expenses increasing more than revenues each year, a low profit margin represents another sign of potential unpro fitability.However, taking into consideration Royal Caribbean’s 0. 2% profit margin, which means that they keep much less than a penny for every dollar they sell, Carnival Corporation is performing much better than Royal Caribbean. Off course, there are additional expenses that are not calculated in operating income like interest and tax expenses. It is worth mentioning that carnival corporation currently does not pay any U. S. federal income taxes because it qualifies for the benefits of section 883 of the Internal Revenue Code (Carnival). Section 883 basically states that some non-U.S. corporations that generate income from the operation of ships are not subject to federal income tax in the United States (Carnival). However, the closing of this tax loophole could become a potential threat for Carnival, as it would significantly affect their net income in subsequent years CI #5. Senator Jay Rockefeller of West Virginia confronted representatives of the cruise industry in a h earing last year (Walker). Senator Rockefeller questioned why Carnival, a company that sells to many American and extensively benefits from the resources of forty U. S. ederal agencies, gets to pay no federal income taxes (Walker). Let’s analyze the Debt to Asset ratio, measured with total assets and total liabilities. Carnival Corporation has a 38% Debt to Asset ratio which by itself represents an okay picture. More specifically this means that debt was used to finance 38% of the assets. On the other hand, Royal Caribbean has a 58% debt to asset ratio which indicates that the company may run into problems borrowing more money in the future. For its debt, Carnival paid $336 million in interest in 2012, a healthy amount compared to the $2. 3 billion operating income (Kennon).Operating income divided by interest expense gives us interest coverage ratio, which indicates problems when it is below 1. 5 (Kennon). But carnival has a 4. 8 interest coverage ratio which means that ther e is still room for earnings to decrease before the company would default on bonds and loans for not being able to keep up with interest (Kennon). But will Carnival be able to meet short-term liabilities? The current ratio is short-term indicator of the company’s ability to pay its short-term liabilities from short-term assets; how much of current assets are available to cover current liabilities (Kennon).A healthy current ratio is greater than 2, but for Carnival Corporation’s is only 0. 25 which indicates that meeting current obligation could be a problem for the company (Kennon). But again we see that Royal Caribbean may have a bigger of a problem since their current ratio is only 0. 08. Another important factor to point out from the financial statements is that operating cash flows show a declining trend. From 2011 to 2012, cooperating cash flows declined 20%.What this means is that unless the current trends change, the company may start running out of cash and bec ome unable to fulfill its obligations, which could lead the company into filing for bankruptcy. Interestingly, Royal Caribbean’s cash flows also declined 20%. However, it is worth mentioning that cruise companies have the advantage of receiving money for unearned revenues because cruise tickets are generally paid in advance. It’s like getting loans at 0% interest. Another important figure to analyze is Earnings per Share (EPS), which is especially important to stockholders.Carnival’s $1. 67 EPS means that if net income was divided amongst all outstanding shares, investors would receive $1. 67 per each share owned. Although a good EPS does not necessarily represent company strength or weakness, its changes affect the price of a company’s stock and therefore it is one of the most looked at figures by investors (Kennon). Based on EPS only, Royal Caribbean may not be an attractive choice of stock since their EPS is only $0. 08. Corporate Resources – Ma rketing Product (Service) Carnival sells cruise tickets for vacations around the globe.Although Carnival markets the experience on the cruises as the vacation destination, their ships go to hundreds of destinations worldwide. Carnival sells numerous products and services onboard either directly or through independent concessionaries from which a commission is collected. Some of the onboard products and services offered that are not included in the ticket price include â€Å"liquor and some non-alcoholic beverage sales, shore excursions, casino gaming, gift shop sales, photo sales, full service spas, communication services, art sales, a wide variety of dining options and laundry services† (Carnival).Moreover, Carnival offers shore excursions and activities, and depending on the destinations, it owns or has stake in hotels where customers are offered a stay in a vacation package. In addition, carnival owns or leases private islands where it operates â€Å"among other things, b each bars and restaurants, water sports, sky lifts, cabana rentals and a surf rider attraction† (Carnival). Promotion: Carnival’s annual report states that each of its brands has â€Å"comprehensive† advertising programs designed to attract the local market. The principal mediums used for marketing and advertising are television, magazine, radio, outdoor billboards, direct mail, e-mail, online websites, online advertising and social media† (carnival). Social media’s utilized are facebook, Twitter, YouTube and Pinterest. In 2012, Carnival’s facebook pages reached over five million â€Å"likes†. In addition, Carnival has â€Å"past guest recognition programs† designed to give past guest’s incentives such as reduced prices and gifts in order to create customer loyalty.Price: Through its many brands, ships, and packages, Carnival claims to provide an option for every generation, taste, lifestyle, and off course, budget. The co mpany categorizes their â€Å"cruise experiences† as contemporary, premium, and luxury. A contemporary experience is the cheapest and most casual alternative, lasting a week or less. A premium experience is designed for experienced consumers with an emphasis on quality, comfort and style and lasts from a week to two weeks.The most expensive alternative is the luxurious, which provides high standards of accommodation and service in a smaller cruise. All cruise tickets include dining and entertainment but other options are available at additional prices. Carnival’s brands all offer special promotions, early booking or past guest recognition programs that reduce the regular price of a vacation. But regardless of the type of experience and discounts taken, cruise ticket prices can vary due to many factors including demand and season.To have little bit of an idea of prices we went through the steps of booking a vacation on carnivals website. The first thing we noticed on th e carnival-U. S. website was a sale of â€Å"up to $200 off + free upgrades for 3-5 day sailings† or â€Å"up to $400 off + free upgrades for 6+ day sailings. Using this sale, for travel in July and departing from Miami on a cruise to Bahamas, the cheapest alternative per person came out to be $330. On the other hand, high-end vacations can cost thousands of dollars. Place: Consumers can always book their cruise vacation directly on the company’s website.But according to Carnival Corporation, their cruise vacations are sold â€Å"mainly through travel agents, including wholesalers, general sales agents and tour operators that serve our guests in their local markets† (Carnival). Accordingly, the company puts a lot of emphasis on their relationship with travel agents. Carnival provides additional commission incentives to travel agents in order to motivate them to sell more of carnival’s vacations. Carnival also provides agents with educational tools such a s training seminars, online courses, and videos for them to better understand and sell Carnival’s products and services (Carnival). . TASK ENVIRONMENT Threat of New Entrants: medium * Economies of scale: expansion of current companies is the greatest weapon against new entrants. The few leading companies, Carnival, Royal Caribbean, ; Disney, purchase or build larger ships or renovate older ships. Carnival, the leading giant of the industry, â€Å"As of January 2011, the company operated 98 cruise ships with a passenger capacity of 191,464 berths. The company operates through four segments: North America cruise brands; Europe, Australia and Asia (EAA) cruise brands; cruise support; and tour and other. (â€Å"Global hotels†, 2012) * Government regulations: as a global industry, it is very difficult for government of any particular countries to impose regulations. Therefore lack of enforcement or adherence to regulations regarding employment, safety, and health requireme nts make it less bureaucratic for a new entrant. * Capital requirements: large capital is required to own and maintain a ship. * Product differentiation: many companies offer a variety of theme cruises to attract or cater to different needs or preferences. It is an opportunity for a new comer although quite difficult to grasp. Access to ports cannot be so easily obtained. There are very few ports embarkations in populated cities. Giant companies sometimes share ownership of ports when they financially contribute with state government to build them. Rivalry: medium high * Capacity growth: the cruise industry is driven by capacity maximization; every square inch of space must be utilized to accommodate and maximize the experience of the passenger. * Service characteristics: cruises and ships are designed to cater to the various ‘wants’ and preferences of different demographic around the world.Many cruise lines difference themselves by the amenities or destinations they pr ovide or offer. This uniqueness in the service adds an edge to the competitive field. Creativity is key in designing cruise themes that respond to or attract unexploited market niches. * Rate of industry growth: based on various reports the industry is growing at a much slower pace in North America than Europe and Australia. The slow growth may be because of the economic downturn that we are facing or it may be the result of how difficult it is for the cruise industry to reach the wallets of more Americans. Number of competitors: the industry is somewhat fragmented and few competitors have a hand in multiple niches. Competition is very high in the industry because they are fighting for a bite of a pie that is already small. The companies try to maximize their revenues by offering attractive prices and exotic destinations to customers. (Lester, Thyne, ; Weeden, 2011) * Switching cost: can be high or low based on the type of cruise that is analyzed. Threat of Substitute Products or Se rvices: medium high * Existence of substitutes: land-based vacations are the biggest threat to the industry.The cost is half or one third less expensive, the vacationer has more control in land than over sea, greater sense of security towards land than sea. Although land transportation does not provide the sea experience that a cruise does, it is by far preferred to sea transportation. Also, a cruise is considered a luxury item and can be compared to the purchase or acquisition of luxurious items such as jewelry, high-class automobiles or whatever else discretionary money is used for. A cruise is not a necessity; it is a choice, a reward or a gift to oneself or loved ones.The rating of medium high is mostly due because of the fact that choosing a cruise over a road trip, a flight, a hotel is determined by preference and affordability. * Switching cost: the only cost is the loss of the experience of the cruise. Power of Buyers: medium low * As a luxury item, the cost of a cruise is n ot negotiable. The expectation of a high cost is lightly brushed with the hope that a cruise will not drain a savings account. The buyer does not have a significant influence on the price. Prices are more inelastic than elastic. Backward integration is quite impossible, the capital necessary to lease or purchase a ship is over tens of thousands dollars. Average passengers cannot afford it. * Alternative suppliers do exist but high product differentiation does not allow the buyer to compare oranges with oranges, more likely the buyer has a choice between grapes or oranges. Moreover, the same company under different names may offer different theme or budget cruise. Cruise companies own more than one cruise lines, therefore choosing one cruise line over another may not represent a competitor’s advantage.Carnival and Royal Caribbean cater to different income brackets, Windstar offers exotic destinations for adventurers, Disney Cruise Lines are more family oriented. (Deep sea, 201 2). * Due to the hefty price of a cruise, the buyer has a high expectation about the service. The demands and expectations of buyers greatly influence the marketing techniques and expansion projects that cruise companies undertake. Brand recognition is a magnet to create and retain customers and helps increase demands. Power of Suppliers: medium high * Supplier dominance: only a few companies build ships, provide staff and services to cruise companies. Forward integration for suppliers is less likely but backward integration for the cruise line industry is highly possible. Carnival uses backward integration to reduce costs and retain control of how its ships are built. * Product and services that the suppliers provide to cruise lines is very unique and specific to that industry; switching cost is high. What these suppliers make or produce can only be sold to the cruise industry. * Economies of scale: purchasing industry is very important to the supplier. All the major cruise compani es own at least 5 to 10 cruise lines; which strengthen their purchasing power.However, there are not that many suppliers to choose from. Having limited purchasing options, increases the power of the suppliers. Relative Power of Other Stakeholders: very high * Special interest groups: environmental activists voice their concerns to the industry and directing their attention to fuel emissions, waste water dumping and few others. Thousands gallons of sewage and water bathroom water are discharged untreated in the ocean daily. Onboard observers are placed on ships that use ports in Alaska to ensure that wastewater is sanitized before being dumped in the ocean (Klein, 2011).In his article, Klein also indicated in his article that the daily fuel emission of one cruse ship could be equivalent of that of thousands of cars. * Loyal customers: their perception regarding the safety of the industry affects their decision about whether to use discretionary money on a cruise or elsewhere. It also taints their views of the brand recognition. They are less likely to refer that cruise line or to become repeat customers. * Travel agencies: most cruises are sold and advertised by travel agencies.Travel agencies are described by Cruise Lines International Association (CLIA, 2011) as ‘the distribution channel offering the best service† to the cruise industry. * Government regulations: even though some of the big companies have headquarters in the USA, they are incorporated in Antillean territories such as Panama, Bahamas, and Virgin Islands. Doting a ship with a flag registered in countries like Liberia and Panama, becomes a convenient avoidance tool that shields the cruise companies from adhering to labor and environmental laws, health and safety regulations, and most importantly avoid paying corporate taxes. Airlines industry: they provide means of transportation to different ports (from one state or one country to another), when airfares are high, it adds to the cos t of transportation to a port. To overcome this dependence more ports are being built in areas that can be driven to. * Local communities: when a cruise ship arrives at a destination, the community of that foreign location receives the passengers. How passengers and the cruise line are received affect how the cruise experience is perceived. * Global workforce: many describe the work environment as ‘sweat ship’ and it does not project positively on the companies.In the cruise industry, employees are in contact with passengers 24 hours a day and for several days; an unhappy or miserable employee is contagious. It does affect indirectly the bottom line of the company. Lack of respect, living quarters, rigorous demands of the job, being underpaid, language and culture differences separate the cruise workforce from the visibles and the invisibles. The cruise industry is part of the service sector; an unhappy, mistreated, undervalued workforce does not contribute to a pleasan t experience for the passenger (Agaard, Larsen, ; Marnburg, 2012). SWOT ANALYSISStrengths:1- wide variety of theme cruises Case issue #6 2- largest ship capacity Case issue #63- backward integration4- heavily invest in marketing Case issue #65- experienced managenent Case issue #1, #3 ; #4| Weaknesses:1- Corporate culture regarding ship workforce Case issue #12- PR handling of current sea tragedies Case issue #3 ; #43- HR: employee training and recruitment Case issue #1| Opportunities:1- partnership with travel agencies Case issue #62- leader in environment protection ; safety Case issue #3 ; #43- Adopt a global standard of ethics ; conduct Case issue #14- develop a positive rapport with ship workers Case issue #15- treat labor force as valuable contributors Case issue #1| Threats:1- Extra costs (taxes, cleaner waste water) Case issue #52- slow growth of North American market3- workforce motivation Case issue #14- land-based transportation and hotel resorts Case issue #65- brand rec ognition mudded by sea tragedies Case issue #3 ; #4| MODIFIED TOWSSO Cross referencing * The capability of backward integration puts Carnival in a better position to build ships that are safer friendlier to the environment while controlling costs. S3, O2 Case issue #3 ; #4 * Experienced management can develop standards that could help improve the workforce environment on board. S5, O3, O4, O5 Case issue #1 * Sharing marketing techniques with travel agents may improve and strengthen their relationship. O4, S1| WO Cross referencing * The tone starts at the top. A workforce that feels valued and adequately paid strengthens the base of any company. W1, O3, O4, O5 Case issue #1 * Actions speak louder than words. W2, O2, Case issue #3 ; #4 * Treating employees as valuable contributors helps HR in their recruitment strategy.W3, O5 Case issue #1| ST Cross referencing * Experienced management can use their expertise to create a working environment that empowers and values the ship employees. S5, T3 Case issue #1 * Marketing techniques is the best weapon to weaken the threat of substitutes and ‘clean’ the brand. S4, T2, T4. T5 | WT Cross referencing * When morale is low, ‘the ship may sink’. Employees are the foundation of companies, the weaker the base, the less solid is the company. W1, W3, T3 Case issue #1 * A PR is the voice of the company. After a tragedy, responsibility, reassurance, and compensation is key in re-building confidence. The opposite drills the hole deeper. W2, T4, T5 Case issue #3 ; #4| 5. EVALUATE STRATEGIC ALTERNATIVES Alternative #1Pause/Proceed with Caution Strategy: Proceed with caution until they are able to evaluate how the new tax and fuel regulations will affect the company and how to go about decreasing lawsuits due to employee exploitation and onboard guest safety. (CI #1, 3, 4, 5) Pros: * Customers will continue to do business with Carnival if they feel that they are working to improve the ship’s safety. * Employees put forth more effort if they do not feel as though the company is taking advantage of them and increased motivation from the staff can increase the company’s bottom line. Cons: * Only making small changes gives the competition a chance to catch up. * Nothing can be done to stop new regulations, so the company is bound to lose profits if there is an increase to fuel prices and taxes. Alternative #2No-Change Strategy: Since Carnival Corporation ; PLC has the largest ship and passenger capacity in the cruise industry with many diverse brands they can continue to do what they have been doing and hope they remain ahead of the competition even with the replacement of Mr. Arison in the future (CI #2). Pros: * Carnival is already one of the most profitable cruising companies with a 47% market share in the UK, 68% in Italy, 51% in Germany and 45% in France, so they are dominating the global market competing mainly with Royal Caribbean. * Doing nothing new gives the company time to fix some of the current issues. Cons: * Competition could pass and take control of market if Carnival sits idly by especially with growing customer concerns about safety of the ships. Profits are already decreasing from previous years so doing nothing new could keep the company from enjoying profits that could be acquired with innovative ideas. Alternative #3 Horizontal Growth Concentration Strategy: Carnival can increase operations in the current European market as well as reaching out to new regions (CI #6). Pros: * Carnival derives a majority of its revenue (nearly 52%) from US customers which is currently on the decline, so it would be beneficial to tap into other markets around the world. * Carnival already has market presence in Europe, so it would not be as difficult to increase capacity in that region as opposed to starting fresh somewhere else. Cons: The value of the dollar against Euro appreciated from 1. 60 in January 2010 to 1. 53 by April 2010 against the Pound . If the dollar strengthens it would record lower revenue than is actually earned. * The European economy is also faltered, so profits are not guaranteed and an increase in operations could instead cause a company lose. RECOMMENDATION I would recommend that Carnival begin with the pause and proceed with caution strategy for at least 1 to 2 years. This would give them time to get the company back in line with the aspiration of earlier business days when the safety and satisfaction of customers and employees came before the profits of the corporation (CI #1,3).Once they are back on track I would then recommend for Carnival to go forward with the horizontal growth. It is in their best interest to reach out to untapped markets particularly since there is a decline in the current US regions and they are looking for ways to increase revenues since Carnival is only currently reaching 20% of the total US market (CI #6). Growing horizontally in any market has significant financial implicatio ns for a cruise company. Considering that the newest Carnival Dream-class ships cost $740 million each (Shipcruise. org), it is a very expensive strategy to implement. In addition, the company would have to engage in research, planning, training, and marketing activities which can be very costly.Because Carnival’s balance sheet shows $465 million in cash, it will most likely be necessary for the company to borrow money to finance their growth. But borrowing money would not cause any problems for Carnival Corporation because as we analyzed earlier, the company has a healthy interest coverage ratio which measures the ability to pay interest on outstanding debt (Kennon). Although it is costly and risky, investing the money to expand into new and existing markets now, Carnival would have the potential to increase its revenues in the future years to offset the increasing costs. Carnival is already in the process of building two new ships to be entered to service in 2013 and 2014 a nd estimates that these two new ships will increase their passenger capacity by 19% (Carnival).Also, a continuous growth by the largest company in the industry could drive some of its competitors out of business and capture a larger market segment. 6-A. Implementation After an extensive in-depth review of the Carnival Corporation ; PLC, it is apparent, as with any large corporation it has many strengths and weaknesses. Carnival and its subsidiaries have a dominating; nearly 50% market share and strong support base among its customers. With plenty of loyal customers, and many recognizable and respected brands it would  appear to have few  problems. However, despite all the good attributes, several recent negative events have arisen concerning both  safety and corporate concerns, which have shaken the company and its shareholders. 6-B.What must be done?  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   1. Shareholder Confidence  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   2. Safety Concerns  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   3. Impr ovements and New Ship Building Action Steps| Responsibility| Start-End  | Financial impacts| Questions? | Concern:| WHO? | WHEN? | HOW MUCH? | What Must be done? |   |   |   |   | | 1. Shareholder Confidence| Micky Arison (CEO), Upper Management| 4/1/13-Ongoing| Determine Future Earnings|   | 2. Safety Concerns| Upper Management,Howard S. Frank (COO)| 4/1/13- 12/31/13| Cost of Training and current safety assessment|   | 3. Improvements and New Ship Building| Upper Management, Design Team,David Bernstein (CFO)| 4/1/13- 4/1/16| Set budget for cost of research|Shareholder Confidence Over the last 5 years Carnival's stock price has  collapsed. Granted, the worldwide economy has endured one of the worst periods in history, but In 2008 the stock was trading roughly 15% higher than what it is today, and between that time it fell as much as 70% to the 2009 lows. I believe Micky Arison (CEO) should be focusing on how to re-energize and grow the company in the face of some ver y difficult times. I believe this could be achieved by continuing to expand to new entrant markets in Asia, Europe and Australia. The United States has been saturated for some time, with little growth and shrinking profit margins due to fierce competition.In addition the company must provide a great experience for clientele in order to ensure repeat business, which is essential to Carnival's success. Safety Concerns Over the last couple years Carnival has experienced several bad events and even worse publicity. This has caused many to suspect wrong doings and create concerns over safety. Incidents like the MS Costa Concordia in 2012, which was one of the worst  disasters in modern cruising history, in which 34 people were killed and the ship was a total loss costing nearly 600 million dollars are a nightmare for a cruise line. In a more recent case, the Carnival Triumph endured an engine fire disabling the ship and causing the boat to be stranded at sea for several days.Although n o one was hurt, it  caused a severe inconvenience to the passengers and crew. Tales of rotten food and overflowing toilets ran for several days on international media. Safety should always be of utmost concern with any industry. The last thing people want or need is to have a feeling of insecurity  on a vacation. Cruises overall have been very safe for many years but still in the back of many people’s minds the thought of the Titanic lingers. Carnival needs to make sure people know that safety is  the top priority of the Carnival Corporation. Although it shouldn’t be pushed to the point where people get scared, it definitely needs to be continuously addressed.Carnival needs to constantly implement the most modern safety techniques and they must educate the crew how to keep passengers as safe as possible. Improvements and New Ship Building Because of the fierce competition in the cruise industry it is vital to constantly upgrade older ships and build larger and mo re desirable new ships with more features and amenities. A new trend in the industry over the last couple decades is to build bigger and bigger ships. Cruise lines such as Royal Caribbean have been very successful over the last decade by initially building  100,000 Gross Tons ships. Since then the Oasis Class that is well over 200,000 Gross Tons has been put in service. Carnival and its subsidiaries aren’t necessarily building the biggest ships but they are uilding larger ones as well. I believe this is very important because more and more people are going on cruises for the entertainment rather than the ports. Many cruise goers are like the typical individual who want the newest and the best and this is the reason it is pivotal for Carnival to keep up with the new trends of constant upgrades and services. 6-C. How should it be put into action? Action Steps| Responsibility| Start-End  | Financial impacts| Questions? | Concern:| WHO? | WHEN? | HOW MUCH? | How should it be put in action? |   | Micky Arison (CEO), Howard S. Frank (COO), Upper Management| 4/1/13| Determine budget in conjunction with finance dept. |Concerning safety, it must be a top priority to follow the standard government mandated procedures, which are given to the entire Cruise Industry. Carnival can go above and beyond this by simple measures such as drills and employee training. They can go beyond the recommend amount of life jacket and lifeboat requirements. I believe the biggest concern is to hold top officials such as the Captain responsible for such disasters as the MS Costa Concordia. Carnival is doing a great job in terms of shipbuilding and upgrades. They have kept up with the competition so in my personal opinion I believe the company needs to make security a given so that passengers focus on the amenities of the cruise ship.The company should also take guest recommendations seriously and look at what competitors such as Royal Caribbean are doing in newer ships and follo w as well. As for the Shareholders it is important for Carnival to insure that it is strong and well managed, generating consistent profits and growth. This is very important to any shareholder and I believe this can be achieved by expanding to new markets in  Asia, Europe and Australia. Logistics is also important to have available ships to move to these new ports to expand. 6-D. Who should do it and when should it take place? Action Steps| Responsibility| Start-End  | Financial impacts| Questions? | Concern:| WHO? | WHEN? | HOW MUCH? |Who Should Do it and when should it take place? |   | Micky Arison (CEO) Howard S. Frank (COO), Upper Management,  | 4/1/13| Determine budget in conjunction with finance dept. | Carnival and its subsidiaries future expansion and safety goals need to be implemented and enforced at senior management levels in order for the employees to know that it truly is important to the company's success. It takes a strong leader to do what’s necessa ry for future growth and fend off new fierce competition within the industry. It is important to start as soon as possible because the competitors within the industry will try to take advantage of Carnival's recent problems.I believe safety is a big concern with two major issues within a year of each other. This has brought bad press and will most likely follow up with loss of customers in the future. 6-E How much will it cost? Action Steps| Responsibility| Start-End  | Financial impacts| Questions? | Concern:| WHO? | WHEN? | HOW MUCH? | How much will it Cost? |   | Upper Management,Micky Arison (CEO),David Bernstein (CFO)| 4/1/13| Set budget for cost of research| Modern cruise ships  cost no less then 250 million dollars, with the most expensive costing well over 1 billion dollars. Carnival as well as the rest of the industry has absorbed these costs by constantly upgrading ships every year or two rather then building many ships at once.They also have sold older ships to othe r cruise lines, or even created new cruise lines with their older ships to cut costs and continue making more money with new locations around the world. As far as safety is a concerned it shouldn’t cost much considering a large amount of the cost of new cruise ships is equipping them with the most modern safety equipment available. It is very important for the employees be able to use and know this safety equipment because it is worthless if the staff doesn’t know how to use such equipment. Work Cited Carnival PLC. (2012, March 03). Carnival corporatoion ; plc 2012 annual report. Retrieved from http://phx. corporate-ir. et/phoenix. zhtml? c=140690;p=irol-reportsother2 Carnival PLC. (2010, March 03). Carnival corporatoion ; plc 2010 sustainability report fiscal year 2010. Retrieved from http://phx. corporate-ir. net/phoenix. zhtml? c=140690;p=irol-sustainability_env Carnival Corporation ; PLC. 2012 Annual Report. Washington, DC. March 7, 2013. http://phx. corporate-ir. net/phoenix. zhtml? c=140690;p=irol-reportsother4 Carnival Corporation. 2006 ;Retrieved from http://phx. corporate-ir. net/phoenix. zhtml? c=200767;p=irol-history; Morningstar 2013 ;Retrieved from http://insiders. morningstar. com/trading/board-of-directors. action? =CCL;region=USA;culture=en-us; The Financial Times Ltd. 2013 ;Retrieved from: http://markets. ft. com/research/Markets/Tearsheets/Directors-and-dealings? s=CCL:NYQ; â€Å"How Much Does a Cruise Ship Cost to Build. † Ship Cruises. N. p. , n. d. Web. 13 Mar. 2013. http://www. shipcruise. org/cruise-articles/489-cruise-ship-cost Kennon, Joshua. â€Å"Investing Lesson 4: Income Statement Analysis. † About. com Investing for Beginners. N. p. ,n. d. Web13Mar. 2013. http://beginnersinvest. about. com/od/incomestatementanalysis/a/income-statement-analysis. htm â€Å"Market Share | Cruise Market Watch. † Cruise Market Watch RSS. N. p. , n. d. Web. 12 Mar. 2013.

Netflix Case Essay

In the late 1990s, with the booming in number of Internet users (dot-com boom), investors was encouraged to invest in Internet to get in on the very profitable market that was available at that time. Netflix was one of the first Internet companies, which took that advantage by getting into Internet video market. By the late 2000s, home video rental business (Blockbuster, Hollywood video, etc.) took place in the market, however it didn’t take too long for Netflix to beat that market and in mid 2009 increase its stock prices to $39 when its best competitor Blockbuster’s was less than $1. Although Netflix was taking power over the video industry, companies such as Apple, Amazon studios and Hulu began to threat Netflix’s share in the market but Netflix could respond to those threats by investing in research and development and bring up new models such as video on demand model. Today Netflix is world’s leading Internet TV and movie provider and has over 40 million members in most developed countries. Netflix is still working hard to meet unending challenges while controlling its core business and it is not very easy to manage an organization as Netflix since there are always issues and problems due to competitors’ challenges in this competitive industry but it is possible for Netflix to manage these competitions by doing research and development to come up with new models and trends. The video industry started in the 1970s in the United States and it was mostly focused on VCR technology. With the decrease in movie theatres, the industry concerned about loosing the control over selling their movies and was looking a better way to extend the distribution network, which was only by movie theatre at that time. By the 1990s, they came up with the idea home rental videos since they saw the opportunity of video rental business which could not only be an alternative of going to movie theatre, but also great chance of selling or renting the movies that performed bad in movie theatres. The market has changed in 2000s when DVD technologies, which had special features such as, extra scenes and extended versions took place in the market until 2010 when the Blu-ray came up since there was a demand for viewing of high definition movies but it didn’t take place very well in the market and then DVD maintained its position again. However, there was a change in buyer behavior as Internet technologies have improved. Buyers started not to go to video rental store just like they didn’t want to go to a computer store to buy a computer. Internet sales took control over almost every industry. Even grocery shopping could be done online. Hence, digital distribution of TV shows and movies via Internet streaming wasn’t a big surprise for the industry. Since all these was threatening physical video rental business, Netflix offered its customers to watch a movie immediately when purchased without worrying about turning it back or even late fees. The organization turned into a win-win situation because of the fact it included customers, producers, TV and cable providers, distributers, movie theatres and even video stores into its value chain.

Up Style and Down Style

Up Style and Down Style Up Style and Down Style Up Style and Down Style By Maeve Maddox Book titles–and newspaper and magazine headlines–are usually formatted in one of two styles: â€Å"up style† and â€Å"down style.† Up Style This style calls for capitalizing the first and last words in the title or headline and all â€Å"major words† in the title. Not all style guides agree as to what should be considered a major word. Most agree that nouns, pronouns, adjectives, verbs, adverbs, and subordinating conjunctions (if, because, as, that, etc.) are major words and should always be capitalized. That leaves articles (a, an, the), prepositions, and coordinating conjunctions (and, but, or, for, nor) in the minor league where lowercase prevails. Unfortunately, as is frequent with arbitrary rules, style guides don’t always agree. Both the Chicago Manual of Style and the AP Stylebook agree that articles (a, an, the), and coordinating conjunctions (and, but, or, for, nor) should not be capitalized unless they are the first or last word of the title, but when it comes to prepositions, they differ. CMOS says never capitalize a preposition unless it is the first word in the title. AP says leave short prepositions in lowercase, but capitalize prepositions and conjunctions of four or more letters. Here is how the same title would be formatted according to CMOS and AP: CMOS: Four Theories concerning the Gospel according to Matthew AP: Four Theories Concerning the Gospel According to Matthew Most stylebooks state that all verbs are capitalized, including is, am, and be, but that the to of an infinitive is to be treated like a preposition and put in lowercase: How to Train Your Dragon, How to Be a Better Parent. Down Style The only words capitalized in down style are the first word of the title and any proper nouns that appear in the title: Four theories concerning the Gospel according to Matthew. (book title) Coastal Commission enters fray over San Mateo County beach access (headline) Down style has been adopted by many newspapers because it calls for fewer rules. The purpose of having style guides is to make reading pleasant by providing a clear, consistent manner of presenting written material. If you write for yourself, adopt any style you wish for your blog or other publications. If you write for hire, follow your employer’s house style. The following headlines and book titles taken at random from the Web illustrate the fact that not everyone follows the same stylebook: Journey Home Finally Begins for the Victims of Malaysia Airlines Flight (headline, NYTimes) Why Triumphant Jihadis In Iraq Will Help Assad Crush Opposition In Aleppo (headline, HuffPost) Modern Identity Changer: How To Create And Use A New Identity For Privacy And Personal Freedom (book listed on Amazon) Gone With The Wind (AMC filmsite.org) Gone with the Wind (Imdb) Gone With the Wind (Rotten Tomatoes) Hardball: How Politics Is Played, Told by One Who Knows the Game  (book listed on Amazon) How To Hide Anything  (book listed on Amazon) Why Government Fails So Often: And How It Can Do Better (book listed on Amazon) I’ll save the question of â€Å"Italics or Quotation Marks?† for another post on book titles. Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Style category, check our popular posts, or choose a related post below:Comparative Forms of AdjectivesPeople versus Persons75 Synonyms for â€Å"Hard†

Auditing for Good Analytical Research

The accounting methodology is as old as most of our basic mathematics that we practice in our daily life. Its importance has played a key role in the financial industry ever since the era of banking industry had commenced. From the past till today accounting is often reflected as auditing for a huge amount of ransom, assets and any other entity which add value to an individual or organization.   With the heavy involvement of the financial industry, thus, it is essential for accounting to integrated policies, standards, protocols and other ethics to have better control of practices with high integrity which classifies into a single term, internal control. Referring to the above quote, the author`s view of internal accounting control may seem to provide more favourable arguments rather than against. But no ideology can be perfect. Firstly, this essay will contribute a fair illustration of the relationship between strong accounting system and legal practices. Then, the importance of t he existence of internal controls. Lastly, it will instigate the beneficial and loosing arguments of internal accounting controls referring to the best practice preferred by the organization. Internal control can be described as a process through which the organizations are able to coordinate the activities and put a bar on the fraudulent activities by the management, as well as the employees (KSU, 2016). For an effective planning, as well as control it is essential to have a well-defined internal control mechanism that will trace the deficiencies and bring transparency in the working. The element of internal control is assessed during the planning stage of the audit of a financial statement (Gilbert et. al, 2005). The outcome of the impact is directly in tune to the auditor’s stage of testing in detail.   To lessen detailed testing, the organization needs to have a strong system of an internal control. Internal controls are part and parcel of organization policies that pertains to finance and business. It comprises of all the actions undertaken by the management for the safeguard of the resources in terms of waste, fraud, and efficiency (KSU, 2016). Secondly, it helps in bringing accuracy, as well as reliability in accounting and operation of data. Thirdly, it enables a strong compliance with the regulations set by the organization (Hoffelder, 2012). Lastly, it helps in assessment of the performance of all the units of the organization. Internal control is simply a good practice that steers the business in an ethical manner. The internal control system is put into practice by the management or the ones who are entrusted with the duty of ensuring strong governance. It ensures that the compliance is done in terms of rules and regulations (Schaeffer, 2006). Moreover, it leads to efficiency in terms of operational efficiency. This can be possible when the internal control system is put into implementation through elements or subsystems and are termed as the components of an internal control system. It has five major components: This simply means a well-equipped environment of the entity where the operations of the business happen. A controlled environment enables strong control and keeps the wrong practices at bay. For example, if the organization is authentic and strict towards the false practices then the employees will fear in any kind of falsehood. This will ensure commitment and keep the fraud away (Manoharan, 2011).   Moreover, an auditor needs to have a proper understanding of the environment and determine whether it is implemented by the management and the behavior. One of the major roles of internal control is to trace and rectify the misstatements. Further, it needs to be noted that management will not wait for the happening of the misstatement rather it will find a measure to detect and correct it (Ingram, 2016). The entity develops the process of risk assessment that helps in identification of the material misstatement (ACCA, 2016). The auditor obtains a clear notion of how the process of risk evaluation process is working and whether it is shedding light on the risks that are expected, the influence of such a risk, an event of happening of such a risk and decision that pertains to such a risk (Harrington, 2003). Information has assumed a vital place in the space of business environment. When an audit engagement happens, an auditor adds to his understanding of the information, as well as a system of communication that is one of the elements of the accounting system (Ingram, 2016).   But, it is not always alike as the accounting system. It I described as the system through which the management develops a link with the internal and external environment. Controls are mechanisms that are implemented by the management to ensure that the financial information is reliable. An apt example is that of the debtors that cannot be written off without the consent of the finance director or any other relevant person. In a similar scenario, credit sales cannot be done until a recommendation is taken from the credit control department (Schaeffer, 2006). Such activities do not constitute authorization.   A need to enter the password in certain modules of an information system is a classic example of the information system. The last element of an internal control system is the process of monitoring. It can be treated as a service that is inbuilt to the system of internal control and evaluates the skills of an internal control system. The process of monitoring is done by evaluating the internal control operation that pertains to the current period and assessments that are separate in nature that includes routine and non-routine checks (Christensen, 2011). Such an evaluation requires external information like the feedback of the customer. Hence, the ones who are entrusted with the responsibility of governance take an appropriate step so that any risk or material misstatement is warded off with ease and flexibility. Internal control system will lessen the amount of audit work and this will have a positive impact because the auditors will be able to use system based audit that will enhance the level of audit work. Moreover, the presence of a strong internal control mechanism reduces the chances of frauds, as well as errors and will bring new supervision (ACCA, 2016). This will accelerate custody and the third party liability will be minimized bringing a great deal of speed and accuracy. Secondly, internal control lessens the audit evidence that needs to be produced as it enhances the audit evidence to be present within the business. This helps to frame a view that leads to speed and evidence (ACCA, 2016). Moreover, the presence of this control system solidifies the audit evidence that needs to be gathered. It reduces the work overload and reduces the time that is needed to prepare a report (Kruger, 2015). Last but not the least it provides a strong internal function that enables the auditor to focus more on the problem and facilitate the work. Further, it facilitates the company’s assets. The presence of internal control might lead to error and fraud because at times the major reliance is on the strength of internal control and this exposes the auditor to the liabilities that is civil in nature. Secondly, the presence of internal control lessens the volume of scrutiny that needs to be done by the auditor leading to smaller samples hence, leaving another area prone to fraud and problems.   Collusion, as well as manipulation might lead to mismanagement and hence, a biased report might occur. Further, the vigilance of an auditor is reduced owing to the internal control and hence, impacts the audit quality. It has the chances of being abused by the internal auditor through collision with the management. Gamers Den is situated in Cambridge (United States) and has a huge selection of games. It is strongly involved in providing an environment that is safe and friendly for the community at large. People can come and play their favourite games. The availability of a dedicated area makes it one of the best places to be in. Many events are even conducted that that attracts and accommodates various players. This keeps the store busy. Further, the presence of less number of employees makes it less complicated. The current internal control mechanism of the gamer den is straightforward. Two game designers are involved in the process that is designed, as well as promotion. On the other hand, two main assistants are present that is Phil and Amy and another employee is ELLA. The policies that the company follows are weak in terms of an internal control. During the hours of business, an amount of less than 50$ can be withdrawn from the cash register. Credit sales are available with a defined time period and according to the customer comfort that is weak in nature. Further, a single cash register is present that lacks all the entries and physical stock counting I unavailable. Moreover, a problem with the physical counting of the stock has appeared. Therefore, cash is collected and remains in the office till a person deposits it to a bank. Further staffs have an access to borrow iPad, laptops, etc. and there is no trace of the current items. A strong system that needs to be developed for Gamers Den will require a proper number of stuff. When the number of employees will be more, the work responsibility will be divided that will lessen the pressure (Lapsley, 2012). Further, the internal control must be structured in a manner that will lead to proper allocation of person who can shoulder the responsibility. In the present system, there is no availability of financial records and information lacks reliability. The accounting control will be a boon to the business. The system of accounting control will help the organization in many ways (Kaplan, 2011). The system of inventory will be maintained in a proper manner, before the issue of stock the authorization and approval will be needed. Further, budgetary control will aid the organization that will enhance the profit with the sales volume. The review of assets will be easier and hence, variances can be traced. The above report provides a clear cut indication that internal control is vital in the smooth running of the organization. It leads to a strong control over the activities that is not witnessed in an organization that lacks internal control. Therefore, internal control brings a wide variety of advantages that helps in steering the business. This leads to a strong momentum and helps the organization as a whole. When internal control is into practice it leads to an enhanced level of accountability and responsibility. ACCA 2016, Audit working papers, viewed 15 October 2016 https://www.accaglobal.com/in/en/student/exam-support-resources/fundamentals-exams-study-resources/f8/technical-articles/effective-audit-service.html ACCA 2016, The new Auditor report, viewed 15 October 2016 https://www.accaglobal.com/in/en/student/exam-support-resources/fundamentals-exams-study-resources/f8/technical-articles/auditor-report.html ACCA 2016, F8 Audit and Assurance aims and update, viewed 15 October 2016   https://www.accaglobal.com/ie/en/student/exam-support-resources/fundamentals-exams-study-resources/f8.html Christensen, J. 2011, ‘Good analytical research,’ European Accounting Review, vol. 20, no. 1, pp. 41-51 Gilbert, W. Joseph J and Terry J. E 2005, The Use of Control Self-Assessment by Independent Auditors, The CPA Journal, vol.3, pp. 66-92 Harrington N 2003,   Risk Management & Insurance, McGraw- Hill Education (I) Ltd. Hoffelder, K 2012, New Audit Standard Encourages More Talking, Harvard Press. Ingram, D 2016, What Are the Seven Internal Control Procedures in Accounting?, viewed 15 October, 2016, https://smallbusiness.chron.com/seven-internal-control-procedures-accounting-76070.html Kaplan, R.S. 2011, Accounting scholarship that advances professional knowledge and practice, The Accounting Review, vol. 86, no. 2, pp.   367–383. Kruger, P 2015, Corporate goodness and shareholder wealth, Journal of Financial economics, pp. 304-329 KSU 2016, Internal Audit, viewed 15 October 2016 https://www.k-state.edu/internalaudit/internal-controls/ Lapsley, I. 2012, Commentary: Financial Accountability & Management, Qualitative Research in Accounting & Management, vol. 9, no. 3, pp. 291-292. Manoharan, T.N. 2011, Financial Statement Fraud and Corporate Governance,   The George Washington University. Schaeffer,M 2006, Internal control breakdown study, viewed 15 October 2016 https://www.aicpastore.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2009/CorpFin/IntControls_Breakdown.jsp Getting academic assistance from