Login

Welcome, Guest. Please login or register.

March 29, 2024, 05:50:55 am

Author Topic: HSC Business - Case studies  (Read 61519 times)  Share 

0 Members and 1 Guest are viewing this topic.

EEEEEEP

  • New South Welsh
  • Forum Leader
  • ****
  • Posts: 971
  • Resource Writer
  • Respect: +543
HSC Business - Case studies
« on: May 07, 2018, 06:39:35 pm »
+13
Hi there it’s E6P!

Case studies … Case studies … Over the following weeks, I’ll be providing HSC business case studies! These cases will be recent and relevant. They may even make things a little bit interesting!

*I understand that this may be an overload or overkill, but the point of this is to provide a diversity of examples (outside Crumpler and Qantas). Take what you can get out of this post!*

((Marketing))
((HR))
((Finance))

….
Operations
Operations in its core is about:
-   What Services or products are we producing?
-   What affects our production?
-   How do we turn things or inputs into outputs
.....
 role of operations management
•   strategic role of operations management – cost leadership, good/service differentiation
KMART vs Myers, Kmart sells cheap clothes and has lower profit margins per clothes. Myers sells higher end clothes.

Android vs Apple: Android phones are cheaper to produce, apple phones and have differentiated themselves. Thus, higher prices. Apple phones use more premium materials

•   interdependence with other key business functions
Apple, apple cut production of the Iwatch and Iphone X due to lower demands. This shows that marketing and Operations are closely linked. If the demand is less, production for it will decrease (otherwise there are too much stocks of it)
https://www.wsj.com/articles/apple-to-curtail-iphone-x-production-in-the-face-of-weak-demand-1517312098

Go pro cuts drone production entirely, due to weak demand.  “extremely competitive aerial market,”
https://qz.com/1174544/gopro-cuts-nearly-300-jobs-is-it-puts-an-end-to-its-drone-business/

………………………………………………………..
influences
•   globalisation, technology, quality expectations, cost-based competition, government policies, legal regulation, environmental sustainability

 Technology
Coles and Woolworths have introduced the self-Checkout. This means that operations can be more streamlined.
Apple Pay, Paypass is accepted in many stores now for payments Faster payments, shorter lines!

Quality expectations
Customers expect fresher produce and vegetables. Since Aldi has improved the stores to have more fresh food, market share has increased!
https://www.smh.com.au/business/companies/aldis-fresh-food-offer-puts-heat-on-woolworths-and-coles-20170906-gyc07u.html


Cost-based competition
Aldi’s introduction to Australia. Aldi has lower prices than Coles and Woolworth’s due to lower prices and overheads. Coles and Woolworth’s responded with lower prices too! They have continued losing market share.
https://www.retailpharmacymagazine.com.au/rise-rise-aldi/

Government policies
Due to the issue of a lack of natural gas for emergencies, the government introduced a new energy policy. Supply for Australia must increase and they aren’t allowed to export it all.
http://www.abc.net.au/news/2017-09-27/gas-export-controls-on-hold-amid-government-agreement/8993254


Australia’s SA is embracing Solar energy, so they have worked with Tesla to build Powerwalls and solar panels on homes.
https://www.theguardian.com/australia-news/2018/feb/04/labor-offers-solar-panels-and-tesla-batteries-for-50000-south-australia-homes

http://www.news.com.au/finance/business/retail/woolworths-to-withdraw-plastic-bags-in-some-stores-two-months-before-bans-come-into-affect/news-story/2db4fef2452a733786ad2055d2a140c6
Bans coming in place for plastic bags! Stores must stop using them or they will be fined $5000. Maximum fines of $20,000.

Legal regulation/legal compliance
UBER – Uber operated in Aus and it was illegal in many states. Drivers were fined.  The government ended up introducing new laws and regulations that uber had to abide by.
Driving record > pass background check

https://www.uber.com/en-AU/drive/sydney/get-a-license/

Federal Court fines Flight Centre for price-fixing - Flight Centre tried to stop three international airlines offering cheaper fares through their own websites between 2005 and 2009, the full Federal Court said in a judgment… violated price fixing laws
http://www.themercury.com.au/federal-court-fines-flight-centre-for-pricefixing/news-story/bafd50585134d489c512b13f72366f08

Window glass company fined 1 million dollars for WHS breach. The company had been given advice by the NSW govt but did not heed the safety instructions.
http://www.safework.nsw.gov.au/news/media-release/window-glass-company-fined-$1-million-for-whs-breach


Environmental sustainability

•   corporate social responsibility
–   the difference between legal compliance and ethical responsibility
Legally, Australian retailers do not need to ensure workers are treated right, but it’s the right thing to do.  There isn’t worker protection laws in Bangladesh! On the ethical side, all workers should be treated with respect!

http://www.abc.net.au/news/2013-06-24/australian-retailers-linked-to-sweatshop-abuse/4773738


–   environmental sustainability and social responsibility

Woolworths stops offering single use disposal plastic bags (which get blown around and found in the ocean). Society has changed to value the environment more.
https://www.sbs.com.au/news/woolworths-brings-forward-plastic-bag-ban

Woolworths, reverse vending machines for plastic bottle and can recycling. Reducing the impact of their operations and looking more socially responsible.
https://www.nsw.gov.au/news-and-events/news/container-refunds-coming-to-woolworths/

…………………………………………………………………
operations processes
•   inputs
–   transformed resources (materials, information, customers)
–   transforming resources (human resources, facilities)

E.g. BANK

Information is transformed into services via people in a bank. Information such as your details, requirements and your needs are the transformed resources.  Transforming resources would be the people who talk to you, the computers that are used!

•   transformation processes
–   the influence of volume, variety, variation in demand and visibility (customer contact)
Low volume, high variety = Ferrari (takes lots of people hours)
High volume, low variety = Normal cars (capital intensive)
Visibility: people don’t normally see factory operations, but they do see food cooking.

It really depends on the type of manufacturing.

–   sequencing and scheduling – Gantt charts, critical path analysis

Software is often used to plan out processes and work flows. This is usually done on Microsoft project.

–   technology, task design and process layout
Process technologies = RFID, automated production lines (e.g. Tesla)
Product technology = finger print scanner on iPhone… Face ID

E.g. Zara have automated factories, robots do the work non stop, 24/7
https://www.forbes.com/sites/gregpetro/2012/10/25/the-future-of-fashion-retailing-the-zara-approach-part-2-of-3/#4d86ce17aa4b



–   monitoring, control and improvement
Apple has the capability to customise Iphone colours and deliver high quality phones at a quick speed. They also adjust the speeds of processes when necessary, e.g. slowing down production due to scratches. Quality control checks were added!
https://www.theverge.com/2012/10/10/3483112/iphone-5-tighter-quality-control-scratches



•   outputs
–   customer service
Knowledgeable, friendly customer service at the Apple Store.
Bunnings – knowledgeable friendly people

–   warranties
Apple will give you 1 year warranty for phones at no added cost.
Camera stores give you 6 months warranty!
……………………………………………………………………………….
operations strategies
•   performance objectives – quality, speed, dependability, flexibility, customisation, cost
Quality: LG used to be known for bad products, now they are known for good products!
Speed: Woolworths Self checkouts – quicker shopping
Dependability: Some airplanes are known for being a little bit unreliable (Jetstar)
Flexibility: E.g. Banking, processes change depending on needs
Cost: More or less fixed costs?

•   new product or service design and development
Apple and Samsung keep coming up with new devices (iPhone, tablets) in response to each other as they want to maintain the business advantage.

Telstra and 4G/5G. Telstra has been leading the charge for 4G deployment all over Aus (greater speeds)
https://www.itnews.com.au/news/telstra-deploys-50-small-cells-in-melbourne-cbd-487446

•   supply chain management – logistics, e-commerce, global sourcing
CostCo is building an Australian Warehouse to improve logistics in Sydney. Kemps Creek is halfway from Sydney to Canberra.
https://www.businessinsider.com.au/costco-is-building-its-first-australian-warehouse-in-sydney-2018-3


•   outsourcing – advantages and disadvantages
QANTAS has outsourced its maintenance for 474’s. Part of some measures to save costs and have more leverage.
http://australianaviation.com.au/2014/01/qantas-747-maintenance-to-move-offshore/

Australian telecommunications outsourcing Call centres to save money. The quality has gone down, but it saves a lot of money. The minimum annual award salary for a full time contact centre agent (working 38 hours) in Australia with no penalty rates is $39,9265 (August 2017) and that’s assuming you can find someone willing to work for it with starting contact centre salaries often in excess of $50,000 compared to the average $5,573 AUD  a customer service agent working in the Phillipines would receive.
https://cxcentral.com.au/for-managers/thought-leadership/reasons-aussie-call-centre-jobs-go-overseas/


•   technology – leading edge, established
Leading edge = Telstra and it’s 4G/5G trials for mobile Internet
Established = Standard Internet plans and copper wire networks

•   inventory management – advantages and disadvantages of holding stock, LIFO (last in first-out), FIFO (first-in-first-out), JIT (just-in-time)

JIT : Toyota has Just in time production. They stock products when they need it to reduce waste! Capacity is not wasted either. 


FIFO: http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/just-in-time.html

Woolworths uses FIFO for fresh fruit and consumables. This is because vegetables go bad and old, so the fresh stock must go out first.


•   quality management
–   control
–   assurance
–   improvement

Apple has extremely high-quality control standards. Products are built to the highest standards.  They test the products after the final phone is put together and inspect it.
https://www.apple.com/procurement/


•   overcoming resistance to change – financial costs, purchasing new equipment, redundancy payments, retraining, reorganising plant layout, inertia

Telstra and Qantas fired hundreds of workers. Qantas restructured to cut costs and routes. Telstra wanted to save costs on call centres.

NAB workers will be lost due to robots taking their jobs! They will given redundancy payments!
http://www.abc.net.au/news/2018-02-21/nab-robots-taking-over-white-collar-jobs/9465524



•   global factors – global sourcing, economies of scale, scanning and learning, research and development
global sourcing
http://money.cnn.com/2013/01/18/news/companies/boeing-dreamliner-parts/index.html
Companies like Boeing source globally as countries may have expertise in it!  For example, Italian firm Alenia Aeronautica makes the center fuselage, French firm Messier-Dowty makes the landing-gear system, Diehl Luftfahrt Elektronik supplies the cabin lighting.

https://www.businessinsider.com.au/where-iphone-parts-come-from-2016-4
Apple’s iphone uses parts from Japan (display), Korea (RAM), processor (Korea), storage (Japan) and Wifi Modules (China). 

Economies of scale
https://www.businessinsider.com.au/the-verdict-is-out-heres-why-australian-car-manufacturing-is-at-an-end-2013-12#PC-cars-scale
Since Holden had low economies of scale in Australia and high running costs, it had to cut workers and couldn’t average out costs. 200000 cars need to be made for a factory to be productive, it was at 80000 cars.

Many products are made in China because they have large factories that can enable huge economies of scale. This is why products such as electronics, clothes and many other things are moved over to China for production!
   
Scanning and learning
Companies use social media keyword scanning tools to look for trends in their pages and customer sentiments. Instagram, Facebook and even twitter scanners exist now! 
http://www.fanpagekarma.com/

research and development
E.g. GOPRO’s Karma. They spent a lot of R & D and it was a total failure and they made losses.
https://www.theverge.com/2017/2/2/14489422/gopro-q4-2016-earnings-loss-karma-drone-recall-hero6
Was wasteful and consumed many resources. They lost 373 Million dollars!
« Last Edit: May 28, 2018, 05:33:03 pm by EEEEEEP »

EEEEEEP

  • New South Welsh
  • Forum Leader
  • ****
  • Posts: 971
  • Resource Writer
  • Respect: +543
Re: HSC Business - Case studies
« Reply #1 on: May 14, 2018, 05:11:43 pm »
+4
((OPERATIONS))
((HR))
((Finance))

Marketing

What is Marketing about?
- How do we find out what people want?
- How do we price, distribute and promote goods?
- What are the things we need to keep in mind, when promoting or pricing?
...............................
role of marketing
•   strategic role of marketing goods and services
•   interdependence with other key business functions
•   production, selling, marketing approaches

http://bgr.com/2018/02/02/iphone-x-discontinued-second-half-2018/
Production and selling: Apple produced Iphone X’s in the hope that people would buy it, but people did not buy it. It was a good product that was high quality but the demand was not there for it. They even tried selling it.

•   types of markets – resource, industrial, intermediate, consumer, mass, niche

Mass market = milk
Intermediate = semi conductor
Resource = coal
…………………………………………………………………..
influences on marketing
•   factors influencing customer choice – psychological, sociocultural, economic, government
Psychological =  APPLE… Apple markets itself as cool, trendy and classy.
Sociocultural = films… people watch a film based on critics
Economic = Building (building material sales go up and down depending on the economy)
Government = Cigarettes, governments may increase or decrease taxes on smokes.

•   consumer laws
–   deceptive and misleading advertising

https://mumbrella.com.au/coles-fined-2-5m-for-misleading-advertising-on-claims-bread-products-were-baked-today-286555
Coles was fined $2.5m for claiming that bread was “baked today” when it wasn’t.

https://www.channelnews.com.au/hp-nobbled-again-by-acc-this-time-for-dodgy-printer-practises/
More 200,000 HP Australia customers who bought certain models of HP printers were not informed non-HP ink cartridges would not work in their printers.

Those customers could now be eligible for compensation, the ACCC announced today.

–   price discrimination
PRICE DISCRIMINATION - Apple, Adobe and Microsoft had different pricing in Aus for services and products. People in Aus pay more for music, games and more!

–   implied conditions
https://www.caradvice.com.au/531202/accc-takes-action-against-audi-australia-over-diesel-emission-claims/
Products are meant to do what they represent. AUDI misled the public on their cars diesel emissions.

The ACCC alleges that between 2011 and 2015, Audi knowingly misled the buying public by failing to disclose it had used “defeat” devices during laboratory testing in order to produce a lower nitrogen oxide (NOx) emission reading than under normal driving conditions.
      
–   Warranties
https://www.gizmodo.com.au/2017/10/msy-fined-750000-for-misleading-warranties-again/
MSY was fined for misleading customers on warranty. Did not tell them they could get warranty if the products were faulty.

http://www.abc.net.au/news/2017-04-06/apple-taken-to-court-by-accc-over-alleged-consumer-misrepresent/8421346
Apple misled customers in regards to “error 53”. Consumers were entitled to a free remedy (fix) but were told no!

•   ethical – truth, accuracy and good taste in advertising, products that may damage health, engaging in fair competition, sugging

Cigarettes companies did not want to display packaging showing the damage of their products, but the policy was upheld.

https://www.accc.gov.au/media-release/accc-to-oppose-bps-acquisition-of-woolworths-service-stations
ACCC opposes the acquisition of petrol stations by Woolworths due to the fact that it would reduce competition. It would be bad for fair competition and result in a monopoly.


marketing process
•   situational analysis – SWOT, product life cycle
Product life cycle – decline - Apple discontinued the old iphone, ipod and Ipad after they had released so many new generations of phones and tablets. This was because sales were low and it was hard to support those devices.

•   market research
https://appleinsider.com/articles/11/05/05/apple_initiates_customer_pulse_market_research_focus_group
Apple had set up a website where people provided input or comments on Apple products. Participating customers will reportedly receive up to two surveys a month.


•   developing marketing strategies
Talked about more in the later section of the syllabus !

………………………………………………………………………..
marketing strategies
•   market segmentation
Psychographic – Magazines have different targets for different types of people!
Geographic- Woolworths has metro stores in the inner city , closer to places… more tourists.
Demographic – Nicer and more luxury cars are advertised in inner cities and not in western Sydney.
Behavioural – Woolworths everyday rewards cards….to get information on how often people shop.

•   product/service differentiation and positioning
Product differentiation – Apple ( strives to do things  a little different ..and charge higher prices)… face scanner, Augmented reality

Service Differentiation – Microsoft does 24 hours online support for business and consumer customers! 

•   products – goods and/or services
–   branding
–   packaging

Apple.. simple sleek branding and packaging that speaks to people. It’s cool, it’s prestige. It’s about passion, hopes and dreams!


•   price including pricing methods – cost, market, competition-based
–   pricing strategies – skimming, penetration, loss leaders, price points
–   price and quality interaction


price – quality: Google = perceived as lower brand.. cheaper. Apple always commands higher prices and margins! The Iphone 8 costed around roughly 1200, where as the Samsung equivalent costed 800- 900.

Penetration pricing = Netflix… making a loss on its subscriptions while gaining a lot of new customers. They had to take on new debt.

Skimming = TESLA… more expensive that most EV’s but they are trying to gain back the value on R & D. The model S costs $72700.

Loss leader = printers… printers are getting cheaper but ink isn’t! Ink costs nearly 100 dollars per drum. One drum is even more expensive than the printer.

•   promotion
–   elements of the promotion mix – advertising, personal selling and relationship marketing, sales promotions, publicity and public relations

–   the communication process – opinion leaders, word of mouth


Apple gives early access to tech leaders and people with big followings (where they make videos on the phone). They also advertise on train stations, TV and online.  Youtubers make videos as they get early releases of the latest phones.

They also pay for spots in films and TV shows (most movies use Apple products).

•   place/distribution
–   distribution channels
Apple sells directly to consumers and also goes through retailers (E.g. Jb Hifi)

–   channel choice – intensive, selective, exclusive
Apple only sells products at certain retailers and at their physical stores.   They also have limited edition iphones and watches that are expensive and not produced on a mass scale.

–   physical distribution issues – transport, warehousing, inventory
•   people, processes and physical evidence
Apple. Apple has a sleek and professional uniform (but casual) and the people there have knowledge of Apple things. The whole Apple store is sleek, modern, cool and simple. It makes for a good shopping experience.

•   e-marketing
Many companies now sell through a website and don’t have many stores globally. E.g. THE ICONIC

Apple sells directly through their website and does orders through it.

•   global marketing
–   global branding
–   standardisation
–   customisation
–   global pricing
–   competitive positioning


Macdonald’s has the same big M globally, prices are pretty similar (they can also be used to predict exchange rates to an extent – Big Mac index), but products are customised for local markets. There’s rice in Asia and local Mexican food in Mexico. MacDonald’s also has an efficient global network of local suppliers (collaboration) , which makes it less costly to provide services and this is passed onto customers.

MacDonald’s also adjust the pronunciation and script to make it sound more pleasing for languages such as Japanese or German.
« Last Edit: May 28, 2018, 05:29:50 pm by EEEEEEP »

EEEEEEP

  • New South Welsh
  • Forum Leader
  • ****
  • Posts: 971
  • Resource Writer
  • Respect: +543
Re: HSC Business - Case studies
« Reply #2 on: May 21, 2018, 05:23:21 pm »
+1
((OPERATIONS))
((Marketing))
((Finance))

Human resources

HR, HR, HR... what is HR about?
- The hiring of people
- Managing talent
- Laws relating to employment of staff
.....................

role of human resource management
•   interdependence with other key business functions
HR hires the people that work in other sections of the company. They find people of the right fit.

If operations or marketing wants to produce a new product, they need more staff….E.g. Tesla hiring more staff due to less automation.

Companies cut staff when broke or under financial distress! 

•   outsourcing
–   human resource functions
–   using contractors – domestic, global


Many companies now hire or use external services to conduct hiring, payroll for them. One service that they use is SAGE.
http://www.sage.com/au/products-and-services/payroll-and-hr/payroll-and-hr-services/outsourcing

“Sage Payroll Outsourcing - Our outsourcing team of Payroll Administrators are highly qualified and experienced in payroll administration and management.”

key influences
•   stakeholders – employers, employees, employer associations, unions, government organisations, society
•   legal – the current legal framework

http://www.abc.net.au/news/2017-07-25/7-eleven-court-penalties-now-top-1-million/8740706
7/11 and many places got fined in 2017 for not paying enough (legal) wages to workers. This was owed under the  General Retail Award 2010.

https://www.hospitalitymagazine.com.au/melbourne-restaurant-fined-200k-underpayments/
Melbourne Restaurant fined for underpaying 13 workers.


http://www.abc.net.au/radio/hobart/programs/tas-country-hour/workers-compensation/9699626
Workers compensation costing businesses due to premiums…

……………

•   economic
When the economy is bad, people spend less and less positions for people… people get fired.. during the GFC, unemployment was high! 5.8%

http://www.abc.net.au/7.30/qantas-sacks-employees-as-financial-crisis-takes/2675710
Qantas sacks 1750 jobs! During the GFC the markets were turbulent and company profits were down.

•   technological
Technology means that people can be replaced by machines. 

http://www.abc.net.au/news/2018-02-21/nab-robots-taking-over-white-collar-jobs/9465524
NAB robots are taking over simple tasks in NAB. 6000 workers getting fired, 2000 hired only!



•   social – changing work patterns, living standards
People want more flexibility. Workplaces are now allowing woman to make sacrifices of their salary for flexibility and theres less unskilled jobs in the workforce (taken by automation).

•   ethics and corporate social responsibility
Affirmative action in many places. No place for racism or discrimination.

https://careers.telstra.com/why-telstra/diversity-and-inclusion
Some 32,000 people, in more than 20 countries, make up the Telstra family. We’re from diverse backgrounds, with a variety of skills and talents.

https://news.nab.com.au/nab-champions-diversity-and-inclusion-in-partnership-with-2018-special-olympics-national-games/
NAB supporting the special Olympics to show that it cares for disabled people.

…………………………………..
strategies in human resource management
•   leadership style
Delegative – In many start-ups, people are allowed to make their own decisions as to what is needed or what is best for the company!

https://www.cnbc.com/2014/03/11/why-microsofts-nadella-may-succeed-where-ballmer-failedcommentary.html
Participative / Democratic - Satya Nadella, Microsoft CEO allowed employees to make their own decisions. He allowed them to take centre stage and gave them confidence.

Authoritarian = Steve jobs. He was arrogant,  a bit of a dictator and sometimes “mean”.

•   Job design – general or specific tasks
https://www.nbnco.com.au/corporate-information/careers/graduate-program.html
2-year rotation, spending a few months in each business unit!

•   global – costs, skills, supply

Many companies outsource operations to East Asia and China due to the cheaper cost of labour. Labour costs can be cut in half or even by a quarter. In India, there is also an abundance of programmers. The hourly wage in India is 0.40 USD. It is 9 in the USA.
   
http://www.abc.net.au/news/2016-07-08/telstra-slashes-300-jobs-some-sent-to-philippines/7581472
Telstra cut 300 jobs in 2016 to outsource call centre jobs. This brought the total to 10,000 overseas workers.  Wages over there are $9 USD per day.

•   workplace disputes
–   resolution – negotiation, mediation, grievance procedures, involvement of courts and tribunals


Qantas 2009 strike
Workers strike over pay, conditions and the outsourcing of jobs overseas after negotiations failed. FWA declared it illegal after it got escalated and a conciliation process followed.  Qantas management has made an early agreement with the Australian Licensed Aircraft Engineers Association (ALAEA) in a deal that reflects compromise by both parties, despite earlier strong rhetoric from both sides.


2018 rail strike
Workers were unhappy with conditions and pay, so they sought the help of unions and wanted to strike. They wanted better hours and a more balanced workload.  Prior to the strike there were many negotiations which were unsuccessful. Fair work Australia got involved in the end after they deemed it illegal and the strike got called off!
………………………………………

effectiveness of human resource management
•   indicators
–   corporate culture
–   benchmarking key variables
–   changes in staff turnover
–   absenteeism
–   accidents
–   levels of disputation
–   worker satisfaction


http://www.news.com.au/finance/business/travel/report-exposes-ubers-toxic-culture-as-ceo-steps-down/news-story/1374e61302946f08ff9d1bb9c201a828
Corporate culture, Staff turnover: Uber lost nine executives due to bad culture. Company’s “hustlin’” culture had encouraged “poor behaviour”, how illicit drugs and alcohol were being used at work events.

https://www.theguardian.com/technology/2017/may/24/tesla-factory-workers-injuries-higher-than-industry-average
Accidents, Absenteeism: TESLA had a lot of injuries at their factories and workers too many days away.  Workers had been “having a hard time, working long hours, and on hard jobs”.

https://www.reuters.com/article/us-banks-turnover/banks-face-talent-crisis-amid-mounting-costs-of-employee-turnover-report-idUSKBN153090
Employee satisfaction and staff turnover: Banks are facing a crisis, costs of employee turnover are getting higher with employee dissatisfaction and voluntary staff turnover on the rise.

« Last Edit: May 28, 2018, 05:29:14 pm by EEEEEEP »

EEEEEEP

  • New South Welsh
  • Forum Leader
  • ****
  • Posts: 971
  • Resource Writer
  • Respect: +543
Re: HSC Business - Case studies
« Reply #3 on: May 28, 2018, 05:26:30 pm »
+3
((Marketing))
((HR))
((Operations))

Finance

Finance, Finance, Finance.... the final Chapter.
PS (This one took the longest as it's the most difficult)

Finance is about:
- Managing cash flows (in and out)
- Managing finances in the long and short term
- Financial reporting
............................................................
Role of financial management
•   objectives of financial management
–   profitability, growth, efficiency, liquidity, solvency
–   short-term and long-term


2017 – Apple was declared the most profitable company in the world! 45.7B in profit!  2016 – Apple had more than 50% of the shares of smart phone sales! Apple has a liquidity ratio of 1.28, which means that for every dollar in liability, they have $1.28 in profits.

•   interdependence with other key business functions
Finances are needed for marketing, operations and HR. Without finances, operations can’t run, marketing campaigns can’t run!

https://www.macworld.com/article/1138344/ericsson.html
In 2009, Sony Ericson cut 5000 jobs due to declining profits and finances.  This is relevant as HR needs finance to fund the expansion of departments and operations! Operations cannot expand as it may increase their costs!

…………………………………….

influences on financial management
•   internal sources of finance – retained profits
AMAZON has returned 11 quarters of profits, after reinvesting nearly all profits from 2012 to 2015. The 2017 last quarter had $1.9 B in profit!
https://www.recode.net/2018/2/1/16961598/amazon-jeff-bezos-record-profit-11-quarter-q4-2017-earnings


•   external sources of finance
–   debt – short-term borrowing (overdraft, commercial bills, factoring), long-term borrowing (mortgage, debentures, unsecured notes, leasing)
Factoring >
https://cashflowfinance.com.au/invoice-factoring/
Companies like CFF provide invoice factoring. The invoicee receives an up-front payment for the invoice, without having to invest resources into chasing up the debtor, a responsibility that is assumed by the invoice finance provider.

Debentures >
https://www.dealstreetasia.com/stories/ifc-mulls-15m-more-funding-in-aptus-97234/
–   IFC is offering to provide 15 million dollars for Aptus Value Housing Finance India Ltd. They will have a life of 7 years, be non-convertible.

https://www.businesswire.com/news/home/20180412006279/en/Atlanta-Gold-Convertible-Debenture-Payments-Due
Atlanta Gold has $2.5M in debentures , the company is trying to delay the maturity date and change the interest date.

Unsecured notes (bonds)>
http://www.afr.com/business/transport/automobile/tesla-sells-us546-million-of-bonds-as-buyers-cant-get-enough-20180201-h0sa42
TESLA sells bonds to investors for finance (546 Million)

https://www.japantimes.co.jp/news/2017/05/18/business/corporate-business/toyota-planning-%C2%A5100-billion-bond-issue-focus-rd/
Toyota sells 900 million in bonds for R & D Finance.

Leasing >
https://www.tesla.com/en_AU/support/tesla-leasing?redirect=no
TESLA leases out their vehicles to businesses. They pay for the running of it.

Many car dealerships lease out cars to people for money.

–   equity – ordinary shares (new issues, rights issues, placements, share purchase plans), private equity
New issues > http://www.afr.com/technology/atlassian-prices-ipo-sets-record-us44-valuation-20151209-gljvsp
Atlassian issued shares for the first time in the US. They raised $462 M dollars at 21 dollars per share.

https://www.reuters.com/article/us-godaddy-ipo-exclusive-idUSKBN0MR2S220150401
GoDaddy IPO values company at $4.5 billion. They raised 440 million dollars at 20 dollars per share.

Rights issues/ Placements
https://www.forbes.com/sites/jimcollins/2018/04/25/a-brief-history-of-tesla-19-billion-raised-and-9-billion-of-negative-cash-flow/#10ebe7763d65
TESLA has been able to raise 19B dollars since its IPO. Some of it from equity raisings.

Private equity > E.g. Goldman Sachs, Blackstone Group… 
http://www.afr.com/technology/web/ecommerce/aussiefounded-bigcommerce-raises-84-million-ahead-of-us-ipo-20180424-h0z5m1

Startups and new firms approach Goldman Sachs who have database of rich investors.

https://www.smh.com.au/business/companies/healthscope-receives-4-1b-takeover-offer-from-private-equity-groups-20180426-p4zbpa.html
Healthscope was approached by a private equity consortium (2 or more firms that get together) for $4.1B



•   financial institutions – banks, investment banks, finance companies, superannuation funds, life insurance companies, unit trusts and the Australian Securities Exchange
[u[Banks[/u] > Self explanatory

IB > Many large companies like VTB seek the services of State Street (IB), Macquarie Bank and JP Morgan!

https://www.reuters.com/article/us-vivo-energy-ipo/vivo-energy-vitols-africa-venture-floats-with-2-billion-pound-valuation-idUSKBN1I50Q7
JP Morgan was helping Vivo Energy to list on the London Exchange to raise 2 Billion pounds. They raised the funds and it was over subscribed (the level of interest was greater than the amount they needed)!

https://www.reuters.com/article/us-astonmartin-ipo/aston-martin-plans-to-appoint-three-banks-to-prepare-4-billion-pounds-float-source-idUSKCN1HD2R6
JP Morgan is helping Aston Martin to list on the London stock exchange for 4 billion pounds!


Super funds > Super Funds like AustralianSuper and Industry Super invest in companies and direct funds there.

ASX > Companies can raise money on the ASX by listing…
http://www.insightnews.com.au/Article3/1533/Ophthalmic-startup-targets-ASX-listing-to-generate-10-million
TeleMedC (start-up) is floating on the ASX to raise 10 M.

https://thewest.com.au/business/markets/nicheliving-gets-second-chance-at-asx-listing-ng-b88822530z
Nicheliving listing on the ASX. They are seeking 12M dollars.
 

•   influence of government – Australian Securities and Investments Commission, company taxation

ASIC >> http://www.abc.net.au/news/2018-04-27/asic-fronts-hayne-royal-commission/9702662

ASIC dictates what’s allowed in financial markets and products. AMP misled ASIC on 20 occasions about a practice of charging fees to customers who were no longer receiving financial advice. This is illegal according to the Corporations ACT!

http://asic.gov.au/about-asic/media-centre/find-a-media-release/2018-releases/18-024mr-asic-commences-civil-penalty-proceedings-against-commonwealth-bank-of-australia-for-bbsw-conduct/
ASIC started proceedings against COMMBANK for manipulating the BBSW (interest rate setter). COMMBANK traded bank bills to make it go up and down to improve its profits. 

TAXATION >>  In Australia, many companies were grilled over tax avoidance. Google and Facebook had to be TAXED onshore, which meant that revenue HAD to be recorded in Australia.  Facebook booked revenue of $327 million, ten times the $33.5 million recorded in the the previous year.

https://theconversation.com/google-facebook-fall-into-line-on-tax-but-ebay-remains-defiant-76946

•   global market influences – economic outlook, availability of funds, interest rates
economic outlook  >> During the GFC, the economic outlook was low and borrowing of funds for companies was difficult!  Banks restricted the amount of money that companies could borrow (for internal leverage)

availability of funds >> As the stock exchange was doing good (as was the economy), it was easy for companies to get funds! Investor sentiment was at its highest (compared to the GFC)

https://www.cnbc.com/2017/03/23/investor-sentiment-jumped-to-highest-level-since-tech-bubble-in-first-quarter.html
….......................................................................

 processes of financial management
•   planning and implementing – financial needs, budgets, record systems, financial risks, financial controls
https://www.ato.gov.au/general/other-languages/in-detail/information-in-other-languages/record-keeping-for-small-businesses/?page=2
INCOME, expenses, Bank records MUST BE KEPT

–   debt and equity financing – advantages and disadvantages of each
Debt: http://fortune.com/2018/04/06/spacex-tesla-elon-musk-debt/
Tesla’s DEBT is due (2.9B). They need to find a way to pay it back, one way or another .. or they will go broke.

TESLA does not need to pay back the billions they got during equity raisings.

•   monitoring and controlling – cash flow statement, income statement, balance sheet
https://www.apple.com/newsroom/2018/05/apple-reports-second-quarter-results/
Apple reported 61.1B in revenue and had over 15B in operating cash flow.  Revenue comes from income statement and CF comes from cash flow.  The core business of Apple generated 61.1 B after depreciation and taxes.

https://www.stocknewsgazette.com/2018/04/18/gopro-inc-gpro-raising-eyebrows-among-investors/
Go Pro has 202.5 M in cash and 551.54M in liabilities. It has more liabilities than owners’ equity. It means that they are in a bad shape! They could go broke if they cannot pay their liabilities!

•   financial ratios
–   liquidity – current ratio (current assets χ current liabilities)
–   gearing – debt to equity ratio (total liabilities χ total equity)
–   profitability – gross profit ratio (gross profit χ sales); net profit ratio (net profit χ sales); return on equity ratio (net profit χ total equity)
–   efficiency – expense ratio (total expenses χ sales), accounts receivable turnover ratio (sales χ accounts receivable)
–   comparative ratio analysis – over different time periods, against standards, with similar businesses

Liquidity >> https://simplywall.st/stocks/us/retail/nasdaq-nflx/netflix/news/is-netflix-inc-nasdaqnflx-a-financially-sound-company/ . Netflix has $5.47B liabilities and $7.67B meaning that they have a ratio of 1.41. They can comfortably pay off their short term debts.

Gearing >> Netflix has 3.37B of debt for 6.36B in equity. This means that it has a ratio of 53%. For every dollar of equity, there is 53c in debt, which means that it can pay back its debt in the long term.

Profitability >> https://www.forbes.com/sites/danafeldman/2018/01/22/netflix-has-record-breaking-fourth-quarter-in-2017-exceeds-11b-in-revenue/#75cd622588eb . Netflix produced a profit of $227M

Comparative ratio analysis >> http://www.wired.co.uk/article/netflix-2016-earnings-revenue-original-shows
Netflix made a profit of 186.7M in 2016.  They made 227M in 2017. This is an increase of 21.6% over the same quarter in the previous year!

•   ethical issues related to financial reports
http://www.afr.com/business/legal/new-slater--gordon-investigation-unsurprising-given-long-history-of-accounting-problems-20161221-gtfu0z
Slater & Gordon said that it had uncovered errors over three years relating to its cash flow calculation, that summed to tens of millions of dollars. They also wrote things off.. creative accounting!


http://www.afr.com/news/world/north-america/former-autonomy-exec-convicted-of-accounting-fraud-in-disastrous-10b-hp-merger-20180430-h0zgqq
Former Autonomy exec convicted of accounting fraud in disastrous $10b HP merger. He had spun his company's financials to create a false appearance of growth.
……..............................................
financial management strategies
•   cash flow management
–   cash flow statements
–   distribution of payments, discounts for early payment, factoring


Cash flow statements > TALKED ABOUT IN processes of financial management - monitoring and controlling. Basically look at the money coming in and out.. and then adjust / change things in the business.

Discounts for early payment > TALKED ABOUT IN Working capital management.
Distribution of payments > Companies can spread out the cost of bills or debt over a few months. For example, NRMA allows customers to pay monthly or choose the entire bill.

•   working capital management
–   control of current assets – cash, receivables, inventories
> Cash
Touched in other areas of finance! Can include leasing or selling assets for cash!

> Receivables
Receivables means that service is provided, but money is owed! Electricity, gas and phone companies sometime provide a discount for early payments!

https://www.originenergy.com.au/terms-and-conditions/origin-saver-and-conditions.html
–   A pay-on-time discount on the usage charges if you:
–   pay the total amount due by the due date and don't have an overdue amount on your account

https://campaign.agl.com.au/landing/residential/jm/?state=QLD
–   AGL: 28% off electricity usage charges when you pay on time

> Inventories
Zara uses Just in time for its inventories. This means less stockpiled products and more cash.

Toyota uses JIT and just orders materials when they need it (gets orders from customers).   Less piled up stock and written off items.

–   control of current liabilities – payables, loans, overdrafts
> Loans – reduce or refinance
https://www.smh.com.au/business/companies/whitehaven-coal-strikes-14b-refinancing-deal-20150312-141rbf.html
Whitehaven Coal renegotiates the debt.  Interest on the $1.4 billion debt facility will be about 100 points better than the 6 per cent on Whitehaven's previous loan.

https://www.ft.com/content/6fce65d2-48e3-11e8-8ee8-cae73aab7ccb
Total debt had fallen from $22.7BN to $14.9B.

–   strategies – leasing, sale and lease back
LEASING: https://www.tesla.com/en_AU/support/tesla-leasing?redirect=no
Tesla Leases out their cars to companies to generate cash.

https://www.whistleout.com.au/MobilePhones/Guides/leasing-a-phone-on-telstra-how-does-it-work-is-it-a-good-deal
Telstra leasing out phones. People can use phones for up to 2 years and then have the option to wait or buy it.

SALE: https://www.goauto.com.au/news/toyota/toyota-puts-altona-machinery-up-for-sale/2017-05-10/56742.html
Toyota sells their manufacturing plants in AUs. It will recover some capital and result in a loss of 2600 jobs.

•   profitability management
–   cost controls – fixed and variable, cost centres

Expense Minimisation: https://investor.gopro.com/press-releases/press-release-details/2018/GoPro-Announces-Fourth-Quarter-and-Full-Year-2017-Results/default.aspx
Gopro reduced operating expenses by 54% to $548M. They are aiming for $400M.

Costco: Negotiates in bulk and doesn’t spend much on fancy stores. They just use a warehouse and have basic decorations!

Cost Controls: https://www.investopedia.com/news/amazon-eyes-boxes-effort-cut-shipping-costs/
Amazon is trying to reduce the amount of boxes used to cut costs!

–   revenue controls – marketing objectives
Companies like DJ, Myers and TopShop have discounts during non-Christmas seasons to even out sales and clear out stock.

•   global financial management
–   exchange rates

https://www.ft.com/content/f21b3a92-f907-11e1-8d92-00144feabdc0
BMW lost 2.4 BN in profits due to exchange rates changing.  BMW did not want to pass on its exchange rate costs to consumers through price increases.

http://www.autonews.com/article/20170206/OEM01/170209886/toyota-operating-profit-declines-39-percent-on-foreign-exchange-hit
Exchange rates hit Toyota’s profit and it dropped by 23%.

–   methods of international payment – payment in advance, letter of credit, clean payment, bill of exchange
Derivatives > many companies that export use derivatives such as forward exchange contracts to protect them against FOREX changes. Particularly exporters!

Hedging > https://oilprice.com/Energy/Energy-General/How-Oil-Hedging-Could-Cost-Companies-7-Billion.html
Companies lock in the price of oil at $65, just in case the price of oil falls!

Buyers can also lock in the price of things like coal and other inputs.

Methods of International payment >
letter of credithttps://www.prnewswire.com/news-releases/vistra-energy-significantly-increases-merger-synergy-targets-announces-post-merger-financial-guidance-and-reports-first-quarter-results-300642645.html
$18 million in available letter of credit capacity. Vistra still has 18 million dollars in funds that they can draw from, if they need extra capital.

clean payment > Self explanatory. Companies just pay only online for a good or service before they receive it.
« Last Edit: May 28, 2018, 05:28:43 pm by EEEEEEP »

nishta

  • Trailblazer
  • *
  • Posts: 25
  • Respect: +9
Re: HSC Business - Case studies
« Reply #4 on: February 24, 2019, 01:26:50 pm »
0
this is awesome thanks!!

Would you suggest looking at a bunch of different case studies like you have depending on the dot point, or is it better to look at 1-2 in depth?
HSC 2019: English Extension 2, Maths Advanced, Legal Studies, Business Studies, Visual Arts

Mada438

  • Forum Leader
  • ****
  • Posts: 793
  • Skiing, motorcycle and travel fanatic
  • Respect: +399
Re: HSC Business - Case studies
« Reply #5 on: February 28, 2019, 10:50:09 am »
0
this is awesome thanks!!

Would you suggest looking at a bunch of different case studies like you have depending on the dot point, or is it better to look at 1-2 in depth?
It's better to know a range of different case studies, as some will satisfy the criteria better than others. E.g if you use Qantas for the whole syllabus, there are some things where it doesn't sound right and you really have to spin it to make it fit. Whereas, if you also had cases from Apple and IKEA on the sam dot point then that can make it a lot easier to write about an example for that dot point because you have 3 cases and you pick the one that fits the best to make your answer sound better.

I'd recommend loosely knowing 2-3 cases per dot point so that you're prepared no matter what question you're asked. I know that can seem like a lot, but once you research a business a little and know some information, getting the pieces that fit depending on the syllabus point becomes easier.

Hope that makes sense!
"Live life like a pineapple. Stand tall, wear a crown and be sweet on the inside"

"May you grow up to be righteous; may you grow up to be true. May you always know the truth and see the lights surrounding you. May you always be courageous, stand upright and be strong"

"Be fearless in the pursuit of what sets your soul on fire"

Advice for starting year 12
An open letter to my School Friends
Would 10 year old you be proud of who you are?

2020: Bachelor of Arts @ANU

ArthurMiller

  • Adventurer
  • *
  • Posts: 10
  • Respect: 0
Re: HSC Business - Case studies
« Reply #6 on: March 09, 2019, 08:22:32 am »
0
Hello,
does anyone know a good case study for established technology regarding it as a disadvantage for the business?

JCorben.2019

  • Adventurer
  • *
  • Posts: 10
  • Respect: 0
Re: HSC Business - Case studies
« Reply #7 on: March 12, 2019, 11:16:39 am »
0
Hi does anyone have any McDonalds Case studies ?

twelftholmes

  • Trailblazer
  • *
  • Posts: 45
  • Respect: +6
Re: HSC Business - Case studies
« Reply #8 on: December 30, 2019, 03:08:49 pm »
0
this is super helpful, thank you!!!
HSC 2020: English Advanced [71], Maths Adv [74]+ Ext [21], Physics [80], Ancient History [79], Business Studies [67]
ATAR: 68.50

round 2!!
HSC 2021: eng adv, math adv, physics, ancient history