Managerial Econ
The company that is going to be discussed in this analysis is Starbucks. Starbucks is in the quick service restaurant business, with a focus on the coffeeshop industry. The outlets are a combination of company-owned stores and franchises, most of the latter being overseas. There is an agency problem in the way that some of these franchise businesses are structure. Starbucks, in going overseas, frequently utilizes local partners to run franchises.
Organizational architecture involves three main considerations: the assignment of decision rights, the reward system and the performance-evaluation system (Brickely et al., 2009). At Starbucks, there is a dual architecture for foreign franchises, especially in the countries were foreign franchises compete directly against store-owned franchises. In such situations, the decision rights are primarily with the company, and the franchisee has its decision rights subordinated. The reward system is based on store performance. The rewards range from more territory rights being awarded to financial incentives. The performance-evaluation system is based on metrics like profit, revenue and market share. In addition, there are cost control metrics involved, and customer service/reputational metrics.
2. Agency problems arise when "one party in a relationship is expected to act in another's best interests" (Investopedia, 2012). One agency problem that sometimes arises exists when Starbucks competes in a market in which it has sold franchise rights (Layne & Sloan, 2010). The franchisees have an expectation that they will be able to enjoy exclusivity in a region or area in exchange for their efforts in running the stores. What happens, however, is that sometimes they find themselves in competition with other businesses within the Starbucks family. Sometimes, these are company-owned stores that encroach on the franchisee's territory. Other times, these conflicts arise when Starbucks markets its other products nearby. For example, if Starbucks has a franchise-owned outlet in a large Asian shopping mall, and then it sells its packaged coffee to a hotel adjacent to that mall, the store risks losing customers from that hotel who otherwise would...
Price: The customer will be able to choose from a wide variety of prices, starting with $15 and ending with $2,000. The average retail price is of $100.00 a bottle of specialty wine, with an average fixed cost per bottle of $50. The $50 difference allows me to reduce the retail price if I find this is necessary to attract customers. I could also implement various pricing strategies, such as
Managerial Economics The company that I am going to write about is Apple, Inc., which designs and markets personal electronics devices, software and accessories. Apple is known for its strategic control systems, both in terms of behavior control and information control. Chapter 9 notes that there are two different approaches to informational control, the traditional approach and the contemporary approach. The traditional approach compares performance against standards while the contemporary approach
Managerial economics, there are variety of structures and philosophies that companies will use to maximize their profit margins. This is accomplished through taking these concepts and continually adapting them in order to achieve these objectives. To fully understand how this applies requires examining an employer. This will be achieved by providing a description of the company, describing any problems they are facing, analyzing the dimensions of the job and studying
Managerial Economics Whether it is important for a company to achieve cost leadership is dependent on the generic strategy that the company has chosen to pursue. The two basic forms of generic strategy are differentiated and cost leadership. Companies pursuing a differentiated strategy do not need to pursue cost leadership. They seek to maximize profits by building brand power to the point where they can charge premium prices for their goods.
Whole Foods Managerial economics Managerial economics: Whole Foods In many ways, Whole Foods defies current assumptions of what constitutes a successful company strategy. It is an organic niche supermarket that prices its products relatively high in relation to its competitors. Yet it has become wildly successful in recent years, even defying conventional predictions of its likely demise during the credit crisis of 2008. This paper will explore the 'secret' of Whole Foods success
Rewarding Work: How to Restore Participating and Self-Support to Free Enterprise (Harvard University Press, 197), economist Edmund Phelps offers this plan to help the working poor: apply tax credits for "qualified employers" or hire disadvantaged people for "eligible jobs." Evaluate this plan in terms of market incentives, one of the ten principles of economics, to work and current welfare programs. Is the Phelps' plan an improvement over current government
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