Corporate Reporting Case Study Diageo plc

Corporate Reporting Case Study Diageo plc 1. Information about the company Diageo, formed in 1997, from the merger of Guinness PLC and Grand Metropolitan PLC, is a multinational company, trading in over 180 markets across the world, listed on both the London Stock Exchange (DGE) and the New York Stock Exchange (DEO). It is the worlds leading premium drinks business. The company containes 24,270 employees worldwide with offices in around 80 countries. Company takes up about 30% global markets, and holds worlds top 20 brands include: Smirnoff, Johnnie Walker, Captain Morgan, Baileys, JB, Josà © Cuervo, Tanqueray, Guinness, Crown Royal, Beaulieu Vineyard and Sterling Vineyards wines, and Bushmills Irish whiskey. Key numbers for fiscal year ending June, 2009: Sales: $15,378.0M One year growth: (4.7%) Net income: $2,849.0M Income growth: (10.6%) Source: Answers (2009) Diageo: Information from answers 2. Competitive Environment 1 ¼Ã¢â‚¬ ° Industry Competition Overview The world drink market is broadly exploited in the mature markets. Among the competitors, the most successful are Pernod Ricard Group, Majestic Wine PLC, Bacardi Company Limited, Brown-Forman Corporation, Fortune Brands, Inc. Diageo PLC holds 30 per cent of the total drink market. 2 ¼Ã¢â‚¬ ° Globalisation and Mergers Acquisitions There is a rapid growth in international trade and increasing globalisation of Liquor industry. The main competitions focus on the emerging market and expanding the global market shares by mergers and acquisitions. Pernod Ricard and Fortune Brands jointly buyout the worlds second largest spirits company Doumic in UK. In order to precedence over its competitors, the company speeds up mergers and acquisitions internationally. 3 ¼Ã¢â‚¬ ° Legislation and Economic Environment The EU will enact legislation to uniform the standards for wine production. Regulation is also rapidly developing in emerging markets, which may compounds some difficulties in taking up the emerging market. Economic crisis had a deep impact on the pattern of alcohol manufacturing competition, which had a varied impact on Diageos brand performance and parts of the brands sales fell significantly. Evaluation of Financial Statements The Corporations financial position is evaluated by ratio analysis, horizontal analysis and vertical analysis, which is measured by using FinSAS, according to the Income Statements and Balance Sheets, compared with another biggest drink manufacture-Majestic Wine PLC. 1. Ratio Analysis The value of the firm is determined by its profitability and growth. In ratio analysis, I compare the ratios of the Diageo PLC for six years and compare the group with another firm in the same industry. The objective of ratio analysis regarding to the firms financial position is to evaluate the effective of the groups policies in operating management, investment management, financial strategy and dividend policy. 1) Overall Profitability Assessment The ROE is a comprehensive indicator of firms performance. The ROE of Diageo shows a significant increase from 2007 to 2009, from 33.94% to 43.78%, much higher than its competitor in UK. On average over long periods, large publicly traded firms in the U.S. generate ROE in the range of 11 to 13 percent. The ROE of Diageo is stable at a relatively high level around 30% to 50%. That indicates the managers are suitable performed in employing the funds invested by the firms shareholders to generate returns. Diageos strategies of focusing on profit improvement, such as acquisitions, restructuring initiatives and targeting at emerging markets, gains positive results. 2) Operating Management Assessment The Gross Profit Ratio and EBIT Margin show the profitability of companys operating activities. The figures above show that the Gross Profit Ratio and EBIT Margin of Diageo are much higher than Majestic Wine plc, indicating a seriously competition in the economic situation. Both ratios of Diageo decreased slightly to 1.59% and 1.28% form 2008 to 2009 due to the impact of economic downturn, especially in Spain and Ireland. However, both ratios maintained at a relatively high level, validating the companys stated intention in its annual report of focusing on profitability. Diageo has grown profits in the mature markets and made great advances in emerging markets by volume, by net sales, and by operating profit. 3) Financial Management Assessment The level of Diageos financial leverage is s slightly higher than Majestics and increased significantly from 2006 to 2009. Financial leverage increases the Groups ROE as long as the cost of the liabilities is less than the return from investing these funds. What we should pay attention to is that while a firms shareholders can potentially benefit from financial leverage, it can also increase their risk. 4) Investment Ratio Assessment The DPS of Diageo increased steadily from 2005 to 2009, which reflects a stable dividend policy. Reported EPS growth increases by 10% in the recession period. The profits come from two restructuring initiatives in the year, which generate  £160 million of cost reductions in all, and from the Exchange rate movements which increase net sales by  £1,095 million. 5) Liquidity Ratio Assessment The above ratios attempt to measure the firms ability to repay its current liabilities, i.e. short-term solvency. The Current Ratio of Diageo is significantly outstanding than Majestics, about 1.35 on average. Diageos inventory situation form 2005 to 2009 was uncomfortable when measured in terms of quick ratio, which is too low (less than 1) for manufactory industry. Diageo paid less attention to improve the inventory management. 6) Financial Strength Assessment A companys financial leverage is also influenced by its debt financing policy. The Diageos Debt Ratio and D/E Ratio are higher than its competitors, and its D/E Ratio increased significantly from 2006 to 2009. From the tables above, we can find out that Diageo relies on debt to some extent. It is optimal for firms to use debt in their capital structure for its low costs. However, too much reliance on debt financing is potentially costly to the firms shareholders. Furthermore, Diageo will face financial distress if it defaults on the interest and principal payments. 2. Horizontal Analysis Sales were increasing significantly from 2005 to 2009, especially in 2009, reflecting the contribution from brands outstanding performance in Asia Pacific and Europe, which offsets the impact by the weakness in North America. The operational progress and foreign exchange benefits stated by annual report also increase its net sales. The increase of Cost of Good Sales is more than Sales increase for the accounting period, which means that it costs more to sell the product than we actually made. The growth of Operating Expense exceeds the growth of Gross Profit by 18.53%.This means that our sales exceeded the expenses, and the company gains the money. Income Tax Expense exception, other items on the income statement are increase, which indicates a decline in profitability of the company. The increase of Net Income results in the change for EPS on LSE and DEO. 3. Vertical Analysis The proportion of COGS increased from 2005 to 2009 by 2.28%, which shows the direct effect on the companys Gross Profit. The decrease of the proportion of Operating Income and the increase of proportion of Interest Expense results in the slightly decline of Net Income. 2) Capital Structure analysis The total long-term liabilities of Diageo PLC take more than half parts of its capital structure both in 2008 and 2009. Its capital structure is far more risky than the Majestic Wine PLC which contains large proportion of equity and current liabilities. Under the risk-based capital structure, low liquidity enhances the Diageos financial risk. On the other hand, the non-current assets, which gain high level of return, take up a large proportion, so the profitability of the company has also been improved. Conclusion Diageos strategy is to generate consistent top line growth while enhancing its operating margins and return on invested capital. The company seeks out selective acquisitions to support brands growth which strengthen its market position in both United Kingdom and abroad. In the future, according to the companys strategy, Diageo looks for the opportunities in emerging markets, such as Brazil, Russia, India and China. Annual report reveals that the Companys credit risk comes from financial instruments and business activities. Diageo minimizes its financial credit risk through the application of risk management policies approved and monitored by the board. Trade and other receivables exposures are managed locally in the operating units where they arise and credit limits are set as deemed appropriate for the customer. There is no concentration of credit risk with respect to trade and other receivables as the group has a large number of customers which are internationally dispersed  [1]  . Although the corporate gains stable profitability, it has several financial management limitations. Its capital structure contains too many long-term debts and inefficient inventory management may add the liquidity risk. SECTION B Corporate GovernanceThe goal of Corporate Governance is to solve the agency problem and create sustainable shareholders wealth. The corporate governance practices of Diageo PLC mainly include: internal control by board of directors and remuneration policy. Key to committees  [2]   1. Audit 2. Executive (comprising senior management) 3. Nomination 4. Remuneration Comes from the figures above and corporate governance report, the board has an appropriate structure and directorship. The size of board is appropriate, in which case, the decision making and internal control are effective and can make sure all the directors are participating in the significant affairs. Good balance between executive and non-executive directors. There are fewer executive directors and more non-executive directors. Putting the outside directors into the committees can prevent manager conspiracy plundering the shareholders profits. The Board Committees are constructed clearly according to their functions, which plays a positive effect to the board: 1) Define the functions of board of directors. 2) The directors can access to company information more easily. 3) In favor of non-executive directors of the companys affairs involvement. The company has experienced experts serving on their board. The executive directors have a plenty of experience in the drink business, supported by a wide range of financial and technical experience of the non-executive directors. 2) Independence The Non-Executive Directors play an important part in corporate accountability and governance through their membership of sub-committees: Audit Committee, Executive Committee, Nomination Committee and Remuneration Committee, which improves the boards independence. The non-executive directors have a particular responsibility for ensuring that the business strategies proposed are fully discussed and critically reviewed. This enables the directors to promote the success of the company for the benefit of its shareholders as a whole,  [3]   2. Remuneration Committee 1) The composition of Remuneration Committee The Remuneration Committee consists of Diageos non-executive directors, all of whom are independent. In that case, the committee members have no financial interests about themselves conflicting with shareholders, which reinforce the committees independence. 2) Responsibilities for the corporate governance The responsibilities of the Committee include  [4]  : Making recommendations to the board on remuneration policy as applied to the executive directors and the executive committee. Setting, reviewing and approving individual remuneration arrangements for the chairman, executive directors and executive committee members including terms and conditions of employment. Determining arrangements in relation to termination of employment of each executive director and other designated senior executives; and Making recommendations to the board concerning the introduction of any new share incentive plans which require approval by shareholders. Types of Main Executive Compensation  [5]  : Base Salary: The Committee takes base salary into the consideration of the value created by individual, performance and the external market data. Annual Bonus: Incentives year on year delivery of short term performance goals. Cash bonuses were earned by other senior managers for achieving relevant performance targets for the financial year. Share Options: Incentives three-year earnings growth above a minimum threshold. Provides focus on increasing Diageos share price over the medium to longer term, however, may increase the manipulating of accounting profits. Performance share awards: Provides focus on delivering superior returns to shareholders. Pension: Provides competitive post-retirement benefits. Long Term Incentive Plan (LTIP): These awards vest three years after grant and are subject to satisfying the appropriate performance criteria over the relevant three year performance period. This policy can prevent manager focusing on manipulating short-term earning. Ownership Structure Diageo Plc is incorporated as a public limited company in England and Wales. It is listed on the London Stock Exchange, as DGE, and on the New York Stock Exchange, as DEO. The Ownership Structure of Diageo PLC is classified into Block-Holders Ownership. Capital Group Companies, Inc. are the only major shareholders, with 123 million ordinary shares (4.01% of the issued ordinary share capital) and no different voting rights. No other major shareholders are listed in Diageos Annual Report. Audit Independence 1. The audit report opinion  [6]   The financial statements give the objective and fair description of the Groups affairs at 30 June 2009 and its profit for the year then ended. The statements have been prepared accordance with IFRS. The statements have been prepared accordance with the requirements of the Companies Act 2006 and Article 4 of the IAS Regulation. 2. Assurance The independent auditor provides a positive assurance. It gives the audit opinions that the financial statements meet the requirement of IFRS, Companies Act and IAS Regulation. The mentioned above can improve the independence of external auditing. 3. Non-audit services  [7]   The group has a policy on the use of the external auditor for non-audit services, which is reviewed annually, most recently in June 2009. These pre-approved non-audit service categories may be summarized as follows: Accounting advice, employee benefit plan audits, and audit. or other attestation services, not otherwise prohibited; due diligence and other support in respect of acquisitions, disposals, training and other business initiatives; and Certain specified tax services, including tax compliance, tax planning and related implementation advice in relation to acquisitions, disposals and other reorganizations. All the non-audit services are under the supervision of audit committee which avoids the interest conflict while audit and non-audit services are provided by external group audit simultaneously. Audit Committee 1. The main features and characteristics Composition: Exclusively Independent Non-Executive Directors. Assurance: Financial reporting is evaluated by the Audit Committee. Background of committee members: The corporate requires at least one committee member is a financial expert. The term of office: The term of office of members should not be too long, generally 3 years. 2. The role in enhancing the credibility of the published information The audit committee takes the following responsibilities: Monitor internal control and risk management throughout the Group. Review the objectivity of the interim and annual financial statements including a review of the significant financial reporting judgments contained in them, before submission to the full board. Monitor the effectiveness of the global audit and risk function. Critically review the groups policies and practices concerning business conduct and ethics. Monitor the companys relationship with the external auditor, including its independence and managements response to any major external audit recommendations. According to the mentioned above, audit committee can monitor the key financial and operational risky areas, review the fairness and effectiveness of internal control system, and oversight of external audit and internal audit on the implementation of the recommendations of internal control through the internal audit functions. 3. The role in enhancing the independence of the external auditor  [8]   In reviewing the independence of the external auditor, the audit committee considered a number of factors. These include: the standing, experience and tenure of the external audit director; the nature and level of services provided by the external auditor; and confirmation from the external auditor. The audit committee established the policy to reinforce the independence of external auditors. The provision of any service must be approved by the audit committee. The fees generated from non-audit services are under the supervision of audit committee. Consulting work cannot be performed for audit clients. Voluntary Disclosures 1. The evaluation of voluntary disclosure  [9]   Environmental disclosure The Companys Environmental Statement provides a detailed description of environmental policy regarding to the improvement in environmental performance, energy and greenhouse gases, Water management, Brands, packaging and innovation, Supply chain, Research and transfer of technology, Hazardous substances, and Emergency response. Social disclosure Diageo PLC makes a real contribution to creating a positive role for alcohol in society, minimizing the harm from misuse and promoting the social benefits of responsible drinking. The companys investing in employee development increases the capability of its workforce, creates value and spreads wealth through the community. The company sets some policies about safety at work, employees health, employees capability and development. Ethical disclosure The liquor has a negative impact on peoples health, and the Diageo not only focuses on the markets expanding but also give a positive guidance to the public. 2. Three main potential impacts The Company contributes to the wider community through their involvement in corporate citizenship, volunteering and charitable activities, which gain positive impact on corporate reputation. One of the most significant impacts of its business on local economies is to provide employment. The occupational health and safety of employees is a high priority, which enhances the motivation and performance of employees.

Recruitment and Selection Strategies Essay

Summary: The recruitment and selection strategies that a company chooses are vital to the success of a business. Recruitment and selection strategies just thrown together are likely to fail. This is why a new business, such as Landslide Limousine must define the necessary criteria for recruitment and selection processes that will support its employee selections. This criterion will include hiring an adequate and qualified staff, a commitment to fair employment practices, and pre-employment standards to include background and reference checks. To determine the criteria for these requirements, the company’s organizational goals, the forecasted demographic changes, analyze workforce needs, workforce diversity objectives, organizational branding, and the methods needed for recruiting, screening, and selecting the proper candidates will be looked at. By assessing these areas we will be able to provide Landslide Limousine effective strategies for the recruitment and selection of personnel to provide a high quality and reliable service to its customers. We will also need to take into account that Landslide Limousine is a new company moving into Austin, Texas, and will need to follow local, state, and federal laws for the area in the employment processes. Organizational Goals Mr. Stonefield has set a goal for his company Landslide Limousine to be the  best limo service in Austin, Texas. He plans on hiring up to 25 employees within the first year with only a 10% turnover rate. He does expect to have a net annual revenue of -$50,000 for the first year, but an annual expected revenue growth of -5% for future years. To meet these goals there needs to be the right employees in place that will â€Å"buy in† to the company. These employees will understand the vision that Mr. Stonefield wishes for his company and want to help him reach it. Forecasted Demographic Changes Landslide Limousine is expecting to have a high turnover rate the first year. To keep the business going successfully it is necessary for the individuals hired to help out in other areas when needed. For this to be accomplished, the applicants need to be qualified in a variety of areas. The company will also need to think ahead and hire individuals who might be bilingual because of the proximity of Austin, Texas, to the Mexico border. An applicant who is not bilingual should not be dissuaded from applying, it would just be an added benefit for the company. Analysis of Workforce Needs Landslide Limousine will employ up to 25 people within the first year these employees will include customer service representatives, dispatchers, drivers, HR assistants, and managers. Customer service representatives will handle the calls from customers and potential customers. They will be the frontline to the business and must have high customer service qualities. Dispatchers will convey information that the customer service representative gathers to the drivers about where and when to pick up and drop off clients. Drivers will drive the customers to their locations in an efficient professional manner. HR assistants will help the manager in making sure that the company is following the applicable local, state, and federal employment laws and help handle any HR related issues with the employees. A manager will oversee the rest of the employees and ensure that the company is maintaining its perspective on the company’s goals and objectives. Workforce Diversity Objectives Landslide Limousine’s success will depend on its ability to hire qualified  candidates from a diverse pool of applicants. For this reason the hiring individual must be familiar with equal employment opportunity laws, fair employment practices related to the recruiting and hiring processes, and employment eligibility that allow an individual to work in the United States. The last is especially important with Austin, Texas, close to the Mexico border the immigration laws must be strictly adhered to (â€Å"Do your applicants,† n.d.). This will ensure that the employees have the proper credentials necessary for employment in the United States. Organizational Branding Mr. Stonefield wants his company to be the best there is in Austin, Texas. To do this he must ensure that his goals and visions for the company meet the needs of his consumers. He will also need to ensure that the employees hired are a good fit for the company and the image that he wishes to portray. In this type of industry, the contact made with the customer is a big influence on how he or she perceives the company. If there is a choice between attitude and skills, the individual with the correct attitude toward customer service should win out every time. Work skills are something that can be taught with training, customer service skills have to do with the attitude that an individual has and how he or she can handle situations with customers effectively. Methods for Recruiting Candidates This will be a key component in an effective recruitment and selection process. The methods for recruiting candidates will be from several sources. We cannot use internal sources at this time because the company is just starting up in the Austin, Texas, area. This is something that will be considered for future job openings in the company. For the initial job openings the sources will be external, and the areas to consider are newspaper advertisements, state employment services, job fairs, and using word of mouth. These methods will bring in applicants who may have the experience needed for the line of work the company is looking to fill. Another area to consider would be online job-related sites such as carreerbuilder.com and monster.com. Networking through professional organizations and keeping an eye out for changes among the competition as  also very useful. The company must know exactly what type of applicant they are looking for before advertising the positions and accepting resumes (Richason IV, n.d.). One last area to consider would be a temp service agency that specializes in providing other companies employees who will work for them on a temporary basis. These employees are hired by the temp service agency to meet the requirements requested by the company. By hiring through a temp agency, the screening and selecting of candidates is completed by them. Employees hired by this type of agency do have the opportunity to be hired as a permanent employee of the company. Methods for Screening Candidates The company needs to ensure the individual doing the hiring is knowledgeable in equal employment opportunity laws and affirmative action provisions pertaining to the position. This is the first opportunity in the recruitment and selection processes that an employer can express his or her commitment to equal opportunity. This is a critical part of any effective recruitment and selection process. When screening applicants for a position the reviewer must look for suitable qualifications. These are the experience of the applicant, his or her credentials, educational requirements for the position, and the presentation of his or her qualifications. A quick review of applications and resumes can help a company identify qualified applicants by looking for key words. Interview Methods Once the applicants have been narrowed down, the individual doing the hiring can conduct preliminary phone interviews. These phone interviews or screening interviews will describe to the applicant in more detail the job position and requirements, assess the applicants communication skills, review his or her work history, and to determine if he or she is interested in a face-to-face interview. The face-to-face interview is the most common interview method, which involves the applicant and the interviewer meeting face-to-face in an office. These interviews can be behavioral, situational, structured, and  unstructured or a combination thereof. A behavioral interview will typically ask an applicant to explain his or her work experience, skills, and activities as examples of his or her past behavior. A situational interview will ask questions about hypothetical events. The applicant is asked how he or she would react in a particular situation. A structured interview has a standard set of questions that are asked of every applicant. An unstructured interview adapts the questions based on the applicant’s intelligence, understanding and answers. It is recommended that these different types of face-to-face interviews be melded into one for Landslide Limousine. The interviewer should have some structured questions to ask of all applicants, unstructured questions based on the interviewees understanding and answers. Behavioral and situational questions will ask the interviewee questions based on his or her past behavior and questions based on hypothetical events. Testing Procedures There are several types of tests that can be administered. Cognitive tests will test reasoning, memory, math skills, reading comprehension, and knowledge of a job or function. Personality and integrity tests will determine if an individual has certain traits or dispositions and will predict if the individual will engage in certain types of conduct. Medical examinations are required by the Department of Transportation to carry a commercial drivers license (CDL) and in Austin, Texas, a CDL is required to drive a limousine. Drug testing required for every employee before and during employment. Also criminal background checks are recommended because of the nature of business the company does. These tests should be administered without regard to color, race, sex, national origin, age, religion, or disability (â€Å"Employment tests and,† 2010). Before giving a test for pre-employment there are a few things that need to established to ensure that the test is legally defensible. These things are to make sure that the right tests are given and that the company has certified the tests validity and reliability. A valid test must measure the criteria needed for predicting job performances. It also must be reliable, which means that the test must measure an item consistently or that an individual’s score should be close to the same every time it is  taken. Because employment testing can be challenged in court, the company needs to make sure that the tests do not violate any local, state, or federal Equal Employment Opportunity Laws, including Title VII (Quast, 2011). There are several laws that need to be considered when administering these tests. They are the Age Discrimination in Employment Act of 1967 (ADEA), the Americans with Disabilities Act of 1990 (ADA), and the Title VII of the Civil Rights Act of 1964 (Title VII). The use of these tests and applicant selection procedures are prohibited if they are discriminatory. Avoid questions of a personal nature or ones that may be considered offensive. Also the company should not just rely on these test results to choose the right candidate for the position (â€Å"Employment tests and,† 2010). Interview Process Considerations Interviews are scheduled when the hiring individual has free uninterrupted time. This allows them the opportunity to review the resume and conduct an informational interview with the applicant. Refrain from focusing on his or her credentials or experience. The interviewer needs to present hypothetical scenarios to the applicant and ask how he or she would evaluate and solve the problem. Listen to his or her responses without interrupting and make notes on the key points of the conversation (Richason IV, n.d.). Methods for Selecting Candidates The methods used for selecting the right candidates for the positions will be varied, depending on the position applied for. The interviews and tests will be a consideration for positions needing filled. The notes taken during the interview process will be compared to the applicants resume to see if anything was missed. The selections will be based on how competently he or she answered the questions and the questions that were asked by him or her during the interview. The limousine driver position needs a valid commercial driver’s license for the state of Texas, and is a requirement for working in the Austin, Texas, area. Applicants who do not ask questions are either uninterested in working for the company or shy and therefore might not be a good fit for the company (Richason IV, n.d.). Conclusion The recommendations that have been made will ensure the continued success of the company. The company’s organizational goals, forecasted demographic changes, workforce needs and diversity objectives, organizational branding, and the methods needed for recruiting, screening, and selecting candidates have been considered in the development of this plan. The recruitment and selection process must adhere to local, state, and federal laws to ensure compliance and avoid legal issues. By following these recommendations Landslide Limousine will hire an adequate and qualified staff while ensuring a commitment to fair employment practices and pre-employment standards. References Do your applicants have the right to work in the u.s.?. (n.d.). Retrieved from http://www.firstchoiceresearch.com/docs/I-9 Employment Eligibility.pdf Quast, L. (2011, September 13). [Web log message]. Retrieved from http://www.forbes.com/sites/lisaquast/2011/09/13/pre-employment-testing-a-helpful-way-for-companies-to-screen-applicants/2/ Richason IV, O. E. (n.d.). Methods of recruitmant and selection. Retrieved from http://smallbusiness.chron.com/methods-recruitment-selection-2532.html The U.S. Equal Employment Opportunity Commission, (2010). Employment tests and selection procedures. Retrieved from website: http://www.eeoc.gov/policy/docs/factemployment_procedures.html

Cici’s Pizza Research Paper Essay

Introduction â€Å"Hi, welcome to CiCi’s! † This is the warm greeting that every CiCi’s employee will welcome every customer with when they walk through the door. This warm welcome is just one of the many things that CiCi’s does to exceed the customer service expectations that come with a buffet style restaurant. With competition lurking, and the economy pinching, great customer service has become a premium. This is why CiCi’s focuses so much on the customer’s wants and needs. The mission statement is as follows: Do â€Å"Whatever it Takes† to exceed each guest’s expectations. Background CiCi’s Enterprise is an American style buffet restaurant chain based in Coppell, Texas. There are approximately 600 franchised and corporately owned restaurants in 35 states. The company was founded in 1985 in Plano, Texas by Joe Croce and Mike Cole. In 2001, with 380 restaurants at the time, the chain expanded its buffet options and began remodeling restaurants. Four years later, CiCi’s had more than 500 locations, and was the fastest growing pizzeria in the United States. In 2003 Croce retired from the business, and passed ownership of the company to Craig Moore, a general manager in Dallas. Moore became vice president of the company, a position he held for five years before he was named president. As president of the chain, Moore oversaw the company’s operations and franchise growth, eventually announcing his retirement in 2009, after 17 years with the company. Michael Shumsky took over after Moore retired in late 2009. He had previously served as CEO of La Madeleine Restaurant, Inc. In addition to its current 600 restaurants, in 2010 CiCi’s announced plans to add another 500 restaurants in the next 10 years. CiCi’s has won numerous awards and has also been named one of the top 25 performing brands by The Wall Street Journal and a top 200 franchise concept by Franchise Today (CiCi’s Pizza, 2011). Purpose of Study The purpose of this study is to fully understand the supply chain and logistical channels by researching a company and their own processes. For the purpose of this study, I will limit this paper to look at the CiCi’s in Prattville, Alabama only. Also I will limit this to follow only pizza products through the logistics channel. Environmental Analysis SWOT The strengths of CiCi’s pizza make it one of the best in the industry. It offers a unique buffet experience with so many pizza varieties. Most of the competition in the industry only offers one style of pizza with one price, but at CiCi’s you can get up to 20 different varieties with one low price. If you don’t want to sit in the family oriented restaurant with the best customer service and eat then you have the option to order take out. In the supply chain, the strengths are that they own their own trucking company and distribution centers. With all these strengths under their name it is no wonder that CiCi’s is the 9th largest pizza chain in the United States. (Pizza Franchise Report 2011, 2011) The owner Michael Shumsky is not satisfied with the title 9th largest pizza chain in the US. The weaknesses of CiCi’s are that they have no delivery services while the other top competitors do. Also, because the price is so low, there can be a perception of low prices = low quality. The one other thing that is holding CiCi’s back from being in the top five is that there is 15 states in the US that so not have a CiCi’s in them. Simply put, there needs to be more franchises build in order for this company to rise to the top of the list. (JMC Restaurant Distribution INC. , 2011) One common quality of successful franchise owners is that all a weakness shows is that there are opportunities. CiCi’s can offer delivery services in order to make their customer service that much better. Also in order to make the company name and logo as popular as the top companies it needs to expand into the rest of the United States and have at least one restaurant in every state. Last, because CiCi’s is in the top ten of the industry, there are threats that come with that title, because there are many other business that are close behind them that what to take their spot. The Mellow Mushroom is a pizza buffet that is less than a mile from the CiCi’s in Prattville, AL. Mellow Mushroom offers similar services but at a higher price. One advantage that the Mellow Mushroom has is that is looks a little more elegant and upper class. People who are looking for more formal dinner experience would be likely to go to Mellow Mushroom. Another threat for the CiCi’s in Prattville, Al is that it is in a place where there are many food options available. Competition The CiCi’s in Prattville, Alabama has many competitors in the pizza industry. This creates a highly competitive market, which is good for the customer because that means that the customer service will be top notch. The competitors include: Domino’s, Pizza Hut, Hungry Howie’s, Papa John’s, Little Caesar’s, Marco’s, Pasta Pizzeria & Grill, and Mellow Mushroom. All these companies are within a 20 mile radius. In a lucrative market like the pizza one, the more competitors the better the customer service because it is so competitive. Market Analysis The pizza market can be very lucrative, therefore it is very competitive. There are low barriers to entry for this market because there is not a perfect way to make a pizza, so there is a lot of room for different types and different restaurants. CiCi’s has established itself as a top competitor in this market. The pizza segment of the food industry represents 11. 7% of all restaurants and accounts for more than 10% of all foodservice sales (Pizza Franchise Report 2011, 2011). Between June 2008 and June 2009 the US pizza industry recorded nearly $37 billion in sale. According to â€Å"Pizza Power†, PMQ magazine’s (Pizza Marketing Quarterly) Annual Industry Analysis, of the 67,554 pizza stores in the US, 59% are independently owned and control 51% of total pizza sales. Franchises and chains account for 41% of the market and for nearly half the sales. The following pie charts were sourced from PMQ’s 2009 annual industry analysis and depict the breakdown of pizza stores in the US and a breakdown of US pizza sales (Pizza Franchise Report 2011, 2011). CiCi’s pizza is included into the other top chains 15%. The pizza industry experienced a loss of market share and sales during the recession as skyrocketing cheese prices and an increase in the cost of wheat and other pizza essentials drove up the cost of pizza. Customer Analysis Pizza is enjoyed by people from all walks of life and eating out at restaurants is an essential part of the American lifestyle. According to the National Restaurant Association, 45% of adults say that restaurants are still a major part of their lifestyle and that they will continue to frequent their favorite restaurants. According to a survey completed by Mintel, 93% of Americans eat at least one pizza per month and 21% of 18 – 24 year olds purchase pizza more than three times per month. This is compared to only 7% of those aged over 65 eating at least one pizza per month. Pizza also proved popular with parents. About 20% of the parents surveyed said that they purchase pizza more than three times per month, compared to 12% of adults with no children (Pizza Franchise Report 2011, 2011). This customer group covers much of the target market for CiCi’s pizza. Because so many age groups love pizza, there are many target markets for pizza places to target. These customers look for more than just a good tasting pizza now, they look for a place with good deals and even better customer service. Supply Chain Activities CiCi’s, like many other businesses has a busy season. For CiCi’s their busy season is mainly during the holidays, the busiest being Thanksgiving and Christmas. For these special times of the year they need to forecast just how much more products they need in order to keep the customers satisfied. The forecasting is done by looking at the previous year’s sales during that particular time period; in addition, if there is any national media at that time. They take the dollar usage per item and multiply that by the projected sales to give them how much to order of each item; the items being flour, sauce, and pizza toppings (Hassell, 2011). Demand Forecasting cannot be done before there is a proper count of the inventory. Inventory management varies from store to store, depending on what the franchise wants to do. Most stores count inventory every Sunday night or Monday morning. The CiCi’s in Prattville counts inventory on Sunday nights. To manage the inventory they have a food cost program that you enter the ending count; the computer downloads the order and uses the previous count as the beginning. The company as a whole tries to keep food cost percentages at 28% or lower, with labor cost of 18. 5% or lower (Hassell, 2011). Once the forecasting is done, then it is time to place the order. CiCi’s uses an online order management system called ESOS (Exhibition & Sponsorship Ordering System). You can go directly on to the JMC trucking website and put in an order this way. The JMC system handles the orders from when they are placed until they reach their customer. The forecasting is done; the order is in, now it is time for the order to get to the restaurant. This is where CiCi’s takes a big leap from its competition, because of its transportation system. CiCi’s has become such a powerful force in the pizza industry partly because of attention to detail in the transportation channel. They own their own transportation service. JMC restaurant distribution Inc. is a full service distribution company founded by Joe Croce in 1990, after he found out that other distributors were not able to keep pace with his vision of great service, low prices and â€Å"whatever it takes† attitude. Today JMC serves over 600 restaurants in 35 states out of three distribution centers strategically located in Dallas, TX, Atlanta, GA and Richmond, IN. The opening of a fourth center is in the making in Arizona. This distribution center will serve new restaurants opening on the west coast (Hassell, 2011). JMC has a well maintained fleet of over 70 power units with 48†² or 52†² refrigerated trailers (some with lift gates), run consistent routes each week to CiCi’s restaurants, and return to our Dallas, Atlanta and Richmond, Indiana bases carrying freight for ourselves and others under JMC authority. JMC brings the same dedication to great prices and great service to its freight customers as it does to its restaurant customers. To date, JMC has served over 1500 freight customers handling a wide array of dry, refrigerated and frozen products throughout the United States (JMC Restaurant Distribution INC. , 2011). Just as important as the forward movement of goods, is the reverse movement. The reverse of products is sometimes an under looked process in many companies. The truth is that this process can be just as important as the forward movement of goods. CiCi’s does have a reverse process for damaged or broken products. For example, if a bag of flour that comes off the truck has a hole in it or it is leaking, there is a chance that it is contaminated so they throw the bag away. To compensate for the loss of the bag the receiving store will get one free bag of flour they next week when the truck comes in (Hassell, 2011). When the delivery truck comes to CiCi’s, carrying this week’s supply, it is the driver’s responsibility to unload the truck. The employees at the restaurant do not help with unloading. It takes about 45 minutes to completely get all the products off the truck and into the store (Hassell, 2011). Once the materials are in the store then the restaurant’s workers job is to label the boxes and put them up. The labeling and packaging of the boxes is not that importance in the CiCi’s supply chain, because the customer of the restaurant does not see what the bags of flour look like or how the pepperoni is packaged. What is important in the packaging is that the packages be able to withstand certain temperatures and weights because most of the trucks are refrigerated and carry lots of other products. Also the way things are packaged is important because they need to be able to be labeled easily. Damaged packages will be directed right back to the JMC in the reverse process. With the forward and reverse of all these products, transportation can get pretty expensive. The facility locations are very important because of this. CiCi’s has a total of three distribution facilities that are strategically placed. The biggest of the three facilities is the one in Dallas, TX. This facility covers all the states shaded in red in the picture below. Second largest facility is the one in Atlanta, GA. This one covers the states shaded in yellow. (JMC Restaurant Distribution INC. , 2011) That is where the CiCi’s in Prattville Alabama gets all of its products. Last, the states shaded in blue are handled by the facility in Richmond, IN. All the facility locations were made with the main roads, possible traffic, and distance in mind. Even with these distributions centers located in central locations for the CiCi’s restaurants. The procurement process does not have influence on the locations, because the raw materials come from all over, they receive bids on their products and JMC makes the decision based upon the quality of that product and the other ones. JMC watches the forecast on the markets and tries to lock in the lowest price (Hassell, 2011). As stated previously, the pizza industry is extremely competitive, and with his competitive market, customer service is a premium. â€Å"Hi, welcome to CiCi’s! † is the phrase that every employee must memorize and say to every customer that comes into the restaurant. Customer service is a component that this company really focuses on. On the website they have a list of guest promises that they stand by. They are as follows: to do â€Å"whatever it takes† to exceed your expectations, to say â€Å"Hi, welcome to CiCi’s, to guarantee you a full-hot-fresh buffet, and to use our names to make you favorite pizza, to serve you in a fun, sparkling clean restaurant, and to say â€Å"goodbye, come back and see us (CiCi’s Pizza). The pizza industry is so competitive that the best way to get new customers and keep the loyal customers is to have the best customer service around. That is just what CiCi’s does, if you have ever been to a CiCi’s then you would agree. Recommendations Pizza is very much part of the American way of life, with Americans eating approximately 100 acres of pizza each day, or 350 slices per second. Although the pizza industry experienced a decrease in sales during the recession, the beginning of 2011 has seen an increase in sales. The development and implementation of new technology and marketing strategies has enabled the pizza industry to adapt to growing consumer demands for cheap, fast, and convenient products. CiCi’s has done a good job establishing itself as a top competitor in this market. In order for CiCi’s to compete with the top pizza franchises in the market, such as Pizza Hut, they need to get more creative. CiCi’s needs to increase their marketing budget, this would create more awareness to their target customers and increase sales. CiCi’s need to become a household name and in order to do that there needs to be more franchises. Currently CiCi’s only has restaurants in 37 states. If they were to expand into all 50 states and increase their marketing then I believe the CiCi’s would be the best pizza franchise in the United States. Conclusion After all, the â€Å"do whatever it takes to exceed the guest’s expectations† is a great mission statement that CiCi’s defiantly goes by. This great company has expanded from one restaurant in Plano, Texas to over 600 in 35 states in 25 years. That is a great accomplishment, and they are not done yet. With a plan to build more restaurants in the future, you can expect to see CiCi’s at the top of the pizza industry very soon. The supply chain management is one of the best in the industry because they own part of their supply chain. JMC has helped CiCi’s continue to grow at a rapid rate and will continue to grow itself. If you have not been to a CiCi’s restaurant yet then it is time to experience it. References CiCi’s Pizza. (2011, November 7). Retrieved November 30, 2011, from wikipedia. com: http://en. wikipedia.org/wiki/CiCi’s_Pizza JMC Restaurant Distribution INC. (2011). Retrieved November 8, 2011, from cicistrucking. com: http://cicistrucking. com/about_jmc. html Pizza Franchise Report 2011. (2011). Retrieved November 24, 2011, from Franchisedirect. com: http://www. franchisedirect. com/foodfranchises/pizzafranchises/pizzafranchiseindustryreport20111/80/292#Ref1 CiCi’s Pizza. (n. d. ). Retrieved November 26, 2011, from Welcome to CiCi’s Pizza: http://www. cicispizza. com/_template. php#Scene_1 Hassell, M. (2011, November 12). Regional Manager. (J. Montgomery, Interviewer).

Analysis Of John Fowles s The Magus - 1739 Words

A written piece of literature means nothings without the reader. If a story is never read or interpreted by someone, then it means nothing at all. Only when a piece of literature is read and given a response does it mean anything. The role of the reader is essential to the meaning of a text, for only in the reading experience does the literary work come alive. Furthermore, each reader can interpret a text differently and is affected by outside influences. These influences can effect major areas of the text and in some cases give it a different meaning. In John Fowles s The Magus, the reader s response to the authors story telling can differ by their social class, reaction to the main character, and gender. These key differences can give the story a whole new meaning and why the reader s response to literature is so important. In The Magus, the reader social class can change their outlook on the story. The Magus follows the main character Nicolas Urfe, a young middle class Englishman . Nicholas, being from the middle class, receives more than the lower class and less upper class social groups. He may had received a different education, experienced a different sort of living, and overall may have a different way of interacting with the world. For example, he was able to attend Oxford university in England which is a very costly and prestigious university to attend. For the reader that is of a lower class, Nicolas becomes a less relatable character. Throughout history