Dow Chemical Case

Dow Chemical Case Question 1 Polyethylene is the world’s most widely used plastic. Polyethylene plastic’s principal application was in packaging, from trash bags to milk jugs. It was widely used in the manufacture of everything from trash bags, picnic cutlery and garbage pails, to plastic toys. Polyethylene also replaced glass, wood, and metal in certain applications. There were three types of polyethylene, Low-density polyethylene, High density polyethylene and Low linear density polyethylene. Polyethylene produced from ethylene. Ethylene is produced from oil or natural gas. Ethylene plants separated either naphtha molecules (derived from crude oil) or ethane molecules (derived from natural gas). The ethylene derived from this process was used to produce polyethylene. The critical success factors in this business were capital intensive and economies of scale. Polyethylene was a global commodity product and pricing worldwide typically fell into a narrow band. The demand for polyethylene was large because it was the world’s most widely used plastic and polyethylene customers were typically small and medium-sized plastic processing companies. The big Risks in the industry: * The raw material risk – Cracking naphtha (the raw material derived from crude oil) required much more energy, manufacturing intensity, and equipment than cracking ethane (derived from natural gas). Supply of primary materials and electricity are crucial to success of polyethylene production. * Cost risk – large plant sizes and the need for economies of scale rendered the ethylene industry highly capital intensive. A plant for cracking ethane was estimated to hundreds of millions and the cost for a plant for cracking naphtha is double. Capacity additions or reductions could significantly affect balance of supply and demand, influencing capacity utilization rates, prices, and profit margins. * Ethylene profitability was tightly links to its global operating rate. The ethylene business links to oil companies, governments, pure chemical companies, conglomerates, private investors, and joint ventures. * Competition of polyethylene industry in Argentina and in the global market. The government operator was directly or indirectly financing capital – intensive ethylene plants in order to stimulate downstream business. Some of countries, the government contribute the investment. * The margins for producers of ethylene and first-order derivatives (mostly plastics) were highly correlated because the producers for them were highly integrated. Question 2 The stages of the project: * Stage 1: involved taking control of PBB, which comprised the ethylene cracker and polyethylene plant, and then upgrading the facilities in order to make them internationally competitive * Stage 2: involved acquiring Polisur’s two polyethylene plants * Stage 3: involved building a new ethylene cracker and a polyethylene plant These three stages are closely related to each other. The next stage would be reached only if the previous stages achieved, and the followed stages ensure the success of the previous stages. Acquiring PBB offers Dow the opportunity to enter Argentina market, and this is the first step for Dow to take over control of Bahia Blanca’s polyethylene activities. Dow is bidding not only for PBB in the privatization, but also an overall plan for the development of Dow’s polyethylene business in Argentina. Dow will decide on the price to bid for PBB in the upcoming privatization, the price is based on the valuation of the entire project (stage 1, 2 and 3). The three stages are one big project. Dow’s bid for PBB should not be based solely on the value of Stage 1 of the project. Gaining control of PBB would be the first step in the project. But taking all the factors discussed above into consideration, Dow should value all the 3 stages in order to bid on the PBB project. Dow believed that it had the opportunity to become the number-one player in the Latin American polyethylene industry. To achieve this goal, Dow would also have to acquire Polisur’s two polyethylene plants (stage 2) and expand existing capacity. The expansion of its polyethylene capacity in Bahia Blanca would require the company to build a world-class competitive cracker (stage 3). Doing so would nearly triple PBB’s ethylene capacity. Therefore, Dow had to not only consider what to bid for PBB in the privatization, but also develop an overall plan for the development of Dow’s polyethylene business. Dow had to incorporate the terminal value of each stage of the project. Question 3: The followings are the arguments that support the acquisition of PBB: 1. The whole project will increase Dow shareholder’s wealth. As a public company, the first aim of the management team is to increase the shareholder wealth. The project proposed by the management team is definitely consistent with this goal. And bidding on the PBB is the first stage of the whole project. The exact increase in shareholders’ equity may be various at this point as it depends on lots of other factors ( we will discuss the risk of valuation thought the whole case. , but in general, the management team is confident in the future outlook. 2. The other important strategic purpose of acquiring PBB is that it is the first stage towards consolidating all Bahia Blanca’s polyethylene activity under Dow’s control. The 3-stage project will make Dow to be the leading company of polyethylene in Argentina, even in Latin America because of its MNC background. This will have a long term positive influence in Dow’s stock price as well as shareholders’ equity. 3. Also, as indicated in the case, the demand of polyethylene will increase in the next couple years. Argentina is an emerging market, which is facing a rapid transformation. Dow’s vice president anticipated continued improvement in standards of living, which will lead to increase demand for polyethylene in Argentina, as well as in Latin America. The expected growth in polyethylene demand made PBB a potentially attractive acquisition. 4. PBB right now is a government controlled complex which is going to privatize. For Dow, it is a perfect opportunity to build long term relationship with Argentina government. It will give Dow more opportunities in the market of Argentina and Latin America. Question 4: The followings are the mains risks of the project for Dow beyond the general industry risks discussed in Question 1: 1. Country risk. Argentina is an emerging market. It is widely agreed that when we estimate the risk of emerging market by using the traditional model like CAMP, the result also unfavorable. Some reasons are the market is highly concentrated and integrated. And also the country risk cannot be diversified. So it brings the uncertainty to Dow’s valuation. 2. Political risk. Political risk is part of country risk. It is identified as the potentially adverse impact a country’s environment has on a firm’s future cash flows. And it will affect Dow’s future expected returns and valuation measures. If there is some major political unrest in Argentina, the government expropriates PBB, Dow will face a significant loss. Also, if the Argentina government default on its debt, Dow would face the bad debt which is an huge cost and will drag down the expected cash flows. 3. Economics risk The privatization in Argentina was the progress to control the fiscal problems, like hyperinflation, stagflation and huge fiscal deficits. As an emerging country, Argentina had not developed a healthy financial market within the country. The unstable economy would lead to a huge possibility of default. Another possible aspect was the economics risk of the world. If there was an economics downturn, the huge investment of the project would worth less and Dow will facing difficulties to rise equity to finance the project. 4. Unexpected risk: (1) Unexpected shortage of energy. The industry is really energy intensive. If there is a energy shortage such as the decreased supply of oil, the whole project will face negative return. (2) Unexpected rise in variable cost, such as transportation cost. The unexpected rise in variable cost will have negative impact on Dow’s cash flow. The decrease of expected cash flow will lead the decrease value of the project. (3) There are 3 stages of the whole project. If one of them did not work well, the overall goal will be affected and the whole project would have the risk of failure. Question 5: Given in the case that Dow’s cost of capital for similar U. S. based projects is 10%, thus we chose to use NPV to evaluate the different stages of the project, by discounting each year’s expected cash flow (Exhibit 9, 10 & 11) to the base year-1995. Stage 1 Valuation Given in the case, Dow is bidding on the sale of 51% of PBB, therefore, if we calculate the Present Value of the cash flow, Dow should get 51%. Dow’s total investments for PBB Ethylene cracker and PBB Polyethylene cracker between 1996 and 2000 are $128. 9 million and $28 million in Exhibit 7 from the case. If we compare these figures with Exhibit 9A & 9B investment numbers between 1996 and 2000, they are the same (shown in Table 1); this means that the cash flow of PBB in exhibit 9A is the cash flow after only deducting the investment from Dow. So, we add back Dow’s investment to get the actual cash flow of PBB. Since Dow’s share in PBB is 51%, it gets 51% of PBB’s cash flow and we discount the cash flow. Next we calculate the sum of Present Value of Dow’s investment in each year, and subtract it from Dow’s 51% share in PBB. This number reflects the actual net cash flow been distributed to Dow. The followings summarize the steps of the thinking process: Step 1: Add back Dow’s investment to PBB’s cash flow, this gives the total future cash flow to be distributed among Dow (Dow owns 51% of PBB) and other owners. Step 2: Find the PV of total future cash flows Step 3: Distribute the 51% of the PV of total future cash flow to Dow Step 4: Deduct PV of Dow’s investment from Step 3 The value of Stage 1 is $345. 71 million as shown in Table 2. Stage 2 Valuation In Stage 2, we took polyethylene CFs directly from Exhibit 10, and discount them by appropriate discount rate, and summing up these PV of the cash flows we get the value of Stage 2, $399. 76 million. Another point worth mentioning is the calculation of the terminal value in 2010. Given in the case, the growth is 3. % constant for the project, we took the cash flow in 2010, which is $82 million; multiplied it by (1+g)/(k-g), and discounted it by 16 years to get the present value. Stage 3 Valuation Stage 3 involves building a new ethylene cracker and a polyethylene plant. We summed up the total cash flows of them and find PV of the cash flows in each year. The total of all the PV of the cash flows is the value of Stage 3, $ 993. 69 mill ion shown in Table 4. Now we have the value for each stage, and we get the total of the project, it is worth $1739. 16 million with the value of Stage 1, Stage 2 and Stage 3 are $345. 1 million, $399. 763 million and $993. 690 million respectively, under the assumption that each stage is successful just like Dow has planned. Question 6: There are two ways to do Discounted Cash Flow analysis in an international context. We can adjust the discount rate by adding a country’s political risk premium or, adjust the cash flow of the project. In this question, we will discuss the appropriate method of the project’s discount rate. In a country, the higher risk that investors perceived, the higher discount rate that should be applied to the project’s cash flows. The risks we are talking about are not diversifiable. Since November 1995, the Convertibility Law tied the peso to the U. S. dollar, even thought the market thinks the fixed exchange rate would last for several years, but as the executives of Dow, Virgnar and Marcer need to consider the possibility of future crises. Uncertainty about future currency thus will increase the discount rate of project in Argentina, which means that Dow’s cost of capital is increased. Possible impact of government policies relevant to foreign investments is another issue, example increased tax rate. This will leave Dow with a lower investment return than before. In practice it is often difficult to quantify the likelihood and impact of political risk on international investments; given US and Argentine Yields in the case, we can adjust the discount rate by adding the sovereign yield spread between U. S. and Argentina. The idea is that the bond spreads between two countries with same maturity reflects country risk. The country with the higher yield in this case is Argentina; it offers approximately 10% more than the U. S’ yield shown in Exhibit 12. The reason behind that is Argentina has a higher country risk than U. S. , so it has to offer a higher yield in order to compensate the investors for taking additional risks. Therefore Dow should take these additional risks into consideration when evaluating the project. The adjusted discount rate for the project should be 20%, 10% ( cost of capital for similar U. S projects from Q5) + 10% (Argentina’s country risk) and this change in the discount rate will have a big impact on the value of each stage in the project which we will examine later. There are two major advantages of adjusting the discount rate by adding the sovereign yield spread. One of the advantages is the countries’ bond yields are easy to find, observe and access, investors can easily calculate the country risk by subtracting the two bond yields. Another advantage is that the yield of bond is forward-looking, it does not only incorporate today’s condition, also the yield reflects the market’s future expectation of a country’s risk and return so it is a good representation of cost of equity in a particular country. Salomon Smith Barney model is similar to the model that we just described, but with additional inputs and refinements. If we have more information from S&P country sovereign ratings, country ratings, and macro variables, we could adjust discount rate for the project more accurately. Furthermore, the political risk premium that we can add to the discount rate can be scaled up or down based on subjective scores for Dow’s access to capital, susceptibility of the project investment to Argentina’s political risk and the importance of the investment for Dow. Therefore, the more relevant information we have, the more accurate discount rate we can construct to help evaluate the project. Question 7 The calculation process for is basically the same as in question 5, except here we use the cost of capital 20% instead of 10% to discount expected cash flow. Calculation shows in Table 5 (in Million U$). The project worth is $464. 734 which about only 20% of the project value if it located in US. The largely decrease in project value is due to the higher country risk in Argentina than in the US. The higher country risk was reflected in the higher discount rates which lower the present value of the cash flow. In stage 1, the present value of expected cash flow (CFs) is 160. 32 which is 54% lower than the stage 1 value in question 5. The percentage of decrease is lower than the total project value’s decrease, since most of the value in stage 1 was generate from early years cash flow. The country risk in the short run is lower than in the long run. Because in the long run there are more chances for uncertainty events to happened. In stage 2, the present value of CFs is 194. 81 and it is 51% lower than the project value in US which also less than the percentage decrease of the total project value. And this is due to the same reason as in stage 1. In stage 3, the value is $109. 837 which is 89% lower than the question 5’s value. The significant decreasing value is due to the value of stage 3 is mainly from terminal value. Since there are higher country risk and more uncertainty in the long run, stage 3’s long run cash flows ( include terminal value) are heavily discounted which lead to low present value. Question8 Dow should bid for PBB no matter the project is in US or Argentine, since the total project values and stage 1 values are both positive in these two countries. Because Dow is an American company, the shareholders care about the US returns. The Project cash flows and stage 1cash flows are discounted by the cost of capital in US and get positive present values, which mean the PPB will increase Dow’s shareholder wealth. To determining how much Dow should bid, the company should aware that there are some requirements made by the Argentina government. First, the government set the minimum accepted price is 150million U$, which is the lowest range for Dow’s bid. Second, the government requires the bidder to have a statement of net worth of at least 5 billion U$. While, Dow has two other competitors Copesul and Perez also want to bid PPB. However, Copesul only has net worth $929,538,000 and Perez has net worth $1,461,000,000. Even if Copesul and Perez combine to bid PPB, their total net worth around $2,391,000,000 will be smaller than the $5 billion requirement. Therefore, Dow should not been threatened by Copesul and Perez’s bid, and they should not affect Dow’s biding strategy. Therefore, for the bidding price: Value of the bid= Value of (stage 1+2+3)-cost of PBB- cost of Polisur The cost of stage 3 is already included in the value of stage 3. In question 3, we obtain the Value of (stage 1+2+3) equal to$464. 734 million. Since the Value of the bid>0, then cost of (PBB+ Polisur) < $464. 734million According to the government requirement, Dow could bid PBB for $150 million, then their higher range for Dow’s bid should be $ 314. 734 million ($464. 734million- $150 million). Table 1: Table 2: Table 3: Table 4: Table 5:

An Overview of The Treaty of Versailles

An Overview of The Treaty of Versailles Signed on June 28, 1919, as an end to the First World War, The Treaty of Versailles was supposed to ensure a lasting peace by punishing Germany and setting up a League of Nations to solve diplomatic problems. Instead, it left a legacy of political and geographical difficulties that have often been blamed, sometimes solely, for starting the Second World War. Background World War I had been fought for four years when, on November 11, 1918, Germany and the Allies signed an armistice. The Allies soon gathered to discuss the peace treaty they would sign, but Germany and Austria-Hungary werent invited; instead, they were allowed only to present a response to the treaty, a response that was largely ignored. Instead, terms were drawn up mainly by the so-called Big Three: British Prime Minister Lloyd George, French Prime Minister Frances Clemenceau, and U.S. President Woodrow Wilson. The Big Three Each government represented by the men in the the Big Three had different desires: Woodrow Wilson wanted a fair and lasting peace and had written a plan- the Fourteen Points- to achieve this. He wanted the armed forces of all nations reduced, not just the losers, and a League of Nations created to ensure peace.Frances Clemenceau wanted Germany to pay dearly for the war, including being stripped of land, industry, and its armed forces. He also wanted heavy reparations.Lloyd George was affected by public opinion in Britain, which agreed with Clemenceau, though he personally agreed with Wilson. The result was a treaty that tried to compromise, and many of the details were passed down to uncoordinated subcommittees to work out, who thought they were drafting a starting point rather than the final wording. It was an almost impossible task. They were asking for the ability to pay off loans and debts with German cash and goods but also to restore the pan-European economy. The treaty needed to state territorial demands- many of which were included in secret treaties- but also to allow self-determination and deal with growing nationalism. It also needed to remove the German threat but not humiliate the nation and breed a generation intent on revenge- all while mollifying voters.   Selected Terms of the Treaty of Versailles Here are some of the terms of the Versailles Treaty, in several main categories. Territory Alsace-Lorraine, captured by Germany in 1870 and the war aim of the attacking French forces in 1914, was returned to France.The Saar, an important German coalfield, was to be given to France for 15 years, after which a plebiscite would decide ownership.Poland became an independent country with a route to the sea, a corridor of land cutting Germany in two.Danzig, a major port in East Prussia (Germany) was to be under international rule.All German and Turkish colonies were taken away and put under Allied control.Finland, Lithuania, Latvia, and Czechoslovakia were made independent.Austria-Hungary was split up, and Yugoslavia was created. Arms The left bank of the Rhine was to be occupied by Allied forces and the right bank demilitarized.The German army was cut to 100,000 men.Wartime weapons were to be scrapped.The German Navy was cut to 36 ships and no submarines.Germany was banned from having an Air Force.An Anschluss (union) between Germany and Austria was banned. Reparations and Guilt In the war guilt clause, Germany has to accept total blame for the war.Germany had to pay  £6,600 million in compensation. The League of Nations A League of Nations was to be created to prevent further world conflict. Results Germany lost 13 percent of its land, 12 percent of its people, 48 percent of its iron resources, 15 percent of its agricultural production, and 10 percent of its coal. Perhaps understandably, German public opinion soon swung against this diktat (dictated peace), while the Germans who signed it were called the November Criminals. Britain and France felt the treaty was fair- they actually wanted harsher terms imposed on the Germans- but the United States refused to ratify it because it didnt want to be part of the League of Nations. Other results include: The map of Europe was redrawn with consequences which, especially in the Balkans, remain to the modern day.Numerous countries were left with large minority groups: There were three and a half million Germans in Czechoslovakia alone.The League of Nations was fatally weakened without the United States and its army to enforce decisions.Many Germans felt unfairly treated. After all, they had just signed an armistice, not a unilateral surrender, and the Allies hadnt occupied deeply into Germany. Modern Thoughts Modern historians sometimes conclude that the treaty was more lenient than might have been expected and not really unfair. They argue that, although the treaty didnt stop another war, this was more due to massive fault lines in Europe that WWI failed to solve, and they argue that the treaty would have worked had the Allied nations enforced it, instead of falling out and being played off one another. This remains a controversial view. You rarely find a modern historian agreeing that the treaty solely caused World War II, although clearly, it failed in its aim to prevent another major war. What is certain is that Adolf Hitler was able to use the treaty perfectly to rally support behind him: appealing to soldiers who felt conned and wielding the anger at the November Criminals to damn other socialists, promise to overcome Versailles, and make headway in doing so. However, supporters of Versailles like to look at the peace treaty Germany imposed on Soviet Russia, which took vast areas of land, population, and wealth, and point out that country was no less keen to grab things. Whether one wrong justifies another is, of course, down to the perspective of the reader.

French King Pie Traditions and Vocabulary

French King Pie Traditions and Vocabulary On January 6th is the Christian holy day of Epiphany, when the three kings, also called the three wise men, guided by a strange star in the sky, visited baby Jesus. On that day the French eat La Galette des Rois, a delicious puff pastry pie. The lighter version is just the puff pastry, eaten golden out of the oven and then topped with jam. But there are many scrumptious versions, including various fruit, cream, apple sauce filings and my personal favorite: frangipane!   In the South of France, they have a special cake called le gà ¢teau des rois which is a brioche with candied fruits, shaped in a crown, and perfumed with orange blossom water. French King Pie Secret Now, the secret of la galette des rois is that hidden inside is a little surprise: a small token, usually a porcelain figurine (sometimes plastic now...) called la fà ¨ve. The one who finds it is crowned the king or the queen of the day. So, when you eat this delicacy, you have to be extremely careful not to break a tooth!   The French King Pie is sold with a paper crown - sometimes, kids do one as a project for their home, or sometimes they do two since a king gets to pick his queen and vice and versa. French Galette des Rois Traditions Traditionally, the youngest one at the table will go under the table (or really close his/her eyes) and designate who gets which slice: the one serving asks: Cest pour qui celle-l ? For whom is this one? And the kid answers:Cest pour Maman, Papa... Its For Mom, Dad... Of course, this is a very practical way for the grownups to make sure one of the kids gets the porcelain figurine. Another tradition dictates that you cut the pie according to the number of guests plus one. Its called la part du pauvre (the paupers slice) and was traditionally given away. I dont know anybody who does this nowadays however.     So, the person who finds la fà ¨ve proclames: Jai la fà ¨ve (I have the fava), s/he puts one the crown, then picks someone at the table to be crowned as his king/queen, and everybody yells Vive le roi / Vive la reine (long live the king / long live the queen). Then everybody eats their slices, relieved that no one broke a tooth :-) French Kings Pie Vocabulary La Galette des Rois - French King Pie Puff PastryLe Gà ¢teau des Rois - South of France King CakeUne fà ¨ve - the little porcelain figure hidden in the pieUne couronne - a crownÊtre Courronnà © - to be crownedTirer les rois - to draw the king/queenUn roi - a kingUne reine - a queenPuff pastry - de la pà ¢te feuilletà ©eCest pour qui celle-l ? For whom is this one?Cest pour... - Its for...Jai la fà ¨ve ! I have the fava!Vive le roi - Long live the kingVive la reine - long live the queen I post exclusive mini lessons, tips, pictures and more daily on my Facebook, Twitter and Pinterest  pages - so join me there! https://www.facebook.com/frenchtoday https://twitter.com/frenchtoday https://www.pinterest.com/frenchtoday/

The Cats Pajamas

The Cats Pajamas The Cats Pajamas The Cats Pajamas By Maeve Maddox Not everyone loves cats, but the language has its share of expressions coined from the appearance and behavior of these slinky domestic companions. The slang of the 1920s leaned towards expressions involving animal anatomy, giving us the cats meow and the cats whiskers, both meaning outstanding! It also gave us a non-anatomical cat expression the cats pajamas, meaning the absolute best or really modern and up-to-date. NOTE: Pajamas were a fairly recent cultural adaptation in the 1920s. The word derives from Hindi pajama, the word for loose trousers tied at the waist. Europeans living in the East adopted the comfortable style for nightwear and the fashion eventually found its way to the West. British spelling favors pyjamas. cat In the 1920s a slang word for flapper was cat, (hence the connection of the cats pajamas to the idea of modernity), but in black slang the word meant man, guy, dude. What it means to call a person a cat varies according to context. To call a man a cat is to imply that hes cool. To call a woman a cat is to insult her. catnap a short sleep, usually in the daytime. I suppose power nap is the more current term. Question: what does one wear while taking a cat nap? Answer: Why, the cats pajamas, of course! having no room to swing a cat being in a confined space. When I was little, I imagined a poor cat being swung through the air by its tail. I finally learned that the cat in this expression derives from a term for a whip used to flog sailors in the Royal Navy in the old days. It had nine thongs instead of one. to rain cats and dogs to rain very hard; possibly from the expression to fight like cats and dogs. catkin the furry flowers of trees like willow, birch and oak. The name derives from the soft, pettable texture of the flowers. catcall rude remarks shouted at sporting events catfish a fish with whiskers. (Yum) catwalk a high narrow walkway like those seen on construction sites. The idea is that only a cat could keep its balance. cats-cradle A game in which a string is looped on the fingers to form an intricate pattern between a players hands that can be successively varied or transferred to another players hands. Whether the word derived from the animals name is anyones guess. catsup A condiment consisting of a thick, smooth-textured, spicy sauce usually made from tomatoes. This word has absolutely nothing to do with cats and, in its original form, had nothing to do with tomatoes. Its from Malay kichap from Chinese koechiap brine of fish. According to the Online Etymology Dictionary, catsup (earlier catchup) is a failed attempt at Anglicization, still in use in the U.S. Apparently it was the Americans who added the tomatoes to the original concoction. Also spelled ketchup. catty-corner directional word, meaning that something is diagonally across from something elseanother cat word that has nothing to do with cats. Originally cater-corner. The cater is from an English dialect word meaning to set or move diagonally. Because that cater dropped out of the language, folk etymology got busy and now we have all kinds of cat variants for this concept: catty-cornered kitty-corner kitty-cornered catty-corner cat-a-corner kitty-corner kit-a-corner Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Expressions category, check our popular posts, or choose a related post below:20 Types and Forms of HumorPeople versus Persons10 Functions of the Comma

Strategic Resort Management Essay Example | Topics and Well Written Essays - 1750 words

Strategic Resort Management - Essay Example Lastly, the paper would also build a case for different actions that could be used to counteract the perceived threats and try to look for options which would help in meeting the anticipated opportunities. Tourism industry, with special regards to resorts, is considered an important sector in the UK economy. Back in the year 1999, an astounding 22 1/2 million visitors came to visit UK (Torkildsen, 2005). The expenditure on the tourism industry in 1999 was estimated close to sixty one billion pounds (Torkildsen, 2005) and the total employees catering to the tourism industry were estimated to be close to 1.8 million people. The tourism industry is widely fragmented and according to the government estimates, there are over 125,000 businesses related to the UK tourism, out of which only 20% have an earning of over 250,000 pounds per annum. (Aramberri & Butler, 2005) Tourism industry is the world's largest industry and hence it is vital for the world economy. It directly or indirectly generates 11% GDP and provides jobs to over 200 million employees across the globe (Holloway & Taylor, 2006). The employment opportunities in the UK alone, with special regards to bars, pubs, restraints, cafes, night clubs, travel agencies, tour operators and tourist accommodations are immense but the problem lies in terms of competition. (DCMS, 2000) Of the total number of tourism related business in the UK, 80% do not earn beyond 250,000 pounds per annum and hence the employment opportunities through these organizations have limited growth potentials (Aramberri & Butler, 2005). The above mentioned sectors are directly or indirectly dependent on the tourism industry and when we take the example of a resort, which in itself is a self sufficient tourist hub, we forget to underline the problems of a mismanaged work force. If one of these sectors suffers a loss, the other sectors would automatically be affected and vice versa. Besides providing various employment opportunities and generating an annual income for the growth of a nation, the tourism industry with special regards to resorts in UK, gives an ample scope to numerous educational institutions (ONS, 2000). Various new courses and subjects pertaining to tourism benefit through this expanding trade. (EuroStat, 1998) The Necessary Threats To Counteract And The Opportunities To Capitalize On The UK tourism industry is a boon of sorts and is stated to provide ample work opportunities to millions of its citizens. As far as opportunities are concerned, there is no bigger opportunity than providing employment to all. The need for money is the single most driving factor which propels the citizens of a nation to work towards achieving their goals in a systematic manner. Resorts in UK provide employment opportunities to hundreds of thousands of individuals and this in turn increases the overall employee satisfaction scores. (Mort, 2006) If the tourism industry is to capitalize on its recourses, it needs to justify its act in terms of providing ample opportunities to those who deserve the most. Likewise, the growth of a resort with regards to the influx of tourists is directly proportional to the growth of those sectors which support the basic functionalities of a resort (Karl W. W'ber, European Cities Tourism (Organization), 2002). Meat shops, cafes,

Wendy's Hamburgers Case Study Example | Topics and Well Written Essays - 1000 words

Wendy's Hamburgers - Case Study Example His desire to control his life and business is a good illustration of some of the basic entrepreneurial traits. Also, he has demonstrated open mindedness and innovation traits when decided to open burger restaurant with new innovative and creative ideas. When he has made a decision to shift to hamburgers, he made a decision to shift to the thing which he really liked. In such a way he has demonstrated his passion to do what he loves. Despite the skepticism and negative forecasts of experts he has made a decision to move forward with his idea. Thus, Dave has demonstrated optimism and belief in himself and his expertise, which is also critical for successful entrepreneur. 2. Dave’s success with the first Wendy’s restaurant can be attributed to an idea to offer fresh hamburgers of high quality. This was something new as the competitors offered hamburgers made from a frozen meat. Even though the market was saturated he has managed to find a unique selling point or the so called competitive advantage, which enabled his business to develop and grow despite fierce competition on the market. It is possible even to suggest that he has broken some stereotypes, as fast food is usually associated with bad quality and unhealthy food. Thus, fresh high quality fast food offered in Dave’s restaurant has contributed to shift in consumer’s perceptions about fast food. He has managed to satisfy customers’ needs and even exceed their expectations, making the restaurant profitable within the first weeks after the opening. 3. The phrase about the most difficult thing in running business is â€Å"being willing to listen to customers then doing whatever it takes to make your dream (and their wants) a reality† could be interpreted as Dave’s vision of his role as an entrepreneur. Dave is an entrepreneur who pursues his own dream, and chooses optimal

Comparative Financial Reporting Essay Example | Topics and Well Written Essays - 3000 words

Comparative Financial Reporting - Essay Example Material misstatements are misstatements that can affect users' decisions on the financial statements of a company. The auditor may either issue an unmodified opinion (when the financial statements are not materially misstated or a modified opinion (when the financial statements are materially misstated). (McMeeking, 2006). This paper examines contemporary issues between International Financial Reporting IFRS and the Generally Accepted Accounting Principles GAAP. The IASB / FASB project on revising the conceptual Framework has removed ' substance over form'. (IASB / FASB May 2008, Exposure Draft, Conceptual framework for Financial Reporting ) . The explanation is: BC2.19. The Boards concluded that faithful representation means that financial reporting information represent the substance of an economic phenomenon rather than solely its legal form. To represent legal form that differs from the economic substance of the underlying economic phenomenon could not result in a faithful representation. Accordingly, the proposed framework does not identify substance over form as a component of faithful representation because to do so would be redundant. However, the fair value view assumes that market are relatively perfect and complete and that in such a setting financial reports should satisfy both the interest of passive investors and creditors by stating a current value derived from the current market prices. An alternative view to this doctrine assumes that markets are imperfect and incomplete and that in such a market settings, monitoring requirements of shareholders should be catered for. To conclude therefore, in the words of Whittington (2007), the practical supports of two views is unrealistic as in a realistic market setting; the search for a universal measurement method may be fruitless. According to Whittington (2007), a more appropriate approach to the measurement problem might be to define a clear measurement objective and to select the measurement that best meet the objective. 1. 2.0 Identify and comment on what you regard as the 4 most significant accounting policy differences between IFRS's and US GAAP ' (200 words) International Accounting Standards (IAS/IFRS) are a set of accounting standards promulgated by the International Accounting Standards committee (IASC) and intended to be used as a basis for cross-border capital raising and listing in global financial markets. (Asbaugh, 2001). The main goal of the International set of Accounting Standards is to standardise the financial and accounting method disclosures of firms in different nations. That is, if firms follow the same set of accounting standards, their external financial reports will provide more uniform disclosures and thus investors would make more use of the variables inherent in the financial statements. (Asbaugh, 2001). Also, firms and investors would benefit from financial statements prepared following an international set of accounting standards. (Asbaugh, 2001). In meeting with the above objectives, the European Union issued regulation 1606/2002 of July 19, 2002 requiring that all companies listed in the European Union and European listed companies in other countries to adopt international accounting standards in their Financial statements from 1st January 2005 onwards. The regulation also gave member states the