Service Marketing-Pizza Hut Essay Example for Free

Service Marketing-Pizza Hut Essay A subsidiary of PepsiCo, Inc. , the company oversees more than 11,000 pizza restaurants and delivery outlets in 90 countries worldwide. In October 1997, the company expected to become a subsidiary of Tricon Global Restaurants, Inc. , formed from the spin-off of PepsiCos restaurant holdings. Pizza Hut was founded in 1958 by brothers Dan and Frank Carney in their hometown of Wichita, Kansas. When a friend suggested opening a pizza parlorthen a raritythey agreed that the idea could prove successful, and they borrowed $600 from their mother to start a business with partner John Bender. Renting a small building at 503 South Bluff in downtown Wichita and purchasing secondhand equipment to make pizzas, the Carneys and Bender opened the first Pizza Hut restaurant; on opening night, they gave pizza away to encourage community interest. A year later, in 1959, Pizza Hut was incorporated in Kansas, and Dick Hassur opened the first franchise unit in Topeka, Kansas. In the early 1960s Pizza Hut grew on the strength of aggressive marketing of the pizza restaurant idea. In 1962, the Carney brothers bought out the interest held by Bender, and Robert Chisholm joined the company as treasurer. In 1966, when the number of Pizza Hut franchise units had grown to 145, a home office was established to coordinate the businesses from Wichita. Two years later, the first Pizza Hut franchise was opened in Canada. This was followed by the establishment of the International Pizza Hut Franchise Holders Association (IPHFHA). It aimed at acquiring 40 percent of the companys franchise operations, or 120 stores, and adding them to the six outlets wholly owned by Pizza Hut. The acquisitions, however, brought turmoil to the chain. Varied accounting systems used by the previous franchise owners had to be merged into one operating system, a process that took eight months to complete. In the meantime, sales flattened and profits tumbled. In early 1970 Frank Carney decided that the company practice of relying on statistics from its annual report to inform its business strategy was inadequate, and that a more developed, long-term business plan was necessary. The turning point occurred when Pizza Hut went public and began growing at an unprecedented pace. Pizza Huts corporate strategy, arrived at after much consultation and boardroom debate, emerged in 1972. The corporate strategys first priority was increasing sales and profits for the chain. Continuing to build a strong financial base for the company to provide adequate financing for growth was the second priority. The strategy also called for adding new restaurants to the chain in emerging and growing markets. In 1970 Pizza Hut opened units in Munich, Germany, and Sydney, Australia. That same year, the chains 500th restaurant opened, in Nashville, Tennessee. Further acquisitions that year included an 80 percent stake in Ready Italy, a frozen crust maker, and a joint venture, Sunflower Food Processors, formed with Sunflower Beef, Inc. The same year, the menus for all restaurants added sandwiches to the staple Thin n Crispy pizza offering. In 1971 Pizza Hut became the worlds largest pizza chain, according to sales and number of restaurantsthen just more than 1,000 in all. A year later the chain gained a listing on the New York Stock Exchange. Pizza Hut also achieved, for the first time, a one million dollar sales week in the U. S. market. At the end of 1972 Pizza Hut made its long-anticipated offer of 410,000 shares of common stock to the public. The company expanded by purchasing three restaurant divisions: Taco Kid, Next Door, and the Flaming Steer. In addition, Pizza Hut acquired Franchise Services, Inc. , a restaurant supply company, and J G Food Company, Inc. , a food and supplies distributor. The company also added a second distribution center in Peoria, Illinois. In 1973 Pizza Hut expanded further by opening outlets in Japan and Great Britain. Three years later the chain had more than 100 restaurants outside the United States and two thousand units in its franchise network. The companys 2,000th restaurant was opened in Independence, Missouri.

Geoffrey Keynes Research on Cancer Treatment

Geoffrey Keynes Research on Cancer Treatment In God We Trust. All Others Must Have Data Radical surgery had undergone an astonishing boom in the 1950s and 1960s. William Halsted had become the patron saint of cancer surgery in the United States. But at St. Bartholomews Hospital in London, a doctor named Geoffrey Keynes was not convinced. In August 1924, Keynes examined a patient with breast cancer. Rather than reaching indiscriminately for a radical procedure, he opted for a much more conservative strategy. He buried fifty milligrams of radium in her breast to irradiate her tumor and monitored her to observe the effect. Surprisingly, he found a marked improvement. Her tumor had reduced so rapidly that Keynes might be able to remove it with a minor surgery. Over the next five years, Keynes tried other variations of the same strategy. The most successful variation was to remove the tumors with a minor surgery, followed by a small dose of radiation to the breast. Nothing was radical, yet their cancer relapse rate was comparable to those got by using radical surgery in Baltimore and New York. In 1927, Keynes reviewed his experience combining local surgery with radiation in a technical report to his department. But his theory and operation were ignored by American surgeons. They called Keyness surgery lumpectomy. In 1953, a colleague of Keyness gave a lecture on the history of breast cancer at the Cleveland Clinic in Ohio, focusing on Keyness observations on minimal surgery for the breast. In the audience was a young surgeon named George Barney Crile. Crile had learned the radical mastectomy from students of Halsted. But he was having his own doubts about radical mastectomy. As Crile poured through Keyness data, the flaw in the logic of radical surgery came to light. If the breast cancer was locally confined, then it could be cured by a small local surgery. Radical surgery could add no benefit. If the tumor had already spread outside the breast, then even the most exhaustive surgery would be useless. Crile gave up on radical mastectomy and treated breast cancer using an approach similar to Keyness. Over six years, he found that the effect of his simple mastectomy was remarkably similar to Keyness, with patient survival rates similar to those got from radical mastectomy. A Pennsylvania surgeon named Bernard Fisher had also lost faith in radical mastectomy. In 1971, Fisher organized a clinical trial through the NSABP National Surgical Adjuvant Breast and Bowel Project to test the efficacy of radical mastectomy against lumpectomy+radiation and simple mastectomy. It took Fisher 10 years to gather that data. 1,765 patients from 34 centers in the United States and Canada enrolled in the trial. Patients were randomized into three groups: one treated with simple mastectomy, the second with lumpectomy followed by radiation, and the third with radical Mastectomy. The results of the trial were made public in 1981. The rates of breast cancer relapse, death, and metastasis were statistically identical among all three groups. Radical mastectomy is rarely, if ever, performed by surgeons today. In 1973, a 22-year-old veterinary student in Indiana named John Cleland was diagnosed with metastatic testicular cancer-cancer of the testes. The cancer had metastasized into his lungs and lymph nodes. In 1973, the survival rate for such a cancer was less than 5 percent. Cleland was under the care of a young oncologist named Larry Einhorn in the cancer ward at Indiana University. Einhorn initially treated Cleland with a three-drug cocktail called ABO, which was found to be marginally effective. In the fall of 1974, Einhorn replaced the ABO regimen with a new chemical called cisplatin. Other researchers had seen transient responses in testicular cancer patients treated with cisplatin. Einhorn wanted to see if he could increase the response rate by combining cisplatin with two other drugs. For Celand, it was a choice between the uncertainty of the new regimen and the certainty of death. He took the gamble and enrolled as patient zero for BVP, the new regimen containing bleomycin, vinbl astine, and cisplatin. Ten days later, the tumors in Clelands lungs had vanished. By 1975, twenty additional patients had enrolled in the trial all with remarkable and durable responses similar to Celands. By the late winter of 1976, it had become clear that some of these patients would not relapse at all. *** Meanwhile, the NCI had turned into a factory of toxins. With money from the National Cancer Act, the institutes drug-discovery program was testing zillions of chemicals each year to discover new cytotoxic drugs. The money also stimulated enormous, multi-site trials, turning academic centers into drug factories and cancer hospitals into efficient trial-running machines. It was trial and error on a humongous scale, not targeted research. In one NCI-sponsored trial, known as the eight-in-one study, children with brain tumors were administered eight drugs in a day. Most of the children died soon afterward, having only marginally responded to the chemotherapy.

Regeneration Schemes in Detroit Michigan

Regeneration Schemes in Detroit Michigan As a result of increased mobility, cities are constantly changing. People move in from towns and rural areas and become concentrated in urban ones and then the pattern reverses and the move is from the urban to the rural, creating semi-cities. This growth of the suburbs has seen the decline of the urban core. As a result, the urban dynamic is no longer one of expansion, but of shrinkage. An example of the suburban movement can be seen in the Shrinking Cities in the USA where the suburban population increased by 12% in the period from 1970 to 1977 whereas the central city population decreased by 4.6% (Holcomb and Beauregard, 1981). This has lead to a change in the cities, where the suburbs of the middle-class and jobs (factories/offices) are key elements and the inner cities have been abandoned (Sassen, 1991). The drastic changes in cities caused by shrinking presents not only an economic and social, but also a cultural challenge. Shrinking cities oppose the image of the boomtown- a b ig city characterised by constant economic and demographic growth. The American Dream of prosperity for all meant that cities like Detroit and New Orleans grew to be vibrant, bustling cities but as a result of two totally different issues- one economic and one a natural disaster- they became shrinking cities which have had to find ways of regenerating. Detroit, Michigan developed from 1900 as the centre of the global auto industry. In 1930, it was the fourth largest city in the United States and grew to a population of 1.8 million by 1950. Its fortunes turned after World War II and by the end of 1950s, the movement to the suburbs had already begun. From 1950 to 2000, Detroits population plummeted, as factory after factory closed and its economic condition steadily worsened. As white-collar employment moved to the suburbs along with large parts of the citys middle class, office buildings, retail corridors in downtown and elsewhere were neglected and abandoned. The remaining population was poorer, and more highly dependent on public services that the city could no longer afford to provide. One of the main reasons for shrinkage is the de-industrialisation process where factories move to other destinations where production costs are cheaper and/or global economic factors that have a devastating effect on one industry i.e. the car indus try. The exodus of mainly white inhabitants into the suburbs was a cause of the decay of Detroits inner city. Next the automotive factories and shopping malls began to follow the people beyond the citys administrative borders. Detroit has become a byword for economic decline and urban decay. By 2000, the city had shrunk to 950,000 residents, while the surrounding suburban population grew to nearly 4 million. Today, Detroits population is around 800,000, less than half its 1950 population. Over 40 square miles is made up of vacant land, and between 30,000 and 50,000 buildings sit empty. Almost one-third of the land is empty or unused and nearly 80,000 homes are vacant. Unemployment in Detroit stands at 28 % and compared against USAs 100 largest metropolitan regions, Detroit finishes last. The image above is an aerial view of a mostly vacant neighborhood in downtown Detroit. It illustrates the loss of social fabric and the consequent issue of safety associated with an abandoned neighborhood. When a population shrinks, the decline is not evenly spread across the city, causing more problems- Detroits tagline is Murder City of the World. Without sufficient concentrations of people, not only is the provision of normal municipal services extremely expensive, but urban life itself begins to break down. There are not enough customers to support the neighborhood stores and services, or even to provide a sense of community. Empty streets become unsafe and abandoned buildings become haunts for drug dealers and other criminals. (Rybeczynski 1995 pp36-44) Whilst Detroit shrank as a result of economic forces, New Orleans contraction was caused almost entirely by Hurricane Katrina. In August 2005 80% of the city was flooded, with some parts under 15 feet (4.5m) of water. More than half of its residents left the city as a result of the storm. Most of the major roads travelling into and out of the city were damaged. As of October 2006, the population of New Orleans had dropped by almost 60% from 455,000 people pre-storm to 187,500 post-storm. Hurricane Katrina hit the most underprivileged members of society who inhabited the most susceptible areas-these areas were populated by poor African Americans. (Griffith M. 2006). The storm and its aftermath devastated tens of thousands of already struggling people. But three years later it is growing rapidly and has become one of the countrys fastest growing cities. Its population is up 8.2% in the 12 months that ended July 1, 2008, gaining 23,740 people to 311,853, according to the US Census Burea u, 2008. So how has New Orleans managed to overcome its devastating problems and turn itself into a modern day boom town? Why has it taken Detroit so much longer to come to terms with its problems? Urban shrinkage is a fairly normal global phenomenon (Oswalt quoted in Detroit is Not Alone, Dec. 10, 2003 Collins L.). Oswalt does not see shrinkage as a harmful thing. In reality, he sees the shrunken city as an empty canvas for planners, architects and artists to develop innovative and improved ways of living. Detroit is not better or worse than other places, says Oswalt. Its just different. The question is not whether Detroit is a shrinking city or a city in decline. The fact is that it will be a far smaller city, in terms of population, than in the past. If Detroit could manage to boost its economy, there is still a fundamental issue -it is just too big for itself. Detroit has to change because it simply cant manage as it is. The city grew to accommodate two million people, not the 800,000 that live there today. Can a smaller Detroit become a stronger, healthier, and more sustainable Detroit? Detroit has far more land than it needs to accommodate its people. It needs to look at its land uses to create smaller, better functioning, more sustainable and interconnected liveable communities (AIA Report 2008). A new compact development pattern based on an urban core and a network of urban villages linked by roads and roadways will not only allow for more efficient and cost effective delivery of public services, but will encourage public transportation, provide opportunities for diverse, mixed income communities, and create long term environmental benefit by reducing vehicle use and fostering transit and land use efficiency. In other words it needs to right size. Schematic representation of future urban form concept for Detroit (AIAs R/UDAT (Regional and Urban Design Assistance Team) Katz and Bradley writing in the New Republic 2009 suggest that the new Detroit might be a patchwork of newly dense neighborhoods, large and small urban gardens, art installations, and old factories transformed into adventure parks. The Detroit River waterfront area is already being restored and a land bank has been established where the authorities commission vacant and derelict properties and start clearing the land. They can then decide what to do with it- a small park, handing it over to a resident or community group for tending, redevelopment or just green space. Detroit already has hundreds of community gardens and a growing number of small agricultural operations. When the centre depopulates, nature enters the city and replaces the people. This combination of natural and artificial ecology gave me the idea of Urban Ecologya city is an organism rather than a machine. (Park K. 2005). These urban agriculture schemes will employ thousands of residents, as well as improve their health. By increasing consumption of locally produced food the Citys carbon footprint is reduced and existing food processors and distributors in Detroit gain additional business opportunities. Detroit needs to fill the jobs gap by educating and empowering all the diverse groups. It needs to create jobs that all residents can access-these urban farms would help. New Orleans started its regeneration in full view of the world. The disaster affected the locals but the nation, as a whole, were on trial to get the rebuilding programme right .The city received help from Federal and State governments as well as thousands of volunteers who wanted to see the city emerge stronger and better. Approximately $109 billion was allocated towards the recovery, with housing a priority-without housing for returning families, workers, and new temporary workers then businesses would close and the economy would worsen. The Regional Transport Authority provided free transport. There was a worldwide thrust to get New Orleans city quickly rebuilt. It worked, as was stated earlier; it has become one of the countrys fastest growing cities. The storm was devastating but it didnt destroy the citys strong musical heart: musicians returned and the music scene- essential to New Orleans identity- is on the road to recovery. Relief efforts started to help New Orleans musicia ns after the storm. The New Orleans Musicians Clinic began a Foundation to help musicians replace their instruments and return to their homes. After the initial crisis passed, its efforts centred on giving musical instruments to schools for the next generation of musicians. In fact the Sweet Home New Orleans Foundation raised more than $2 million to help musicians. The American dream was once again awoken in New Orleans- working together to achieve a better, richer, and happier city for its people. Race is an issue in both cities-both have a highly segregated community living in a concentrated area. Detroit needs to create a sustainable community where all the community value the land, work towards finding economic opportunities that are environmentally responsible and socially just, and create viable, healthy communities that are shared by all people, of all economic levels and racial or ethnic backgrounds. In 1955, during its famous period of being the Motor City, the car company, General Motors, arrogantly influenced the city governing body to have the citys tramlines torn up. Their logic was that the workers earned enough to buy cars and enough money to use them to travel. Today, there is hardly any local public transport-this has to be a priority. The people of Detroit want their city to be alive again. Many initiatives and projects have started and new investment has begun to flow into the centre of downtown and there are signs of a slow recovery. Initiatives include: Back a Bike- encouraging and enthusing the young to use cycles for transport and leisure, Cass Corridor Neighbourhood Development Corporation where community partnerships work together to acquire abandoned buildings and renovate them. The Earthworks Urban Farm uses volunteers to educate Detroit school children in science, nutrition and biodiversity through organic farming. Detroit Summer is another highly successful scheme where students from the University of Michigan and volunteers from both inside and outside of Detroit work on rejuvenating parks, designing art works, poetry workshops and progressive hip hop events- the sounds of Motown returning! There is a Motown Museum in the original Hitsville USA studio on West Grand Boulevard, but the city hasnt really built on its famous musical past. The Denver Film Centre is one of many groups that offer regular filmmaking classes and workshops-Detroit itself has been used many times as a location for Hollywood films. Maybe if Detroit had been savaged by a hurricane and submerged by a voracious flood then maybe the rest of the USA and the world would help and support it? Can it ever return to being a city once the living proof of the American dreams? Compared to New Orleans, Detroit has received minimal government aid-$18.4 billion. The local government continues to argue over its fate and there is no cohesive policy that unites all. To date the energy and financial commitment needed to help grasp any vision of urbanity is sorely lacking. The city is fragmented and if its allowed to die, then it would be an American nightmare. Bibliography AIAs R/UDAT (Regional and Urban Design Assistance Team) 2008 Collins L., Detroit is Not Alone http://www.metrotimes.com/editorial/story.asp?id=5718 Griffith M., Hurricane Katrina: The Catastrophe that Uncovered Americas Race and Class Issues, Tulane University Graduate Paper, 2006 Holcomb and Beauregarde, Revitalising Cities, Washington, DC: Association of American Geographers, 1981 Katz B., Bradley J., The Detroit Project, A plan for solving Americas greatest urban disaster, 2009 Liu, Fellowes, Mabanta, Katrina Index: Tracking Variables of Post-Katrina Recovery, Washington Brookings Institution. 2006. Oswalt P. et al, The Shrinking City Volume 2,Hatje Cantz Publishers 2006 Oswalt P. et al, The Shrinking City Volume 2,Hatje Cantz Publishers 2006 Park K. et al Urban Ecology: Detroit and Beyond MAP Book Publishers 2005 Richardson J. Whats Needed for Post-Hurricane Recovery, Washington: The Financial Services Roundtable, 2006 Rybezynzski W. Downsizing To Make Cities Work Better, Make Smaller, The Atlantic Monthly (October 1995 Washington DC) pp36-40 Rybezynski W. City Life Diane Publishing Company 1995 Sassen S. The Global City Princeton University Press 1991 US Census Bureau www.census.gov/Press-Release/www/releases/archives/population/013960.html

Statement of Educational Goals and Philosophy Essay -- Philosophy of E

Statement of Educational Goals and Philosophy As children we have many goals and dreams. Eventually, the time comes when we have to make a career decision based on our interests and goals. The choices that we make now will have a lasting effect on our lives. Like most college students I have explored many career options, but I am always lead back to the education field. Teachers have a very difficult job because they have the power to shape and inspire our future nation. Although that can be an intimidating and often scary thought, it also gives me inspiration to move ahead in pursuing my goal of becoming a teacher. I have always had a passion for children. There is nothing like watching a child grow and watching their mind expand as they learn. Teachers play such an important role in a child’s life. They are often the only one who is there to encourage and support them. If I can make a difference in only one child’s life, then I will have fulfilled my purpose of becoming a teacher. Teaching is not only about standing in front of a classroom and showing children how to work a math problem. It involves a whole different element of modeling for children morals such as respect for oneself as well as others, self-discipline, and a positive self-concept. There are many different personalities and levels of learning in a classroom. As a teacher, I plan to know each of my students personality, learning style, and academic level so that I can conform to these needs and create the best learning environment possible for all of my students. The definition of knowledge is the fact or condition of knowing something with familiarity gained through experience or association. The nature of... ...ssignments efficiently. I plan to graduate from Concord in the Spring 2004. After graduation, I plan to enter the masters program at either Concord or West Virginia University. At some point in my career I plan to continue my education and obtain my doctorate in education. The teaching profession offers many benefits in its teacher union, so I plan to join the teacher’s union wherever I will be employed. Teaching is a very rewarding career. I am very excited about completing my education and going into my own classroom. I hope that I can inspire my students and be a positive role model in their life. I want to be an effective teacher who brings out the best in my students; I want to show my students that they can do anything they put their mind to and I want to give them the confidence and the ambition to achieve their goals.

Preventing Disease and Promoting Health Essay -- Health and Wellness

Early detection of certain diseases, especially cardiovascular disease (CVD), and which incorporates approaches that implement lifestyle changes, medication, and counseling, has the potential to alter the course of the devastation the disease can cause (Murimi & Harpel, 2010). The U.S. Preventive Services Task Force recommends regular examination of obesity and health-related issues, such as cardiovascular screenings for everyone (Murimi & Harpel, 2010). Documented research demonstrates that a healthy lifestyle that includes a proper diet, exercise, no smoking, and limited alcohol decreases the risk of CVD (Gordon, Lavoie, Arsenault, Ditto, & Bacon, 2008). Kehler, Christensen, Risor, Lauritzen, and Christensen (2009) reported that patients who had a discussion with their doctor about cardiovascular disease including information about the disease, knowledge about the disease, and perception of risk and prevention strategies indicated that they were able to incorporate healthy lifestyle changes into their diet. Many respondents reported feeling relief and empowerment following the conversation with their doctor (Kehler et al., 2009). Lifestyle changes suggested for a client could include quitting smoking, reducing alcohol consumption, engaging in a heart healthy diet, exercising, losing weight, taking medication as prescribed, and finding ways to relieve stress. Lack of compliance related to the identified lifestyle changes is an issue. Sargeant, Valli, Ferrier and MacLeod (2008) suggest that it is very difficult for individuals to change comfortable and enjoyable behaviors in which they have been engaged their entire lives. There are many reasons clients do not comply, and finding ways to facilitate compliance is a key role o... ...08). Health behaviors and endothelial function. Journal of Behavioral Medicine, 31(1), 5-21. doi:10.1007/s10865-007-9129-0 Kehler, D., Christensen, M. B., Risor, M. B., Lauritzen, T., & Christensen, B. (2009). Self-reported cognitive and emotional effects and lifestyle changes shortly after preventive cardiovascular consultations in general practice. Scandinavian Journal of Primary Health Care, 27(2), 104-110. doi:10.1080/02813430902793563 Murimi, M. W., & Harpel, T. (2010). Practicing preventive health: The underlying culture among low-income rural populations. The Journal of Rural Health, 26(3), 273-282. doi:10.1111/j.1748-0361.2010.00289.x Sargeant, J., Valli, M., Ferrier, S., & MacLeod, H. (2008). Lifestyle counseling in primary care: Opportunities and challenges for changing practice. Medical Teacher, 30(2), 185-191. doi:10.1080/01421590701802281

Term Paper of Dbbl

Introduction: To finance their investments firms use retained earnings, new borrowings or the issue of stock. The financing decision involves i) dividend and ii) the capital structure. Dividend policy involves the decision to pay out earnings versus retaining them for reinvestment in the firm, and dividend policy decisions can have either favorable or unfavorable effects on the price of a firm’s stock. Cash distributions are made to stockholders form the firm’s earnings, whether those earnings were generated in the current period or in previous periods. Origin of the Report:During this semester of Summer 2010 in MBA program of East West University, we are required to submit a term paper in the course Corporate Finance: â€Å"An Appraisal of Dividend Policy and Capital Structure of An Organization†. We have chosen PRAN for our term project. Objectives of the Report: The general objective is to prepare and submit the term project within specified time by having an idea and over viewing the PRAN, their Dividend Policy and their Capital Structure. Scope of the Report: The scope is limited to over viewing PRAN their dividend policy and the Capital Structure they have adopted for their organization.Limitations of the Study: Secondary data were used in this study as result it may differ from actual data. As a group, we have also faced some difficulties in compiling and discussing it due to unavailability of all members at the same time. The absence of solid and verse knowledge about dividend policy is absent and we have taken it as an addition in our learning curve. Methodology: The report is originated from secondary data sources- 1. The Company’s Annual Report 2. DES website 3. Different Articles from Internet 4. Other related websitesCompany Profile PRAN: PRAN stands for Programme for Rural Advancement Nationally. â€Å"PRAN† is currently the most well known household name among the millions of people in Bangladesh and abroad also . Since its inception in 1980, PRAN Group has grown up in stature and became the largest fruit and vegetable processor in Bangladesh. It also has the distinction of achieving prestigious certificate like ISO 9001:2000, and being the largest exporter of processed agro products with compliance of HALAL & HACCP to more than 70 countries from Bangladesh.PRAN is the pioneer in Bangladesh to be involved in contract farming and procures raw material directly from the farmers and processes through state of the art machinery at our several factories into hygienically packed food and drinks products. The brand â€Å"PRAN† has established itself in every category of food and beverage industry and can boost a product range from Juices, Carbonated Drinks, Confectionery, Snacks, and Spices to even Dairy products.Today, our consumers not only value â€Å"PRAN† for its authentic refreshing juice drinks products, but also for its mouth watering quality confectionery products with high visual appeal and exciting texture. We intend to expand our presence to every corner of the world and strive to make â€Å"PRAN† a truly international brand to be recognized globally. The authorized capital of PRAN is BDT 50,000,000 and paid up capital is BDT 8,000,000. The proportion is given below: |Share Percentage | |Director /Sponsor |Govt. Institute |Foreign |Public | |42. 75% |0% |1. 27% |0% |55. 98% | [pic] Dividends: Dividend is that part of the profits of a company which is distributed amongst its shareholders. According to ICAI, â€Å"Dividend is a distribution to shareholders out of profits or reserves available for this purpose. † In other words we can say that a corporation makes Dividend payments to its shareholder. It is the portion of corporate profits paid out to its stockholders.When a corporation earns a profit at the end of a financial year, that profit can be uses by two different ways: it can either be re-invested in the business or it can be pai d to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend. Dividend Policy and Stock Value: There are various theories that try to explain the relationship of a firm's dividend policy and common stock value. Dividend policy is the policy a company uses to decide how much it will pay out to shareholders in dividends. A firm has different options to deal with its earnings.It can give all their earnings as dividend or it can retain all its earnings as retained earnings. The firm can also declare a portion of its earnings as dividend and can retain other portion as retained earnings. Dividends may be in the form of cash or stock. Most secure and stable companies offer dividends to their stockholders. Their share prices might not move much, but the dividend attempts to make up for this. High-growth companies  rarely offer dividends because all of their profits are reinvested to help sustain  higher-than-average  gr owth. Dividend Relevance Theory:The value of a firm is affected by its dividend policy – the optimal dividend policy is the one that maximize the firm’s value. Optimal Dividend Policy: Proponents believe that there is a dividend policy that strikes a balance between current dividends and future growth that maximizes the firm's stock price. Dividend Irrelevance Theory: The theory states that a firm’s dividend policy has no effect on either its value or its cost of capital. Bird-in-the-Hand Theory: It states that dividends are relevant. Remember that total return (k) is equal to dividend yield plus capital gains.Myron Gordon and John Linter took this equation and assumed that k would decrease as a company's payout increased. As such, as a company increases its payout ratio, investors become concerned that the company's future capital gains will dissipate since the retained earnings that the company reinvests into the business will be less. Gordon and Linter argued that investors value dividends more than capital gains when making decisions related to stocks. In this theory â€Å"the bird in the hand' is referring to dividends and â€Å"the bush† is referring to capital gains.The traditional argument in favour of dividend is the idea that dividends reduce risk because they bring shareholders’ cash inflows forward. Although shareholders can create their own dividends by selling part of their holdings, this entails trading costs, which are saved when the firm pays dividends. The risk reduction or bird in the hand argument is associated with Graham and Dodd (1951) and with Gordon (1959) and it is often defended as follows. By paying dividends the firm brings forward cash inflows to shareholders, thereby reducing the uncertainty associated with future cash flows.In terms of the discounted dividend equation of firm value, the idea is that the required rate of return demanded by investors (the discount rate) increases with the plough -back ratio. Although the increased earnings retention brings about higher expected future dividend, this additional dividend stream is more than offset by the increase in the discount rate. This argument overlooks the fact that the risk of the firm is determined by its investment decisions and not by how these are financed.The required rate of return is influenced by the risk of the investments and should not change if these are financed from retained earnings rather than from the proceeds of new equity issues. As noted by Easterbrook (1984), in spite of paying dividends the firm does not withdraw from risky investments, thus the risk is merely transferred to new investors. Reasons for Paying Dividends: 1. Clientele Effect: The investors in your company like dividends. 2. The Signaling Story: Dividends can be signals to the market that you believe that you have good cash flow prospects in the future. 3.The Wealth Appropriation Story: Dividends are one way of transferring wealth fro m lenders to equity investors (this is good for equity investors but bad for lenders) Types of Dividend Policies: 1. Constant-Payout-Ratio: Constant-Payout-Ratio is a dividend policy based on the payment of a certain percentage of earnings to owners in each dividend period. The problem with this policy is that if the firm’s earnings drop or if a loss occur, the dividend may low or nonexistent. 2. Regular Dividend Policy: Regular Dividend Policy is a dividend policy based on the payment of fixed amount of dividend in each period.It provides the owners with positive information, thereby minimizing their uncertainty. 3. Low Regular and Extra Dividend Policy: Low regular and Extra Dividend Policy refers to a dividend policy based on paying low regular dividend, supplemented by additional dividend when earnings are higher than normal in a given period. Nature of Dividend Decision The dividend decision of the firm is crucial for the finance manager because it determines: 1. The amo unt of profit to be distributed among the shareholders, and 2. The amount of profit to be retained in the firm. There is a reciprocal relationship between cash dividends and retained earnings.While taking the dividend decision the management take into account the effect of the decision on the maximization of shareholders' wealth. Maximizing the market value of shares is the objective. Dividend pay out or retention is guided by this objective. Factors Affecting Dividend Policy: A. External Factors B. Internal Factors A. External Factors Affecting Dividend Policy 1. General State of Economy: In case of uncertain economic and business conditions, the management may like to retain whole or large part of earnings to build up reserves to absorb future shocks.In the period of depression the management may also retain a large part of its earnings to preserve the firm's liquidity position. In periods of prosperity the management may not be liberal in dividend payments because of availability of larger profitable investment opportunities. In periods of inflation, the management may retain large portion of earnings to finance replacement of obsolete machines. 2. State of Capital Market: Favorable Market: liberal dividend policy. Unfavorable market: Conservative dividend policy. 3. Legal Restrictions: Companies Act has laid down various restrictions regarding the declaration of dividend:Dividends can only be paid out of: Current or past profits of the company. A company cannot declare dividends unless: It has provided for present as well as all arrears of depreciation. Certain percentage of net profits has been transferred to the reserve of the company. Past-accumulated profits can be used for declaration of dividends only as per the rules framed by the Central Government 4. Contractual Restrictions: Lenders sometimes may put restrictions on the dividend payments to protect their interests (especially when the firm is experiencing liquidity problems) B.Internal Factors af fecting dividend decisions 1. Desire of the Shareholders: Though the directors decide the rate of dividend, it is always at the interest of the shareholders. Shareholders expect two types of returns: [i] Capital Gains: i. e. , an increase in the market value of shares. [ii] Dividends: regular return on their investment. Cautious investors look for dividends because, [i] It reduces uncertainty (capital gains are uncertain). [ii] Indication of financial strength of the company. [iii] Need for income: Some invest in shares so as to get regular income to meet their living expenses. . Financial Needs of the Company: If the company has profitable projects and it is costly to raise funds, it may decide to retain the earnings. 3. Nature of earnings: A company, which has stable earnings, can afford to have a higher divided payout ratio 4. Desire to retain the control of management: Additional public issue of share will dilute the control of management. 5. Liquidity position: Payment of divid end results in cash outflow. A company may have adequate earning but it may not have sufficient funds to pay dividends. Apprising Dividend Policy of PRAN: Year |NI |EPS |Dividend Per |Dividend Payout Ratio | | |(in Millions) | |Share | | |2000 |33. 76 |42. 20% |20. 00% |47. 39% | |2001 |41. 99 |52. 49% |20. 00% |38. 10% | |2002 |43. 41 |54. 26% |25. 00% |46. 07% | |2003 |44. 39 |55. 49% |24. 00% |43. 25% | |2004 |40. 31 |50. 39% |24. 00% |47. 3% | |2005 |40. 77 |50. 96% |26. 00% |51. 02% | |2006 |28. 95 |36. 19% |26. 00% |71. 84% | |2007 |29. 33 |36. 66% |26. 00% |70. 92% | |2008 |35. 95 |44. 94% |28. 00% |62. 31% | |2009 |39. 97 |49. 96% |29. 00% |58. 05% | Table: 1 From the table 1 we see that in 2000 and 2001 PRAN have paid a cash dividend of BDT 20 per share in 2000 and 2001; in 2002 the dividend payment was BDT 25 per share.In 2003 to 2004 and 2005 to 2007 they have paid a cash dividend of BDT 24 and BDT 26 per share respectively. In the year 2008 and 2009 the cash dividend per share was BDT 28 and 29 respectively. Here we see that the dividend has increased in last two year, although the Net Income of the company decreased. However the EPS has also increased during the last two years and the same pattern can be seen in the Market Price of the share. [pic] Figure: 1 From figure 1 we can say that the dividend payment of the PRAN is certain and stable, regardless with earnings.As we see that despite of a drop in the earning in the year 2006 and 2007 the company maintained a constant cash dividend payment which is BDT 26 per Share and when the earnings increased in the year 2008 and 2009 the Dividend payment also increased. [pic] Figure: 2 The Dividend payout ratio indicates the percentage of each unit earned that a firm distributes to the owners in form of cash |Dividend Payout Ratio |= |Dividend Per Share | | | |Earnings Per Share |If we look at the figure 2 we see that to maintain a steady dividend payment per share each year they had to make a huge payme nt out of the Net Income. In 2006 and 2007 the dividend payout ratio was above 70% and in 2008 and 2009 it was above 58%. According to the Regular Dividend Policy the payment of the dividend is a fixed amount in each period. The Regular Dividend Policy also tries to establish to pay out a certain percentage of earnings, however it tries to stabilize the dividend by pay out a certain amount of dividend and it adjusts the dividend towards the target payout as proven earnings increases.In short we can say that PRAN is following the Regular Dividend Policy Constrains of Regular Dividend Policy: If we have a look at the figure 1 we see that the earnings of PRAN fluctuates year to year for this Regular dividend policy may sometimes prove dangerous. Once a company adopts the regular dividend policy, any adverse change in the dividend payment may result in serious damage regarding the financial standing of the company in the mind of the investors. The same problem is been experienced by PRA N despite of a drop in the earnings that they had to maintain the same amount of dividend.Appropriate type of Dividend Policy: A Stock market tends to be very efficient in the allocation of capital to its highest-value users. That market also helps increase savings and investment, which are essential for economic development. An equity market, by allowing diversification across a variety of assets, helps reduce the risk the investors must bear, thus reducing the cost of capital, which in turn spurs investment and economic growth. However, volatility and market efficiency are two important features which will ultimately determine the effectiveness of the stock market in economic development.In contrast to that the stock market of Bangladesh which is informationally inefficient, investors face difficulty in choosing the optimal investment as information on corporate performance is slow or less available. The resulting uncertainty induce investors either to withdraw from the market unt il this uncertainty is resolved or discourage them to invest funds for long term. Moreover, most of the time it is seen that investors are not rewarded for taking on higher risk by investing in the stock market, or excess volatility weakens investor’s confidence as a result they people avoid investing their savings in the stock market.Due to the imperfect market and the uncertainty of return the investors always aim for short term investment as a result they prefer dividend rather maximizing the firm’s wealth. The regular dividend policy, which ensures a fixed amount of dividend to be paid to the investor regardless to the company’s income during the period, helps to reduce the uncertainly for the investors. For this the Regular Dividend Policy is the appropriate for PRAN. Year |Net Asset Value Per |EPS |Dividend Per Share |Bonus Share |Market Price Per | | |Share | | | |Share | |2000 |258. 39 |42. 20% |20. 00% |- |416. 50 | |2001 |284. 60 |52. 49% |20. 00% |- | 370. 00 | |2002 |312. 82 |54. 26% |25. 00% |- |366. 00 | |2003 |343. 9 |55. 49% |24. 00% |- |412. 00 | |2004 |362. 27 |50. 39% |24. 00% |- |523. 50 | |2005 |386. 55 |50. 96% |26. 00% |- |519. 25 | |2006 |396. 11 |36. 19% |26. 00% |- |386. 00 | |2007 |383. 91 |36. 66% |26. 00% |- |382. 63 | |2008 |428. 9 |44. 94% |28. 00% |- |1142. 00 | |2009 |449. 96 |49. 96% |29. 00% |- |1363. 00 | Net Asset Per Share Vs. Market Value Per Share: Table: 2 From the table 2 we can say that PRAN has never issued any Bonus shares from 2000 to 2009. However they have maintained a steady dividend payment that shows a positive slope. The market price is very fluctuating in 2005 the MV was 519. 25 but in 2006 it went down to 386. 00, in 2007 it was 382. 63 but in 2008 the MV was 1142. 00. [pic]Figure: 2 From the figure 2 we see that till 2007 the Share Market Price and the Net Asset Value Per share is very close however from 2008 the difference between the Market Price and Net Asset value per Share increase d despite of a drop in the Net Income. In the year 2008 and 2009 the corporation has paid a cash dividend of BDT 28 and 29 per share respectively and the EPS in 2008 was 44. 94% and in 2009 was 49. 96. From the above mentioned information we can say that there is a high possibility that the reason behind the increase in the market price of the share imperfect market condition in the Capital Market in Bangladesh.The imperfect market situation might be the result of Syndication or by spreading rumor in the market, which caused the Share Price of PRAN to go up. Capital Structure: In finance, capital structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities. In other words we can say that Capital Structure is the mix of a company's long-term debt, specific short-term debt, common equity and preferred equity. The capital structure is how a firm finances its overall operations and growth by using different sources of funds .Debt comes in the form of bond issues or long-term notes payable, while equity is classified as common stock, preferred stock or retained earnings. Short-term debt such as working capital requirements is also considered to be part of the capital structure. For example, a firm that sells BDT 20 billion in equity and BDT 80 billion in debt is said to be 20% equity-financed and 80% debt-financed. The firm's ratio of debt to total financing, 80% in this example is referred to as the firm's leverage. In reality, capital structure may be highly complex and include dozens of sources.Gearing Ratio is the proportion of the capital employed of the firm which come from outside of the business finance, e. g. by taking a short term loan etc. A company's proportion of short and long-term debt is considered when analyzing capital structure. When people refer to capital structure they are most likely referring to a firm's debt-to-equity ratio, which provides insight into how risky a company is. Us ually a company more heavily financed by debt poses greater risk, as this firm is relatively highly levered.The Modigliani-Miller theorem, proposed by Franco Modigliani and Merton Miller, forms the basis for modern thinking on capital structure, though it is generally viewed as a purely theoretical result since it assumes away many important factors in the capital structure decision. The theorem states that, in a perfect market, how a firm is financed is irrelevant to its value. This result provides the base with which to examine real world reasons why capital structure is relevant, that is, a company's value is affected by the capital structure it employs.Some other reasons include bankruptcy costs, agency costs, taxes, and information asymmetry. This analysis can then be extended to look at whether there is in fact an optimal capital structure: the one which maximizes the value of the firm. Capital structure in the real world if capital structure is irrelevant in a perfect market, then imperfections which exist in the real world must be the cause of its relevance. The theories below try to address some of these imperfections, by relaxing assumptions made in the M model.Capital Structure Theory: Trade-off theory of capital structure Trade-off theory allows the bankruptcy cost to exist. It states that there is an advantage to financing with debt (namely, the tax benefit of debts) and that there is a cost of financing with debt (the bankruptcy costs of debt). The marginal benefit of further increases in debt declines as debt increases, while the marginal cost increases, so that a firm that is optimizing its overall value will focus on this trade-off when choosing how much debt and equity to use for financing.Empirically, this theory may explain differences in D/E ratios between industries, but it doesn't explain differences within the same industry. Pecking order theory Pecking Order theory tries to capture the costs of asymmetric information. It states that co mpanies prioritize their sources of financing (from internal financing to equity) according to the law of least effort, or of least resistance, preferring to raise equity as a financing means â€Å"of last resort†.Hence: internal debt is used first; when that is depleted, then debt is issued; and when it is no longer sensible to issue any more debt, equity is issued. This theory maintains that businesses adhere to a hierarchy of financing sources and prefer internal financing when available, and debt is preferred over equity if external financing is required (equity would mean issuing shares which meant ‘bringing external ownership' into the company. Thus, the form of debt a firm chooses can act as a signal of its need for external finance.The pecking order theory is popularized by Myers (1984)[1] when he argues that equity is a less preferred means to raise capital because when managers (who are assumed to know better about true condition of the firm than investors) is sue new equity, investors believe that managers think that the firm is overvalued and managers are taking advantage of this over-valuation. As a result, investors will place a lower value to the new equity issuance.. Agency Costs: There are three types of agency costs which can help explain the relevance of capital structure.Asset substitution effect: As D/E increases, management has an increased incentive to undertake risky (even negative NPV) projects. This is because if the project is successful, share holders get all the upside, whereas if it is unsuccessful, debt holders get all the downside. If the projects are undertaken, there is a chance of firm value decreasing and a wealth transfer from debt holders to share holders. Underinvestment problem: If debt is risky (e. g. , in a growth company), the gain from the project will accrue to debt holders rather than shareholders.Thus, management has an incentive to reject positive NPV projects, even though they have the potential to i ncrease firm value. Free cash flow: unless free cash flow is given back to investors, management has an incentive to destroy firm value through empire building and perks etc. Increasing leverage imposes financial discipline on management. Other The neutral mutation hypothesis—firms fall into various habits of financing, which do not impact on value. Market timing hypothesis—capital structure is the outcome of the historical cumulative timing of the market by managers.Accelerated investment effect—even in absence of agency costs, levered firms use to invest faster because of the existence of default risk. Primary Factors influencing the Capital Structure: 1. Business Risk: It is the risk associated with the unique circumstances of a particular company, as they might affect the price of that company's securities. If the business risk is higher than the optimal debt amount will be lower. 2. Tax Position: It is the second key factor.The major reason for using debt i s that the interest is tax deductable which helps to lower the effective cost of debt. However, if much of a firm’s income is already sheltered from taxes by accelerated depreciation or tax loss carried forward from previous years, its rate will be low, as a result debt will not be advantageous as it would be to a firm with higher effective tax rate. 3. Financial Flexibility: It indicates a firm’s ability raise capital on reasonable terms under adverse conditions. 4. Managerial Attitude: It is the firm’s attitude to borrowing fund.Some of the firms are more aggressive than others; hence, some firms are more inclined to use debt in an effort to boost profit. This factor does not affect the optimal capital structure or value-maximizing, however it does influence the firm’s target capital structure. Evaluating the Capital Structure of PRAN: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. Closely related to leveraging, the ratio is also known as Risk, Gearing or Leverage. Year |Equity |Debt |Debt to Equity Ratio|NI |EPS | | | | | |(in Millions) | | |2005 |330. 04 |165. 94 |33. 46% |40. 77 |50. 96% | |2006 |337. 69 |152. 59 |31. 12% |28. 95 |36. 19% | |2007 |327. 93 |114. 00 |25. 80% |29. 33 |36. 66% | |2008 |342. 71 |92. 9 |21. 25% |35. 95 |44. 94% | |2009 |359. 97 |138. 99 |27. 86% |39. 97 |49. 96% | Table: 3 From the table: 3 we can say that that in 2005 when the D/E ratio was 50. 96% the company experienced the highest EPS. If we compare the D/E ratio and the EPS of 2008 and 2009 we see that in 2009 the debt ratio has increased by 6. 61% which had a positive effect on the EPS as a result the EPS increased by 5. 02%. It shows that when the D/E ration increases the EPS also increases.If we look at the graphical presentation it will be easier for us to understand which is given below. [pic] Figure: 4 If we take the average of the D/E ratio from 2005 to 2009 we see that on average PRAN is maintaining a D/E ratio of 27. 90%. In short we can say that 27. 90% of the total equity is financed by Debt. It means that the PRAN is moderately aggressive towards the debt financing. As a result they have a lower Financial Risk and higher Business risk. Conclusion: PRAN is one of the reputed companies in the Dhaka Stock Exchange and they fall under the Category â€Å"A†.From year 2000 to 2009 PRAN has always have paid cash dividend however they have never paid stock dividend. PRAN is maintaining a reserve capacity Dividends can be used to budge assets out of the company and consequently from the potential allege of creditors which can be injurious to creditor wealth, and creditors will beyond a shadow of a doubt take pricing or contractual actions to offset these latent uses of dividends. The contemplations of signaling, agency and the effects of market imperfections upon optimal dividends are imperative dimensions about which financial managers must be sentient. Recommendations:Cash and stock dividend, both should be paid without fail. Our stock market is not an efficient market. The available information most of the times do not lead to the desired reality. Many investors believe on the rumors and invest in the share market. Security Exchange Commission should take proper steps to minimize this condition. Disclosure of the overall market price in the annual report is desirable. The company can ideas from its investors to improve the situation and thereby engaging them in the part of the decision making process. Issuing of bonus shares can be a good option to attract the potential investors.

Porters Five Forces Us Airlines Industry Case Study Essay

The year 2011 was another dismal one for US airlines in terms of financial performance. Despite an increase in both passenger numbers and revenues for the year, profits were down on 2010. In total, US airlines earned net profits of about $0.4 billion, representing a net margin of less than 1%. The dire financial state of the industry was underlined by AMR (the parent of American Airlines) entering Chapter 11 bankruptcy in November 2011. This ended AMR’s distinguished record of being the only one of the major legacy airlines to have avoided bankruptcy. In 2005, Delta, United, Northwest, and US Airways had all fi led for bankruptcy protection. The early months of 2012 offered little hope of improvement. Airline revenues were up by 8.2% during the first quarter of 2012 compared to the same quarter of 2011. However, as a result of higher costs, net income was down by 73.6%: net margins had deteriorated from –3.2% to –5.2%. 1 The woes of the US airline industry during the 21st century were typically attributed to the triple-whammy of the September 11, 2001 terrorist attacks, the high price of crude oil, and the 2008 financial crash. Certainly, each of these was a powerful force in boosting costs and depressing demand. Yet, the financial problems of the US airline industry predated these events. Even during the generally prosperous 1990s, the US airline industry had been barely profitable. Outside the US, the state of the airline business was little better. The IATA, the worldwide association of airlines, showed that the global airline industry had consistently failed to earn returns that covered its cost of capital