Pearson began 2012 with 30,000 $1 common shares issued and outstanding. Paid in capital in excess of par was $25,000 and retained earnings were $175,000. Net income for 2012 was $22,000.

Requirements:

Review Pearson’s transactions for 2012 in the Excel Template below, then:

1. Record the transactions in the journal.
2. Prepare the statement of shareholders’ equity for 2012.

. 2002 2001 ’01 to ’02 . $ % of Sales $ % of Sales % increase Net sales 62349545 26072585 139.1% Cost of Goods Sold 51402174 82.4% 21010605 80.6% 144.6% Gross Profit 10947371 17.6% 5061980 19.4% 116.3% Advertising 1818126 2.9% 327479 1.3% 455.2% General & Administrative 8067331 12.9% 4162408 16.0% 93.8% Total Operating Exp 9885457 15.9% 4489887 17.2% 120.2% Income from Operations 1061914 1.7% 572093 2.2% 85.6% Interest Income 17977 0.0% 16237 0.1% 10.7% Gain on Marketable Securities 0.0% 41962 0.2% -100.0% Interest Expense -2400 0.0% -3184 0.0% -24.6% Total Other 15577 0.0% 55015 0.2% -71.7% Income Before Taxes 1077491 1.7% 627108 2.4% 71.8% Taxes 536143 0.9% 161000 0.6% 233.0% Net Income 541348 0.9% 466108 1.8% 16.1% Consider the following questions in your evaluation: What was the percentage increase in sales from 2001 to 2002? What impact did the new sales have on the gross profit? Were the new sales more or less profitable sales based upon their impact on the gross profit? What happened to the advertising expenses ($ & %)? Is the change in advertising likely to be long term? Why? What impact did the new sales have on G&A (General & Administrative)? Why? Are total operating expenses up or down as a percentage? What impact does the change in operating expenses have on the bottom line? Is income from operations up or down ($ & %)? Is total other a significant dollar amount? Percentage increase? Look at the amount of taxes paid. Why is the change so significant? Compare the increases in sales to the increase in profit after taxes. Was it worth it from an operations point of view? From the stockholders point of view?

1. According to the Business community, What is the primary purpose or for the use of a Strategy: 

A. Being better than rivals no matter the price

B.Focusing on satisfying all stakeholders

C.Being an excellent “corporate citizen” follow the social responsibility best practices

D.Having an end state of success

 

2.The principal similarity between business and military strategy is that

A.They are both concerned with tactical maneuvers that can establish positions of advantage.

B.They share common concepts and principles.

C.The nature of leadership is much the same whether in a military or business context.

D.They share the same objective: to annihilate rivals.

 

3.The principal difference between accounting profit and economic profit is:

A.Accounting profit is distorted by the arbitrary treatment of depreciation and unusual items

B.Economic profit is pure surplus; accounting profit includes the normal return to the providers of equity capital.

C.Economic profit is cash flow based and is less subject to manipulation that accounting profit

D.Economic profit is endorsed by economists who tend to be more rigorous than accountants.

 

4.The fundamental problem of any type of performance management system is:

A.The tendency for performance management systems to be based entirely on financial targets

B.Performance targets always lead to unintended consequences because individuals always “game the system”

C.A performance management systems needs short-term measures to assess performance, yet the ultimate goal is to enhance the long-term performance of the firm

D.Managerial, political and personal interests need to be taken into account

 

5.To forecast industry profitability consistently accurately, professional analysts have to:

A.Look at the link between industry and structure performance , then, use information on major trends in industry structure to predict their effects upon the forces of competition

B.Look at the probability of new entries in the industry, to determine the major trends, and to forecast the probable overall industry profit

C.Determine the five larger players in the industry and their relative bargaining power in regards to their buyers and customers, and to identify their strengths and weaknesses

D.Develop a deep understanding of how the industry creates value now and in the future, whether they use the tools described in the chapter or not

 

6.Analyzing key success factors leads one to ask the following two questions

A.What do customers want which we could supply and what should the firm do to survive competition?

B.What do customers want and what type of operational changes should a firm implement to survive competition?

C.Which of the five forces of competition most threaten a firm’s survival and how could the firm deal with them?

D.What should managers do to a information collected from the market and the firm’s operational units?

 

7. Competitive intelligence, the systematic collection and analysis of information about rival firms, is:

A. A practice which, though legal in most countries, is unethical

B.Likely to distract firms from their efforts to establish positions of competitive advantage based upon their distinctive strengths

C. A useful activity that forms an important element of firm’s environmental scanning and strategic analysis

D. A useful activity because it can help firms imitate the strategies of their more successful competitors.

 

8.When a company has weaknesses relative to competitors among strategically important resources and capabilities, the appropriate strategic response is to:

A.Invest heavy in order to upgrade weaknesses

B.Diversify in order to find new areas of business where the these resources and capabilities are unimportant to competitive advantage

C.Outsource those activities where third parties can offer superior capabilities while positioning the business to reduce vulnerable to remaining weaknesses

D.Employ management consultants to seek a solution.

 

9. The most valuable contribution of strategic planning processes to the success of companies:

A.Allowing quantitative analysis to be applied to strategy alternatives

B.Introducing the tools and techniques of strategic analysis into companies’ decision making

C.Curbing the power of CEOs

D.Creating a dialogue for sharing knowledge and ideas, and building consensus

 

10.Causal ambiguity allows a firm’s competitive advantage to be sustained because potential rivals are:

A.Deterred from directly competing with the advantaged firm

B.Unable to identify the sources of the advantaged firm’s superior performance

C.Unable to acquire the resources needed to compete against the advantaged firm

D.All the above

 

   You have a choice to use either an existing company or a fictitious company(Please use a real company). In either case, the Project is to complete a written plan that will suggest a practical Strategic Direction for the company.   

The Plan will have 7 sections. The 6 sections will reflect each of the 6 TCOs plus a bibliography. Each section will be 2 – 3 pages in standard business proposal format.

The sections are:

1. Strategy (TCO F)
2. Core Competencies (TCO C)
3. Industry Dynamics (TCO A)
4. Technology Sourcing and Internal Innovation (TCO D)
5. Product Development Strategy (TCO E)
6. Strategy to protect innovations (TCO B)
7. A bibliography listing your references for the project

Section 1 – Strategy

TCO F – Given an organizational and industry context, identify and suggest a deployment strategy that will facilitate the success of a technologically driven organization.

This is the most important part of the project, because it sets the direction for all other sections. In this section, you establish the strategy for an organization.

Often people refer to this component as the “Vision” or “Mission” of a company, but it is not. The Vision for a company could be that you want to be a market leader. However, the technology strategy tells everyone how you will achieve that market leadership. The technology strategy tells the various stakeholders – employees, customers, community, and stockholders – what you are going to do to achieve that market leadership. This strategy should be very clear and easy to understand so that everyone will be “on the same page” when it comes to working together toward that goal.

In this section, you should describe what “SHOULD” be the strategy of a technologically driven company. You should focus specifically on the technology strategy. You should think about all the things we learned in the class that will determine a strategy that will help the company succeed.

Remember that you can use either an existing company or a fictitious company. If you choose to use an existing company, you can visit their web site to see if their strategy is listed. Or you can do a web search on their technology strategy to see if anyone has written any stories about their strategy. For a fictitious company, you should make up a technology strategy that fits that type of company.

Examples of a Technology Strategy:

• Verizon Wireless – Have the best network of all wireless carriers
• Honda – Build the best engines
• Keller – Deploy the best Internet based on-line and blended education technology, not build it, not own it, but use a 3rd party to provide it
• Intel – Have the fastest and most powerful CPUs

The key is to be able to describe the strategy in a 1 or 2 sentence summary and in detail as well. The description should start or end with the simple sentence statement of the technology strategy. However, there must be sufficient detail to explain why that is the right strategy.

Section 2 – Core Competencies

TCO C – Given an organizational and industry context, identify the core technological competencies of the organization.

Like all subsequent sections of the project, this section is based on the Strategy Section.

Example:

• Verizon Wireless Strategy is the having the best Network. Thus, the core competencies will be built around the network. Things like RF Engineers and wireless security experts would be detailed
• Intel’s strategy is to build the fastest most powerful CPUs. Thus their core competencies will be built around CPU engineering
• Keller’s strategy is to deploy the best on-line education technology. Thus their core competencies would be things like educational technology evaluation and on-line education curriculum development

The best way to do this section is to apply the three tests of a core competency (page 123) to the strategy that you detailed in the Strategy Section.

Section 3 Industry Dynamics

TCO A – Given a company situation be able to describe the industry dynamics of technological innovation.

Here you should take the strategy identified in Section 1 and describe in detail why that is the right strategy based on what is occurring in the industry. Provide as much detail as possible as to the industry trends and why you think those trends are important.

Section 4 – Technology Sourcing and Internal Innovation

TCO D – Given an organizational context, develop a plan to increase the innovative capabilities of the organization both through collaboration strategies and internal innovation.

Here you would offer ideas as to what is the best way to “Source” the technology that supports the strategy. A complete discussion about how best to manage the innovative capabilities of the company being described is required.

Section 5 – Product Development Strategy

TCO E – Given information about a company’s industry, and organization, formulate a technological innovation strategy through its new product development strategy.

Product Development is very important to an organization. This section will describe how the company will structure its product development. Obviously, the kind of structure will be determined directly by the technology strategy stated in Section 1.

Section 6 Strategy to protect innovations

TCO B – Given a company situation be able to determine whether and how to protect its technological innovations.

Using the things learned in the class, describe how you would use patents, trade secrets, copyrights, etc. to protect the Intellectual Property (IP) required to support the strategy.

assignment attached

 

each question needs 125 words for the answer