Premium Essay

Value Creation

In: Business and Management

Submitted By indyfanmom
Words 8646
Pages 35
Identify and describe the categories of value creation on which Best Value currently relies most. Identify and describe the categories of value creation on which Best Value currently relies most

Straight commission is a “pay for performance plan” where monetary compensation is strictly tied to the results achieved by the salesperson. It is best used when maximum time is provided for the salespeople to sell while non-selling tasks are minimized. Ordinarily, commissions are in direct correlation and proportionate to the value or volume of completed sales transactions made by the salesperson. Since financial compensation plans are offered as motivational incentives to inspire and energize the sales force to achieve greater results, it is assumed that the higher commissions earned from performance will also produce higher profits for the company (Hoffman, 2007). Because straight commissions are directly paralleled with performance outcome, it is believed that salespeople are motivated to attain a higher level of selling effort (Johnston & Marshall, 2009).

The advantage of paying employees on a straight commission basis is that they provide maximum incentives for the salesperson. Straight commissions tend to reward high achievers while discouraging poor performance from salespeople with low productivity. For the company, higher commissions can be used to direct the sales team toward certain products that may produce a higher profit. In addition, it limits the amount of working capital because the business does not pay high wages for their salespeople unless they generate high sales revenues (Johnston & Marshall, 2009).

The disadvantage of paying employees on a straight commission basis is that salespeople have very little financial security because their income is unstable and difficult to predetermine. In difficult economic times, employee turnover is…...

Similar Documents

Free Essay

Law Value Creation

...Chapter One Law, Value Creation, and Risk Management A Manager’s Dilemma: Putting It into Practice Guanxi: Networking or Bribery? Issue Presented: Should a business leader in China encourage a manager to run for office? Engage in guanxi lobbying to encourage district leaders to impose stiffer emissions and mileage requirements for heavy trucks? Hire the son of a prominent local official? Whenever engaging in international business development, managers are expected to exercise their responsibilities according to the laws and practices of the countries where they conduct business. However, a manager should also consider the ethical standards in the home country, where the firm is headquartered and where the board of directors will review his or her performance, as well as what the shareholders would consider ethically acceptable. In China, companies have a long history of engaging in political activities. Chinese executives are frequently elected to local or national government to engage in guanxi lobbying, where they are permitted to make charitable contributions and report issues relevant to their corporation to the government. The Election Act of China permits the local manager of Dexter’s affiliate to seek election as a congressperson while remaining on Dexter’s payroll. In light of this legislation, the manager could run for office and, if elected, lobby to persuade district leaders to impose stiffer emissions and mileage requirements for......

Words: 1579 - Pages: 7

Premium Essay

Corporate Governance, Shareholder Structures and Value Creation

...Péter HARBULA CORPORATE GOVERNANCE, SHAREHOLDER STRUCTURES AND VALUE CREATION Summary : This paper analyzes the interaction between shareholder structures and the quality of the corporate governance structure in France using the value creation criterion. Using shareholder structures allows analyzing the performance of French firms and to measure an underperformance of “hard core” and diffuse ownership firms. This paper, updating results from Harbula (2004), also investigates the relationship between performance and shareholder stakes. Keywords: Corporate governance, value creation (EVA, CFROI), enterprise performance, shareholder structures. Classification JEL: G32, G34 Electronic copy available at: Péter HARBULA: Corporate governance, shareholder structures and value creation 1. INTRODUCTION The objective of this working paper is to determine whether “hard core” governed firms truly underperform their peers. The main cornerstone of the analysis will be again to introduce the concept of shareholder structures. During the analysis, the common tools developed by corporate finance practitioners were used including, among others, value creation and return to shareholders. By performing this analysis, even if it is not the central point, the underlying question of ownership structure and efficiency will also be considered. I will also include in the analysis, beside the performance measurement tools, an analysis if the......

Words: 15126 - Pages: 61

Premium Essay

Value Creation

...affected by identity theft but you think you are at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report, contact the IRS Identity Theft Hotline at 1-800-908-4490 or submit Form 14039. For more information, see Publication 4535, Identity Theft Prevention and Victim Assistance. Victims of identity theft who are experiencing economic harm or a system problem, or are seeking help in resolving tax problems that have not been resolved through normal channels, may be eligible for Taxpayer Advocate Service (TAS) assistance. You can reach TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059. Protect yourself from suspicious emails or phishing schemes. Phishing is the creation and use of email and websites designed to mimic legitimate business emails and websites. The most common act is sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft. The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request personal detailed information through email or ask taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts. If you receive an unsolicited email claiming to be from the IRS, forward this message to You may also report misuse of the IRS name,......

Words: 4773 - Pages: 20

Premium Essay

Value Creation and Economic Profit

...CASE STUDY FOR FINANCIAL MANAGEMENT CASE 4: The Battle for Value, 2004: FedEx Corp. vs. United Parcel Service, Inc. VALUE CREATION AND ECONOMIC PROFIT I. OUTLOOK OF CASE 4 Case 4 mentions about the competition between two leading companies in package- delivery market. FedEx which is the largest foreign presence in China, with 11 weekly flights, serving 220 Chinese cities, so the company’s volumes in China had grown by more than 50% between 2003 and 2004. UPS which is the world’s largest package-delivery company and dominant parcel carrier in US, serving 200 cities in 2003. FedEx had virtually invented customer logistical management, and was widely perceived as innovative. Historically, UPS had reputation for being big, bureaucratic and an industry follower. Two companies have their own market, an individual characteristics, and inconclusive. Thus, not only based on the development and operation of the two companies, the analysis also relied on the special purpose financial ratios ( especially Economic Value Added (EVA), an effective measure and rapid for firm within an industry) to find which company has more competitive advantage. II. INTRODUCTION 1. FedEx corporation: [pic] FedEx, formally known as Federal Express, started delivering packages and freight on April 17, 1973. The company......

Words: 3275 - Pages: 14

Free Essay

Shared Value Creation

...responsibility" mode of thinking, where social issues are marginalized. We lack is an integrity guide framework. Pathway to solve the problem is that the principle of shared value: companies create value for society to deal with social challenges, meet the social needs of the process, thus creating significant economic value. Business must reconnect business success with social progress. Opportunity already exists, but companies ignored. Business have become commercial, not because of its charitable donations, but because the business is to deal with the most pressing issues of social powerful force. It is the time to meet the new concept of capitalism, which means companies must be redefined as creating shared value, not profit itself. This will drive the next wave of innovation and global economic growth (Porter & Kramer, 2011). Learning how to create shared value is the best business opportunity to regain legitimacy. Literature review Companies that create value for society need to deal with social challenges, to meet the social needs, creating significant economic value (Porter & Kramer, 2011). The commercial must reconnect business success with social development. Shared value is not social responsibility, not a charity concept, not even sustainable development, but a new way to achieve economic success. Shared value is not the company's secondary activities, but the core activities that will lead the next round of business concept revolution. Companies usually......

Words: 2723 - Pages: 11

Premium Essay

Value Creation Report for Business Concepts

...Value Creation Report | April 8 2013 | Course : NBCMI 2010-2011 | | Table of Content 1 Introduction 3 2. Research Problem 3 3. Conceptual Model 4 4 Research Question 5 5 Theoretical Framework 7 6 Methodology 8 7 First Findings 8 8 Conclusion 9 Bibliography ..11 Appendix A: Value Map………………………………………………………………………………………………………………..12 Appendix B: Emotion Map……………………………………………………………………………………………………………13 1 Introduction The following document is concerned with the creation of value, more precisely the creation of value by the utilization of music. Value is a widespread term and in the business world you will hear the words “value added” or “value creation” thrown around. Everyone tells you they can “add value” or that they want to “create value”. But what is value? How is value created? In the following some of the definitions for the term “value” are mentioned. First of all, the different values are to mention such as personal values, which are the beliefs, principles or ideas important to you in your life- often things you are for or against, what you believe in and what you are willing to support and stand up for. ( Moreover, value in economic terms can be, according to many business dictionaries, explained as the performance of action that increases the worth of goods and services or even a business. According to Kotler, Armstrong &Wong, 2010 value is created in order to satisfy the customers´ needs and wants.......

Words: 3153 - Pages: 13

Premium Essay

Shared Value Creation Review

...Shared Value Creation; Revolution or Rhetoric? Abstract The concept of Creating Shared Value(CSV), was made popular in a Harvard Business Review(2011)by M. Porter and R Kramer defines as, policies and operational practices that enhance the competitiveness of the company while transforming social problems which is related to the corporation into business opportunities and simultaneously yield greater profitability(Porter, Kramer,2011). As it sounds, it is a seductive promiseand has so far received obscene attention in the business markets and among business educators. Both authors seeks to regain trust in “business and society who has pitted against each other so long” …”Learning how to create shared value is our best chance to legitimize business”(Porter, Kramer, 2011) is how companies were viewed as prospering at the expense of the community. With both aims of evaluating and analysing the concept of creating shared value, in this paper, we suggest how CSV can help businesses harness its full potential by simply creating economic value while simultaneously creating value for society. Focusing on making the right kind profits, companies should look beyond just merely maximum profits but also integrates social benefits at the same time; starting a positive cycle which reconnects business with society. In CSV, it represents a new approach for businesses moving beyond CSR approaches in the past. However promising this bold new approach is, it has also created......

Words: 2295 - Pages: 10

Premium Essay

Value Creation

...comes to assessing the value that individuals receive for the goods or services rendered, there are a lot of factors that become involved into the process. Many individuals, groups, and sub-groups place this economic value at different ends of the spectrum depending on how they view the goods or services and the way in which the value is presented. For that reason, in this short analysis I will discuss the strategic pricing and value creation as presented by Integra Creek Apartments of Murfreesboro, TN and how they optimize the use of value creation to maximize profits and customers willingness to pay in the competitive housing and apartment unit rental market. Murfreesboro, TN is a small community that sits in the heart of Middle Tennessee. With a population of just over 100,000 residents many organizations and firms understand the unique opportunity that exists in creating value and the need to deliver that value to its customer base. Integra Creek Apartments of Panther Properties Investment, LLC is one particular group I studied for this analysis that does such in value creation in comparison to competitors. When it comes to assessing the value that individuals receive for the goods or services rendered, there are a lot of factors that become involved into the process. Many individuals, groups, and sub-groups place this economic value at two different ends of the spectrum depending on how they view the goods or services and the way in which the value is presented.......

Words: 1076 - Pages: 5

Free Essay

M&a Creation of Value

...AIX-MARSEILLE UNIVERSITÉ INSTITUT D’ETUDES POLITIQUES MEMOIRE Pour l’obtention du Diplôme La création de valeur lors d’une opération d’acquisition Par M. Arthur URIOT Mémoire réalisé sous la direction de M. André CARTAPANIS                                           L’IEP n’entend donner aucune approbation ou improbation aux opinions émises dans ce mémoire. Ces opinions doivent être considérées comme propres à leur auteur.     Table des matières Résumé..................................................................................................... 5   Mots-clefs................................................................................................. 5   Introduction ............................................................................................ 7   1   Chapitre: Cadre théorique et définition de la fusion-acquisition . 1   1.1   Section 1 : Définition et motivations d’une opération de croissance externe  ............................  1   1.1.1   Paragraphe 1 : Définition et formes de fusion-acquisition  ..................................................................  1   La fusion  ...................................................................................................................................................................

Words: 30385 - Pages: 122

Free Essay

Value Creation and Strategic Thinking

...Weight Watchers International: Value Creation and Strategic Thinking Staying Competitive with Advancements in Digital Technology   I. Introduction Two of the most important management principles for an organization is value creation and strategic thinking. Value creation is a very abstract term, but can easily be defined by the performance of actions that increase the worth of goods and services. It’s important for organizations to create value for its customers, employees, investors as well as its shareholders.1 Both value creation and strategic thinking are important to an organizations performance. Organizations look outward to define: What is its business? Who is its customer? and What does the customer value?2 Strategy takes this a step further in having a forward thinking approach in how can it can continue to create value for its customer by staying competitive. A great example of value creation and strategic thinking is Weight Watchers International (WWI). Its mission is to have a clear vision of where it wants to go and have strategy and set of values to get them there. Weight Watchers International’s business model is being tested by advancements in technology. The important question for WWI is how it can improve their strategy while still creating value for its customer and staying competitive in a digital weight management world. II. Background For over 50 years, WWI has been a global......

Words: 1497 - Pages: 6

Premium Essay

Value Creation

...2.9 Definition and Meaning of Value Creation Value creation is the primary objective of any business entity. It is obvious that most successful organisations understand that the purpose of any business is to create value for its customers, employees, investors as well as its shareholders. Because the customers, employees and investors are linked up together, no sustainable value can be created for one unless for all of them. The first point of focus should be that of creating the value for the customer, remember, customers are always right. Value creation for customers will help in selling the services provided. This can only be achieved when the right employees are employed, developed and rewarded as well as when investors keep receiving consistent attractive returns. However, from a financial point of view, value is said to be created when a business earns revenue which surpasses expenses. Value creation simply put occurs when there is an additional value being added to the bottom line of a business thanks to the creation and use of new methods to maximize the shareholders wealth. Value creation from the customer point of view entails the provision of services that customers will find consistently useful. In today's business world, such value creation is typically based on constant process innovation as well as constantly understanding the customers needs with the ever changing business world. This can be achieved thanks to the commitment, energy and imagination of......

Words: 805 - Pages: 4

Premium Essay

Value Creation house. After embracing sustainability at large in the last decade, H&M has made significant changes internally towards adopting and embedding sustainability into all their operations and value chain – but it’s still a work in progress. H&M’s CSR initiatives have a strong track record and involve various stages and stakeholders of its value chain, including their design team, suppliers of raw materials and fibers, as well as customers. Some of these renowned initiatives include the Better Cotton Initiative, the Conscious Collection, the Fashion Against AIDS collection and the Garment Collecting Initiative to name a few. All which have in common the involvement of different stakeholders, from suppliers to customers and designers. In this context, our challenge was to find what more can H&M do? Where and how should value be created, and which opportunity would create the most value for H&M and its stakeholder, all while increasing the company’s triple bottom line. The company’s core values, its strong customer focus and its business vision to provide customers with “fashion and quality at the best price in a sustainable way”, has driven many of H&M’s past initiatives and helped us identify a new area of opportunity for H&M to grow and create more value for its stakeholders: the sportswear market. Economically, the sportswear market is H&M’s fastest growing category. In fact, the sportswear category is growing at triple the rate of......

Words: 10942 - Pages: 44

Premium Essay

Marketing Management and Value Creation

...MARKETING MANAGEMENT AND VALUE CREATION CLEAN EDGE RAZOR – SPLITTING HAIRS IN PRODUCT POSITIONING QUESTION 1 Consider exhibit 1 and the three different consumer segments. For which segment would the niche strategy be more effective? And for which group would the more mainstream approach be more effective? Considering exhibit 1, social and emotional shavers is the segment where the niche strategy would be more effective. This group has some specific characteristics as: more brand switching (mainly to super premium quality); shorter inter-purchase intervals; and shorter average usage period for blades (greater recognition for earlier replacement). On the other hand, maintenance shavers is the segment where the mainstream approach would be more effective. This segment: has a view of products as they are the same; a lack of interest in product category; shaving routine is inconsistent; shaving is a chore they try to finish as quickly as possible; and are motived by the price. QUESTION 2 What segment would you choose to target and how would you position Clean Edge for this segment? I would choose the niche market segment with a super-premium product. This market, with a low initial investment, minimizing costs, and selling through the niche market, we have what seems like a less risky strategy, that still yields a healthy profit. The niche market will complement company’s existing product portfolio perfectly and avoid cannibalism, it requires less immediate......

Words: 809 - Pages: 4

Free Essay

Value Creation Sylabux

...הלימוד תתבסס על הרצאות, דיונים, פתרון אירועים ותרגילים, קריאות ויישום החומר הנלמד בעבודת שדה. 3. חובות הסטודנטים חובת נוכחות בכל ההרצאות. על הסטודנטים להגיש תרגילים ואירועים, להשתתף בבוחן הביניים ולהגיש את מצגת הפרויקט במדיה אלקטרונית. 4. הערכת הסטודנטים הציון הסופי יהיה מורכב כדלקמן : תרגילים ואירועים - חובת הגשה פרויקט גמר - 50% בוחן ביניים - 50% על פי החלטת ועדת ההוראה של הפקולטה לניהול, החל משנה"ל תשס"ח מופעלת בפקולטה מדיניות שמירה על טווח ציונים. לפי מדיניות זו בכל קורסי החובה בפקולטה ממוצע הציונים יהיה בטווח 78-82. 5. תרגילי בית התרגילים, האירועים, והפרויקט יוגשו בקבוצות של עד 2 סטודנטים. כל התרגילים והאירועים ישלחו במועדם למרצה ולמתרגל בדוא"ל כקבצי power point כך ששם הקובץ של כל משימה יהיה כדלקמן: Value 2012A Ass. No. X Group Y.ppt. יש לציין בנושא הדוא"ל: "מבוא ליצירת ערך, בעז רונן". כמו כן, על הסטודנטים להביא לכיתה מדיה של התרגיל להצגה (ב-disk on key, מחשב אישי, CD שליפה ממייל, וכו'). סטודנטים שנבצר מהם להגיש את התרגיל במועד (מחמת מילואים, מחלה וכו') יגישו את התרגיל עד סוף הסמסטר בתאום מראש עם המתרגל. 6. חומר הקריאה חומר הקריאה מחייב וידיעתו חיונית הן לפתרון התרגילים והאירועים והן לפרויקט ולבחינת הביניים. לקראת כל שיעור יש לקרוא את הקריאות הרלוונטיות. 7. רשימת הנושאים שיכוסו במסגרת הקורס |מטלות |תאריך |נושא |מפגש | |רונן ופס 1,2,3,4 ......

Words: 1204 - Pages: 5

Premium Essay

The Predicament Called ‘Value Creation’ for Today’s Customers

...MANAGEMENT THE PREDICAMENT CALLED ‘VALUE CREATION’ FOR TODAY’S CUSTOMERS WITH A FOCUS ON AN EMERGING MARKET OF NORTH BENGAL PRESENTED BY: NIRMALYA ACHARJEE DIRECTOR, INSTITUTE OF MANEGEMENT AND ENTREPRENEURSHIP DEVELOPMENT SILIGURI INDEX Sl. No. 1 2 3 4 5 6 Topic Introduction Related work Presented work Research methodology Evaluation results Conclusions Page no. 3 5 7 10 11 16 Page | 2 Introduction “Don’t sell your customers goods that they are attracted to; sell them goods that will benefit them” - Konosuke Matsushita (Founder – Panasonic) The simplest way to define Marketing would be “To create profitable customer relations”. And a customer would only spend money on a product/service, if it creates value for him/her. So, in a way, marketing creates ‘VALUE’. Today, Marketing, more than anything else, is to identify and create a product/service that would be valuable to a customer and convey that message to the customer effectively. Much has been written about customer orientation, customer relationship management (CRM), Customer Lifetime Value (CLV) metrics, Customer Centric organization models, customer retention, customer care etc. And we see the poor customer is still the most dissatisfied lot. Customer value, in its most basic form, is merely the difference between the benefit receive from a product and the cost associated with that product. But the challenge for a marketer today, is to identify what value his product/service delivers to......

Words: 2371 - Pages: 10