Eurodisney Business Case Essay

Eurodisney Business Case Essay.

1) How could the company have erred so badly in its estimates of spending patterns of European customers?

* The idea was market Euro Disney as a complete holiday package and encouraging people to stay in the hotels and eat all meats in the complex.
* While setting prices the Company was unable to estimate spending patterns of European consumers and competitors price alternatives. Due to the location advantage and incredible accomodation prices consumers prefer to stay in the city center.

* Travel time to Paris city center from Euro Disney is only 35 minutes and cost of accomodation in Disneyland is as much expensive as a best hotel in Paris.

People prefer to stay overnight in the city center instead of staying in the park.

* At the end of 1992, it became clear that the numbers were not being met – there was a recession and people were bringing their own food and not staying in the hotels for many nights. Park admission prices were also very high (.

25US for adults)

* Skimming Pricing: is relatively high pricing strategy. It is tempting where product is highly differentiated. Setting prices assuming that demand will not be determined by price and therefore the price can be high with large profit margins. It assumes inelastic demad curve, which sales will not affected by prices.

* Penetration Pricing: Setting prices assuming that demand will increase with lower prices and decrease with higher prices and therefore there are limitations on your profit margin. Elastic demand curve assumption.

* Eurodisney saw itself in a monopoly position, and positioned itself in a relatively inelastic demand curve with attracting customers regardless of higher prices. As a result of skimming pricing policy high prices, visitors shortened their stay, avoided hotels abd brought their own food and drink. Many visitors arrived early in the morning, staying late at night or check out early in the morning.

2) Could a better reading of the impact of cultural differences on revenues have been achieved?

There were a few cultural blunders made:

* A no alcohol policy (wine is customary for lunch and dinner in France) and this discouraged visitors * It made mistakes with predicting the peak periods and had to lay off a number of staff when there were fewer visitors, but France has very strict labour laws so they found this to be very difficult

* Disney failed to predict demand for breakfast. They told that Europeans dont take breakfast however demand for breakfast is 10 times more than capacity * Tour bus drivers were not catered for properly, so tour companies did not recommend visiting Euro Disney as much as they would have

* In America there is a well-established theme park culture. In planning Euro Disney there do not seem to have been many contingency plans established. The attitude towards customer habits was very complacent, assuming that there would be so many customers every day, each staying an average number of nights spending an average amount of money (for America that might be the case). * Leftist demonstrators against to American culture. They called the Park an American cultural abomination. * Disney management failed to research the culture thoroughly enough

3) What suggestions do you have for fostering a climate of sensitivity and goodwill in corporate dealings with the French?

* Cultural differences need to be addressed and not just assume that the foreign country will adopt domestic views. The way Europeans took holidays, bought souvenirs, took transport and ate, all affected Euro Disney’s performance * Disney did not understand the differences in the United States compared to European Labor Laws. This resulted in a waste of funding because labor costs in Europe were significantly higher than in the United States

4) How do you account for the great success of Tokyo Disneyland and the problems of Euro Disney? What are the key contributory differences?

Euro Disney contrasted Tokyo in a number of ways.

* Disney invested heavily in the Euro initiative while it never invested any funds in the Tokyo Park since the Tokyo Disneyland was owned and operated by the Oriental Land Company. * Tokyo Disneyland was a major success with a turnover of over 16 million in 1991 as compared to the low turnover in the Euro Disney. * An increasing trend in Japan towards leisure along with increasing appetite for the American food as opposed to the French who never valued the American foods contributed a lot to the success of Disney land in Tokyo. 5) Do you believe that Euro Disney might have done better if located elsewhere in Europe rather than just outside Paris? Why or why not?

* With change of location to be somewhere else in Europe other than Paris, Euro Disney could have not done any better. This is because people in the Europe follow relatively similar cultural norms. It was not only the French who had problems with them, but also others. In Spain where they thought of at first had no adequate space for the establishment of the facility. The master spirit on the sides of the Americans could also not allow them to work in any environment. Moreover a general wave of recession and economic downturn all over the Europe, did not allow such capital intensive project.

6) “Mickey Mouse and the Disney Park are an American cultural abonimination”. Evaluate this critical statement.

* Although European public acceptance of the theme park itself has not been a problem for Euro Disneyland there has been a different type of cultural clash. Most Europeans believe there is cultural imperialism * “Mickey Mouse and the Disney Park are an American cultural abomination” This is a statement connected to the hard line taken by the French Leftist who never accepted the American people to erode their culture. They claimed the pollution on their country’s cultural ambience was due to the arrival of Mickey Mouse and the company. They wanted to see more European culture in
the park than the American culture.

7) Consider how a strong marketing approach might be made to both European consumers and middlemen, such as travel agents, tour guides, even bus drivers. * The strategy was very greedy in buying all the surrounding land so no one else could benefit from the project. This is not going to promote any local support and isolates the project from and other business support. The scale of the investment also isolated them more in the case of a failure. * The idea was to market the Disney as a complete holiday encouraging people to stay in the hotels and eat all meals in the park.

* The travel time to Paris was 35 minutes from Euro disney and the hotel Disney cost as much as the best hotel in Paris, many people may prefer to stay overnight in the city center. * High competition in tourism industry. People passing through the area may decide to take the more traditional visit to Paris instead. * Marketing approach is very strong local partnership is important. In planning, Disney were more interested in the moneymaking ventures than the fundamental details such as providing enough restrooms for coach drivers. Inpatient drivers resulted a decrease in the number of visitors. * Tour guides have direct communication with customers.

8) Discuss the desirability of raising admission prices at the very time when attendance is static, profits are nonexistent, and new attractions are months and several years in the future.  * Skimming Pricing: is relatively high pricing strategy. It is tempting where product is highly differentiated. Setting prices assuming that demand will not be determined by price and therefore the price can be high with large profit margins. It assumes inelastic demad curve, which sales will not affected by prices.

* Eurodisney saw itself in a monopoly position, and positioned itself in a relatively inelastic demand curve with attracting customers regardless of higher prices. As a result of skimming pricing policy high prices, visitors shortened their stay, avoided hotels abd brought their own food and drink. Many visitors arrived early in the morning, staying late at night or check out early in the morning.

Eurodisney Business Case Essay

Small Business Feasibility Studies Essay

Small Business Feasibility Studies Essay.

Nowadays, printed shirt are everywhere: most common are seen on school s and universities: logos on uniforms, schools group & organizations uniforms etc. Some are used as freebies to promote a certain brand, socio-political events and gathering that comes in different designs and colors. We also see shirts with novelty designs such as cartoon characters, quotable phrases and anything that can be printed on shirts.

There are many processes of transferring a design to a shirt. Digital printing, the traditional silkscreen-printing process, iron-on, and customized hand painted.

In these modern days, things are done in faster ways; wherein computer plays a vital role. Computer printed designs are among the most common in the market today. One can have his own picture printed on a shirt in just an hour or he can even personalize a design that he likes to be printed on his shirt. A design can also be mass-produced by a clothing company.

Digital shirt printing is the focus of this feasibility study.

I come up with this idea as an answered prayer to the consumers demand for an alternative supplier for computerized design shirts. This digital printing business is not also limited to shirts only but will also be made available on other promotional items like mugs, tumblers, id laces, umbrellas etc.

School like SGGS, usually have their PE, intramurals, and other school activities shirts done elsewhere through a supplier. With this in mind, I would like to propose to become the school’s sole suppliers for all their t-shirt needs. Not only SGGS will enjoy a very discounted rate (since I’m an alumna) but will also give a free-hand to the students to showcase their unique creativity through t-shirt designs and customized it according to their likings.

Small Business Feasibility Studies Essay

Business Plan for Grab-N-Go Snax Essay

Business Plan for Grab-N-Go Snax Essay.

II. Executive Summary & General Company Description

Grab-N-Go Snax are a selection of prepackaged, single serving snack foods which will be sold out of food carts conveniently located around the core downtown Portland business district. Our new enterprise caters to the need for downtown office and business workers to gain quick and easy access to healthy breakfast, break and lunch snack food options. Grab-N-Go Snax offers a wide selection of high quality fresh fruits, vegetables, dairy, grain and gluten-free products. Products are cleaned, cut, portioned, packaged in re-sealable recyclable packaging and refrigerated for immediate consumption.

To augment our name brand product selection, we’ll offer a variety of products in this category offered by other name brand companies, such as granola bars, trail mix, bottled water, fruit juices and energy drinks.

To start, activities of the business will include stationary food cart vending in the high activity food cart vending groups, called ‘PODS’. Supplemental activities of the business will be to participate in special events vending.

Special events include city wide water front events, Saturday Market, sporting events and holiday celebration activities.

In a preparation area that will be set up for processing, packaging, and storing food products, work will be done each day to prepare products for delivery. Products for the day’s sales will be transported in refrigerated storage containers to the food carts early each morning. Vendor services will stock their carts and displays in preparation of opening for business.

Customers and passer-bys will notice the brightly lit awning, colorful displays, smells of fresh fruit and sounds of nature in a clean environment open early in the morning for their convenience. They will see a wide selection of food items for breakfast, or to eat later for workday snacks. Customers can grab items for purchase for themselves from the on-board displays or refrigerated cases. Vendor services will scan the UPC codes and processes the sale quickly via POS system.

For the future of the business, it is our plan to promote the sale of our own Grab-N-Go Snax name brand product selection through refrigerated vending machines, fitness health clubs and in-office delivery. Our catering services will accommodate the need for refreshments during company meetings and parties to businesses in and around the core downtown area.

Our goal is to develop a strong business model, brand name and reputation so that as the business continues to grow into other locations and communities, becoming more recognizable, we can develop Grab-N-Go Snax into an operation that can be franchised. We like the flexibility a LLC provides to allow the option to hire professional management that would not necessarily be owners. This would allow us to offer employees (potential new franchisees) the opportunity to learn the ropes of the business and experience what it might be like to operate their own Grab-N-Go Snax food cart before they make the decision to invest in our business as a franchisee.

III. Qualifications

My background of working downtown Portland for the past 30 years and being a customer of a lot of the food carts in the downtown area has provided me with the drive to make this unique business concept a true success story among the growing trend of food carts here. I have worked as Administrative Assistant to Directors of companies and Project Manager and coordinator for projects that required budgeting, multi-tasking and attention to detail. My strengths are with organization, human relations, patience and dedication.

Besides devoting a lot of my own funds that will go into this venture that I believe in, I will be committing a lot of my time and energy to making sure every aspect of the business operational needs are met to meet the customer demands. Outside of the day to day product preparation, on-site vending and management of business affairs, I will be networking and connecting with other Administrative Assistants, Event and Meeting Planners and with businesses in the downtown area to sell our in-office delivery and catering services.

IV. Products and Services

Products: See Appendix A (not included in this document) for examples of wholesale costs and pricing comparisons of local retail & grocery store competition. * Fruits: apples, bananas, oranges, grapes, grapefruit, melons, cherries, berries, * Vegetables: carrots, celery, cauliflower, broccoli,

* Nuts: almonds, peanuts, cashews, walnuts, soy, trail mix, granola mix * Dairy: milk, yogurt, cheese sticks, pudding, vegetable dips * Beverages: water, vitamin water, sports drink, fruit drinks, fruit juices, vegetable juices, dairy drinks, fruit smoothies, Products will be displayed in a highly lit environment while activating physical senses. (e.g. sight-lighting of colors & textures; sound-background musical sounds of fresh water falls, breezes, birds , etc; smell-odors from fresh fruit juices)


* Parked truck/trailer: Daily on-the-street vending.  * Mobile truck/trailer: Special events vending – fairs, markets, entertainment venues, promotional events, sports events, * Catering: Regularly scheduled in-office supply replenishment, meeting room delivery. Customer service is highlighted with a smile, cheerful attitude, immediate attention to the customer’s inquiries, recommendations for specials and new products, appreciation for their business and request for feedback via our web page.

These items are offered fresh, dried and refrigerated from early in the morning, to catch people before work and school, to late afternoon. Products are intended to fulfill the desires of those seeking healthy and nutritional breakfast, pre-lunch, lunch and post lunch time snack options. Snacks and drink items represent alternatives to those high in sugar, fat, cholesterol, caffeine or carbonation. Grab-N-Go Snax objective is to promote the image of providing high quality healthy snack food options, quick and easy to obtain with freshness guaranteed. Products being offered will be healthy, pre-packaged, single serving, ready-to-eat snacks and drink items.

V. Marketing Plan

Currently the food cart business is growing and thriving in the downtown Portland area. Owners of parking lots and open spaces are looking to expand and convert available space for this business use because of the increase in space revenue and the ease of which the city has made it a viable optional use of their property. Because of the local and nationwide publicity for many of the local food cart businesses, more downtown workers and visitors to the downtown area now consider experiencing a food cart meal. The advantage of Grab-N-Go-Snax is that there are a lot of busy downtown workers who do not tend to eat breakfast, they don’t remember to purchase snack items in advance, do not remember to bring them to work when they do, and when they do want a snack for a break, do not have a lot of healthy snack options convenient for them to choose from.

Busy professionals know they want and need to move towards healthier food selections, but need convenience and speed of ownership to change their current habits. They need a place close by their work for that quick turn-around time during a break or before they enter their office building in the morning. Promotional objective will be to change downtown workers’ behavior, not only around the kind of snack foods they do select, but actually adding the activity of taking time in the morning and during breaks to include snacks for nutritional and health reasons. Within the promotion is the message of how quick and easy it is to obtain a selection of quality healthy snack foods. I want our customers to see the convenience and ease of taking a new step that contributes to their health and well being.

I plan to communicate this message with colorful unique signage outside the food cart to grab attention with matching post card size business cards. I have also planned to promote the cart through the nearby business office building tenant newsletters, providing coupons and a drawing with on-line website registration. The purposes of the registration and drawing would be for obtaining e-mail addresses for on-going communication and promotions. There will be bonuses and discounts offered for frequent customers. I will be listed in the website created to promote Portland’s food cart businesses and I will create a press release with a twist on the food cart business. The purposes of the press release will be to create a buzz around the food cart concept not only in the local market, but nationally in order to get free press stories and media attention.

Plan for success: I plan to expand the business by offering products and services for catering to the downtown business offices. I also plan to make consignment agreements to sell product through the local fitness health clubs, whose customers workout early in the morning, on breaks and through their lunch hour. I will be expanding the business to include personnel needed for developing orders, product preparation and delivery. I will promote the catering side of the business by selling face to face to the local business office administrative staff, typically responsible for making in-office food arrangements for meetings, parties and for employee benefit.


Our customers are middle class, educated at or above a high school education, mostly white, men & women that work, play and go to school in the downtown Portland area, though most do not live in the downtown area. For lunch, most all of our customers walk within a one to 3 block radius of a group of food carts called ‘pods’.

The majority of these target customers’ ages range from their mid 20’s to their mid 50’s, most of which are already getting messages of healthy eating and control of obesity from multiple media sources as well as their employer’s health benefit provider. From my experience and relationships with colleagues that work downtown, they lead extremely busy and sometimes stressful lives at work, try to work out to stay fit when they can and don’t always eat right or as often as they should. From my visual survey of workers entering offices in the morning and exiting during breaks and lunch hours, very few bring food from home.

VI. Market Research

From my visual survey of existing food carts in both the high density target markets, there is no other food cart offering fresh, healthy, pre-packaged, single serving, ready-to-eat snacks and drink items. Since I will be offering more nutritional beverage options consistently at a lower price, I will also be targeting to gain their lunch hour beverage business, even though they may be purchasing their lunch food at a food cart nearby. This strategy will also serve to allow customers to view all the snack options available for their future consideration.


Our pricing objective is to beat everyone’s price on beverages and be competitively priced on like items offered at other food cart vendors and local corner convenience stores nearby. The more desirable items, pre-packaged mixed product sets and items not offered elsewhere is where I will make a higher profit margin. Using a Loss Leader strategy – Beverages will be offered at lower prices consistently every day. This will ensure the customer remembers that the place to always get a great price on healthy beverages is specifically at our food cart.

For specific ‘like’ items that can be found at in-office building vending machines and indoor convenience stores nearby, we will set our price lower than the indoor store to encourage customers to venture outside of the building for the savings. Prices on identical food items that can be found at the customers’ local supermarket outside the downtown area will be priced higher for the benefit of convenience and freshness. Based on research of urban grocery store pricing, we expect to be able to set our product prices at least 20% above what customers would pay outside the downtown Portland center.


Our distribution objective is to be situated where there is the highest density of daytime office workers in the downtown Portland market, close to other businesses that customer frequent. Currently the two desirable pods (groupings of food carts) are located on SW 5th Avenue near Stark and around the block of SW 10th Avenue and Alder for their proximity to high density population of workers. (12/13) Being located at either the 5th Avenue or 10th Avenue pods would be most desirable because of the foot traffic from the surrounding businesses and transit mall. From my visual count, there averaged 100 – 165 people on one side of one block throughout the 12:00 to 1:00 hour being served by 13 to 15 trailers per block length. During their lunch hour, most customers are drawn to the area because of the variety in choices of food from the high density of food carts.

These two food cart groupings are close to our customer’s offices and on their way to and from transportation options. (parking garages, Max train, Tri-met buses, etc.) Because both pods are located within parking lots, there is a lot of flexibility for delivery of goods and situation of the trailers. When the weather is wet or windy, being located outside office building retail space, is not as convenient, but does reach more customers from a variety of businesses all around the pod. If it is possible, it is our goal to incorporate clean solar energy as part of our uniquely designed cart to be able to operate at special events where electricity may not be conveniently located or expensive to purchase.

VII. Operational Plan

We have selected to start the business with a fresh new trailer concept, rather than take over an existing business or invest in someone else’s franchise. Our food cart and catering operations have many elements that are not currently offered from any food cart currently in the Portland markets.

Business Plan for Grab-N-Go Snax Essay

Business Case for Recreation and Wellness Intranet Project Essay

Business Case for Recreation and Wellness Intranet Project Essay.

1.0 Introduction/ BackgroundManage Your Health, Inc. (MYH) is an international company that provides a variety of health care services across the globe. MYH has more than 20,000 full-time employees and more than 5,000 part-time employees. MYH recently updated its strategic plan, and key goals include reducing internal costs, increasing cross-selling of products, and exploiting new Web-based technologies to help employees, customers, and suppliers work together to improve the development and delivery of its health care products and services.| 2.0 Business ObjectiveThe Recreation and Wellness Intranet Project provide an application on the current intranet to help employees improve their health.

This application will allow employees to access various wellness programs through an internal intranet site.

3.0 Current Situation and Problem/Opportunity StatementCurrently MYH pays 20 percent more than the industry average for employee health care premiums, primarily due to the poor health of its employees. Adding this application to the current intranet will allow employees to register for company-sponsored classes and programs to help them manage their weight, reduce stress, stop smoking, and manage other health-related issues The project will not only include information about healthier lifestyles, but it will also include classes that our employees can join to take care of such issues as smoking cessation, weight loss and stress management.

We can also offer incentives for employees that join and achieve their goals, such as successful weight loss.

4.0 Critical Assumption and ConstraintsRecreation and Wellness Intranet Project must demonstrate its value to MYH as a new Web-based technology. The project team should be able to use existing hardware and software to. The new application must be easily accessible by employees and be secured.MYH must get behind the project, and make it as visible as possible.| 5.0 Analysis of Option and RecommendationThere are three options for addressing this opportunity: 1. Do nothing. We can continue to pay the increased health care costs. 2. Farm out the service to another company. This way our employees can partake of the needed services without having to build and support these services in-house. 3. Build the Recreation and Wellness Intranet Project and run it in-house. We feel that the third option is the best one. This will have lower the costs and allow us better control the project.

6.0 Preliminary Project Requirements

The main features of the Recreation and Wellness Intranet Project will be to inform employees about health issues and allow them to: 1. Register for company-sponsored recreational programs 2. Register for company-sponsored classes and programs to include weight loss, stress reduction, smoking cessation and other health related issues. 3. Track data on employee participation. 4. Offer incentives for employees to join programs and do well. 5. Other features as they are suggested by our employees and health insurance providers, if they add value to our business.

7.0 Budget Estimate and Financial AnalysisA preliminary estimate of the cost for the entire project is $200,000. This includes the hire of a temporary project manager, and the hours used by current employees to work on the project. Project savings comes in the form of reduced health insurance cost due to a healthier workforce that makes fewer claims.

8.0 Schedule EstimateThe sponsor feels that the project can be completed in 6 months, but there is some room to go over without adverse effects. The system should have an indefinite lifespan, as the increased participation by employees will keep our health insurance cost down.9.0 Potential RisksThere are a few risks involved with the Recreation and Wellness Intranet Project. The main risk is in our employees not participating in the various services offered. Therefore, employee input is necessary to make sure that those services offered are those that employees are interested in. We must also make sure that the various managers allow the employees to partake in the services.The secondary risk is that of the technical type. We must make sure that we use technologies that are currently employed by our current Intranet and HR departments. This will insure smooth integration with our current assets, and decrease the possibility of non-compatibility.

Business Case for Recreation and Wellness Intranet Project Essay

Business Admin Research Information Essay

Business Admin Research Information Essay.

1.1 Give reasons for agreeing objectives and deadlines for researching information Agreeing objectives is essential for a team or individual to know what they are focusing on to avoid wasting resources and time. Deadlines strongly affect what you research, for example, if a deadline of one week is agreed for writing a newspaper, you wouldn’t want to include today’s news as it would be very outdated by the time of publication.

1.2 Give reasons for identifying and agreeing sources of information It’s useful to identify and agree a source to use when researching information, as a standardised method means more uniform work.

All information would be in a similar format when gathered from one source, but also, there is less room for error, as the agreed upon source is likely to be accurate and widely trusted.

1.3 Explain the purpose of recording and storing information researched Storing information is essential for many reasons; these include ease of access and readability, the level of detail you are able to store, the choice to have various copies of the information in case of loss and ease of transfer.

2.1 Agree aims, objectives and deadlines for the information search Agreeing aims and objectives helps me to do my work efficiently as they give me a clear idea of what I need to find and why. Deadlines are also very important to me as our customers and our reputation are negatively affected if don’t complete work in the required time so time limits help me estimate the time I have to spend on each one, otherwise, for example, I could spend too long researching one dental practice and affect another.

2.2 Identify sources of information

Information can come from numerous sources, for example, other people such as colleagues or friends, online knowledge bases such as Wikipedia or books on the subject in question

2.3 Search for and obtain data

I can search for information using the sources stated in the previous criteria, then to obtain the relevant data, I sift through all on offer then write down or type up what I require. If the information is copyrighted I would need to contact the author and request permission to use the data.

2.4 Check that data is suitable for the purpose of the research To ensure the data I find is suitable for the purpose of the research, I should agree guidelines for exactly what is needed and in what format with my manager or whoever set the task.

2.5 Record the data and store it securely

I record information in various formats, such as documents onto my computer, memory stick or external hard drive, and onto websites such as Google Calendar and KashFlow. The majority of the information I deal with is confidential so I have to guarantee they are kept secure. I do this by setting strong passwords that only myself and any other required individuals know, and by keeping hardware on my person or locked away.

2.6 Make a record of information sources used

It’s important to record all sources I use, as I often need to refer back to previously used documents, or find other information from a particular source. All records are kept organised and secure in our lockable store room.

2.7 Meet deadlines for completing research

As previously mentioned, completing research in the set deadlines is important for me to present accurate data, and keep the strong relationship we have with our clients. To ensure I meet these deadlines, I have to carefully prioritise my workload and plan in advance how to tackle it, as I get a steady stream of new site notes every week and some are far more urgent than others.

Business Admin Research Information Essay

Typical Business Plan for a Financial Advisor Essay

Typical Business Plan for a Financial Advisor Essay.

A.) Executive Summary:

The role of the wealth manager is not to simply sell a financial product to a prospect. Instead, a wealth manager’s first concern is developing a comprehensive understanding of the client, a client-centric approach to providing financial solutions. Next the wealth manager must match the right solutions to the client’s needs and desires and ensure he or she receives an exceptional service experience. After that, product and service sales opportunities will naturally follow. Making the transition is clearly a trade-off between short-term results and long-term success.

Financial security through goals-based wealth management. As a wealth manager with Merrill Lynch, the emphasis would be on marketing and looking for ways to help clients with a broad array of financial capabilities. The objective is to help clients achieve their goals and dreams, whether it’s living in luxury, providing charitable contributions and/or leaving a legacy for family and friends; consult and advise clients how to best save and structure their investments to reach their goals.

1. What would your specific goals be for new assets under management?

a. Year 1 – 10 Million of Assets Under Management ( 10 qualified contacts per day, 1-2 new accounts per week ). b. Year 2 – 20 Million of Assets Under Management ( 20 qualified contacts per day, 2-3 new accounts per week ). c. Year 3 – 30 Million of Assets Under Management ( 30 qualified contacts per day, 3-5 new accounts per week ).

2. What would your value proposition be to a prospective client?

Financial planning will become a more important part of financial advisors’ value proposition as regulators in key financial markets draft legislation that requires financial advisors to act as fiduciaries with all clients, and wealth management firms seek to differentiate financial advisors’ offerings from those of online brokerages. Emphasis on the client, the benefit not the feature, reassuring discussion and clairity of market uncertainty, effective use of numbers telling prospective clients that our plan holders are able to enjoy the life that they planned- a client benefit focused statistic.

Five competencies, five chances to differentiate:

Provide customized financial planning advice to meet your needs in areas including cash flow management, tax efficiency, asset protection, superannuation and retirement planning, insurance, risk management and estate planning. Manage and administer individual investment portfolios according to individual client risk tolerances, preferences and directions. Protect and grow client’s wealth by utilizing the best available and independently researched investment opportunities.

Ensure no investment opportunities are missed, tax implications are addressed, and fees and costs are minimized Monitor investments closely on an ongoing basis. Obtain investment returns comfortably above market ( to at least cover management costs). Provide timely and accurate recording and reporting. To deliver caring, attentive and personalized service a Merrill Lynch Wealth Management Advisor must balance the customer value proposition with profitability, delivering the right offering to the right client segment at the right price.

a. Why should they do business with you?

Customers see their personal wealth management strategy as a lifelong endeavor that influences every financial and practical decision they will make from the immediate to distant future. Even customers who fail to grasp their bigger financial picture are driven by the need to plan for specific monetary events that will impact their lives. In both of these contexts, superior customer service, sound advice and an advisory relationship are valued features not easily copied by competitors.

The core of any successful wealth management offering is the relationship developed between the advisor and the client. Successful advisors develop a relationship with clients by demonstrating that the clients’ interests are the advisor’s paramount concern. In the context of an advisory relationship, the wealth management firm works with the client to develop, implement and monitor a comprehensive wealth management strategy.

To win new customers and retain existing ones, as a wealth management advisor, I must be perceived as competent, dependable and empathetic. Clients must also perceive that they are paying a justified price for the value that they are receiving. Client opinion is formed through a combination of personal experience, word of mouth and marketing. To compete effectively, the wealth management advisor must have a brand like Merrill Lynch that is firmly associated with the qualities demanded of a wealth management institution.

Another major component of successful wealth management is the human touch. Clients respond to charismatic guidance and a high level of attention; they feel valued when their questions are addressed promptly and personally. I have a passion for the financial markets and an overall interest in eating, sleeping and breathing this business. Moreover, I enjoy working with people and am good at communicating my ideas in a coherent and persuasive manner.

I understand that very few clients maintain all of their accounts with a single provider; an integrated view of their overall financial picture is critical if clients are to be able to make informed decisions. Financial advisors, too, should be able to access and analyze customer data efficiently. When information is automatically integrated across accounts and across institutions, advisors can concentrate on helping customers make fact-based and insightful wealth management decisions, rather than focusing on more mundane tasks like assembling statements from multiple sources.

Key Wealth Management Points:

– Perception ( Cash Management )
– Personal Touch ( Protection, Asset Management)
– Integrated Information ( Tax Planning, Retirement and Estate Planning )
– Multichannel Access ( Credit )
– Asset Allocation ( Proper Risk Management )

B.) Customer Analysis

3.What would your ideal client look like?

A substantial amount of old and new wealth needs managing. Factors like increased volatility and uncertainty, the growing number and complexity of financial products available, and increased personal responsibility for retirement planning have made many previously confident investors realize that they do, in fact, need advice. Before embarking on an ambitious and expensive wealth management effort, firms should carefully consider the needs of the customer segment they are trying to target. Designing an offering that matches the competencies that attractive segments value to the firm’s capabilities is the key to successful wealth management.

Ideal Client Profile:

Identifying attractive customer segments is just the first step in outlining a viable wealth management strategy. I would focus on the wealthiest customers, and then take full advantage of their established reputations and relationships. Successful entrepreneurs, professionals, business owners, corporate executives, young affluent individuals who have inherited wealth from older generations, and retirees. Determine what motivates the ideal client, what causes them pain, and why they would be interested in buying from me. Then determine how I am different from the competition and how I want to be viewed by my prospective client. Highlight why I am are different and what value I can offer to my clients.


– Long-term investment focus – they seek both long-term investment performance and wealth preservation – Fee-based preference for wealth management, including portfolio management and integrated financial planning. – Financial delegators open to delegating the task of portfolio management due to insufficient time, interest and/or knowledge – They respect and follow advice from experienced/qualified professionals – They are willing to share and discuss their financial circumstances and objectives

– They understand that the market’s volatility and unpredictability may temporarily negatively affect the portfolio’s performance – They are committed to implementing a written financial strategy to pursue important goals – Want to leave a legacy for the people they love, instead of a tax burden – Recognizes value in delegating investment research and personal financial planning to a professional. – Wants to be educated on the investments, but does not have the time, and/or does not enjoy managing investments. – Ability to be open to advice from professionals and follow through on agreed upon recommendations – Committed to achieving financial milestones

Ideal Client Activities:

– Enjoy traveling, staying active, and being young at heart – Enjoy spending time with family, friends, community activities, and socializing. – The primary source of growing my book of ideal clients will likely be referrals. – Strategic partners and within centers of influence.

– People tend to know and socialize with people just like them. – Psychographics in addition to demographics (magazines, groups, vacations ) – My book of ideal clients will then evolve over time.

a. Investable Assets

Investment assets starting at least of $250,000- $300,000 Net worth of at least $1,000,000 +

b.Key Wealth Management Issues

Many financial institutions currently view wealth management as an integrated set of products: cash management, asset management, protection, credit, retirement and estate planning, and tax planning. Given that most wealth management products are roughly equivalent regardless of who offers them, clients are less interested in product specifics—assuming they meet certain basic requirements—than in the elements of service that surround the products.

Wealth Management is a process – not a product or a one-time event. The Wealth Management Process provides a long-term strategy for a client’s financial future. Financial advisors need to conduct a thorough financial assessment before making any specific recommendations and build a clients portfolio with an eye on stability and risk management, long-term retirement planning long-term care, life insurance and annuities. It is incumbent upon a Wealth Management Advisor to take a disciplined and structured approach to helping a client to manage these issues. Before embarking on an ambitious and expensive wealth management effort, Financial Advisors should carefully consider the needs of the customer segment they are trying to target. Designing an offering that matches the competencies that attractive segments value to the firm’s capabilities is the key to successful wealth management.

The Wealth Management Process includes the following phases:

Discovery and Data Gathering:

At the beginning of the process, it is important to sit down and discuss each client’s unique values, priorities and goals and help them to define their personal and financial goals, understand their time frame for results, and their comfort level with risk.

– What are the current assets in their portfolio?
– How much do they plan to invest each month?
– How many years will they be investing?
– How much do they expect their portfolio to return over 3 months, 1 year, 5 years?
– What is their current asset allocation?
– What are the benchmarks for their current portfolio?
– How much risk can they tolerate?
– How much money can they invest right now?
– How much money will they need to reach their retirement goals?
– How much money can they contribute each month?


Once the fact finding, discovery and data gathering is completed, the results are then reviewed and a Wealth Management Plan is designed to meet the individual client’s goals and objectives. This step of the process includes such areas as analyzing assets, liabilities, cash flow, risk management, current investments and strategies related to tax issues.

Typical Business Plan for a Financial Advisor Essay

Ethical and Moral Issues in Business Essay

Ethical and Moral Issues in Business Essay.

Ethical issues and Moral issues are completely different and it has different values. Morals are more of a motivational word based on ideas and if you are right are wrong. You give yourself a certain expectation and nothing can change that. This is standards that are set by you in order to have a great career in the future. Ethics is a professional based word that is based on your performance. The techniques in a workplace are professional and represented well if you can say you have good ethic skills.

Your morals can be there but if you don’t have good ethics in the working environment, you may not be with that employer long.

You can have good morals but your ethical issues can be a problem with lack of dedication. It is important to have good ethical and moral issues because it shows good leadership and in order to succeed in today’s job industry and be successful you have to have both.

Let’s take me for instants; I work for a multi-million dollar company and we have a mission statement this year that states “ALL IN” meaning we have to give it our all and we have to know that at the end the day, if I did not get that display or sell, at least I tried and the next day try it again.

That is giving your all. My standard is set high which would include my morals to be the best. My working skills are recognizable from all management, so that means I have great work ethics. If I don’t set myself to have my morals and ethical issues intact, I will not keep a job and be successful in the future. Business Ethics is when the business has to make a conscious decision on its problems such as harassment, employee relations and discrimination to name a few. It is everyone’s hope that businesses choose to do what is right meaning ethical.

Businesses become driven by profit and margins and as they grow, the hunger to achieve more money increases and the businesses starts to fall off its ethical mission statements. Managers play a major role in this process because they tend to forget what there position is in place for and they forget about the values that the company need when it comes to work relations. Personal Ethics could be defined as what a person believes to be right. This varies from person to person as these are influenced by culture, beliefs, experience, law and religion.

This person may have their own expectations in the work environment and feel that there way is right and not what the business says it is. The personnel ethics of a person is influence by the business ethics because the expectations can be high are low. If a worker feels that the ethics that the business proceeds is not right, then he are she should confront the person in charge and come to an agreement of the problem. There should be balance when it comes to people in the working environment. A couple of months ago at my job, we had a problem with some of the salesmen’s personnel ethic issues.

The business ethics had its own standards but it was not agreeable with the market feedback that is giving to us; meaning the sales. The salesmen would focus on the criteria one way and when we had a market tour, some of them were dealt with in ways when it could have been avoided. The issue was resolved before any further action had taken place, but if communication would have been a priority, disciplinary action would have not taken place. If we take control our personal & business ethics, we would create a better social responsibility.

Ethical and Moral Issues in Business Essay

Evaluating a Business Code of Ethics Essay

Evaluating a Business Code of Ethics Essay.

Businesses in today’s society share a purpose, a vision, that relates philosophy and principles of ethics to better meet the needs of the organization and stakeholders, including customers, employees, shareholders, suppliers, and communities. Without professional ethics, businesses and its programs would not have the ability to be successful. This paper will examine Humana, its business code of ethics, and its mission statement that assists in organizational values and goals of the company. The type of ethical system used by Humana will be explored, along with examples that support this system and its attributes.

In addition, how the code of ethics is identified and used within the company will be addressed as it pertains to employees, management, and its board of directors. Upon further evaluation, this paper will explore the need for modification, if any, to their existing code of ethics. Reactions to the code of ethics, its effects of organizational culture on the code of ethics, and its effects on the organization will be defined.

Lastly, this paper will provide an analysis of Humana’s business code of ethics and how the analysis exhibits significant key concepts to maintain and promote ethical decision making and business success.

Business Code of Ethics and its Mission Statement Businesses developed codes of ethics starting back in the early 1970s within the United States. Business ethics “is the study of standards of business behavior which promote human welfare and good” (Santa Clara University [SCU], 2011, para. 1). Humana, a company that provides and administers health insurance plans, established its formalized code of ethics in 1995 and since established a 24-hour access to their ethics assistance hotline demonstrating its commitment and accessibility to business ethics (Humana, 2011, para. 1).

Humana’s code of ethics was developed as a means of understanding Human’s ethical standards and promoting open communication and the well-being of members as it pertains to these standards. Humana’s code of ethics stresses its mission and vision of the company: “to become the most trusted name in health solutions. To foster a successful environment, Humana’s code of ethics is designed to educate each associate to contribute to the company’s success through ethical behavior and by doing the right thing in the right way for the right reasons” (McCallister & Catron, 2011, p. 1).

Defining the purpose of the business’s code of ethics allows for better understanding of ways to promote ethical business behavior. Deontological Ethical System Ethical systems in business are the “contexts for making decisions in ethics, much like rules in an athletic competition,” giving significance and meaning to the performance and conduct of employees within an organization (Ulrich, 2010, para. 2). Ethical systems can be broken into subcategories depending on its purpose. Humana demonstrates a deontological, also known as a duty-driven ethical system. “Deontological comes from the Greek deon, meaning, duty.

Deontologists base their decisions about what’s right on broad, abstract universal ethical principles or values such as honesty, promise keeping, fairness, loyalty, rights, justice, compassion, and respect for persons and property” (Trevino & Nelson, 2007, p. 98). Humana’s business code of ethics lays out its purpose and mission statement and supports these objectives by establishing ethical principles that employees and stakeholders are to follow to ensure compliance, quality, and business success. Within Humana’s business code of ethics, it discusses the key to integrity.

The guidelines that are incorporated and integrated into Humana’s ethical code address several key issues that exemplify the business’ duty and obligations to ensure ethical standards are followed. For example, the key components of Humana’s code of ethics focuses on: “Honesty: act fairly and “honestly with those that are affected by our actions; compliance with laws: comply with laws, regulations, and act in such a manner that the full disclosure of all the facts would reflect favorably; business responsibility: adhere to the highest ethical standards of conduct; and responsibility for reporting violations: promote elationships based on trust and respect and reference policies, ethics hotline, and the ethics intranet within Humana’s website that further addresses compliance with Humana’s business code of ethics” (McCallister & Catron, 2011, p. 4). These components provide examples of a duty-driven, deontological ethical system. The code of ethics defines the ethical standards and expects employees and stakeholders to abide by these regulations in order to ensure the highest ethical standards and decision-making abilities.

How the Code of Ethics is Used Humana’s code of ethics defines its mission and goals and how stakeholders can actively participated in ethical decision making within the organization. Employees, for example, are provided with Humana’s business code of ethics on the first day of employment. The purpose of this is to clearly define the organization’s ethical standards and address how employees can adhere to these standards through Humana’s vision. Employees are required annually to view and complete an ethical compliance training course.

This reinforces Humana’s ethical standards and resources that are available when confronted with these ethical dilemmas. For example, one particular part of the code discusses how employees have the right to report workplace violence and harassment. The code lists several examples of unacceptable and unethical behavior that attributes to workplace violence. In addition to the 24-hour ethics hotline, the code of ethics provides additional resources and people to contact if this is occurring.

Furthermore, if violence is occurring outside of the workplace, affecting any one of Humana’s employees, they are also encouraged to discuss this with Employee Assistance. Employee assistance provides Humana employees with support services and resources when faced with violence whether at home or in the workplace. Humana discusses how employee performance and success can be affected both internally and externally and feels each employee should be given the resources and support no matter where employees encounter violence.

In addition to Humana’s business code of ethics, management and its board of directors also have another code of ethics, specifically addressing the ethical guidelines for leaders and managers, and directors within the company. The purpose of a corporate level code of ethics is to “maintain the highest standards in Humana’s financial reporting with governmental agencies” (Humana, 2004, p. 1). Management has responsibilities that require interaction and relationships with businesses, regulating and governing boards, and many stakeholders that participate in Humana’s business entities.

The corporate code of ethics was defined for this reason and discusses standards such as conflicts of interest, accurate reporting, and compliance with these ethical guidelines. In addition, guidelines that address “avoiding personal activity or association with people that could interfere in making good judgment concerning Humana’s best interests” (Humana, 2004, p. 2). The corporate code of ethics is additional resource and tool that managers can refer to when faced with ethical dilemmas such as these. Code of Ethics and Modification

Upon analysis of Humana’s business code of ethics, the guidelines are clear. Humana’s code of ethics is current, accessible, easily understood, and it provides a plethora of useful tools and resources that govern these ethical standards and offer support for Humana employees when face with ethical issues. In addition, a code of ethics is to: provide framework of acceptable behavior, promote high standards of practice, enhance a sense of community, create transparency in business activities, and offer guidelines to comply with government laws and regulations” (Fieser, 2008, para. ). Humana’s business code of ethics not only addresses the significant portions of a code of ethics, but also has 24-hours access to these ethical resources and guidance. When establishing a code of ethics, it is imperative to address key components of a company’s mission and company goals, along with clear guidelines that support a business’ vision. Reactions to a Code of Ethics When businesses prepare a code of ethics, consideration to addressing this code to ensure compliance is significant to ethical and organization success.

A code of ethics should be addressed immediately upon hire or the establishment of a business relationship. Addressing it early promotes the significance of the code of ethics along with guidelines that employees and business partners should be informed up early on to ensure they are able to support these guidelines while maintaining the business relationship. Employees and business partners can either react negatively, stating that this code of ethics tells an employee what to say and how to act.

Others react in a positive and constructive manner and understand the need for ethical guidelines within a business to ensure compliance, yet more importantly, ethical decision making in accordance within Human’s mission and vision, to ensure continued business success and growth. The organizational culture promotes the highest ethical standards that are directly in line with Humana’s mission and its guidelines that support the key to business integrity.

The Effect of a Code of Ethics Businesses are aware of downfalls and economic disasters that attribute to the lack of ethic performance and decision making. Humana’s business code of ethics affects employees, the organization, its stakeholders, and the surrounding communities in a way that displays moral and ethical importance, integrity, and success, attributed by the development of this code of ethics. Furthermore, Humana’s code of ethics promotes business responsibility, honesty, and fairness.

These characteristics affect business and community relationship by promoting trust, a significant behavior in organizational and community success. Summary of Ethical Analysis In reviewing Humana’s business code of ethics, it is apparent that this 52 page code of ethics was not established merely to put it in place. It was established as a way of making clear and important ethical guidelines that support business growth and success.

From its mission statement and supporting regulations, Humana’s business code of ethics supports high ethical standards, promotes trusting relationships, and keys to integrity. Addressing these key components and how employees can support these guidelines, along with several support tools, resources, and 24-hour access to ethical support, Humana provides a business code of ethics that supports ethical decision making and high ethical standards.

Evaluating a Business Code of Ethics Essay

H&M: Target Costing and Business Model Essay

H&M: Target Costing and Business Model Essay.

In the world globalization competitive increasingly environment, how is H&M’s business model maintain and enhance the competitiveness of high-speed growth? With the research of target costing and business model of system innovation theory, you can understand the H&M’s successful business. And you can understand to make much more profit by controlling target costing. Password 1: Accurately grasp and dig into the demand of the client value. Customer, this is undoubtedly the center of the whole enterprise.

Philip Kotler , who from American Marketing From think solving the problem in accordance with the conventional innovation of logic in such a competitive market is no longer applicable. But creative thinking that is based on customers showing growing charm. It is by the original alternative concept and product development to stimulate new markets and profit growth.

Obviously, H&M is the master of “creative thinking” to customer demand, H&M noted that almost every shopper likes fashionable design and image of luxury clothes.

But the vast majority of people have to wait until the clearance sale. Why cannot meet the customers demand of famous brand fashion design and cheap parity? According to the survey of professional organizations Verdict Research, the average price of clothing in 1995 fell 34%. But in the same period the number of women buying clothes has doubled. This suggests that consumers pay more attention to the fashion style. They buy more clothes, but wearing the times less.

Meanwhile, the current consumer market is showing to the two extreme diversion state of “luxury” and “save money. In the “luxury” mode, consumers buy product and service of high quality, reflecting the personality characteristics and meeting the emotional needs at any cost. In the “save money” mode, consumers try their best to find low-cost but high-quality goods. These “contradictions” demand implies the desire of consumers for affordable fashion. H&M Fashion Group, which is to see the change of social structure and consumers, seeking to find crack password equilibrium point, creating a cheap fashion clothing brand positioning. It use the combination of its use of changing fashion and luxury quality and public evaluation to realize trafficking “fashion” like McDonald’s selling hamburgers.

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H&M: Target Costing and Business Model Essay

Forms of Business Organization Essay

Forms of Business Organization Essay.

The study of business organization is a study of complexity: as each business is different, each form of business organization is also unique. From a local hot-dog vendor to a trucking company, from a restaurant to a multinational, each business has different legal, moral and ethical concerns, and there is no “one-size-fits-all” approach to determine how a business should best be organized. Take the first two businesses, the hot-dog vendor and the trucking company, as an example: assume that each business is operated by a single individual.

While one may argue that the proper form of organization for each would be a sole proprietorship, that would not be the case: the hot-dog vendor could clearly be operated as a sole proprietorship, but not the trucking company. Because of the nature of the trucking business, limiting the liability of the principals is vital: thus, the best form of organization for the trucking company would most likely be an LLC (limited liability company).

There are six main forms of business organization, and each has very distinct advantages and disadvantages: some work best for small enterprises, some are better when outside vendors are involved, some are more suitable for larger companies… indeed, there are many variables to consider when determining the organization of a business.

Sole Proprietorship

The most common form of business organization is called a sole proprietorship. The most common way to organize a business, describes it thusly: The sole proprietorship is a popular business form due to its simplicity, ease of setup, and nominal cost. It is the easiest form of business to setup: again, according to Entrepreneur, a sole proprietor need only register his or her name and secure local licenses, and the sole proprietor is ready for business. As the business is not incorporated, all assets and liabilities relating to this form of business are under the control of the individual who started the business; thus, the business owner assumes full liability in the event of a legal judgment. In addition, as there is no legal protection for the business (it being indistinct from the owner), it is entirely possible for a sole proprietor to see their business liquidated as the result of a lawsuit.

The owner has complete control of this form of business: no control has to be granted to anyone else. An advantage to this is that they retain all profits: nothing has to be shared with anyone else, and their return on investment is 100%. Income taxes are easy to calculate: a sole proprietor need only declare their business income on their individual tax form. Because of this, there is no real additional workload or burden to the owner unless they choose to do business under a name other than their own, in which case they would be required to register their business name with the particular jurisdiction they reside in.

The location of the business only matters if an individual wants to avoid a particular jurisdiction’s individual income taxes (corporate taxes are not filed for this form of business): for instance, some states do not charge income tax. No separate legal entities have to be formed if the business changes location: the business is connected to the individual and the business exists as long as the individual chooses to operate it. This form of business has a limited longevity: according to Entrepreneur, sole proprietorships rarely survive the death or incapacity of their owners and so do not retain value. They generally dissolve upon the death of the principal and so cannot be passed on to heirs or others.

General Partnership

According to the Small Business Administration, a general partnership is a business owned by two or more people, with the business partners equally sharing the responsibilities of the business. Like a sole proprietorship, the individual owners of the business assume unlimited liability: it is possible for the business owners to be liquidated due to a legal judgment or the failure of the business. Additionally, because the actions of one of the partners are binding on all the others, the entire partnership can prosper or suffer due to the actions of a single member (The Free Dictionary). Also like a sole proprietorship, a general partnership is, as Quick MBA puts it, a “?…tax reporting entity, not a tax paying entity.”? In other words, the partnership is only a method of business organization; it is not a legal entity for tax purposes, and the individual business owners assume tax liability separately.

The longevity of a partnership is potentially greater than a sole proprietorship: for example, since there are one or more other partners, the death of one member does not mean the end of the business since their share can be passed along to heirs. Control in a general partnership is shared equally: since there is no one owner, all decisions (and their effects) are shared equally. Profits are divided among the partners: while the liabilities are shared, the profits can sometimes be divided unequally upon agreement.

This can affect return on investment: since it is possible to invest in a partnership without being an active member, it is possible to lose money on an investment if the active principals make decisions that affect the business negatively. As with a sole proprietorship, location is not a real concern with a general partnership: since the principals, not the business, are the ones responsible for the tax liability, the decision on where to locate has little to do with corporate tax liability. Like a sole proprietorship, the only real regulatory burden is if the general partnership chooses to do business under a name under their own: the name would have to be registered.

Limited Partnership

A limited partnership is similar to a general partnership. Quick MBA describes a limited partnership as a partnership with two or more partners, with one or more general and limited partners. The biggest difference is that a limited partner does not assume unlimited liability: their liability is limited to the amount of their investment. Also, since general partners are held wholly liable, they are often LLC’s (limited liability corporations) rather than individuals. Like a general partnership, income and income taxes are generally divided among the principals, but a limited partnership has to meet certain criteria to enjoy this right: otherwise it is taxed as a corporation.

The rules of continuity in this sort of organization are different from those of a general partnership. The continuity of the organization is assured: while a general partnership generally must dissolve if a partner leaves, shares of a limited partnership can be created and can be transferred, bought or sold, though principals in the organization have the right to first bid (Quick MBA). Control of a limited partnership rests in the hands of the general partners: because they have management control, they do not have to grant control to anyone else in the organization: in fact, limited partners lose their status if they take a managing role in the business.

Like the general partnership, the profits are shared between the partners: because limited partners are investors in the company, they often receive a greater share of the profits because of their financial contribution. Location concerns as the same as in a general partnership. Concerns of convenience or burden are also the same unless the partnership acts as a corporation, in which case corporate regulations must be followed.


According to Wikipedia, C-corporations are corporations that are taxed separately from their owners. In the United States, corporations are considered “people” for tax and liability purposes: in this form of business organization, C-corps are individual “persons” considered separate from shareholders and directors ( Because of this, the liability of the shareholders (note that in a corporation, shareholders are the owners of the organization) is limited: shareholders are protected from assuming the burdens of the corporation if it is unable to meet its obligations. Income taxes for the c-corp are calculated at the corporate tax rate: sometimes this rate is lower than the income tax rate of the shareholder’s, but oftentimes it proves to be much higher.

Dividends are subject to the capital gains tax of 15%, then subject to the income tax rate of the shareholder; thus, the profits have been taxed twice. The longevity of this form of organization is perpetual: because the company is owned by shareholders, even if the owner leaves the company can continue to exist (The Company Corporation). Control of a C-Corp rests in the hands of shareholders: the owner has control only so far as their share of the company allows. Shareholders generally elect a board of directors to act on their behalf. As with control of the company, profits belong to the owner only in proportion to the amount of stock in the company they possess.

Compared to the forms of organization discussed previously, location has a great deal to do with how and where a C-Corp does business. Phrases such as “Nevada corporation” or “Delaware corporation” have entered popular usage: they refer to corporations incorporated in these states solely due to their business-friendly incorporation laws (i.e. easy incorporation, no need to elect a board or issue stock, etc). Because corporations are regulated by the states, often times businesses will be incorporated in a state other than the one they do business in. This form of business organization comes with more of a burden on the business owner than the previous three: the states and the federal government heavily regulate corporations, these forms of business are more expensive to establish, and the paperwork burden is much greater.


S- and C-corps are very similar, but there are some differences. Like a C-corporation, shareholders are not individually liable for business debts and resopnsibilities (BizFilings). Also, the are similar when it comes to the longevity, profit retention, and location requirements of an S- or C-corporation. The two biggest differences involve the control of the company and the income tax burden. In a C-corp, an unlimited number of shareholders are allowed, and they can be domestic or foreign nationals; however, a S-corp only allows 100 shareholders, and they must be US nationals. When it comes to income taxes, C-corps file as a corporation and corporate taxes are paid; however, an S-corp is a “pass-through”, meaning that taxes on earnings are filed and paid by the individual shareholders.

Limited Liability Company

A limited liability company, according to Wikipedia, is a form of organization that combines the features of a partnership with those of a corporation. Like a corporation, liability is limited: the personal assets of business owners are generally shielded from those of the company. Income taxes are treated differently from the other forms of organization: an LLC can elect how it wants to be treated for tax purposes. LLC’s are, like partnerships and sole proprietorships, pass-through entities: taxes are generally not calculated on the firm as a whole, but on the earnings reported on the individual tax returns of the principals. The continuity of the organization depends on how it is organized: if it is organized as a partnership, the longevity is assured.

The principals of the company have control of the company: if one person alone is in charge, the LLC can operate as a sole proprietorship for control purposes. Profits are divided among the individual owners: a single owner retains control of all profits, but partners divide the proceeds. The location of an LLC can be important: for instance, in Washington D.C., LLC’s are not allowed to pass-through income for tax purposes, and some states assess levies for the privilege of operating as an LLC (Wikipedia).

Compared to corporations, LLC’s have only a minor paperwork burden: though some states regulate them more than others, there is often little more to do aside from filing the standard sole proprietorship/partnership paperwork. Different companies call for different forms of organization: what may work for the sole owner of a shop may not be successful for a large organization. Oftentimes the greater paperwork or regulatory burden imposed on corporations is offset by the advantages of incorporation; sometimes an LLC or partnership may work better. Before deciding on the form of business organization, a prospective business owner will do well to perform a thoughtful analysis to determine which approach will suit their business model.

Internal Revenue Service. Sole Proprietorships. [->0][->1]. Accessed October 9, 2012. Enterpreneur. The Basics of Sole Proprietorships. [->2]. Accessed October 9, 2012. Small Business Administration. Partnerships. [->3]. Accessed October 6, 2012. Quick MBA. The General Partnership.

Forms of Business Organization Essay