Business and Ethics by Carlos Andreu

Business and Ethics by Carlos Andreu 

· What are some interesting mission statements or values statements of some of the companies in your industry? What do their statements reveal about them?

I was looking at some major retail companies mission statements. I was reading about Target’s, Home Depot and Costco Wholesale mission statements. Home Depot’s statement caught my attention because unlike many other companies, Home Depot breaks down its mission statement into “8 corporate values to guide employees at all levels”. The 8 corporate values are: (1)"Taking care of our people: The key to our success is treating people well. We do this by encouraging associates to speak up and take risks, by recognizing and rewarding good performance and by leading and developing people so they may grow. (2)"Giving back to our communities: An important part of the fabric of The Home Depot is giving our time, talents, energy and resources to worthwhile causes in our communities and society. (3)"Doing the right thing: We exercise good judgment by "doing the right thing" instead of just "doing things right." We strive to understand the impact of our decisions, and we accept responsibility for our actions. (4)"Excellent customer service: Along with our quality products, service, price and selection, we must go the extra mile to give customers knowledgeable advice about merchandise and to help them use those products to their maximum benefit. (5)"Creating shareholder value: The investors who provide the capital necessary to allow our company to grow need and expect a return on their investment. We are committed to providing it. (6)"Building strong relationships: Strong relationships are built on trust, honesty and integrity. We listen and respond to the needs of customers, associates, communities and vendors, treating them as partners. (7)"Entrepreneurial spirit: The Home Depot associates are encouraged to initiate creative and innovative ways of serving our customers and improving the business and to spread best practices throughout the company. (8)"Respect for all people: In order to remain successful, our associates must work in an environment of mutual respect, free of discrimination and harassment where each associate is regarded as a part of The Home Depot team."

This statement reveals that Home Depot is devoted to give back to all of their stakeholders. They focus on costumer satisfaction, by providing good services and on creating loyal costumers for their brand by building strong relationships based on “trust, honesty and integrity”. Their statement also reveals that they base their decision thinking on what is best for their stakeholders, not just taking a decision that can affect the community or environment, for example, to gain a larger profit: “We strive to understand the impact of our decisions, and we accept responsibility for our actions.” Also, I was reading that these values are central to the company’s success. They point out in there website that these values are their “competitive advantage in the market”. As I pointed out in the first posting, companies make profit not only because of selling products. Retailers need to make sure costumers are satisfied with their products and services because this creates loyal costumers and stakeholders for companies, which creates long-term profit. I think Home Depot seems to have values that fulfill this.

Here are some other mission statements:

Target: "Our mission is to make Target the preferred shopping destination for our guests by delivering outstanding value, continuous innovation and an exceptional guest experience by consistently fulfilling our Expect More. Pay Less. ® Brand promise." "To support our mission, we are guided by our commitments to great value, the community, diversity and the environment."

Costco: "Costco's mission is to continually provide our members with quality goods and services at the lowest possible prices. In order to achieve our mission we will conduct our business with the following Code of Ethics in mind: Obey the law, take care of our members, take care of our employees, respect our vendors If we do these four things throughout our organization, then we will realize our ultimate goal, which is to reward our shareholders. "

Links:

https://corporate.homedepot.com/wps/portal/? - Look for values under our company

http://retailindustry.about.com/ - look for TargetCorp. and Costco Wholesale mission statement

Sincerely,

Carlos Andreu 

Recent News on What Reailers are doing and how it effects them

During my recent Readings I have found out several new things. In the "Fashion" world, designers are already trying to figure out next springs styles and trends. At these high end fashion and runway shows, corporations like Neiman Marcus, Macy's, Bloomingdale's, and Nordstrom, are sitting in the front rows, eying which clothing lines they like and don't like. Something that most people don't know is that lower priced retailers such as Target and J.C. Penny are present at these super high end fashion shows as well.

I think that these lower priced retailers such as, Target and J.C. Penny are doing a great thing by attending these fashion shows. This is a great way for these lower priced retailers to stay innovative, up to date, and maybe even ahead of the curve.This is crucial in the present economy because, if you are selling products that are trendy you are selling products. Staying appealing to the consumer is crucial because you have to make sales. In this economy, cotton prices are sky rocketing, and labor costs are rising, it is crucial for some of these company to play their cards right.

"We pay attention to the shows," said Penney's trend director Cyndie Washburn-Nester. "We are looking at what people are doing."

On the other hand, there is a general curve in the way higher end consumers are spending there money. They are gravitating toward the higher end products and not only looking for what is on sale. The high end consumers are willing to pay the full price.


http://www.marketwatch.com/story/investing-through-the-lens-of-fashion-2011-09-20


Sincerely,

David Connolly

Business and Ethics

· What are some interesting mission statements or values statements of some of the companies in your industry? What do their statements reveal about them?

I was looking at some major retail companies mission statements. I was reading about Target’s, Home Depot and Costco Wholesale mission statements. Home Depot’s statement caught my attention because unlike many other companies, Home Depot breaks down its mission statement into “8 corporate values to guide employees at all levels”. The 8 corporate values are: (1)"Taking care of our people: The key to our success is treating people well. We do this by encouraging associates to speak up and take risks, by recognizing and rewarding good performance and by leading and developing people so they may grow. (2)"Giving back to our communities: An important part of the fabric of The Home Depot is giving our time, talents, energy and resources to worthwhile causes in our communities and society. (3)"Doing the right thing: We exercise good judgment by "doing the right thing" instead of just "doing things right." We strive to understand the impact of our decisions, and we accept responsibility for our actions. (4)"Excellent customer service: Along with our quality products, service, price and selection, we must go the extra mile to give customers knowledgeable advice about merchandise and to help them use those products to their maximum benefit. (5)"Creating shareholder value: The investors who provide the capital necessary to allow our company to grow need and expect a return on their investment. We are committed to providing it. (6)"Building strong relationships: Strong relationships are built on trust, honesty and integrity. We listen and respond to the needs of customers, associates, communities and vendors, treating them as partners. (7)"Entrepreneurial spirit: The Home Depot associates are encouraged to initiate creative and innovative ways of serving our customers and improving the business and to spread best practices throughout the company. (8)"Respect for all people: In order to remain successful, our associates must work in an environment of mutual respect, free of discrimination and harassment where each associate is regarded as a part of The Home Depot team."

This statement reveals that Home Depot is devoted to give back to all of their stakeholders. They focus on costumer satisfaction, by providing good services and on creating loyal costumers for their brand by building strong relationships based on “trust, honesty and integrity”. Their statement also reveals that they base their decision thinking on what is best for their stakeholders, not just taking a decision that can affect the community or environment, for example, to gain a larger profit: “We strive to understand the impact of our decisions, and we accept responsibility for our actions.” Also, I was reading that these values are central to the company’s success. They point out in there website that these values are their “competitive advantage in the market”. As I pointed out in the first posting, companies make profit not only because of selling products. Retailers need to make sure costumers are satisfied with their products and services because this creates loyal costumers and stakeholders for companies, which creates long-term profit. I think Home Depot seems to have values that fulfill this.

Here are some other mission statements:

Target: "Our mission is to make Target the preferred shopping destination for our guests by delivering outstanding value, continuous innovation and an exceptional guest experience by consistently fulfilling our Expect More. Pay Less. ® Brand promise." "To support our mission, we are guided by our commitments to great value, the community, diversity and the environment."

Costco: "Costco's mission is to continually provide our members with quality goods and services at the lowest possible prices. In order to achieve our mission we will conduct our business with the following Code of Ethics in mind: Obey the law, take care of our members, take care of our employees, respect our vendors If we do these four things throughout our organization, then we will realize our ultimate goal, which is to reward our shareholders. "

Links:

https://corporate.homedepot.com/wps/portal/? - Look for values under our company

http://retailindustry.about.com/ - look for TargetCorp. and Costco Wholesale mission statement

Standing Out with CSR

http://ethisphere.com/wme2011/

This article came from a website called Ethisphere who is "a leading international think-tank dedicated to the creation, advancement, and sharing of best practices in business ethics, corporate social responsibility, anti-corruption, and sustainability" (Ethisphere). This article in particular was about the winners they selected as 2011 World's Most Ethical Companies. They chose these winners based off of 4 criteria: (1) ethics and compliance program, (2) reputation, leadership, and innovation, (3) governance, and (4) corporate citizenship and responsibility. There is no set number of companies that make the list; is is simply based off of recognizing companies that "go beyond making statements about doing busness ethically and translate those words into action" (Ethisphere).

For the year 2011, 110 companies made the list. Of those 110, five were from the retail industry. They included three American companies: Gap, Patagonia, and Timberland. The other two were Adidas (Germany) and Comme iL Faut (Argentina). The process to be placed on this list is lengthy and in depth, so these 5 companies are clear stand outs in the retail industry, and showed they have outstanding ethics programs. Patagonia has been on the list since the year 2006 and has continued going strong. The Gap, Timberland, and Comme iL Faut have all appeared on the list prior to 2011, but none have stayed on it consistently. Something interesting to be noted is that Nike has been on the list since 2006 with Patagonia and 2011 is the first year they were not selected as one of the World's Most Ethical Companies.

Ethics are KEY in Retail!

What Are Key Ethical Issues This Industry Faces?

The retail industry finds way to face a variety of ethical issues. Trust between workers and managers is something i have recently discussed in my business class and that must be based on fairness, honesty, openness and moral integrity. Leadership can help instill corporate values in employees as well. The industry has many employees and people could end up cheating or using fraud and finding information that is private to the company and using it to invest in stocks because they have one leg up on people and may know future outcomes. This clearly is unethical because companies in the retail industry are all competing and it is not fair for one to lost out because of unethical people that work for the companies. Increasing numbers of companies have adopted written codes of ethics for their businesses and employees to follow. They focus on behavior, environmental supports, and etc.

Eric Petroff, a writer in retail for investopedia said that "with such financial rewards at stake, the competition acquire new business is incredibly fierce" (www.investopedia.com). A major career consideration is ethical conflicts brought about by realizers and the sectors in itself. Brokers do not get paid unless the product or service is sold. Customers interests sometime take a "back sear to the broker's need to generate income." Brokers in the retail industry are constantly weighing the need to make money against making appropriate recommendations. That is an ethical issue for them to face with trading the stocks and sometimes knowing information (www.investopedia.com).

ALWAYS,

FALEN RAUCHWERGER

http://www.cnbc.com/id/44626390


The retail industry is actually doing well in this sluggish economy. In fact, sales are predicted to increase by more than 3% in the next coming months. It seems that consumers are not worrying about their wallet so much when they are head out to the store to buy. According to this article, they are not foreseeing a gloom and doom for the industry. In the next coming weeks there will be many predictions made on how the holiday spending in the retail industry will turn out.

How Does the Retail Industry Work and Make Money?

This article on investopedia.com answers a lot of questions




http://www.investopedia.com/features/industryhandbook/retail.asp#axzz1YP4vU8Mj


The term Inventory Turnover is crucial.


According to investopedia  this is calculated by taking the sales over the inventory     sales
                                                                                                                                               Inventory




or            Cost of Goods Sold
                 Average inventory






FYI-Investopedia is a very credible source, nothing like wikipedia even though it sounds like it






Sincerely,


David Connolly

· What are the basic economics of the industry? How do companies make money? What are their costs?

· What are the basic economics of the industry? How do companies make money? What are their costs?

Researching in the Journal of Retailing, I was reading that companies in the retail industry make money by being innovative, effective and efficient. Innovation attracts customers, for example, technological advances can make products easier to reach and more efficient for costumers, therefore improving the costumer experience and costumer loyalty. For example, Redbox makes its product much more reachable to every buyer by using the kiosk technology to allow costumers to engage in a self-service purchasing process. This not only is an advantage for costumers but it also gives benefits to the company, by reducing the cost for employees. Companies make money by being effective, for example, Zara increases revenue by matching product assortment with demand and implementing flexible prices, which involve different types of buyers in the market. To make money in the retail industry, companies must be efficient by reducing cost. For example, Netflix made an efficient advancement by introducing an “industry-standard bar-code sorting machine to handle the odd-shaped envelopes used to mail out DVD’s, increasing the number of envelopes processed to 5,000 envelopes and hour”, this increases productivity. Some of the cost retail industry companies faces are employee wages, obtaining products from manufactures, and paying for advertisement. By being innovative, effective and efficient, businesses can reduce these costs. Finally, what really makes money for a business is improving the costumer’s experience. Redbox’s revenue “grew by 99% in 2009 as it installed over 8,700 new kiosk”, improving the costumer satisfaction because it was a simpler and faster purchasing process for costumers. Making money for retailers is more than just selling products, retailers need to make sure costumers are satisfied with their products and services because this creates loyal costumers for companies. Loyalty assures long-term profits for companies because buyers will continue buying if satisfied. “Profits from retail business model innovation (improving costumer experience) can exceed the profits that can be extracted from product or process innovations (which often mainly influence short-term gains)”.

We should focus on a company or companies that have this elements to make our investment suggestion much more valid.

Supply and Demand for Retail

Discuss Supply and Demand in the Retail Industry

As in any industry, supply and demand in the retail industry are a result of several factors that each contribute to the economy and affect how much people are willing to buy and also how much sellers are willing to sell. Some of the major factors in the retail industry that affect supply and demand include competitors and availability of substitutes, annual holidays, and the threat of new entrants.

Competition in the retail market and the availability of substitutes are arguably the biggest contributors that affect the supply and demand in the market. There is such a vast selection of retail stores and competition is constantly present. This is especially evident in places such as a shopping mall, where clothing stores are lined up next to each other and have to compete for customers. Also, substitutes are very readily available in retail. For example, Under Armour and Nike provide very similar items so it is easy to substitute one company for the other. If the price of Under Armour clothing is cheaper, more customers are likely to shop there over Nike because of the close similarities in products.

Along with competition, annual holidays and the threat of new entrants affect the supply and demand for products in the retail market. In December, both production and sales increase steadily because of the Christmas season. Suppliers are willing to supply more and buyers are willing to buy more during this gift giving time. Also, the threat of new entrants is always a factor to take in to consideration in retail. Many retail stores are chain stores and open at new locations all the time. If a Target is about to open right next to a Wal-Mart, that is going to affect the supply and demand of both stores.

(http://www.investopedia.com/)

Upcoming holidays and recent rivals hit hard on retailers

What are some current events in your industry? What is the impact of these events on the industry?

The retail industry is changing daily with an effect on the industry and it's sales. Just the other day, it was noted that in the coming holiday season, there will be fewer employees working than usual due to anticipation for reduced spending this coming year. Retailers are already expressing their concern and slowing their sales expectations and decreasing the inventory and prices to try to boost customer sales. Because of this, the industry as a whole is looking at cutting back on goods and prices. A Wal-Mart spokeswoman says that they expect to do really well this year considering they are an inexpensive retailer. People who look at stores like Gap and New York city shops are afraid to be reminded of the upcoming holidays ("Update: US Christmas Season Seen Less Cheery For Retailers" WSJ). Other than the approaching holidays and that effect on the economy with the harder times now, retail sales generally this past August were flat. Now let's take a look at the recent retail rivals. Sears holds a brand exclusively called Kenmore, and is now readying themselves for it to be sold elsewhere. Sears now finds itself in need of finding an executive for helping marketing and targeting audiences. Sears is now considering searching for new markets for it's Kenmore line of washing machines and appliances. The sales at Sears have been decreasing for a period of years now due to it's rivals like Wal-Mart and Target and Kohls. Sears is now in fear of losing more traffic and customers if Kenmore is sold by other retailers like Costco. Although it may hurt traffic, it may not be terrible considering Costco customers are people buying in bulk and Sears' customers are purchasing individual goods. The upcoming sales for Sears are ambiguous but Sears has been hurting over time with it's competitors. Lately, retailers have been competing for the lowest prices with the recent hard economic times and trying to cater to their audience. These retailers have hired less employees which hurts employment and the retail industry is working harder than ever to market items well and sell their goods. ("A Kenmore Fridge, at Costco?" WSJ).

Check out these stocks

ticker symbol=VFC

2. pvh

3.ua
4. fosl
5. deck
6.sks
7.m


these are listed in no particular order

-dave

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