Budget and Budget Committee Example

Essays on Budget and Budget Committee Essay Essay Budget and Budget Committee: Budget refers to planning and organizing finances. Businesses especially when launching themselves allocate their financial resources to different things related to the functioning of the business. Hence, a thorough analysis of finances is very essential to the efficient growing and running of any business of committee. Hence, for each business or even any type of group or organization to prosper, it is very essential that its finances are managed carefully. Hence, this requires budgeting which obviously needs a group of people who can sit and ponder over what to spend where ands how etc. this fundamental task comes under the budget committee’s role. For a business, a budget committee’s formation is absolutely needed. This committee helps in outlining financial goals basically. The committee prepares documents and papers that show the financial position of the organization/business etc it is working for. This visual representation helps in planning out the activities of the business in a much better way. Expected financial results can also be seen through a thorough analysis of past records and events done by the committee. This preparation of financial documents for decision making can hence be called the main purpose of a budge committee. (Brian Tracy, 2004). A simple budget committee includes four main things or components. These are: - Sales and revenue - Profit or loss - expected costs (total costs) - Total profits thereafter A budget committee sits down and does a methodical analysis of the marketing and sales departments that it works for. By this, it simply is being a group of people all work together to make accuracy and authenticity of data their main criteria. This is done so that all estimated or projected total costs and the resulting profit or loss from them, are true. This leads to a reliable setoff data to be analyzed and drawn conclusions from. And this serves as a true and accurate set of compiled information that is used by the business (in this case) for decisions making purposes. Usually, for the budget committee to be effective, all data is collected through research by surveys and market analysis. A true budget hence portrays the business’s true worth and potential. Each budget committee member also makes sure that the budget is appraised and reviewed regularly for instance, every month. This calls for even more timely collection of data and keeps the committee on track with the latest trends in financial costs inclinations. The budget committee hence helps in saving a lot of time and money and keeps the entire business organized. (Brian Tracy, 2004). Flow of a Budget: By, flow of a budget, it is meant how basically a budget is prepared. This calls for an outlining of things that come first or are considered first, when making a budget, second, third and so on. A budget as mentioned above undertakes many important goals and deals with different types of financial trends, costs, analysis and decision making etc. The stages involved in the flow of a budget are as follows: 1. Sales value (estimated): The first thing that a budget undertakes or includes in itself, is the probable amount of sales in value for the month the budget is being made for. This is based on a complete analysis of the marketing and sales function of the business. Hence, the data involved here is that of number of goods sold, amount spent on advertising and marketing etc. There are usually written or recorded by a high, medium and low sales tag (estimated sales that is.) 2. Operating Costs: this is the second part of the budget. This illustrates what the business has spent on regular everyday expenses and how much. These costs can be related to the human resource department or even the production or dispatch/delivery department etc. from heating and lighting, to cost of fuel to salaries of employees, all comes under the tag â€Å"operating costs†. A budget hence deals with these different costs listed clearly as follows: Costs of buying the service or product Marketing and other Sales costs Administration costs Costs of operation e.g. Lighting expenses Other fixed, variable and semi-variable costs related to business operations 3. Profit or Loss (monthly): this part of the budget includes the cumulative profit or loss from operations of that month only. This step is useful for the budget committee for analysis purposes that it does later at the end of the year usually to find out the broad trends and inclinations in sales, profit, revenue and losses. 4. Total Profit or Loss: this part contains the cumulative profits or losses for the year or a set of months (quarterly, half-yearly etc.) From this are the breakeven ratios and other business profitability ratios calculated for further analysis of the functioning of the business for that period of time. We can definitely say here, that this part shows a business’s true latent, or its true potential. (Brian Tracy, 2004). Differences between Traditional Costing and ABC Costing Technique: This section refers to a called analysis for the difference/s between Traditional Costing (TC) and Activity Based Costing (ABC). These differences hence are: 1. Traditional Costing deals with exact figures for example, number of goods sold etc. Hence, all overhead costs are assigned to these. ABC costing however, does this very less, and rather puts the general trend as an allocation basis. Assignment is not related to the quantity of products. 2. TC allocates all manufacturing or production costs to products themselves. ABC costing allocates both manufacturing and non-manufacturing to products. 3. Direct labour and machine hours are the allocation bases in TC. This base is usually in correlation to the alterations that occur automatically in overhead costs or operating costs that are allocated to the base when using that base. This does not happen in TC. ABC only allocates a cost to the product only if there will be changes in the product cost in the future because of some decisions. 4. ABC against TC uses more cost allocations or pools. (FMAccounting, n.d.) Important points to remember while selecting Cost Drivers: Cost driver is something that controls the cost relating to a business function or doing. These are a component of the ABC. There are two types of cost drivers. These being: activity driver resource driver (BNET Business Dictionary, n.d.) The question that arises here is what factors to consider when selecting one type of cost driver out of many available. The things to consider are: accuracy acceptable information cost simple to analyze and understand should a combo of cost driver be taken, or one only avoiding complexity, while selecting whichever cost driver (Carsten Homburg, 2002). Different methods for calculating Payback: Payback period refers to the total time that it will acquire for an amount of money that has been invested in a capital good to come back to the investor. This basically is done through a series of cash flows and which eventually results in an accumulation of the total amount that was initially invested. One way to calculate this payback period is through a formula. This formula is: Payback period = Cost of Investment divided by Annual Cash Flows. (Masego Matseke, n.d.) Other methods of calculating payback period include: discounting cash flows; calculating the annual rate of return; IRR; Risk-adjusted rate of return; Return on Assets; Return on investment etc. (LearningMatters, 2008). ‘Both Managerial Accountants and Financial Accountants use the data from the accounting system of the firm but for different purposes.’ Financial information is a necessary tool for all businesses to have so that future and current business decisions are based on this information. A financial accountant is a person who undertakes the objective role that financial information carries with itself. This basically means that a financial accountant makes all the financial statements. His job requires him to present all financial data in a proper format. Hence, he makes all accounts and tables/charts for the managers to see and analyze. An accountant manages and maintains a track for income and expenses, assets, operating costs, returns, loans, debt etc. Accountants handle all this raw data and transform it into a proper categorised data that is presented in the form of information. (QandAs- Legal, n.d.) After all this depiction of information is done in accounts and statements, does the task of a managerial accountant begin. He is responsible for their leadership placements. They use their administration and management skills to analyze the presented information and base their decision making on this information that is prepared by a financial accountant. These are also called advisors to the business, since they evaluate financial information. Managerial accountants also are part of a product’s for instance, entire stream of work. This includes decisions related to marketing budget, sales budget, promotion expenses, pricing, outsourcing etc. (Sigel, Gary, 2000). As mentioned above, it is very clear how the two roles differ even though the main element of each accountant’s role still remains the same. There is just a difference in the â€Å"sub-s† involved. Works Cited 1. Sigel, Gary. â€Å"What do management accountants do?† Strategic Finance Publication. 2000. All Business. August, 17, 2008. http://www.allbusiness.com/accounting-reporting/managerial-accounting/605863-1.html 2. QandAs- Legal. â€Å"What does an accountant do?† QandAs. (n.d.) August, 17, 2008. http://legal.qandas.com/personal-taxes/what-does-an-account-do.html 3. LearningMatters. â€Å"Calculating Payback Period†. LearningMatters. (2008) Echelon Learning Ltd. August, 17, 2008. http://www.learningmatters.com/idx/7741/index.html 4. Masego Matseke. â€Å"Payback Period†. (n.d.) 12Manage. August, 17, 2008. http://www.12manage.com/methods_payback_period.html 5. Carsten Homburg. â€Å"A note on optimal cost driver selection in ABC†. ScienceDirect. 2002. Academic Press. August, 17, 2008. http://www.sciencedirect.com/science?_ob=ArticleURL_udi=B6WMY-456JPDV-B_user=10_rdoc=1_fmt=_orig=search_sort=dview=c_version=1_urlVersion=0_userid=10md5=883baf2da051b21acf9381152ac7eeb5 6. BNET. â€Å"Cost Driver†. BNET Business Dictionary. (n.d.) CNET Networks Inc. August, 17, 2008. http://dictionary.bnet.com/definition/cost+driver.html 7. FMAccounting. â€Å"Difference between ABC system versus traditional based costing system†. Financial, Management and Accounting. (n.d.) August, 17, 2008. http://fmaccounting.com/difference-between-abc-system-versus-traditional-based-costing-system/ 8. Brian Tracy. â€Å"Drafting your budget†. Entrepreneur Connect. 2004. Entrepreneur.com Inc. August, 17, 2008. http://www.entrepreneur.com/money/article72918.html

Are Tax Cuts Beneficial For Improving Economy - 1544 Words

Are Tax Cuts Beneficial for improving an Economy especially after a Recession? Argue and Defend Your Point. Recessions in any country can present the most difficult economic challenges to the authorities as they seek the best methods to regain their economic power. There are different avenues they can attempt to alleviate the issue including the reduction of government spending and tax cuts for the citizens and businesses . The concern for this investigation is the ability of tax cuts to increase the economic stimulus in that period. The review will focus on how the strategy can benefit the citizens and enable the country to restore itself from the financial difficulties over that time. There are different outcomes the country should†¦show more content†¦The recovery of the taxes to the nation’s budget may take time, but it helps them maneuver out of the economic recession. The first benefit that a tax cut will bring is the encouragement of efficiency in the private businesses . It provides an opportunity for investors to inject money into the economy since it has the potential for growth, and they do not incur as many costs for running the investments. The tax cuts also reduce the amount of risk that the companies will have to indulge in to enable them to make a profit. With a high cost of transactions due to the taxes, the corporations will have to spend more on acquiring and paying credits and that increase the amount of risk for their operations. That move will spur their investment ventures and promises quicker growth than other avenues of alleviating the recession. The move also reduces the possibility for the larger organizations to indulge in acquisitions and mergers with the smaller business that may eventually lead to monopolies. It is hard to control most market factors in an environment whose operations have a saturation of monopolistic part icipants; therefore, it is not economically healthy. A reduction in the taxes will encourage all forms of business participation. The cut will provide an excellent opportunity for the small enterprises to withstand the difficulties of the recession. That will prevent the possibility of the larger corporations turning into oligopolies and eventually monopolies that areShow MoreRelatedBarack Obama s Current Tax Code1728 Words   |  7 Pagesup, different tax policies are being debated between the candidates. Whether it is proposed by a Democratic or a Republican presidential candidate, there have been many possible solutions presented on how to reform the current tax code. Focusing specifically on four candidates, two from the Democratic Party, and two from the Republican Party, I will compare and contrast their respective tax proposals. While the Democratic candidates generally agree with President Obama’s current tax code, all fourRead MorePestle Analysis Essay1557 Words   |  7 Pagesinternal environment of a business (Panah, 2012). 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Sexual Pressures Essay Example For Students

Sexual Pressures Essay The media is just one of the factors responsible for the increase in teen sexuality. Throughout a humans adolescents years they are subject to a number of sexual pressures. Through research I have found that peers areamong the most influential. An adolescent is not limited to peer pressure though. They face pressures from the media as well. I believe that media pressure is just a influential as peer pressure. There is also other pressure,from people such as older friends, parents, and just adults in general. Peers is a term that can be defined as friends. I have found that many teens have friends that are athletes. In high schools, boy athletesoutscore all of the other boys with the girls(Elias 1). On the other hand ,girls on sports teams are much less sexually active than other females who do not play sports(Elias 1). This shows that male athletes are far morepressuring each other on the issue of sexuality. So for males who are into sports they are subjected to a host of pressures and can as a result do things they would not normally do. On the contrary, I found that females who do sports are far less pressured and influenced about sex. In fact theyare far less likely to be sexually active than teen females who do not participate in sports. I believe that all teens in general should know the results of being a sexually active teen. There are many consequences of being sexuallyactive, one of the major one being sexually transmitted diseases. A sexuallytransmitted disease might not sound so bad but, some can cause sterilityand even worse , death. Even when condoms are used, a STD can still be transmitted. Depending on the type of std they can or can not be cured. A few diseases that can not be cured include herpes, HPV, And HIV, which later turns into the virus AIDS. The disease HPV can cause cervical cancer andHIV results in a long, painful death. Almost a third of sexually active teenscontracted a new STD within a mere six months, reported one study, evenamong condom users(Terilliger 2). Once a teen has become sexually active he or she must assume newroles. Males must think about the issue of perhaps becoming a father byaccident of intentionally. Moreover, females must think about all the consequences of having sex. No sex happens to be the safest form of sexualactivity. It is not hard for a condom to break of for birth control pills to be forgotten once or twice during a cycle to cause a pregnancy. In addition,once a female becomes pregnant there are few options she can explore. In a like manner, adults are an impact on a teens sexuality. Most teens look up to an adult and admire them. Likewise, they want to try to belike there idol. This is why an adult can have a profound impact on a teentrying to cope with the pressures of sexuality. That is why all adults in allclasses of society should watch what they do or say in relation to teens. Forexample, The President of the United States was adulterous and lied about it. We as society say so what? when the accusations surfaced at first(Kavanagh 13). In the same fashion, the media plays a huge part of sexual pressuresexerted on a teen. One way being television. Television at the present time is full of vulgarness and sex. As far as prime time television is concerned is safer to watch old re runs of the Lucy Show and the Cosby Show. they ere from an era where sex was not such a prime time staple(Riley 186). This show how much society has changed concerning sex. In the old times sex was not a way to get better ratings like it is today. Similarly, music hasan impact on an adolescents sexuality. Rap lyrics at the current time are full of obscenities and words concerning sex. In the rapper Eminems songRole Model , he says, Im going to rape her and leave her, once I get near her(mathers 1). When the media says these kind of things teens are leadto believe that this type of behavior is normal and should not be digressed. .u385158ce4ac28852c2e6213dd79a8272 , .u385158ce4ac28852c2e6213dd79a8272 .postImageUrl , .u385158ce4ac28852c2e6213dd79a8272 .centered-text-area { min-height: 80px; position: relative; } .u385158ce4ac28852c2e6213dd79a8272 , .u385158ce4ac28852c2e6213dd79a8272:hover , .u385158ce4ac28852c2e6213dd79a8272:visited , .u385158ce4ac28852c2e6213dd79a8272:active { border:0!important; } .u385158ce4ac28852c2e6213dd79a8272 .clearfix:after { content: ""; display: table; clear: both; } .u385158ce4ac28852c2e6213dd79a8272 { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .u385158ce4ac28852c2e6213dd79a8272:active , .u385158ce4ac28852c2e6213dd79a8272:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .u385158ce4ac28852c2e6213dd79a8272 .centered-text-area { width: 100%; position: relative ; } .u385158ce4ac28852c2e6213dd79a8272 .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .u385158ce4ac28852c2e6213dd79a8272 .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .u385158ce4ac28852c2e6213dd79a8272 .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .u385158ce4ac28852c2e6213dd79a8272:hover .ctaButton { background-color: #34495E!important; } .u385158ce4ac28852c2e6213dd79a8272 .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .u385158ce4ac28852c2e6213dd79a8272 .u385158ce4ac28852c2e6213dd79a8272-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .u385158ce4ac28852c2e6213dd79a8272:after { content: ""; display: block; clear: both; } READ: Alexander the great 3 EssayEvery teen listens to some kind of music with obscenities and vulgarness, soall are subjected to these kind of musical lyrics. Many teens even idolize musical artists, so they would intern try to be like what they think the artist actually does. Even though most lyrics are just lyrics and are not intentionallymade to mislead teens or anyone. In conclusion, I have found that the media is one of the factors concerning teen sexuality. Furthermore, peers are another huge impact ona teens sexuality. In addition, there where also pressures from adults. through this I search paper I have found out a lot of interesting conceptsconcerning what a teen is pressured by sexually, during the growing years. It was one of the most informative researches I ever did.

Mbaar free essay sample

Through a series of well-coordinated mergers and the growth of a vast selection of innovative food products, Nestle became the global giant it is today. Nestle’s success can be attributed to its deep agricultural supply chain, strong local market teams, hiring from within, and long tenured CEOs. Nestle has become the epitome of innovation and success in the retail food product industry. In 1996 Nestle established the Nestle Environmental Management System (NEMS) in an attempt to produce more environmentally friendly products. NEMS required innovative eco-design in the company’s products and activities, and gave preference to suppliers who worked to improve their levels of efficiency and sustainability regarding their use of resources. Aside from this, NEMS also requires independent environmental auditing regarding the practices of the company. In addition, environmental awareness training for the employees and business partners is required. Nestle launched Sustainable Agriculture Initiative Nestle (SAIN) in 2000 in order to optimize the transparency from farm-to-table and to increase efficiency and productivity. We will write a custom essay sample on Mbaar or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Nestle took a big risk as it was the first to implement this type of program. The program was effective, and other companies such as Unilever and Groupe Danone adopted the idea. In 2006 it further expanded the program to make water a central area of concentration. Five Forces Model Porter’s Five Forces Model was created to act as a framework for industry analysis and business strategy development. Porter singled out five different forces that impact competitive intensity which portrays an image of the overall attractiveness and profitability of a market. To aid in our evaluation of Nestle and its status in the industry, we will apply Porter’s Five Forces Model to the company. Threat of New Entrants The food processing industry is very large and competitive; it is not uncommon for firms within the industry to do quite well. As a result, many companies enter into the market every year in an attempt to gain a portion of the profitable market. Luckily for Nestle, the company has been around for over a century and boasts a long history of quality products and consumer satisfaction, which has allowed the company to obtain a considerable share of the market. As a result, new entrants into the industry must attempt to seize a portion of Nestle’s market share in order to survive. Essentially, Nestle is constantly a target, and so the threat of new entrants is moderate. Threat of Substitute Goods Due to the nature of the industry, Nestle is beset with the threat of substitute goods. From bottled water to lean pockets, there are arrays of similar products that compete directly with Nestle. It is vital for Nestle to continuously find new ways to improve its products because competition is so fierce. In recent years, Nestle has focused on the health and wellness aspects of its products to maintain its competitive edge in the market. Bargaining Power of Suppliers Nestle prides itself on creating and maintaining positive relationships with its suppliers all over the world. Due to the large purchasing power of Nestle, and because the suppliers of agricultural commodities offer a product that is far from unique, Nestle holds more bargaining power than its suppliers. Aside from this, Nestle prefers to create and preserve long-term relationships with its suppliers as this helps to ensure the quality of the raw materials being purchased. In addition, Nestle also offers useful advice to its suppliers on how to perform more efficiently to minimize unnecessary costs. Bargaining Power of Customers Customers have a large amount of bargaining power regarding their consumption of Nestle products. As stated previously, there are close substitutes for Nestle products which allows for the preferences of the customer to be very influential. Nestle understands the power of the customer and has taken specific steps to meet the needs of its products consumers. Specifically, Nestle is incorporating health and wellness into the creation of its products as society has started becoming more health conscious. Competitive Rivalry within the Industry Nestle is a powerhouse in the food processing industry but so are Kraft Foods and Groupe Danone. These companies, among others, are in a constant and continuous battle to outperform one another. Regarding advertising alone, these companies spend hundreds of millions of dollars in an attempt to appear more desirable than the competition. Rivalry is fierce in the food processing industry, and this is a good thing for consumers. As long as these companies continue striving to one up one another, consumers will continue to enjoy ever- improving product lines. - When applied to Nestle, Porter’s â€Å"Five Forces Model† depicts a competitive, but profitable market for the food processing industry. Furthermore, the model places Nestle in a somewhat comfortable position within the food processing industry, while acknowledging the threats to its market share. Specifically, the model notes a moderate threat of new entrants into the market and a substantial threat of substitute goods. In addition, the model shows that Nestle tends to maintain the upper hand over its suppliers as commodities have exact substitutes in the market. Also, customers have a considerable amount of bargaining power, as Nestle must adhere to consumer wants and needs because there are so many close substitutes. For the final force, the model depicts a large amount of rivalry within the food processing industry. - Goals - Nestle has established many goals throughout the life of its company. Being a highly innovative company, it is always looking for new ways to develop higher quality products. In order to maintain a competitive edge over top competitors, Nestle should improve its innovative technology; this will create new products and lead to better efficiency which will minimize costs for Nestle and its consumers. Another goal is to maintain growth by continuing to create value for consumers and shareholders through implementing an effective risk management policy. This can be done by ensuring compliance with Nestle business principles and international law. In addition, Nestle will ensure that its actions are environmentally sound, socially just, and economically viable. Lastly, it should continue to uphold and expand environmental policies (i. e. SAIN, NEMS). This will be done by improving the communication between farmers, employees, managers, and distributors. - Constraints - There are a few pertinent constraints that will affect the implementation of the goals. First, is the loss of brand loyalty due to the current economic recession. With a strain on household incomes, Nestle consumers are more likely to choose less costly and lower quality alternative products from generic brands of competitors. Nestle must improve its certification process of raw materials to meet higher quality standards. An accurate trail of material/product quality information through the various levels of the food chain is key to Nestle maintaining the overall quality of Nestle end-products. The last constraint is the increasing cost of energy, which affects all levels of input, production, and distribution. - Nestle is constantly expanding its horizons. One example is that the company has taken on an ambitious task such as doubling sales and expanding its buyer market. As stated above Nestle continues to search for opportunities to increase efficiency to expand its profitability. With the ever-changing price of commodities, supplies, and consumer tastes, Nestle will continue to struggle with its market position. Nestle has stayed strong and adjusted well through many obstacles over its lifetime. Nestle’s executives are confident they can accomplish just about any goal and are developing new strategies to make this happen. Central Problem - Peter Brabeck, the chief executive, for Nestle uses the approach—when you aren’t growing, you are dying—in how he runs the company. For the past 30 years, this notion has worked for Nestle. Its shares have outperformed competitors in the Samp;P 100. Internally, a central problem for Nestle is how it plans to continue its glo bal capitalization while resisting plateaus or stagnation. Externally, Nestle’s problem is how it will keep the lead on competitors. Nestle has managed its organization around decentralization. This is the idea that globally there is no one specific taste or preference wanted by all. Instead, Nestle has made its productions more regional. This will ensure that it produces products to the wants of the local communities. This strategy has helped Nestle outperform its competitors in different regions. The problem is, companies have taken notice of this practice and are implementing similar strategies. Alternatives Alternative One Cocoa is essential to 40-50 million people’s lives worldwide. Over five million small holder farms produce it. Over the last 20 years, chocolate consumption has doubled, and in the last five years, it has increased 14 percent globally. There has been a shortage of cocoa for four consecutive years now because farmers are producing lower yields as demand continues to rise. â€Å"Many farmers struggle on small plots with aging trees that are vulnerable to disease. Economic pressures mean that farmers are focused on the short term and are not able to invest in good farm management which would help them secure better quality, higher quantity yields in the long term. This quote from Nestle. com states the most apparent reason for the cocoa shortage, which are poor resources for farmers in other countries. The shortage of cocoa has caused the prices to increase continuously. Nestle is one of the world’s biggest buyers of cocoa, and it has pioneered advanced technology in cocoa and coffee for 30 years. Several years ago Nestle created â€Å"Th e Cocoa Plan† as part of its goal of Creating Shared Value for shareholders, employees, farmers, consumers, and the communities where it operates. The plan will improve sustainability of the cocoa (and coffee) supply. This plan is a long term solution, not just a quick fix. It requires a step-by-step approach and implementation process. Over the next 10 years, Nestle will invest CHF 110 million in plant science and sustainability initiatives for cocoa. There are five activities in their implementation plan. The first activity is plant expertise. Nestle has a research and development center in Abidjan in the Cote d’Ivoire in West Africa and also gives training to plant scientists in other cocoa producing countries such as Ecuador and Indonesia. During this first activity, â€Å"The Cocoa Plan† looks to improve quantity and quality of yields by bringing 12 million plantlets to producer countries. The second activity is farmer training and assistance. This process will attempt to improve yields and to ensure sustainability by teaching better farming methods. The third is improving the supply chain. This is a commitment by Nestle to buy beans strictly from farmers who use sustainable practice and to help cooperatives by speeding up the process from farm to shipping. The fourth is better social condition that looks to improve conditions where there is poor access to healthcare and education, and child labor. Nestle is partnered with the World Cocoa Foundation and others in order to achieve these improved conditions. The fifth and last activity is consumer communication. Consumer communication utilizes a Cocoa Plan logo and a Web site dedicated to inviting consumers to learn about the cocoa supply chain and Nestle’s work with farming communities. Our alternative solution comes in at activity one, plant expertise. Nestle could supply these countries with genetically modified seeds and fertilizer, such as the products produced by Monsanto Co. , in addition to supplying producer countries with plantlets. Monsanto uses two techniques to develop seeds that meet the needs of farmers. The first type is breeding the seeds delivering superior genetics, allowing farmers to get higher yields from each seed. The second type is inserting one or more genes into the seed, which in turn protects against insects, controls weeds, and yields are preserved through the growing season. Better seeds make crops healthier and easier to grow, which then allows farmers to be more effective when producing food, feed, and fuel. The benefits of farmers’ use of these products are the following: increased productivity and reduced costs, healthier crops that are easier to grow, conserved time and inputs, and possibly the most important to producer countries—improved protection from insects or disease and increasing crop tolerance to heat, drought, and other environmental stress. Monsanto also offers conservation tillage. Conservation tillage is a protective cover of mulch over crops when they are not in season. This cover holds soil in place, minimizes runoff, and decreases erosion drastically. An advantage to implementing this strategy into â€Å"The Cocoa Plan† would be decreased cost in cocoa due to increased production. By obtaining these suppliers through this plan, Nestle would gain a competitive edge over competitors in the industry by having the best, most efficient, cocoa producers. Another advantage is that it would help to expand environmental policies such as SAIN because it will increase efficiency and productivity. It would help to overcome some of the constraints. The plan would allow Nestle to keep an accurate trail of product quality information. Nestle would know the quality of the products by contributing to the production process. It could ensure the farmers know the proper way to produce quality cocoa. It would also help with the constraint of increasing costs. By increasing production and reducing the cost of cocoa, Nestle would be reducing input costs. A disadvantage to providing producer countries with seed products is Nestle’s cost of supplying the products. Nestle has a planned budget of CHF 110 million for cocoa and would use part of this budget to purchase the products. Another disadvantage would be that the existing decrease in brand loyalty would not be improved through these methods. The cost of the product could potentially even increase slightly. The key to overcoming this issue would be to advertise and demonstrate to cocoa consumers Nestle’s efforts and attempts to positively impact less fortunate countries. Customers are attracted when businesses help communities in need and know the money they spend on a product will benefit others in need. Alternative Two Nestle currently offers an athletic/ sports nutrition line of products geared towards â€Å"smart energy† production and endurance called PowerBar. Nestle bought PowerBar on February 22, 2000, in an effort to expand its influence in the sports nutrition industry as well as show its commitment to a healthy nutritious lifestyle for its consumers. PowerBar is the largest energy and nutrition bar business in the United States. The PowerBar brand is widely distributed and a recognized name in the sports nutrition industry, but it provides a relatively low variety of products and seems to only focus on one segment of the sports nutrition market. When compared to other suppliers such as Apex and GNC, it falls short on many levels. This is because PowerBar, while being a â€Å"smart energy† source, does not provide nearly the punch that the other brands offer. The competitors in this industry offer products for people looking to jump-start, reinvigorate, or maintain their fitness routine. Its products specifically focus on high protein intake, electrolyte replenishment, and natural vitamins, amino acids, and molecular combinations geared towards rapid absorption into the body’s functions. Nestle’s PowerBar products are mainly geared towards maintaining light to medium intensity fitness regimens and recreational activity. None of its products appeal to the avid sports enthusiast/ highly athletic consumer looking to increase their performance. There are four main categories of sports products: energy/protein bars, protein shakes, electrolyte replenishing sports drinks, and daily vitamin/nutrient packs. For example, GNC and Apex provide an array of energy bars ranging from high protein, endurance, and snack bars to meal replacement, and Pro performance bars. These energy bars all provide high protein content, amino complexes and rapid absorption properties, but only some are considered all natural or organic. While all of Nestle’s PowerBar products are considered all natural, its highest protein bar has only 10 grams of protein whereas GNC’s highest protein bar has more than three times the protein with 32 grams. Nestle’s PowerBar does not provide a line of protein shakes or vitamin packs. It has a line of powder sports drinks that nutritionally compare about evenly with competitors; however, it is a powder. It is not offered pre-mixed and bottled, so it will not be found at a local convenience store like Gatorade or Powerade. The sports nutrition market has continued to increase during the recession with an estimated growth of almost 7% in 2008. This development has been accredited to people trying to avoid pricey doctor visits by staying healthy as well as turning toward sports recreation as a substitute to pricier forms of entertainment. Despite the recession GNC saw an increase of 2. 5% in the first six months of 2009. Nestle’s PowerBar is a much larger company than GNC; however, GNC is just one of the many suppliers seeing market increases in this industry. This shows that the sports nutrition market is growing, and there is definitely room for expansion and the potential to increase profits even during the recession. We propose that Nestle use its PowerBar brand to create a specialized segment of sports nutrition that focuses on all natural, organic superior training products providing the same or more benefit than the competition. This new segment would provide a whole body plan that includes supercharged vitamin packs, energy drinks, and protein shakes and bars marketed towards the GNC high intensity athlete consumer. By increasing its product diversity and appealing to a larger group of consumers, PowerBar could begin creating higher brand loyalty and capture a larger share of the market. Currently, PowerBar is a product that is found only on the shelves of distributor stores, but with this expansion, it could eventually be its own store. Consumers could go to the PowerBar wellness and nutrition store and get outfitted with everything they need for any type of athletic life style and level of performance they desire. Success in this type of product has the potential to be a â€Å"flagship line† for Nestle that could bring focus to the whole Nestle company as a leader in all natural, healthy foods. There are several disadvantages that stem from this alternative. One disadvantage is an increase in cost to expand Nestle’s line and establish its own distribution stores in hopes of the market continuing to expand and the line gaining market share. PowerBar focuses on a segmented market and expanding the product line could potentially dilute Nestle’s image resulting in loss of brand loyalty from customers. Alternative Three One of Nestle’s most popular product lines is its pet care brands. Nestle owns many common household brands such as Purina, Beneful, and Alpo. It currently operates its dog food production factories in Venezuela, Thailand, and China. Quality standards in these countries fall below that of the United States, and as a result, there have been recent recalls of dog food produced by Nestle in these particular countries. Recentralizing production by returning to factories in the United States would prevent these problems from occurring due to superior production standards. The advantages of returning to U. S. -based production would be higher quality products and less risk of product recall due to contamination. Several disadvantages present themselves if Nestle recentralizes operations: First, there will be increased costs of labor, which in turn, causes increased production costs. Second, increased costs associated with exportation of goods to foreign markets.