Bus assign

BUS 2000

Answer ALL of the questions below.

Question 1.

Below is a description of a hypothetical industry. Read carefully and answer the questions below.

Hickory Divine is one of the leading manufacturers in the hardwood furniture industry. Hickory Divine has many small competitors, none of which controls a significant portion of the industry. Hickory, like most of the furniture manufacturers, sells its products to a broad variety of small furniture stores throughout the country, none of which represents a large percentage of Hickoryʹs sales. When purchasing the products, it uses for manufacturing its furniture, Hickory is able to choose from many suppliers since the wood it uses is an undifferentiated commodity, and Hickory is able to easily switch to any supplier that has the best price and delivery times. While growth in the hardwood furniture industry has historically been in the double digits, the industry growth rate has slowed considerably into the single digits, to approximately 5% in recent years; consumers have been purchasing less expensive furniture made of composite wood that is considerably less expensive than hardwood furniture but that looks and functions very similarly once it is painted.

Answer all the questions below.

Question 1a. Based on the description of the hardwood furniture industry, how can you describe the threat level posed from Hickory Divine’s suppliers? Is it high? Is it low? Why? Provide an explanation by using the logic and measurements of the 5 Forces model. (2 to 3 paragraphs)

Question 1b. Based on the description of the hardwood furniture industry, how can you describe the threat level posed from Hickory Divine’s competitors (rivalry)? Is it high? Is it low? Why? Provide an explanation by using the logic and measurements of the 5 Forces model. (2 to 3 paragraphs)

Question 1c. Based on the description of the hardwood furniture industry, how can you describe the threat level posed from Hickory Divine’s buyers? Is it high? Is it low? Why? Provide an explanation by using the logic and measurements of the 5 Forces model. (2 to 3 paragraphs)

Question 2a.

Below are income statements of Walmart, Inc. from its 2022 annual report (10-K) report. If the font is too small, please go to: https://stock.walmart.com/home/default.aspx, and scroll down to “Latest Reports” and download Annual Report 2022.

For 2023, what is Walmart’s Sales Volume to break even? Assume:

· The operating expense in 2023 will have grown at a rate (compared to 2022) that is the average of the annual growth rate of each year from 2020 to 2022. Namely, calculate the two growth rates of 2020 to 2021; 2021 to 2022 and apply the average of those to the growth rate in 2023.

· The ratio of COGS (or Cost of Sales) to total sales (revenue) in 2023 will be the average of the ratios in the three years of 2020 to 2022.

Show each step of your calculations below:

Question 2b. Break-even point question. If there were 10,000 Walmart stores world-wide in 2023, based on your calculation of sales volume in Question 2a, how many units of items does a store need to sell in a week to break even? Assume that Walmart sells only one type of item, and its price is U.S. $10. Also assume that all stores are the same in size and sales.

Question 2c. Based on the income statement above, what is the gross profit, gross profit margin, net profit, net profit margin in 2020, 2021, and 2022? Show your calculations below, and then fill in the summary table below.

Calculations:

Summary Table

	2020	2021	2022
Gross profit
Gross profit margin
Net profit
Net profit margin

Question 3. (Answer both questions)

· Which perspectives are closest to your own: the views of the annihilists, the views of the adopters or the views of the agnostics? Why? Please elaborate.

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