Great Grey Owls Essay -- essays research papers fc

Great Gray Owls   Ã‚  Ã‚  Ã‚  Ã‚  I learned many interesting things by reading this article on great grey owls. I really had no knowledge of this species before I began, but I now have a certain respect for them because of the familiarity I have gained. One interesting aspect of these owls is their hunting methods.   Ã‚  Ã‚  Ã‚  Ã‚  The great gray owl is a very aggressive hunter when it finds its prey. â€Å"These owls don’t just pounce, the plunge† (Warren, p.78). First, they locate their prey with the help of their large facial disk that funnels sound to their ears. Then, they tuck their extremely sharp hooked-shaped claws under their chin and torpedo headfirst towards the ground to snatch their next meal. In winter, when there is snow on the ground, the owl plunges into the snow. After a successful dive, it wiggles out from below the surface of the snow and takes its food to a safe spot to eat. These owls are so powerful when they hunt, they can shatter snow crust thick enough to hold a 180 pound person. I don’t think they will be losing too many meals with that kind of force. This hunting technique these owls use gives them a great advantage over other birds in the winter, because others must go to a place where the snow is not so thick. Great gray owls eat a variety of rodents in the lower 48 states, but stick to mostly voles in Canada and Alaska. These small rodents make up 80-90% of their diet. In the winter, adult gray owls can assume up to one-th...

Financial Management in Non Profit Organizations

ITO-YOKADO COMPANY, LTD. M. Edgar Barrett and Christopher D. Buehler Overview The Ito-Yokado Company consisted of three business segments: Superstores and other Retail Operations (lto-Yokado superstores, Daikum discount stores, York Mart, York Benimaru, Robinson's Department Stores, and Oshman's Sporting Goods); Restaurant Operations (Denny's and Famil Restaurants); and Convenience Store Operations (7-Eleven Japan). Ito- Yokado had just acquired struggling Southland Corporation and transitional long-term strategies for Southland would have to be developed.Although diversified, Southland's largest business segment was its Stores Group responsible for operating and franchising of over 7,500 7-Eleven convenience stores. Masanori Takahashi, a senior strategy analyst for Ito-Yokado was considering the possibility that long-term strategies that had been successful in Japan also could be successful in the United States was vastly different than that of Japan; nevertheless, he was confident that through careful and thorough planning, the goal of making Southland profitable could be achieved. Learning Objectives . To acquaint students with the development of a Japanese company and its move into U. S. markets essay writer service review. 2. To acquaint students with elements of â€Å"Japanese management† through Ito-Yokado's â€Å"operation reform project† and to induce them to question the transferability of marketing across national boundaries. 3. To familiarize students with the nature of retailing in Japan buying essay papers online. 4. To show how Southland Corporation became subject to acquisition by Ito-Yokado Company, Ltd. 5. To present the nature of the convenience store industry in the United States.In mid-March 1991, Masanori Takahashi, a senior strategy analyst for Ito-Yokado Company, was preparing to depart for Dallas, Texas. Once there, he would be leading a team of Japanese and American managers responsible for establishing transitional and l ong-term strategies for the Southland Corporation. After nearly an entire year of intense bargaining and negotiation with Southland and its creditors, Ito-Yokado acquired Southland on March 5, 1991. Takahashi began working with Ito-Yokado in 1972 as an assistant manager of one of the company's superstores. He had advanced to the position of regional manager by 1979.In early 1981, Ito-Yokado's Operation Reform Project was conceived and Takahashi was asked to be a member of the team leading the project. During the first few months on the team, Takahashi quickly understood certain crucial aspects of the new project, most notably the use of point-of-sale (POS) systems. Implementation of the project advanced most rapidly in Ito-Yokado’s 7-Eleven Japan subsidiary, so he also had become familiar with the operating environment of convenience stores in Japan. As Takahashi left his Tokyo office, he could not help but feel both excitement and apprehension regarding his new position.He h ad gained confidence while involved with the successful Operation Reform Project at Ito-Yokado's superstores and 7-Eleven Japan convenience stores, but this experience might or might not prove to be useful in respect to Southland. COMPANY BACKGROUND Ito-Yokado's founder, Masatoshi Ito, was born in 1924 and graduated from a commercial high school in Yokohama. He worked briefly at Mitsubishi Heavy Industries before joining Japan's war effort in 1944. After World War II, he worked with his mother and elder brother at the family's 66-square-foot clothing store in Tokyo. 1 The store was incorporated as Kabushiki Kaisha Yokado in 1958.By 1960, Ito was in sole control of the family business. During that same year he made his first visit to the United States. In 1960, Ito visited National Cash Register (NCR) in Dayton, Ohio. While in the United States, Ito was introduced to terms such as â€Å"supermarkets† and â€Å"chain stores† by NCR, which was interested in selling cash r egisters to Japanese retailers. In Japan, retailing was dominated by mom-and-pop stores and a handful of venerable department stores, with few types of retail outlets in between. At this time, Ito began to see the possible role of mass merchandisers in a society becoming â€Å"mass-oriented. Ito soon opened a small chain of superstores in the Tokyo area. These stores carried a large selection of household goods, food, and clothing of generally lesser quality and lower price than either the mom-and-pop or department stores. ‘ By 1965, Ito had opened eight superstores. In the same year, the name of the chain was changed to Ito- Yokado. The Growth of Ito- Yokado as a Superstore Ito's concept for the superstores was centered on having the rough equivalent of several types of retail stores contained within one multistory superstore.The initial stores were located near population centers and railroad stations in the Tokyo areas. ‘ Often, several stores were located in close p roximity in order to achieve â€Å"regional dominance. † The results were high name recognition, reduced distribution costs, and the effective squeezing out of competition. Ito soon realized that social changes in Japan could create new opportunities for his retailing ideas. Younger and more mobile Japanese appeared to be less willing to spend a great deal of time shopping at numerous mom-and-pop stores. Also, the Japanese society was experiencing increased suburbanization.Ito decided to locate stores in suburban prefectures. There were 47 prefectures (provinces) in Japan. One reason for locating stores in suburban areas was the lower cost of real estate. This allowed Ito-Yokado to open larger stores with more parking spaces than competitors located in congested urban areas. Ito continued to use a strategy of â€Å"regional dominance† with these new openings, most of which were concentrated in the greater Kanto district, which consists of the Tokyo metropolitan area an d surrounding cities. By the early 1970s, Ito-Yokado stores were opening at the rate of four or five per year.By the late 1970s, nine or 10 new stores ‘were opened annually. † In early 1987, 101 of 127 Ito- Yokado superstores were located in the greater Kanto district. Ito also adopted a strategy of leasing some properties for new stores. As of the mid-1980s, more than 87 percent of Ito-Yokado's aggregate sales floor space, 10 of the company's 11 distribution centers, and the company headquarters in Tokyo were all leased? Often, property prices were astronomical, or the owners of well-located sites would not part with their property for any price. Constraints on GrowthThe initial success of Ito-Yokado and the other superstores soon resulted in retaliatory action by a powerful competitor: the mom-and-pop store owners. These small retailers were said to â€Å"pull the strings of Liberal Democratic Party politicians at the local level. †8 The action initiated by the small retailers resulted in the 1974 Large Store Restriction Act, which was subsequently strengthened in 1979. The original act restricted the opening of stores with sales areas of more than 1,500 square meters (16,500 square feet). In addition, the act restricted the hours of operation of new and existing large stores.A series of changes in 1979 added restrictions on stores with sales areas greater than 500 square meters (5,500 square feet). A Commerce Coordination Committee was established in each area in order to set policy regarding large-store openings and hours of operation. The committees were effectively controlled by the small retailers. By the early 1980s, Ito-Yokado was opening only four or five new stores annually. † Factors other than the Large Store Restriction Act adversely affected Ito-Yokado. Japanese consumers' real disposable income decreased by a little more than 1 percent during 1980-1981. 0 Japan experienced a general economic downturn in the early 1980s, as did the rest of the world, again serving to limit consumer purchasing power. Net income for Ito- Yokado-which had grown almost 30 percent per year between 1976 and 1981-grew by 9. 7 percent in 1982 and by 0. 9 percent in 1983. 11 The legal restrictions imposed on large stores, when combined with the economic downturn, led to both lower current earnings and a projection of reduced rates of growth in future earnings. Ito-Yokado as a Parent Company During the early 1970s, Ito began pursuing new retailing interests.In 1972, he approached Dallas-based Southland Corporation in an attempt to secure a license to operate 7-Eleven stores in Japan. He was rebuffed. He made a similar attempt in 1973 with the aid of a Japanese trading company, C. Ito and Company, and was successful in obtaining the license. Concurrently, Ito was pursuing another U. S. firm, Denny's Restaurants, in an attempt to obtain rights for opening Denny's Restaurants in Japan. Both subsidiaries, Denny's Japan and 7-Ele ven Japan (originally called York Seven but renamed 7-Eleven Japan in 1978), were established in 1973.The first 7-Eleven and the initial Denny's in Japan were both opened in 1974. Stock for each of the two majority- owned subsidiaries was traded independently on the Tokyo Stock Exchange. Both subsidiaries became profitable around 1977. ITO-YOKADO IN THE 1980s The Ito-Yokado group consisted of three business segments: Superstores and other Retail Operations, Restaurant Operations, and Convenience Store Operations. The Convenience Store Operations segment was made up of 7-Eleven Japan. The Restaurant Operations segment consisted of Denny's and Famil Restaurants.Ito-Yokado super- stores, Daikuma discount stores, two supermarket chains (York Mart and York-Benimaru), Robinson's Department Stores, and Oshman's Sporting Goods Store made up the Super-stores and other Retail Operations segment. Ito-Yokado's financial statements are shown in Exhibits 1 through 3 in separate attachments. SUPER STORES AND OTHER RETAIL OPERATIONS York Mart and York-Benimaru York Mart was a wholly owned subsidiary established in 1975. In 1990, it operated 40 supermarkets located primarily in the Tokyo area.These stores sold mainly fresh foods and packaged goods, and competition was high in this geographic and retail area. Ito- Yokado's Operation Reform Program was implemented by York Mart in 1986 as a means to boost efficiency and profits. By 1990 sales were increasing at 6 percent per year. See Exhibit 3. Is York-Benimaru was a 29-percent-owned affiliate of to-Yokado, and was an independently managed regional supermarket chain. York-Benimaru operated 51 stores as of 1988. The stores were located in the Fukushima prefecture of Koriyama-city in northern Japan. Like York Mart, York-Benimaru operated with a higher profit margin than the supermarket industry as a whole. York-Benimaru's earnings growth rate of 13 percent per year was expected to last into the 1990s, and Ito-Yokado's share of this profit was the major contribution to the â€Å"equity in earnings of affiliates† portion of Ito- Yokado's income statement (see Exhibit 2). Daikuma Daikuma discount stores were consolidated into the Ito-Yokado group in 1986, when Ito-Yokado's ownership of Daikuma increased from 47. 6 percent to 79. 5 percent. † In 1990, Daikuma was one of the largest discount store chains in Japan with 14 stores.Although Daikuma was popular among young Japanese consumers, the discount stores attracted the critical attention of competing small retailers. Because the discount stores were regulated by the Large Store Regulation Act, intensive effort was required to open new stores. Despite these circumstances, and increasing competition, Daikuma opened two discount stores in 1989. Robinson's Department Stores In 1984, the Robinson's Japan Company was established to open Robinson's Department Stores in Japan. The Robinson's name was used under the terms of a license granted by the U.S. sto re of the same name. The Japanese company was wholly owned by Ito-Yokado, and the first Robinson's Department Store in Japan was opened in November 1985 in Kasukabe City of Saitama Prefecture. This was a residential com- munity north of Tokyo and was a rapidly growing area. Although an Ito- Yokado super- store was located nearby, Ito-Yokado's management believed that a niche existed for a slightly more upscale retail store. Ito-Yokado had â€Å"shattered traditional wisdom by opening up a department store in the suburbs, not in the center of Tokyo. 21 The location was expected to serve a population area of more than 600,000 residents and to offer a broad selection of consumer goods at prices higher than superstores yet lower than the downtown Tokyo department stores. ~ Many of the strategies employed by Ito-Yokado in opening its Robinson's Department Store followed similar strategies employed in its superstores. The land was leased (in a suburb). Instead of purchasing goods on a co nsignment basis as most other department stores did, Robinson's managers were made responsible for the outright purchase of goods from suppliers.This allowed Robinson's to purchase goods at a significantly reduced price. Robinson's reported its first profit in fiscal 1989, approximately four years after opening. † In contrast, most Japanese department stores operate approximately 10 years before reporting a profit. The single Robinson's location grossed about ? 28 billion (US$220 million) in fiscal 1989. 24 The second Robinson's Department Store opened in late 1990 in Utsunomiya, about 100 kilometers (60 miles) north of Tokyo. Oshman's Sporting GoodsIto-Yokado licensed the Oshman's Sporting Goods name from the Houston, Texas, parent company in 1985. That year, two stores were opened. One of the stores was located inside the original Robinson's Department Store. RESTAURANT OPERATIONS The Famil Restaurant chain was started in 1979 as an in-store restaurant to serve customers at Ito-Yokado superstores. It had; however, expanded to 251 locations by 1988. 25 The Famil chain did not record its first positive earnings until 1986. In Famil's attempts to expand operations, the company had emphasized its catering business. By 1990, the in-store operations (those located in Ito- Yokado superstores) accounted for 45 percent of Famil's sales, the catering business accounted for 32 percent of sales, and freestanding stores accounted for 23 percent of sales. † Denny's Japan Ito-Yokado opened the initial Denny's (Japan) Restaurant in 1974 with a license from Denny's of La Mirada, California. Ito-Yokado tailored the U. S. family restaurant to the Japanese market, and Denny's Japan became profitable around 1977. By 1981, 100 Denny's Japan restaurants had been established. † and in 1990 there were 320 such restaurants operated by Ito-Yokado. In 1990, Ito-Yokado controlled 51 percent of Denny's Japan stock. In the early 1980s. Ito-Yokado decided that Denny's Jap an should purchase all rights to the Denny's name in Japan. The purchase was made in 1984, and royalty payments to the U. S. parent were thereby discontinued. In fiscal year 1990 (March 1989 to February 1990), Denny's Japan reported a net annual sales increase of 10. 9 percent, as compared with the 4. 9 percent Japanese restaurant industry sales increase for the same period= Exhibits 4 and 5 contain financial statements for Denny's Japan.In 1988, Denny's Japan began using an electronic order-entry system, which allowed managers of individual restaurants to quickly order food sup- plies based on trends in their own restaurants. It also allowed for the periodic updating of menus to reflect new food items. See exhibits 4 and 5. CONVENIENCE STORE OPERATIONS 7-Eleven Japan Since the opening of the first 7-Eleven store in 1974, the chain had grown to more than 4,300 stores located in virtually all parts of Japan by February 1990. 32 At that time, about 300 new stores were being opened ann ually.Ito-Yokado owned approximately 50. 3 percent of 7-Eleven Japan in 1990. Originally, young urban workers represented the primary customer base. As 7-Eleven penetrated the Japanese market, however, almost everyone became a potential customer. In Tokyo, for example, utility bills could be paid at the chain's stores. The 7-Eleven stores were small enough, with an average of only 1,000 square feet, to effectively avoid regulation under the Large Store Regulation Act. This allowed 7- Eleven to compete with the mom-and-pop retailers on the basis of longer hours of operation and lower prices.Faced with this competition, many of the small retailers joined the ranks of 7-Eleven. By converting small retailers to 7-Eleven stores, Ito-Yokado was able to expand rapidly and blanket the country† 7-Eleven Japan pursued a strategy of franchising stores instead of owning them. The franchise commission for 7-Eleven stores was approximately 45 percent of the gross profit of the store (the co mmission was 43 percent for 24-hour stores). Ito-Yokado provided most of the ancillary functions for each store (e. g. , administration, accounting, advertising, and 80 percent of utility costs).In 1987, 92 percent of all 7-Eleven stores in Japan were franchised. † and by 1990, only 2 percent of the 7-Elevens were corporate owned. † Within the Ito-Yokado group, 7-Eleven contributed 6. 8 percent of revenues in 1990. With this relatively small portion of overall corporate revenues, however, 7- Eleven Japan contributed more than 35 percent of the group's profit. Under its licensing agreement, 7-Eleven Japan paid royalties of 0. 6 percent of gross sales to the Southland Corporation. In 1989 and 1990, 7-Eleven Japan paid royalties of about $4. 1 million and $4. million, respectively. The financial statements for 7-Eleven Japan for the years 1986 to 1990 are shown in Exhibits 6 and 7. OPERATION REFORM PROJECT Ito-Yokado implemented the Operation Reform Project in late 1981 in a retail industry environment punctuated by reduced consumer spending and decreasing margins. The goals of the project were to increase efficiency and boost profitability by increasing the inventory turn while avoiding empty store shelves. The plan was originally implemented in the Ito- Yokado Superstores and the 7- Eleven Japan convenience stores.The implementation of the project involved a coordinated effort of catering to rapidly changing consumer preferences while, simultaneously, monitoring merchandise flow more closely. This coordination was accomplished by making individual store managers more responsible for such decisions as what merchandise was to be stocked on store shelves, thus allowing managers to tailor merchandise selection in their individual stores to local preferences. Top Ito-Yokado regional managers held weekly meetings with store managers to monitor the implementation of the project.As late as 1988, these meetings were still held on a weekly basis. † In o rder to avoid depletion of store stocks, Ito-Yokado established an on-line ordering system with vendors. In 1982, the ordering system reached only 400 vendors. By 1988, however, the system linked Ito- Yokado with 1,860 vendors. Point-of-Sale System As implementation of the Operation Reform Project began, Ito-Yokado paid increased attention to the importance of obtaining information regarding the flow of merchandise through individual stores. The tool chosen to accomplish this task was the point-of-sale system.POS system usage was increasing in the United States in the early 1980s, but the systems were used primarily to increase productivity at the cash register. In contrast, Ito- Yokado used similar systems as a part of the project by monitoring specific merchandise flow. As of the late 1980s, many retailers in the United States had begun utilizing POS in similar capacities, and some had begun to use POS to track the purchases of individual consumers. The first use of POS systems in Japan came in 1982, when 7-Eleven Japan began installing them in its stores. By 1986, every 7-Eleven store in Japan was equipped with such a system. The systems available were sophisticated enough to monitor the entire stock of merchandise in a typical convenience store having about 3,000 items. ‘ The systems could monitor the flow of every item of merchandise through the purchase, inventory, sale, and restocking stages. In late 1984, Ito-Yokado decided to install POS systems in the superstores. The sophistication of those systems installed in convenience stores, however, was not adequate to handle the merchandise flow of a superstore, which could stock up to 500,000 items. † New POS systems were developed n a coordinated effort by Ito-Yokado, Nippon Electric, and Nomura Computer Services. The installation of POS systems in the existing superstores was completed in November 1985, with more than 8,000 POS registers installed in 121 stores. † With 138 stores in 1990 , Ito-Yokado had an estimated 9,000 POS registers in the superstores alone. In 1986, after the systems had been installed in all superstores and 7-Elevens, Ito- Yokado accounted for about 70 percent of the POS systems in use in Japan as of 1988; 7-Eleven Japan was the only major convenience store chain in Japan to have installed POS systems. By August 31, 1989, Japan had 119,137 POS scanner-equipped registers in 42,880 stores, making it the country with the most POS systems in use. † The POS systems used by 7-Eleven Japan and Ito-Yokado superstores were upgraded in 1986 to add a new dimension to Ito-Yokado's Operation Reform Project. The upgraded systems allowed for bidirectional communication with the company headquarters. This feature essentially allowed information to flow not only from individual stores to a central location, but also from the central location back to individual stores.By linking the central system to other computer systems, more information than just sale s of retail items could be transmitted. This capability allowed Ito-Yokado to increase the efficiency of deliveries by centralizing some orders. By increasing the total size of orders, Ito-Yokado increased its bargaining position with distributors. One result of this bargaining strength was more frequent deliveries of smaller volume. From 1987 to 1988, deliveries increased from one to three per week for stores in many regions of Japan, notably the Tokyo, Hokkaido, and Kyushu areas.Using the POS systems, 7-Eleven began to offer customers door-to-door parcel delivery in conjunction with Nippon Express. In addition, some POS terminals were being used to issue prepaid telephone credit cards+' Since October 1987, Tokyo-area customers had been able to pay their electric bills at 7-Eleven; since March 1988, they had also been able to pay their gas bills Women traditionally manage household finances in Japan, so these services were designed to attract more women customers to the convenience stores. Results For the Ito-Yokado superstores alone, average days of inventory decreased from 25. in 1982 to 17. 3 in 1987. By 1990, it was estimated to be 13 days. The effect on operating margins and net income for the entire Ito-Yokado Corporation was equally dramatic. In 1982, the company's operating margin stood at 5. 1 percent. It had increased to 8. 1 per- cent by 1987. By 1990, the operating margin had climbed to 10. 5 percent. Net income for the corporation increased from ? 14,662 million in 1982 to ? 34,649 million in 1987, and ? 58,465 million in 1990. 7-Eleven Japan recorded similar increases in operating margins and net income during the same period.In 1982, 7-Eleven Japan's operating margin was 20. 7 percent. It had increased to 34. 6 percent by 1987. Net income from the 7-Eleven operations increased from ? 7,837 million in 1982 to ? 33,000 million in 1987. As of 1990, the Ito-Yokado Corporation was the second largest retailer in Japan, with ? 1,664,390 million of ann ual gross sales. The leading retailer was Daiei, with ? 2,114,909 million of revenues. Ito- Yokado was, however, the most profitable retailer in Japan, with net income of ? 58,465 million. In comparison, Daiei recorded net income of only ? 9,457 million for 1990.Financial statements for Daiei are shown as Exhibits 8 and 9. THE SOUTHLAND CORPORATION The Southland Corporation began in Dallas, Texas, in 1927 when Claude S. Dawley consolidated several small Texas ice companies into the Southland Ice Company. This new company was under the direction of 26-year-old Joe C. Thompson, Sr. Under Thompson's guidance, Southland began to use its retail outlets (curb service docks) to sell products in addition to ice, such as watermelon, milk, bread, eggs, and cigarettes. With the addition of these products, the concept of the convenience store was born.During the Great Depression and the 1940s, Southland's convenience store business added several more products, including gasoline, frozen foods, beauty products, fresh fruit and vegetables, and picnic supplies. Because the store opened at 7 AM and remained open till 11 PM, the store name 7-Eleven was adopted during this time. The 1950s were a period of substantial growth in terms of the number of stores and of 7-Eleven's geographical coverage. The first stores located outside of Texas were opened in Florida in 1954. During the same year, 7-Eleven's operating profit surpassed the $1 million mark for the first time.By 1959, the entire 7-Eleven empire constituted 425 stores in Texas, Louisiana, Florida, and several other East Coast states. John Thompson became president of Southland when his father, Jodie Thompson, died in 1961. During the 1960s, a population migration toward the suburbs and changing lifestyles presented Southland with new growth opportunities. John Thompson lead Southland on the path of expansion, and more than 3,000 stores were opened in the decade. The product line of 7-Eleven also grew during this time to i nclude prepared foods, rental items, and some self-service gasoline pumps.The 1970s were also a period of achievement for Southland. In 1971, the $1 billion sales mark was surpassed. Southland- stock began trading on the New York Stock Exchange in 1972, and the 5,OOOth store was opened in 1974. It was at this time that Masatoshi Ito approached Southland with the prospect of franchising 7-Eleven stores in Japan. During the 1970s and early 1980s, Southland's activities became more diversified. In 1986, the company had four operating groups: the Stores Group, the Dairies Group, the Special Operations Group, and the Gasoline Supply Division.The Stores Group represented the largest of the operating groups in terms of sales through the 1980s. The Stores Group was responsible for the operating and franchising of convenience stores. At the end of 1985, there were 7,519 7-Eleven stores in most of the United States and five provinces of Canada. This group was also responsible for 84 Gristede' s and Charles & Company food stores. 38 Super-7 outlets, and 7-Eleven stores operated under area licensees in the United States, Canada, and several Pacific Rim countries, including Japan.The Dairies Group was one of the nation's largest dairy processors in 1986 and served primarily the Stores Group, although aggressive marketing in the 1980s targeted service to institutional dairy needs. This group operated in all of the United States and parts of Canada. The Special Operations Group consisted of Chief Auto Parts (acquired in 1979); Pate Foods (a snack food company): Reddy Ice (the world's largest ice company); and Tidel Systems (a manufacturer of cash dispensing units and other retailer equipment).The Gasoline Supply Division was formed in 1981 to serve the gasoline requirements of the more than 2,800 7-Eleven stores handling gasoline. This division's history was punctuated by the 1983 acquisition of Cities Service Refining, Marketing, and Transportation businesses (CITGO) from Oc cidental Petroleum. Southland's Recent Activities Southland's dramatic growth and diversification during the 1970s and early 1980s resulted in 7-Eleven having a dominant position in the convenience store industry.Despite this position, circumstances since the mid-1980s had greatly eroded 7-Eleven and Southland's strengths. The oil price collapse of early 1986 was the sharpest drop of crude oil prices in history. The instability of crude oil and wholesale refined products, coupled with CITGO's inventory methods and various write-downs, resulted in only modest income for a previously very profitable company. The volatility of CITGO's financial position greatly affected Southland's earnings. Southland's equity interest in CITGO contributed to a $52 million loss for the entire corporation in 1986.In order to reduce the impact of an unstable crude oil market and the accompanying volatility of CITGO's earnings, South- land entered into a joint venture with Petroleos de Venezuela (PDVSA) i n late 1986. The joint venture with PDVSA had several components. Southland sold a half- interest in CITGO to a subsidiary of PDVSA for $290 million. In addition, PDVSA agreed to both supply CITGO with a minimum of 130,000 barrels of crude oil per day and pro- vide its share of CITGO's working capital requirements. A takeover attempt of Southland occurred in April 1987.Canadian financier Samuel Belzberg approached the Southland board of directors with an offer of $65 per share of common stock. Unwilling to relinquish control of Southland, the Thompson family tendered $77 per share for two-thirds of the outstanding shares in July 1987. The other third of the shares would be purchased at $61 per share (plus $16 per share of new preferred shares) by the would-be private Southland Corporation. Financing for this acquisition came from $2 billion in loans from a group of banks and a $600 million bridge loan from Goldman, Sachs and Salomon Brothers. An additional $1. billion was generated by the issue of subordinated debentures Gunk bonds) in November 1987. This occurred after the stock and junk bond markets crashed in October 1987. Southland's investment bankers had to sell the bonds at a blended rate of almost 17 percent, instead of the anticipated rate of 14. 67 percent. The Thompson family emerged from the buyout owning 71 percent of Southland at a total cost of $4. 9 billion. Paying the High Costs of a Leveraged Buyout After Southland had been taken private through the leveraged buyout (LBO), significant changes occurred in both Southland and 7-Eleven operations.Southland was restructured, with the elimination of two levels of middle managers. During this time, Southland began selling more 7-Eleven stores than it opened in the United States and Canada. Due to the increased number of licensees opening stores overseas, however, the total number of stores worldwide continued to increase. 7-Eleven Japan was primarily responsible for this increase, with the opening o f 340 stores in 1988 and 349 stores in 1989. Southland also divested itself of many large assets in the 1988 to 1990 period (see Exhibit 10).Significant in this group of divestments were the entire Dairy Group, more than 100 7-Eleven stores in the continental United States, Southland's remaining interest in CITGO (sold to PDVSA), and 7-Eleven Hawaii, (purchased by 7-Eleven Japan). In November 1989, 7-Eleven Japan purchased 58 stores and additional properties from Southland. These properties and stores, which were located in Hawaii, were exchanged for $75 million in cash. The 58 convenience stores were organized as 7- Eleven Hawaii, which was established as a subsidiary of 7-Eleven Japan.As of December 31,1990, Southland operated 6,455 7-Eleven convenience stores in the United States and Canada, 187 High's Dairy Stores, and 63 Quick Mart and Super-7 Stores. Southland owned 1,802 properties on which 7-Eleven stores were located. Another 4,643 7-Eleven stores in the United States and C anada were leased. In addition the company possessed 234 store properties held for sale, of which 109 were unimproved. 77 were closed stores! and 48 were excess properties adjoining store locations. Three of Southland's four food-processing facilities were owned (the other was leased).The company owned six properties in the United States on which distribution centers were located. Five of the six distribution centers were company owned. Until December 1990 the company had also owned its corporate headquarters (called City- place) located near downtown Dallas. 59 Financial statements for Southland Corporation are shown in Exhibits 11 and 12. THE PROPOSED PURCHASE OF SOUTHLAND BY ITO-YOKADO The divestments of 1988, 1989, and 1990 constituted attempts by Southland to generate sufficient cash to service the massive debt incurred from the LBO of 1987.By early 1990, however, it was apparent that the cash generated from these divestments and Southland's operations was not sufficient to cov er its interest expense. Some experts estimated that Southland's cash shortfalls would reach $89 million in 1990 and more than $270 million in 1991. 60 Southland's long-term debt still totaled about $3. 7 billion, and interest expense alone in the first three quarters of 1989 was almost $430 million. † In March of 1990, Southland announced that it was seeking â€Å"rescue† by Ito-Yokado. Proposed Acquisition of Southland by Ito- YokadoSouthland had â€Å"looked at possibilities of receiving assistance from other U. S. companies, but decided that†¦ Ito-Yokado was the best potential partner. â€Å"63 The original proposal would have resulted in Ito-Yokado receiving 75 percent ownership of Southland for $400 million. This proportion of Southland would be split between Ito- Yokado and 7- Eleven Japan, with 7- Eleven Japan obtaining two-thirds of the 75 percent share. The deal was contingent on Southland's ability to swap its outstanding publicly traded debt for stock and zero-coupon (non-interest-bearing) bonds.The publicly traded debt amounted to approximately $1. 8 billion. There were five classes of public debt, ranging in type and interest paid. The interest rate of the bonds varied from 13. 5 percent to 18 percent. Ito-Yokado's offer was also contingent on 95 percent of all bond- holders of each public debt issue accepting the swap. Under this original proposal, the Thompson family would retain a 15 percent stake in Southland, and the remaining 10 percent of the company would be held by bondholders.The original proposal had a deadline of June 14, 1990, at which time either Ito- Yokado or Southland could cancel the agreement. Neither party indicated that such action would be taken, even though Southland's bondholders balked at the swap proposal. A bigger problem was facing the two companies: a rapidly approaching interest payment due on June 15, 1990. Southland's failure to pay the $69 million payment would result in Southland having a 30-d ay grace period in which to compensate bond- holders. At the end of the 30-day period, unpaid bondholders could try to force South- land into bankruptcy court. Revisions to the Proposed Buyout Southland did not make its scheduled interest payment that was due on June 15, 1990. Bondholders, meanwhile, had shown little regard for the original deal struck between Ito-Yokado and Southland. Three more revisions of the proposed debt restructuring and terms for the buyout were submitted between mid-June and mid-July 1990. In each revision, either Ito- Yokado's or the Thompson family's stake in Southland was reduced and the share of Southland stock offered to bondholders increased.With each revision came increased bondholder support, yet this support was far short of either the two-thirds majority (as required in Chapter 11 restructuring cases) or the 95 percent acceptance rate dictated by Ito-Yokado, As revisions were submitted, the expiration dates of the debt restructuring and stock purc hase by Ito- Yokado were extended. On July 16, a bondholder filed suit against Southland for failure to pay interest on June 15, because on July 15 Southland's grace period had expired. By September 12, a majority of bondholders had tendered their notes. This majority was still far short, however, of the 95 percent swap requirement dictated by Ito-Yokado. The deadlines were extended to September 25 for both the debt swap offer by Southland and the stock purchase offer by Ito-Yokado. As Southland was apparently headed for involuntary bankruptcy filing under Chapter 11, the proposal again seemed in jeopardy. Acceptance of the Proposed Buyout The deadline for Southland's debt swap offer was again extended. Bondholder approval was finally obtained in late October.Ito-Yokado's offer to buyout Southland was extended to March 15, 1991, pending court approval of the prepackaged bankruptcy dea1. The bankruptcy-court petition for approval of the prepackaged debt restructuring was filed on Oct ober 24,1990. Although Southland did not have sufficient bondholder approval as dictated by Ito-Yokado, the bankruptcy court proceedings were swift. The last few bondholders who held out were placated in January when the Thompsons relinquished warrants for half of their 5 percent stake of Southland's stock. † On February 21, 1991, the U. S. ankruptcy court in Dallas approved the reorganization of Southland.?! At that time, at least 93 per- cent of the holders of each class of debt issued by Southland had approved the reorganization. On March 5, 1991, Ito-Yokado purchased 71 percent of Southland's stock for $430 million. Two-thirds of this stock was purchased by 7-Eleven Japan, and the other third purchased directly by Ito-Yokado. The terms of the accepted debt-restructuring agreement between Southland and its bondholders are shown in Exhibit 13. THE CONVENIENCE STORE INDUSTRY IN THE UNITED STATESThe convenience store industry in the United States changed dramatically during th e decade of the 1980s. The number of convenience stores in the United States, the gross sales of these stores, and the gross margins all increased during this time period. The net income of convenience stores, however, decreased significantly. This outcome was largely the result of the rapid expansion of several chains of convenience stores and the increased number of convenience stores opened by oil companies. Aggregate Measures of the Industry The number of convenience stores grew from about 39,000 in 1982 to more than 70,000 in 1989.From 1985 to 1989, industry sales increased from $51. 4 billion to $67. 7 billion, an increase of 6. 3 percent per year. Gross margins increased from 22. 8 percent in 1985 to 26. 2 percent by 1988. Despite such growth, convenience store operations experienced a decrease in net profit in the late 1980s. The total industry pretax profit peaked in 1986 at $1. 4 billion, fell to $1. 16 billion in 1988, and plummeted to $271 million in 1989. Some trends ar e shown in Exhibit 14. The expansion of convenience stores in the 1980s was led by large convenience store chains and oil companies.In addition to the growth experienced by the Southland Corporation's 7-Eleven, Circle-K, a Phoenix-based convenience store chain, expanded from 1,200 stores in 1980 to 4,700 stores in 1990. The Role of the Oil Companies The impact of oil companies on the convenience store industry had been significant. Virtually all of the major U. S. oil companies began combining convenience store operations with gasoline stations in order to boost profits. In 1984, Exxon opened its first combination convenience store and gas station. By 1989, it had 500.Texaco operated 950Food Marts in the same year. From 1984 to 1989, the number of convenience stores operated by oil companies increased from 16,000 to 30,000. Gasoline sold at a lower margin (about 6 percent in 1984) than nongasoline convenience store products (32 percent in the same year), so the sale of convenience s tore items presented an opportunity for those gas stations with good locations (i. e. , street comers) to increase profits. In order to capitalize on the potential for higher profits in retailing, the major oil companies boosted their marketing expenditures.In 1979, the petroleum industry spent about $2. 2 billion for their marketing efforts. By 1988, these expenditures were almost $5 billion. The convenience stores operated by oil companies were growing in both number and size. In 1986, only about 20 percent of the oil company convenience stores were 1,800 or more square feet in size (the size of about 90 percent of traditional convenience stores). By 1990, however, more than 50 percent of the oil company convenience stores were between 1,800 and 3,000 square feet in size. â€Å"? Merchandise Trends for Convenience StoresBecause of the intensified retailing efforts of oil companies and large convenience store chains, some trends (other than those mentioned previously) evolved. In 1985, gasoline accounted for 35. 4 percent of convenience store sales. By 1989, gasoline accounted for 40 percent of sales. † The gross profit margin for gasoline sales had increased from 7. 3 per- cent to 11. 7 percent more than the same period. â€Å"? Of the 61,000 convenience stores in the United States in 1985,55 percent sold gasoline, and in 1989, 65 percent of 70,200 convenience stores sold gasoline.In 1989, 75 percent of the new convenience stores built were equipped to sell gasoline. † Although gasoline sales and margins became an increasingly significant contributor to convenience store revenues, contributions of revenue from other merchandise stagnated. In 1985, merchandise (other than gasoline) sales for the convenience store industry amounted to $33. 2 billion. In 1,989, sales reached $40. 6 billion. † This increase in merchandise sales, however, was offset by the large number of store openings. In 1985, the average yearly merchandise sales per store was $544,000.This number increased to only $578,000 in 1989. THE SETTING While flying from Japan to the United States, Takahashi reflected on the success that both Ito-Yokado and 7-Eleven Japan had enjoyed over the course of many years. These achievements were the result of long-term strategies that were carefully tailored to the Japanese market. Could these same, or similar, strategies be the foundation for making Southland financially successful again? He realized that the convenience store industry in the United States was vastly different from that of Japan.Nevertheless, he was confident that, through careful and thorough planning, the goal of making Southland profitable could be achieved. -11 pts if late (after 6pm of due date) and additional -5pts for each day thereafter for max late points of -26 pts. Lists the Strengths / Weaknesses/ Opportunities / Threats for the Ito-Yokado Company (total 10 pts) SWOT analysis. Strengths (list and briefly discuss only 3) 1 pt each for tota l of 3 pts. SWOT, defined as the strength, weaknesses, opportunities and threats is an organizational tool used to analyze core competencies of a business.And like most businesses the Ito-Yokado Group consisting of three business segment (superstores and retail operations, restaurants operations, and convenience store operations) is no different. The strategies used to expand its operations Point of sale register, diversified portfolio, name(branding) and strategic location Weaknesses (list and briefly discuss only 2) 1 pt each for total of 2 pts Opportunities (list and briefly discuss only 2) 1 pt each for total of 2 pts The need for new ideas, real estates, the most vulnerable (younger generation) Threats (list and briefly discuss only 3) 1 pt each for total of 3 pts.The threats faced by the Ito-Yokado Group are: competition from mom and pops store, decrease in disposable income and Large Store Restriction Acts. As discussed in the article, the Large Store Restriction Acts influen ce by rival competitors makes it challenging for the organization to cater to its consumer needs. The result is not only deprived customer, but decrease in revenue, as the laws restrict the size of the store, making it impossible to grow different variety in store products.Another threat is consumer income, the limited consumer income, means consumer has limited amount for discretionary spending. And last but not least is the competition from mom and pops stores. These types of small businesses despite their sizes can pose a real threat for large companies such as 7-Eleven, reason being, is the fact that they are better known and rooted within the community. Essay questions to be answered in detail. (18 pts for each question for total of 90 pts) 1.What were some of the primary reasons for Ito-Yokado's remarkable degree of success during the past several decades? Globalization in my opinion was one of the biggest factors in the company success. Today’s market makes fierce comp etition therefore businesses no longer can afford to operate locally. In order for them to be successful, they must join the rest of the world in forming partnership through Joint Ventures, Franchising, Licensing, and Foreign Subsidiaries. While the advantages of globalization exist, it is not without its disadvantages.The transformation of a company from a local organization into a transnational organization is not an easy task mainly because of the various laws, time, efforts, and monetary investment that one must be able to shoulder before taking on such venture. The factors listed include, but are not limited to political stability, relationship between the two countries, licenses fees, market responsiveness, and the cost can determine the successfulness of a business. In addition, the careful planning and leadership ability can also determine whether or not a business can make the transformation successfully.As a leader one of the primary goals is to have a vision that can be c ommunicated down the chain. And as demonstrated by Ito-Yokado, he clearly demonstrated his vision for the company by strategically expanding the company’s operations into three different segment ranging from retail stores, restaurants chain and convenient stores. The result was a diversified portfolio with increase revenue. Another reason of success can be measured by the risk decision made by the company’s leaders. With any operation whether personal or professional, one must be willing to take isk, a risk in which the benefits outweigh the cost. Although the transformation from the Japanese market to the American was uncertain, because of factors such as consumer responsiveness, income, laws and applicable regulations, the decisions to invest into the various markets was worthwhile all because of proper planning and market response. The result was a successful Ito-Yokado group. 2. How did Ito-Yokado’s 7-Eleven Japan differ from Southland's 7-Eleven operations during the 1980s? While the two shares the same name the difference in their operations where obvious.The 7-Eleven in Japan compared to that of Southland differ in their operation that is, the door-to-door parcel delivery by Nippon, the convenience of bill pay for its customers, faster growth opportunities through franchising. Because of the Large Store Restriction Act, the company was limited in growth to expand its physical location; as a result, they resort to a smaller size stores strategically located in suburban areas. This venture was a deliberate marketing strategy used to penetrate the most vulnerable areas (suburbs) and fight off competitions brought on by the moms and pops stores.While the 7-Japan thrive in its operations of smaller stores with over 3000 items with point of sales register, their counterpart was not far behind. Under the leadership of John Thompson, the 7-Eleven in Southland were able to operate convenience stores with expanded products and services includ ing; low cost gasoline, and prepared food. Despite troubles with the oil industry, the 7-Eleven of Southland was able to form a partner with Oil Company such as CITGO and largest ice producer Reddy Ice. The result was a perfect union that brought about increase revenues.The union however, was short lived, as the company profit plummeted and had to file for bankruptcy. 3. What are Ito-Yokado and Z-Eleven Japan getting for their $430 million? 4. What is your prognosis for Southland under Ito-Yokado ownership? Will Ito-Yokado be successful? Based on the article, it is apparent the management and leadership of Ito-Yokado Group are making the right decisions and stirring the company in the right direction. This is evident through it increase franchising of stores and increase revenue. While the Group might be successful in Japan, areful consideration must be given to the market in the United States. As noted in the reading, the Southland Group under the leadership of John Thompson has ha d its share of misfortune mainly because of the oil industry. The fall in oil prices and volatility of the market resulted in loss of profit and buyout. While the venture of acquiring Southland Group, Ito-Yokado, must ensure it does it homework, with proper study of the US market. They must also, realize that the US market is one of capitalism with fierce competition.Unlike Japan, there are no such rules as the Large Store Restriction Act, as long as the proper conditions are met with the right paperwork, a business can expand as necessary. Another determining factor is the need for the product. yes the idea to expand is great! However, is it cost effective or will the company be better off 5. Is 1to-Yokado a global company? Explain your answer. The answer whether Ito-Yokado was a global company would be yes based on the fact that the company operate in more than one country with various subsidiaries.Ito-Yokado, will be consider Multinational Corporation simply because the operation and production of its products and services were done both in the United States and Japan. In addition the trading of its stocks was offered on both the NYSE, and the Japanese trading markets, thereby influencing the economy of both nations. Another important factor is the fact that nowadays, globalization makes it almost impossible for businesses to operate locally. For this reason they must be willing and able to compete on a global stage with numerous   

The Unknown Citizen By. Auden - 1527 Words

The Unknown Citizen Analysis The Unknown Citizen, written by W.H. Auden, is a satirical poem declaring the petty accomplishments achieved by an unnamed citizen in a presumably American or industrialized society. Through several readings of the poem, many would not even consider the Unknown Citizen as a poem, but rather, a letter of recommendation or a speech for a political election. The only obvious characteristic of this piece resembling a poem is the rhyming scheme. Other than rhyming, there are no apparent similes, onomatopoeias, or any other widely-used literary devices. This strengthens the tone and setting of this poem, for the diction and overall language is meant to be interpreted as thoroughly formal, literal, and professional. From the very first line, the reader is given a common but accurate stereotype of the government. It reads: He was found by the Bureau of Statistics to be. This provides the common assumption that the bureaucracy and government don t consider the common citizen a human being, but rather a numerical value or worth. Also, although there is no negativity told of the citizen in question, the compliments seem rather petty and are told so through the excessive use of litotes and double-negatives. Some examples include: no official complaint ; never got fired ; and he never interfered . In this lack of economic writing, the narrator, presumably a businessman or bureaucrat, describes this citizen with insignificant or averageShow MoreRelated The Unknown CItizen by W.H. Auden Essay731 Words   |  3 Pagesâ€Å"The Unknown Citizen†   Ã‚  Ã‚  Ã‚  Ã‚  Ã¢â‚¬Å"The Unknown Citizen† by W.H. Auden, is a commentary on government and the materialism of modern man. The poem is written in the form of an obituary inscribed on a monument built by the government in commemoration of an average, upstanding, and decent community member. Throughout the passage, the speaker lists facts about the citizen’s life which he believes prove that the deceased was a valuable person. In actuality these facts represent nothing more than the sociallyRead MoreThe Unknown Citizen And Wb Auden Analysis820 Words   |  4 Pagessparked an allowance for him to change his writing style. ‘The Unknown Citizen’ and ‘In Memory of W.B Yeats’ were both written in 1939, shortly after Auden’s move to America. Both poems have representations on the multifaceted nature of human immortality and the effects that those depictions have on the individual that they were modelled off and how those interpretations can varying depending on context. In Auden’s poem ‘The Unknown Citizen’ the line, â€Å"To JS/07 M 378 / This Marble Monument is ErectedRead More The Unknown Citizen by W.H. Auden Essay815 Words   |  4 PagesThe Unknown Citizen by W.H. Auden The Poem â€Å"The Unknown Citizen† by W.H. Auden is a satire. Its narrator is the state. In this, the state pays tribute and describes a successful and positive product of its efficiency and effectiveness. In other words, it builds the character later described to the reader as â€Å"the perfect citizen.† The narrator speaks as if he is delivering a speech or common tribute using words and phrases that are familiar to the reader. Using such imagery Read MoreThe Unknown Citizen by W.H. Auden Essay970 Words   |  4 PagesThe Unknown Citizen by W.H. Auden The poem that I am going to talk about is the Unknown Citizen by W.H Auden. I am going to talk about what I first glimpse in the poem but then after further study what you actually see. At the start of the poem under the title it hasRead MoreAn Analysis Of The Unknown Citizen By F. H. Auden2316 Words   |  10 Pageswithout any complaints. Each of the three literary writings has a character that is considered rebellious within the norms of society. 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On the other hand, the short story â€Å"A P† has a conformist character who enforces the rules for the supermarket and a rebellious character who goes against theRead MoreAnalysis Of Auden s The Unknown Citizen, And Funeral Blues All By Auden2119 Words   |  9 Pagesenjoyable and humorous. Poet W.H. Auden did this. As the 1930s seemed to be drawing closer towards war, Auden became a leading spokesman of his generation, a political writer who warned against dangers that are caused by totalitarianism. His socialism and distrust of nationalism during this period was strong, influenced mostly by his experiences in the Spanish Civil War, but his social views were always more complex labels that were given to him. Three works of Auden that can be analysed are â€Å"SeptemberRead More Analysis of The Unknown Citizen by W.H. Auden Essay examples1464 Words   |  6 PagesAnalysis of The Unknown Citizen by W.H. Auden â€Å"The Unknown Citizen†, written by W.H. Auden during 1940, is a poem where the speaker, a representative of the state or government, directs a speech to the audience about a monument being erected for a citizen. Written in free verse, although using many couplets, this poem is a poem that describes the life of a certain person through his records and documents. This citizen is portrayed as a normal and average human being who is being honouredRead MoreThe Unknown Citizen by W.H.Auden1320 Words   |  5 PagesThe poem â€Å"The Unknown Citizen† by W.H. Auden is a poem with a strong message to a wide audience. It portrays a political system’s control over its citizen. The poem is telling us we are a product of our countries, we are nothing but a number of digits to be identified. The poem revolves around the life of the unknown citizen, JS/07/M/378, who was granted a monument by the government in honor of his flawless life in an un-free society. He is by all means the perfect citizen, the citizen who has devotedRead MorePoem Analysis: The Unknown Citizen Essay977 Words   |  4 PagesThe Average Man W. H. Auden satirizes the United States as an entity, which restrains individual advancement. Through depersonalization, the government rewards those who actually never do anything. However, the Unknown Citizen has a monument built as a symbol of his perfection. Thus, Audens The Unknown Citizen shows how the government makes each individual merely a number unless they do not conform to societys norms. The monument of the unknown citizen is erected not to honor the