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Trace the Growth of a Specific Brand - Assignment Example

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The paper focuses on Don and Rhonda Carano who sealed a handshake agreement with the owner of the prestigious automobile brand “Ferrari” which makes cars with the prancing horse badge on the use of the brand since Ferrari formed no plans to make wine…
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Trace the Growth of a Specific Brand
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World Business Question1: Trace the growth of a specific brand through brand extension and licensing. Don and Rhonda Carano sealed a handshake agreement with the owner of the Prestigious automobile brand “Ferrari” which makes cars with the prancing horse badge on the use of the brand since Ferrari formed no plans to make wine and Caranos promised not to open a sports car factory. Ferrari-Carano is a tribute to Don Carano’s paternal grandmother. The Reign of Reds Ferrari-Carano made history at its Healdsburg property, where the white wine program, Chardonnay and lovely Fume Blanc became the foundation for the brand’s initial growth. The fruit is from Dry Creek, Russian River, and Napa/Carneros and most recently, Anderson Valley is all from vineyards owned by the Caranos but with success comes growth. Winemaker Aaron Piotter explains that Ferrari- Carano has outgrown in Healdsburg. While white wine production continues at the original winery, Don and Rhonda looked to the future and decided to purchase land in the surrounding hills of Sonoma. Dashing red wines are not new to the portfolio; several have been introduced over past years, such as Ferrari-Carano’s Meritage blend Tresor and its own version of a Super Tuscan, Siena. However, it was time to expand, so a new winery was built specifically for red wine production in the heart of the Caranos’ latest estate, atop a mountain above the Alexander Valley near Geyserville. Piotter dedicated his time and energy to production at this new state-of-the-art facility, hence leading to his daily success. Piotter, on his visit to Los Angeles, told The Tasting Panel that they called their new label “prevail”. The lush, concentrated mountain fruit comes from two distinct ranches and goes into two sibling wines. Prevail West Face is from Look Out Mountain, a blend of 70% Cabernet Sauvignon and 30% Syrah, grown in deep, nutrient-rich soils. The 2004 Prevail West Face possesses vibrant blackberry fruit, with notes of cardamom and black pepper that lingers through the finish. Prevail Back 40 is named for the 40-acre block of vineyards way in the back of RockRise Mountain. Dark berry, caramel and sweet vanilla persists on the palate of this 100% Cabernet Sauvignon. Ferrari-Carano Winemaker Aaron Piotter originally worked with Sangiovese production in the late 90s at Sebastiani. Piotter notes that there was not much of those varietal in California then, and the deficit could not probably be resolved. He further added that It was a difficult grape to help craft into a substantial wine. However, they also find it quite elegant, so they came up with a blend called Siena. Sangiovese has leaned on a pillar of structure from Malbec, whose Ferari-Corano’s latest project is Prevail, a fitting name for mountain reds. The blend for the 2005 Siena, Sonoma County, is approximately 75% Sangiovese, 25% malbec. Nevertheless, Pinot Noir is on the horizon, with a new estate vineyard project in Mendocino. Piotter explained that they realized that their property in the Russian River and Carneros was well suited for Chardonnay, but not to Pinot Noir. He said that they had great luck in the Anderson Valley; they were near the ocean at their 2,000-foot elevation at Sky High Ranch, where his colleague, Sarah Quider, their winemaker for white wine, Pinot Noir and dessert wines, had made some beautiful Pinot’s from that estate. The new Ferrari-Carano Pinot is awaited to be sampled in its first vintage, which goes to bottle this spring. Question2: Discuss a specific company’s issues relative to violations of a law protecting employees such as the Equal pay Act, the Civil Rights Act or the Americans with Disability Act. Ethical business conduct and compliance with applicable laws and regulations are fundamental aspects of Sony’s corporate culture (Sony 3). To this end, Sony has established a Global Compliance Network comprised of the Compliance Division at the corporate headquarters, a global compliance leadership team and regional compliance offices around the world. In addition, it has adopted and implemented the Sony Group Code of Conduct and set up Compliance Hotline systems through its Global Compliance Network. Sony has taken these actions in order to reinforce the Company’s worldwide commitment to integrity and help assure resources are available for employees to raise concerns or seek guidance about legal and ethical matters. Strengthening the Compliance System In July 2001, Sony Corporation established the Compliance Division, charged with exercising overall control over compliance activities across the Sony Group, to emphasize the importance of business ethics and compliance with applicable laws, regulations and internal policies. The Compliance Division establishes compliance policies and structures for the Sony Group (John 2). In July 2003, Sony established a regional compliance network, comprised of offices in the Americas, Europe, Japan, East Asia and Pan-Asia, which are charged with exercising regional control over compliance activities to strengthen the compliance system throughout the Sony Group. Sony adopted the Sony Group Code of Conduct, which sets the basic internal standards to be observed by all directors, officers and employees of the Sony Group, in order to emphasize and further strengthen corporate governance, business ethics and compliance systems throughout the Sony Group (Azumi & Mcmillan 40). In addition to legal and compliance standards, the Code of Conduct sets out the Sony Group’s basic policies concerning ethical business practices and activities on topics like respect for human rights, safety of products and services, environmental conservation and information disclosure. Standards applicable to Sony Corporation, as well as any company more than 50% of whose outstanding stocks or interests with voting rights is owned directly or indirectly by Sony Corporation and such other companies as determined by the Board of Directors of Sony Corporation. The Standards are applicable to all Sony Group directors, officers and employees (Chaganti and Cook 34). Sony has established an Information Security and Privacy organization headed by a Chief Information Security Officer (CISO) reporting directly to a Sony Corporation Corporate Executive Officer. Sony also has established the Sony Global Information Security Policy and its related subordinate rules, the Sony Global Information Security Standard, and the Global Basic Principles on Personal Information, which set forth Sony’s commitment to information security and privacy and defines policies to be followed by all Sony personnel (Anderson 34). This organization coordinates with individuals responsible for information security and privacy at Sony Group companies globally to create a Groupwide information security and personal information management system. In regarding the adoption of the Sony Group Code of Conduct, Sony also established a Sony Group Compliance Hotline system as a resource for employees to report matters or seek guidance about possible violations of laws or internal policies, and to allow the Sony Group to respond swiftly to potential risks of such possible violations. A compliance-monitoring program helps to ensure thorough global adherence to the Company’s Code of Conduct, internal policies, and training and other protocols (Azumi & Mcmillan 45). The program relies on self-assessments, compliance audits and internal audits, along with monitoring of hotline and other reporting. Among other policies, Sony has adopted the Sony Group Anti-Bribery Policy, which builds on the anti-bribery and accurate record-keeping requirements in the Sony Group Code of Conduct to help ensure that Sony Group personnel do not violate any applicable anti-corruption laws or regulations. This Policy reflects Sony’s strong commitment to business integrity and, in particular, establishes practices and procedures that must be followed to help ensure integrity in Sony’s dealings with government officials, as well as training requirements. Question3: Discuss the poor management decisions or tactics that lead to a specific organization’s bankruptcy or demise. The Hostess Company made a decision to close due to close since it had no financial resources to weather the nationwide strike that had befallen them. It declared that it would sell its assets highest bidders providing a chance for its most popular products to be scooped up for auction and attached to products from other companies. The company ran bankrupt because of monumental failure by all its personnel whereby unreasoned measures were taken to increase the pay of their top officials to meet their interests at the expense of the smooth running of the company’s operations. The president of bakers called for liquidation but said that his members were not the ones responsible, blaming the various management teams that served for a period of the last eight years for failing to turn the firm around. The members decided not to take more of abuse from the company and decide that they were not going to agree to another round of outrageous wage and benefit cuts and give up their wages only to see another management team fail and Wall Street Vulture capitalists and restructuring specialists walk away with untold large amounts of money. The company had given a deadline for the bakers to return to work or face a shutdown of the company whereby they failed to turn up. The membership of one of its major unions, the Brotherhood of Teamsters voted to accept a new contract with reduced wages and benefits but the baker’s union rejected the deal prompting the Hostess management to secure permission from bankruptcy court to force new concession contract on workers. The company’s operating and financial problems were severe that it required steep concession from a several stakeholders but not all stakeholders were wiling to be constructive. The company had a new contract to cut salaries across the company by 8% in the first year of the five-year agreement then raise salaries by 3% the following three years and by 1% in the last year. It also reduced its pension obligations and its contribution to the employees’ health care plan. In exchange it offered concessions including a 25% equity stake or workers and the inclusion of two union representatives on a eight-member board in fight for the company to survive. The improper management skills of the company brought about all the misfortunes to the company since they did not make efforts to address the crucial decisions made by the company to all the workers hence creating misunderstandings that then caused strikes of the workers. The downfall of Hostess was about decreasing demand, high debt and poor management. It announced its intention to declare bankruptcy and close down all of it operations and lay off approximately 18500 workers. Host went bankrupt because of a greedy and stubborn union, which increased the company’s labor costs excessively. Host failed for a variety of reasons that include: Decreasing Demand Decrease of demand in for many of their products led to the demise of the company. Hostess blamed a union strike but history showed that it had been struggling to make profit for a quite sometime and had once filed for bankruptcy in the year 2004. It admitted to decreased demand in a recent statement it released to debtors. From that statement it indicated that the debtors had experienced a significant decline in the demand for their branded sweets and bread products. The debtors total unit volume of branded sweet goods declined by 4.3% over a year and the revenues of related to the debtors branded sweet good products decreased by 1.5% over the same period. The debtor’s total unit volume of branded bread products declined by 9.6% during over a year (Anderson 34). Revenues related to the debtor’s bread products declined by 5.3 over a period of a year. Large Debt Hostess struggled also because it was burdened with over $860 million in debt with just $1 billion in assets. The company has over 100000 creditors including the labor unions and pension funds, which represent the employees and will now undoubtedly lose out some of their claims o the Hostess latest bankruptcy (Anderson 66). A debt-assets like that limits company operations. While Hostess’ competitors spend money on advertising or technological improvements to increase their sales and make their operations more efficient, Hostess was paying off interest on their debt. According to outside the beltway, Hostess was using an antiquated distribution which undoubtedly affected the bottom line of a company that relies on distribution so heavily. Improper Decision-making Process The Think Progress notes that Hostess mysteriously tripled the pay of their CEO just months before asking union members to take a pay cut to save the company. The CEO’s salary was raised from $750000 to $255500. Nine other executives in the company also received massive pay raises. Other CEO’s like the head of American Airlines, reduced their pay in the recent past in order when they asked unions to make similar sacrifices to ensure the success of business operations in their companies (Data Monitor 4). Hostess executive agreed to pay the labor unions their high wages and generous pensions in an earlier contract. The Hostess executives were trying to take back an earlier contractual promise made to the union. The Twinkie will still be on American store shelves in the future, just made by a better run company. Due to poor management bankruptcy befell on the Hostess company whereby poor decision making process cost it the proper running process and effective business transaction. The crucial decisions, which were made to raise the pay of the CEO and other executives was made without considering the financial state of the company and the long term effects of the decisions. The greedy of the personnel made it difficult to correct the state of the company and hence contributed towards its bankruptcy. Works cited Azumi, Keynan & Mcmillan, Cristondolu. ‘Culture and organisation structure: a comparison of Japanese and British organization’, International Studies of Management and Organization. Vol. 5, no. 1, 2004: pp. 35-47. Available from: Business Source Premier. (Web) Bryson, Anderson. Implementing and sustaining your strategic plan: A workbook for public and nonprofit organizations. San Francisco, CA: Jossey-Bass, 2011. Print. Data Monitor (2010), Sony Corporation-Company Profile, pp4, 5 and 21, Publication date: 12 Mar 2010 Elkington, John. (2004) CSR Report 2004, [online]. Available from: http://www.sony.net/SonyInfo/csr/issues/report/2004/index.html (Web) Haksever, Chaganti, and Cook (2004) ‘A model of value creation: a strategic view’, Journal of Business Ethics. Vol. 49, no. 3, pp. 291-305. (Web) Sony (2010). About Sony Group-Sony Corp. Info [online]. Available from: http://www.sony.net/SonyInfo/CorporateInfo/index.html (Web) General Counsel Read More
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