Supply Chain Management, Vertical Integration and Horizontal Research Paper

Supply Chain Management, Vertical Integration and Horizontal Integration of Business Structure - Research Paper Example There are two main issues that we need to consider when making a decision for the vertically integrated, these issues are control and cost. However, the cost feature relies on the cost of marketplace transactions among corporate versus the cost of administering similar activities within a single corporate. On the other hand, the next concern is the influence of asset control that is able to influence barriers to entry as well as that can make a certain collaboration of main value-adding players (Susan Crawford blog, 2010). According to (Clinton et al., 2008) there are a lot of advantages of the vertical integration that potentially a present reduction in transportation costs if general possession results in nearer geographic proximity. In addition, it enhances the supply chain coordination. Also, it offers additional opportunities to differentiate through augmented control over inputs. Since the vertical integration captures downstream or upstream profit margins. This also augments the entry barriers to potential business competitors, for instance, if the company is able to achieve sole access to a limited resource (Clinton et al., 2008). According to (Clinton et al., 2008), there are also various drawbacks those can negate some of the potential gains attained through vertical integration. The main problem is about the capacity balancing. For instance, the corporation can require constructing excess upstream capability to make sure that its downstream operations have enough supply beneath all demand circumstances. In addition, there is a problem of the potentially high costs because of little efficiencies consequential such as lack of supplier competition. Also, there is some decreased flexibility because of the previous downstream or upstream investments. Furthermore, there is some less capability to augment product diversity if major in-house development is needed.     Ã‚  

Financial Ratios Analysis Essay Example | Topics and Well Written Essays - 750 words

Financial Ratios Analysis - Essay Example d. Cost of beverage sold percentage: Cost of beverage sold as percentage of total beverage sales. This works out to be 22.9%, which is within the range of industry average of 20-25%. Interestingly, the actual is very close to budgeted average of 22.5%. This shows that while management has made efforts to achieve what was budgeted, the efforts are certainly within the industry average. e. Average daily rate: This is taken as Room revenue to paid room nights. The paid room night is taken as 7555 and the average daily rate works out to be $62.7. As the value for previous year is not available, it is not possible to compare. f. Profit margin: This is income to revenue. The margin works out to be 56.4% of revenue. Profit margin has been worked out separately for room services and F&B. Profit margin for room service stands at 78.2%, which is marginally higher than the industry average of 70-75%. At the same time, F&B division has profit margin of 22% as against the industry average of 15-25%. g. Total revenue change from budget for rooms and F&B: This is actual revenue to budgeted revenue. This is almost one for F&B; but 0.88 for rooms. This is further corroborated by poorer occupancy rate. Marketing of room service is essential in this context. h. Housekeeping cost per occupied room: This is ratio of total housekeeping costs to total room sold. The actual is 6.5 which are substantially lower than budgeted 7.6. Thus, it appears that housekeeping costs has been controlled considerably. i. Room sales to total sales: This is a good indicator to gauge revenue generation by rooms. On the whole, room sales contributed 61.1% of total revenue. But this is found to be lower than budgeted 64.3%. This calls for some strategic intervention to boost up revenue collection from room service. Based on the above analysis, it can be concluded that F&B division has performed well in comparison