Management

Quesion 1:

In your opinion is the Red Bull viral strategy effective? Explain your idea and discuss Marta’s opinions.

Marta’s Opinion:

Felix Baumgartner’s jumped from the edge of the stratosphere. Red Bull was the main sponsor of the venture.
The YouTube channel from Felix has currently  800,000 subscribers and almost 500 million views on the jump video.

I would like to share some key data with you  about the campaign:

Red Bull has invested approximately 50 million euros in the project
The event was broadcast on around 200 television stations worldwide
More than 3 million tweets about the jump were sent on Twitter
ORF, Austrian television, had 2.3 million viewers
On the American History Channel, the entry Space Jump LIVE became the most visited entry of all time
The YouTube livestream of the project is the most viewed in the history of the video platform! Up to 8 million people were there live at the same time.

This campaign exceeds a marketing value of several billion euros – so I would say the viral strategy was very effective and successful.

Although the success of the jump was uncertain until the end.

Advertising experts expressed the unanimous opinion that this would not have had a negative effect on the brand itself.

Question 2:

Give an example of a Guerrilla Marketing Campaign and explain why it is successful.

Please do a previous research of the guerrilla marketing concept.

Question 3:

Prepare and submit your solutions to the problems below.
IRR rule

The Ocean Shipbuilding Company has a noncancelable contract to build a small cargo vessel. Construction involves a cash outlay of $250,000 at the end of each of the next two years. At the end of the third year the company will receive payment of $650,000. The company can speed up construction by working an extra shift. In this case there will be a cash outlay of $550,000 at the end of the first year followed by a cash payment of $650,000 at the end of the second year. Use the IRR rule to show the (approximate) range of opportunity costs of capital at which the company should work the extra shift.

Capital rationing

Borghese Pharmaceuticals has $1 million allocated for capital expenditures. Which of the following projects should the company accept to stay within the $1 million budget? How much does the budget limit cost the company in terms of its market value? The opportunity cost of capital for each project is 11%. (Find Attached Picture)

Question 4:

Answer the below question (50% of the grade) and make a constructive comment on one of your peers comments (50% of the grade). Cite the sources consulted and include the references at the end.

Give an example of a company whos goal is environmental. Explain how it works and its main contribution to society.

Peer’s comment:
Universal basic income
Universal basic income (UBI) is a model for providing all citizens of a country or other geographic area with a given sum of money, regardless of their income, resources or employment status. The purpose of the UBI is to prevent or reduce poverty and increase equality among citizens.
I.e. According to Subramanian’s report, spending a mere 2 percent of GDP on a UBI of ZAR215.25 per person per month could cut the extreme poverty rate from 22 percent to 7 percent. A benefit of ZAR 450.00 per person per month could cut the rate to below 1 percent in South Africa. However, this has to be legislated by Government, Department of Industry and Labour

Based on an experiment conducted by UBI for two years (from January 2008 to December 2009) in the community of Otjivero-Omitara in Namibia. According to the Namibian Basic Income Grant Coalition, it had the following positive impact, Hence it should have similar positive outcomes if implemented in South Africa.

significantly reduced child malnutrition and increased school attendance
increased the community’s income significantly above the actual amount from the grants as it allowed citizens to partake in more productive economic activities;
even with the restriction that only residents of the village for over a year since the pilot’s start could benefit from the grant, there was a significant migration towards Otjivero-Omitara this despite the fact that the migrants wouldn’t receive the grant; and
overall crime rates fell by 42% – specifically stock theft, which fell by 43% and other theft by nearly 20%.

Identify its pros and cons and the issues that could address.

Pro’s

Fighting technological unemployment

With advanced technology taking over more and more blue and white-collar jobs, UBI would act as a sort of security net for the millions of people who will be left jobless by the tech revolution. Research shows that the longer you are unemployed, the longer it takes to find employment. If the jobless had a small source of income to help them back on their feet, they could find new jobs and start contributing to the economy sooner.

Ending abuse

Those who suffer domestic abuse, mainly women, become trapped in violent situations because they dont have the means to leave them. UBI would make leaving an abusive partner easier from a financial point of view, at least, and would unleash the working potential of countless people who are constrained – professionally, physically and emotionally – by domestic violence.

Supporting unpaid care workers

Those with ill or differently-abled relatives are often forced to quit their jobs to care for them full-time. UBI would allow care-workers to support themselves, encouraging care work within the home and relieving pressure on public services that provide care to the sick and elderly.

Expanding the middle class

The economic growth of high-income countries is making the rich richer but having very little effect on the working classes. The research of economists Emmanuel Saez and Thomas Piketty showed that ‘the bottom half of earners went from making 20 percent of overall income in 1979 to just 13 percent in 2014. The top 1 percent, on the other hand, has gone from making 11 percent to 20 percent. The pie has gotten vastly bigger, and the richest families have reaped bigger and bigger pieces from it’. UBI would help to balance this inequality and expand the ever-shrinking middle class.

Ending poverty

Advocates for UBI believe that in some of the richest countries in the world, no one should be too poor to live. UBI would bring everyones income above the poverty line.

Eliminating the need for social security

There exist countless governmental organizations responsible for helping those in poverty, handing out unemployment benefits, food stamps, subsidized housing, etc. UBI would cut a countrys spending by eliminating these organizations.

Discouraging low wages

UBI would give employees enough security to have bargaining power. As Annie Lowrey says, ‘why to take a crummy job for 7.25 an hour when you have a guaranteed 1,000 dollars a month to fall back on?’

Think of it as Monopoly

Most people intuitively think that jobs lead to financial wealth, but the reality is that having money actually leads to jobs. Without the privilege of wealth, it is more difficult to build a life that makes landing a job easier. In order to get a job, you need to have a house with a shower, a set of appropriate interview clothes and the funds to cover the cost of transport and food during the working day. If you want to contribute to the economy on an even greater scale and start your own business, youll need even more money. In the game Monopoly, everyone starts off with a little bit of money without it, the game wouldnt work and no one would be able to become rich or successful. UBI is like Monopoly everyone starts off with a little bit of money and uses it to fuel a thriving economy.

Successful implementation of UBI would mean improvements in food security, stress, mental health, physical health, housing, education, and employment.

Cons

Motivation to work

The biggest concern is that UBI would incite millions of workers to stop working. If people arent working, there is less taxable income. However, people may choose to stop working for reasons that benefit society as a whole, such as getting a better education or caring for a relative in need.

Cost

The cost of implementing UBI in the United States is estimated to be about 3.9 trillion per year. The idea is that UBI would take the pressure off health services and make social security institutions redundant, but this is nevertheless an enormous number for a government to budget for.

Inequality

Some wonder if it is really fair to give the same amount of money to billionaires as those born into poverty. Does Bill Gates really need extra money each month? Some believe that a certain accumulation of wealth should show you have out-grown UBI.

Philosophical counterarguments

Is money a birthright? Capitalist countries are built on the ideological foundation that money is something we earn UBI would completely change this. Some believe that community service should be a requirement for receiving UBI.

Question 5:

The following video describes the use of the Ishikawa fish-bone diagram for root cause finding in a factory or in any other environment. How useful do you find the method? Could you use make an example of a real life/wok problem you had during your professional career? Link of Video: https://youtu.be/bNDlg1h-za0

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