response 6
Question 1
Select a destination for a vacation. Find a fare for a round-trip flight to your chosen destination, departing on Friday and returning the following Friday. Next find the fare for the same flight but departing two weeks later.
List you departure-airport and destination-airport.
What are the two fares?
What is the difference between the two fares?
Why do you think there is a difference in the fares?
What are the fixed and variable costs for the airline in relation to the customer? In relation to the flight?
What considerations must the airline make in adding or getting rid of a destination?
Respond to this… List you departure-airport and destination-airport.
Minneapolis, MN - St Paul International Airport (MSP)
Cancun, Mexico - Cancun Airport (CUN)
What are the two fares?
2/10-2/17 price is 678.03 nonstop round trip
3/3-3/10 price is 783.13 nonstop round trip
What is the difference between the two fares?
The difference between the two fairs is $105.10.
Why do you think there is a difference in the fares?
I think the difference between the prices is because of the airlines. On the first trip, Spirit Airlines could get me there for $678.03 roundtrip without layovers. Whereas, the trip two weeks later would have to be on Alvermexico which is a less common airline.
What are the fixed and variable costs for the airline about the customer? In relation to the flight?
Fixed costs for the airline in relation to the customer are things like baggage fees and taxes. Variable cost would be things like time of departure and destination.
In relationship, the flight fixed cost would be insurance. Variable costs would be fuel or mechanical work.
What considerations must the airline make in adding or getting rid of a destination?
The airline should consider the costs associated with terminating a destination. For instance is the often traveled destination? Is there more than often full occupancy? Do the flights often fall short? Is it beneficial to end this destination?
Question 2
As the U.S considers the adoption of IFRS, changes exist between presentation and disclosure in current U.S GAAP and IFRS. Based on your research, what are some of the similarities and differences between U.S. GAAP and IFRS? Would the adoption of IFRS increase transparency of U.S. based financial statements? Please support your response.
Respond to this… I don't believe that US GAAP lacks more or less "transparency" than financial statements prepared under IFRS, it's more that it is difficult to compare companies prepared with different standards.
Either the rest of the world needs to adopt GAAP or the United States needs to adopt IFRS, either way, then one can make fair comparisons.
Some of the differences beteeen IFRS and GAAP are listed below.
Consolidation — IFRS favors a control model whereas GAAP prefers a risks-and-rewards model. Some entities consolidated in accordance with FIN 46(R) may have to be shown separately under IFRS.
Statement of Income — Under IFRS, extraordinary items are not segregated in the income statement. With GAAP, they are shown below the net income.
Inventory — Under IFRS, LIFO cannot be used, but GAAP, companies have the choice between LIFO and FIFO.
Earning-per-Share — Under IFRS, the earning-per-share calculation does not average the individual interim period calculations, whereas under GAAP the computation averages the individual interim period incremental shares.
Development costs — These costs can be capitalized under IFRS if certain criteria are met, while it is considered as "expenses" under U.S. GAAP.
https://www.boundless.com/accounting/textbooks/boundless-accounting-textbook/introduction-to-accounting-1/conventions-and-standards-21/differences-between-gaap-and-ifrs-and-implications-of-potential-convergence-131-7049/ Boundless, 20 Sep. 2016. Retrieved 08 Feb. 2017 from Boundless AccountingSource: Boundless. “Differences Between GAAP and IFRS and Implications of Potential Convergence.”
Question 3
The success of a business can depend on a company's competitive and marketing strategies. One of the most successful competitive businesses out there today is Nike. While being so successful and dominating in the world of athletic apparel, even Nike has to have effective competitive strategies.
What competitive advantages or disadvantages do you think Nike has over many of their competitors? What do you think Nike has to do in the future to maintain their strong competitive position and to stay on top?
Respond to this... One of the competitive advantages Nike has over the competitor is sustainability. Nike focuses on sustainability throughout their products. The CEO Mark Parker states "At Nike, we believe it is not enough to adapt to what the future may bring, we're creating the future we want to see through sustainable innovation". (nike.com) With Nike having a sustainable innovation that has been integrated within their entire business policies, processes, and products, this leads them against competitors. I think one of the things Nike needs to do to stay on top is to continuing to using competitive strategy to define its sustainable competitive advantage to stay on top.Using brand loyalty to repeatedly seek out customers with their well known brand will help them have a powerful competitive weapon.
http://about.nike.com/pages/sustainable-innovation
Strategic management in action (Vol. 6). (2013). Upper Saddle River, NJ: Pearson
Education.
