Business Organization For Family Farm Operations - 2333 Words

Family Farm Operations Brittany McKenzie ACCT 511-D02 May 7, 2015 Abstract As an accountant, I will be selecting the best form of business organization for family farm operations that can offer various problems to professional attorneys. Family farms with a lot of land space are typically held as a major asset. Furthermore, there are issues that would most likely to occur when the farm is passed to family heirs, which can take a major toll on the business and estate-planning attorney. In 1988 the Internal Revenue Service (IRS) classified a limited liability company in Wyoming as a partnership for federal income tax reasons, since then all 50 states and the District of Columbia have approved statutes permitting the creation of†¦show more content†¦Alex, Bill, Carl, and Devon’s father ran the business as a sole proprietorship, but they want to form a business entity to own the farm. I am going to be their accountant to help run their business the proper way and right way as Christians should. They are trying to avoid a lot of paperwork, but t hey also want to allow their cousin Xavier to handle the day-to-day operations of the farm. Additionally, they want to know ways to minimize their taxes on the entity. They want to keep this a family business; they do not want a stranger owning any part of their business. I think this can be a great thing if their family is on one accord and want to expand the business. When you start having outsiders, they could come in a try to turn things around within the business and make a lot of unnecessary changes. With Xavier being their cousin, I think they have a plan that will make the business successful. As stated above, in this case the form of business organization used by the deceased father is a sole proprietorship. A sole proprietor is someone who owns an unincorporated business by himself or herself (Sole Proprietorship, 2015). This form of business organization is a business in which one person is in control of the management and profits. A sole proprietorship has its disadvantages and advantages. With being a sole proprietor, you have complete control of the management of the business. Everything is left in your

Business Environment And Strategic Management A Case Of Lego

Question: Describe how the value that the firm creates becomes valuable as a result of factors in the general and industry environment? Answer: 1. Introduction The report here deals with the analysis of Legos internal and external environment in order to identify the core competencies of the company and the added value that the company is providing the field of construction toys to the customers which was founded in 1932. The report further analyses the efficiency of the value chain system of Lego (Bloomberg, 2015). 2. Value of Lego The value created by the company attracts the large range of customers and increases the demand of the product. Lego has recorded a ravishing market share of 24% surpassing both Hasbro and Mattel in toy making by sticking to the core values of imagination, creativity, quality and constant renewal. According to Azadi Rahimzadeh (2012) while Mattel and Hasbro have grown by creating and acquiring a diverse array of toys, Lego has adopted the opposite strategy of focusing on one product iconic to the brand and engaged in constant innovation of the same. The vision of Lego is to inspire and develop the builders of tomorrow. The toy making company has integrated theme parks, Lego video games and also designed scenes of popular movies like Man of Steel, Lone ranger, Ninja Turtles etc which attracts the attention of all ages of customers. The introduction of the new Friends Line in 2011 for the girls made it possible for the company to surpass Mattel (Barutu Tunca, 2012). 3. PESTEL analysis 3.1 Political The depiction of the Star wars fight sequences, The Berlin wall Collapse and some of the other comic fight sequences by Lego was opposed by the Ministry of defense (_). The depiction of armed forces to the children was politically wrong and hence the removal order was passed against Lego. 3.2 Economical The company has faced reductions in sales due to the positive economic downturn in Korea by 52%. Conklin (2012) opined that the purchasing power of the country determines the demand for a particular product. Due to reduction in the purchasing power the Customers are switching over to purchase necessary items instead if toy products. Moreover factors like seasonal buying behavior also affect the sales of Lego. The company experiences 60% of the total sales in December during Christmas. Moreover advanced economic growth in the countries like UK and USA are also hampering the economic stability of Denmark. 3.3 Social Lego conducted Brick fest in order to give recognition to fans creations. By interacting socially with the fans the company was able to ascertain the type of product they should focus on. Moreover the company focused on making educational based promotions of the toys in order to retain the target customers (Sukowski, 2013). 3.4 Technological Olivas-Lujan Bondarouk (2013) opined that with the advent of technologies like three dimensional printing, virtual platform development and video games in tablet and mobile the desires of the customers in toy market are changing and turning to technology based games. 3.5 Environmental Legos current position may be hampered due to the lack of proper waste management system. Around 1099 pieces of plastic bricks are produced each day adding to the waste plastic and also carbon emission by the technologies. Hence improper management of the same will endanger the sustainability of the company. Moreover as per the Forbes majority of the paint used on the toys contain lead which is harmful for children use. 3.6 Legal Lego in order to formulate a growth strategy has started implementing the laws set by the Toy Safety Directives 2009. The company has switched over to plastic bricks with rounded corners so that the use of the toys is safe foe children below the age of 14 years. The company also faced copyright issues in respect of the movie produced by Lego with the Warner bros. The negative movie showing the negative affect of the deal between Shell and Lego damaged the goodwill of the company (Lasserre, 2012). 4. Porters Five force analysis 4.1 Threat of new entrants The factor like high oil prices, unstable economic condition and threat of substitutes makes it difficult for the new companies to enter into the toy market. Rothaermel (2013) opined that although the products can be copied easily however the economic condition is not favorable for the entrance of the new companies. 4.2 Threat of substitutes The company is facing High threat from substitutes like traditional toys, computer games, extracurricular activities and personal hobbies (Lee Carter, 2011). Especially in cases of girls dolls and traditional toys are a better option than construction toys. 4.3 Bargaining power of buyers The customers and the retailers like Wal-Mart and ToysR plays an important role in fixing the price of the Lego toys. Hence a delay in the supply of products during Christmas induces the retailers to take Lego off the shelves (Bloomberg, 2015) . 4.4 Bargaining power of suppliers The major raw material for Lego products is plastic which is being made by oil hence the bargaining power of suppliers are very high. Hence with the fluctuations of oil prices the companys cost of production fluctuates. 4.5 Rivalry of competitors The two other rival companies namely Best Lock from Hong kong and Mega Brands from Canada offers low priced products like Lego. However high brand loyalty and positive brand image reduces the chances of the rivals. Figure 1: Porters five force model of Lego (Source: Bloomberg, 2015) 5. Core competencies Developing product leadership and brand image in targeting a niche product market within the overall toy industry Adoption of the segmentation strategy to reach out to the target market Constant renewal of the same product and focus on high quality standards, design and efficient supply chain (Bloomberg, 2015) 6. Value chain analysis 6.1 Inbound logistics: Main supplier Use of standard commodities (Olivas-Lujan Bondarouk, 2013) 3D Printing Robotic transportation Operations include production according to market demand forecast and abiding by the rules of plastic directives (Azadi Rahimzadeh, 2012). The outbound logistics deals with the transportation of the products to retailers like Wal-Mart for seasonal sales and use of DHL for the purpose of Superior delivery. 6.2 Marketing and selling Lego for the purpose of increasing sales increase the brand value, enters into strategic partnerships and engages in services like downloadable manuals, web community etc. 6.3 Purchasing goods Quality control of plastics Procurement of oil from companies like Shell at high market price Arranging for fairs to recognize the creation of Fans 6.4 Technology development Digitalization of brick products by collaborating with reality company Metaio Usage of 3D animation technology(Barutu Tunca, 2012) 6.5 Human resource management High rate employee benefits like scope of innovation, employee brainstorming sessions Management workshops and congenial working hours Focused on employee motivation and satisfaction Employing creative people for the posts 7. Conclusion The report thus summarizes the values like creativity, logical thinking, constant renewal and innovation that Lego offers to its target customers in order to retain its position as a niche toy maker. The influence of the external factors can hamper the position of the company however by availing to the rules and regulations Lego can avoid the same. 8. Reference list Books Lasserre, P. (2012). Global strategic management. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan. Olivas-Lujan, M., Bondarouk, T. (2013). Social media in strategic management. Bingley, UK: Emerald. Rothaermel, F. (2013). Strategic management. New York: McGraw-Hill Irwin. Journals Azadi, S., Rahimzadeh, E. (2012). Developing Marketing Strategy for Electronic Business by Using McCarthy's Four Marketing Mix Model and Porters Five Competitive Forces. Emaj, 2(2). Barutu, S., Tunca, M. (2012). The Impacts of E-SCM on the E-Tailing Industry: An Analysis from Porter's Five Force Perspectives. Procedia - Social And Behavioral Sciences, 58 Conklin, D. (2012). The global environment of business: new paradigms for international management. Strategic Direction, 28(2) Lee, K., Carter, S. (2011). Global Marketing Management. Strategic Direction, 27(1). Sukowski,  . (2013). Strategic Management as the Ideology of Power. Journal Of Intercultural Management, 5(3). Sumpio, B. (2013). Application of Porter's Five Forces Model and generic strategies for vascular surgery: should be stuck in the middle?. Vascular, 21(3), 149-156. Websites Bloomberg,. (2015). Brick by Brick: Inside Lego: Video. Retrieved 27 January 2015, from https://www.bloomberg.com/video/brick-by-brick-inside-lego-4-17-SlbmZEQnSfyC~y1eSm9FAg.html