Biology: Mechanical Signals Regulating Development University Essay Example

Introduction

The success of tissue engineering is dependent on the ability to promote the desired cellular processes. Given the intricate process involved in tissue development and regeneration, it is crucial to understand how microenvironment regulates cell behavior. Generally, mechanical signals contribute significantly to the development of human beings, especially during embryonic growth, where they influence cell activities such as contraction and protrusion.

Here, both internal and external factors influence cell interactions, thus fostering the process of shaping up cells in the body. Other stimuli to cell activity in developmental processes include physical factors such as mechanical or osmotic stress (Janmey & Miller, 2010). Generally, mechanical forces are just as effective as chemical forces in the development of an individual from embryo stage to old age, mainly due to their role in controlling cell division and alignment of body plan and organs through cytoskeletal forces, shear, and ECM elasticity tensions.

The effect of mechanical signals on development processes may be observed from their role in the regulation of transcription. This is done through mechanical forces such as hydrostatic pressure, shear stress, compressive force, tensional stress, cell traction force, and cell prestress (Mammoto, Mammoto, & Ingber, 2012).

This paper will discuss the role of mechanical signals in regulating developmental processes. In addition, the paper will highlight several control effects of mechanical forces on various cell activities, including early embryonic development, tissue morphogenesis, and organ formation. This is in addition to a discussion on mechanical signal transduction on cell-extracellular Matrix adhesions, cell-cell adhesions, and cell shape distortions. Moreover, the paper will provide a comparison of mechanical signals and chemical signals in influencing cell proliferation and tissue development.

Mechanical Signals control of Cell-Extracellular Matrix Adhesions

The extra-cellular matrix is the living environment for stem cells; it comprises of proteins and carbohydrates that bind cells together. In addition, it supports and surrounds cells, regulating the cell activities, and providing structure for cell movement. In addition, the natural living environment comprises of four niche components, which dictate the ultimate fate and functions; these include soluble factors, direct cell-cell contact, extra-cellular matrices, and forces. Understanding the influence of biomechanical factors on the fate of stem cells will eventually help the development of synthetic approaches that may trigger stem cells to differentiate into desirable phenotypes (Chelluri, 2012).

From the time of fertilization, through embryonic development to the maturation of an organism, mechanical signals play a crucial role in the formation of body organs, systems, and processes; the exposure of cells to various stimuli enhances the production of forces that influence development. Moreover, cell interaction during the developmental process facilitated by mechanical forces or signals tends to be an important aspect that goes as far as enhancing endurance and resistance of body organs to various infections or diseases such as osteoporosis.

For example, changes in microenvironment such as the osmotic pressure that result in mechanical signals interaction with cell activity may “significantly alter the structure of ECM proteins and the activity of soluble growth factors and cytokines” (Mammoto, Mammoto, & Ingber, 2013).

Although mechanical signals are known to influence cell activity, there are instances where cell activity responds to changes that occur when cytoskeletal forces combine with other mechanical forces, causing a state of differentiation. For instance, the activity of the actin cytoskeleton in mechanical transduction always plays a significant role in the developmental process. Moreover, cellular mechanosensitivity plays a central role in the viability and function of cells in the development, maintenance, and pathology of tissues.

In addition, mechanosensitivity allows mechanical signals to induce an active reorganization of the cell cytoskeleton and readjustment of the contractile forces exerted by the cell (Mammoto, Mammoto, & Ingber, 2012).

During development, signals sent by mechanical forces influence cell protrusion and contraction, thus affecting cell growth patterns, especially during embryo development; this tends to influence the size and rate of growth of the embryo. Moreover, gene transfer from the host or parent takes place at this stage, with certain responses tending to be installed in cells when interactions take place.

These gradients partially limit the expression of target differentiation genes and produce distinct organ-specific cells. These allow maturation of tissue and organs in the embryo-generating process. Nevertheless, mechanical forces not only have a role in developmental processes but also are crucial in maintaining the function of most adult organs and organ systems; these include the heart, blood vessels, lungs, and hematopoietic system (Mammoto, Mammoto, & Ingber, 2012).

Stem cell differentiation plays a critical role in organism development or in the wound healing process. Here, external cell activities promote the development of extra-cellular forces that tend to interact with adjacent tissue cells that are infected. However, due to resistance from external tissue boundaries, the extra-cellular matrix plays a vital role in the expansion of cell walls to replace the worn-out tissues in the wound. However, when these restrictions are more complex and not corrected through mechanical forces activity, there are chances of unregulated tissue growth occurring. Nevertheless, “inappropriate development of compressive pressure can lead to ectopic cartilage formation” (Janmey & Miller, 2010).

Mechanical Signals Control of Cell-Cell Adhesions

Mechanical signals can regulate cell behavior through either extrinsic mechanical forces or intrinsic matrix stiffness. In addition, fluid shear stresses in the blood vessels can directly influence endothelial cell gene expression and biosynthetic activities, which in turn regulate the blood vessel remodeling process. It is also worth noting that fluid shear and hydrostatic compression in bone tissue facilitate bone cell mechanical adaptation and tissue remodeling. Mechanical forces in the development process work throughout the development process in embryogenesis. Importantly, spring forces are generated when a spring is compressed or stretched and then acts by trying to force a return to its natural length.

During fertilization, sperm cells are forced in the ovum cell by mechanical forces generated by the activity of the actin bundle and the osmotic pressure in the uterus, thus interfering with the cell membrane and activating the mechanosensitive ions reaction process. Here, the shape of the cells is altered in order to enhance fertilization to take place and form new cells that degenerate to an embryo. The liquid-form surface tension that results from the embryonic formation process is then exposed to external stimuli that influence further cell activity to improve tissue growth through extra-cellular matrix authentication.

The surface tension is determined by differences in intercellular adhesion and cytoskeletal prestress governed by cadherins and actomyosin based contractility. Moreover, “tensional forces, traction and prestress cell shape stability requires the establishment of a mechanical force balance within the cytoskeleton” (Janmey & Miller, 2010). Such a balancing effect allows the cytoskeleton to instinctively steady cell shape as well as to regulate the process of cell determination. On the other hand, shear stress that emanates from the circulation system propagates cell activity in the endothelial, thus hastening the process of cell determination.

It is worth noting that mechanical forces associated with cell strain rise externally from imposed mechanical stimuli common during force transmission to cells through the ECM. It is important to note that mechanical stress may be generated by the interaction of cell activity forces with external stimuli; in other circumstances, “coordination with outside–in stimuli, anchored cells also probe their microenvironment to sense and respond to the stiffness of the microenvironment by pulling on the ECM” (Provenzano & Keely, 2011).

During this process, the ECM adhesions actively participate in enhancing cell activity, especially where the transfer of forces from the external stimuli to the cell generation process is concerned. Moreover, intracellular forces tend to create channels for the transmission of stimuli forces in order to enhance cell activity and enhance the effectiveness of mechanical signals in the development process. For instance, “myosin-based contractility has a role in regulating stem cell differentiation, epithelial morphogenesis, branching morphogenesis of epithelial and endothelial cells, and the cancer-associated invasive phenotype that is induced in mammary epithelial cells by stiff 3D matrices” (Provenzano & Keely, 2011).

Generally, when cells interact, they generate a functional force that influences their contraction and protrusion, leading to adhesions that transfer force to the ECM and thus enhancing growth and development in an organism. In a situation where the microenvironment stimuli and cells tend to function at a stable condition, there is likely to be calmness in cell activity, unlike in a situation where tensional forces are high, thus precipitating abnormal cell proliferation or behavior.

Importantly, proliferation affects the regulation of cell activity; the epidermal growth factor and insulin-like growth factor are receptors known to promote cell proliferation. The mechanical signals transmitted through the structural component provide the cytoskeleton with signaling events to regulate cell proliferation (Mammoto, Mammoto, & Ingber, 2012).

It is important to understand the process of cytoskeletal remodeling and its influence on cell behavior, especially during cell proliferation resulting from mechanical forces stimulation. This would enhance understanding of the influence of mechanical signals on gene transfer and installation during cell proliferation; the understanding will enhance the establishment of the reason why organisms behave in certain ways when compared to their parents.

The mechanical signals provide a complex feedback loop between cell proliferation and pathways that regulate intracellular contraction to produce force through the cytoskeleton, thus regulating FA signaling. An example of mechanical forces is the impact on cell behavior from studies on cell distortion or cell shape as an independent variable. Cell deformation was a result of the tractional forces attached to the ECM substrate that cells exert on their own adhesions.

Experiments on cell deformation show how surrounding cells form adhesion forces on the cellular surface, thus creating extreme tension. Due to the existing soluble factors, the amounts of saturated soluble mitogens create an island that regulates different factors, thus making them constant. This fluid enhances the transmission of stimuli or circulation process in order to influence vascular organs’ functionality, especially in grown-up organisms or human beings.

In addition, vascular remodeling enhances better transport of nutrients and other morphogenic factors. In this mechanical process, fluid shear stress is critical; here, erythroblasts play an important role in the development process. Research on mechanical forces in cell proliferation has established their role in helping the provision of regenerating cells, especially in cancer research. In cancer patients, the regenerating cancer cells are stopped through cell degeneration procedures such as radiation control (Chelluri, 2012). Moreover, researchers in the field of medicine have provided ways of cell proliferation that have enhanced cancer medication in recent years.

Mechanical forces generated in the cytoskeleton of living cells play a central role in the control of tissue development during the early and last stages of embryogenesis. Changes in the cellular force help in balancing the integrin signaling pathways and produces global changes in cytoskeletal structure that are central to this process. The local environment may be altered by changing the level of cell biochemical remodeling or the number of cells packed within a tissue volume restricted by a rigid ECM. Cells tend to sense these local changes in the mechanical cues and integrate them with other chemical and adhesive signals in their microenvironment (Chelluri, 2012).

For cells to switch locally between different stable phenotypes, multiple genes or other regulatory elements must simultaneously alter their activity. Mechanical forces, therefore, play an important role in morphogenesis and tissue patterning, and these physical cues are important chemical factors for developmental controls throughout all stages of embryogenesis. External forces have been known to influence the process of embryo formation, especially when mechanical forces interfere with the process of cellular proliferation to the extent of promoting changes in cell shape and size.

The process cytoskeleton tension is the driving force behind many of these mechanical processes and mechanochemical transduction events. This is evidenced by the tendency of cells responding to the coupling effect of mechanical signals and chemical stresses. Here, it is worth noting that as much as cell-generated tensile forces modify chemical signals transmitted by cells, they also tend to deform the surrounding cells thus creating significant changes in signaling process.

Generally, mechanical and chemical signals tend to be interdependent such that it would be impossible for cells to respond effectively to one form of signal in absence of the other, although mechanical signals are more active and influential. Indeed, the differences between these two forms of signal do not necessarily affect cell proliferation, as they tend to share a number of intracellular molecules and processes that contribute significantly to cell activity.

One of the differences between the two signals is that, while chemical signals decay rapidly in strength as distance from the source increases because they are carried in fluids and gases, mechanical signals are long lasting in terms of strength because they do not need to be pushed along by fluid or air, but they are transferred along networks of fibers in an electronic-like form. In addition, mechanical signals are wide in scope in relation to their capability, as they can handle complex information unlike chemical signals, which tend to be restricted to only less complicated chemical gradients.

New methods, including mechanosensing and mechanotransduction, collaborate with chemical stimuli to control cell and tissue function. In addition, disruption of normal mechanical environment can perturb cell function. There are instances when cell activities may be altered or changed by rigidity of their stimuli despite chemical environment remaining intact, thus resulting to tissue abnormality or emergence of disease. It is generally normal for tissues to be controlled by elastic properties, thus there arises a challenge when they encounter a stiff stimuli, thus interfering with cell formation and proliferation. This abnormal cell activity may result to malignant growth and uncoordinated body processes, thus contributing to emergence of diseases such as cancer and cardiac problems.

Mechanical signals play a vital role in regulating cell activity in embryo development. Here, mechanical forces control asymmetric and symmetric cell division by regulating the activities of cytoskeletal microtubules and contractile actin microfilaments, which polymerize in order to modulate spindle positioning (Mammoto, Mammoto, & Ingber, 2013). In addition mechanical forces influence tissue Morphogenesis is through a process called coupling, where cell-generated mechanical forces combine with chemical forces to regulate the size of epithelia cells, especially during gastrulation.

Here, Cytoskeletal contractile forces constrict the apical surfaces, thus creating pull and push forces that close the dorsal epidermal opening in gastrulation. Moreover, it has been observed that, during gastrulation and neurulation, mechanical forces play a significant role in enhancing the elongation of body axis by controlling cell protrusive and contractile activities (Mammoto, Mammoto, & Ingber, 2013).

The body plan and profile is also a product of mechanical forces, which contribute significantly to the development of the whole body system and its functional components; for instance, during the latter stages of embryonic development, mechanical forces help in aligning and assembling vital organs such as lungs and blood vessels, as well as body systems such as circulation and hematopoetic system.

These forces work in tandem with chemical forces, especially in functionality and development of lungs through amniotic fluid flow and movement. It is also important to note that there is likelihood of mechanical stresses appearing during development processes; however, this is usually resisted through muscle tensions that strengthen inter-cell junctions, thus contributing to tissue growth and maturation (Mammoto, Mammoto, & Ingber, 2013).

Conclusion

In conclusion, the importance of mechanical processes in regulating development in tissues and cells is well defined in this essay. Proper mechanical environment is required for extensive and well-organized functions of the cell organism. Generally, cell functions and forces associated with mechanical forces are enough to help understand the role of mechanical signals in developmental processes. Cell differentiation, proliferation, and degeneration have helped body organs and chemical composition of the body to be well organized. Nevertheless, major cell functions are required to ensure that the body functions in the right way.

All in all, mechanical signals influence tissue formation and development in organism; however, their role in body systems such as the circulation, cardiovascular, and excretion needs to be researched further in order to establish their application and mitigation capability in related problems. Mechanical processes in the cell development help in enhancing functions of major organs in the body.

The body requires these cell functions to enhance flow of blood to different parts and organs. In the lungs, cells in charge of infusing blood with oxygen work in mechanical environment that enhances oxygenation of the body. Nevertheless, it is important to note that, mechanical processes are central in enhancement and improvement of bodily functions in many organisms and they play an integral role in embryo development.

Indeed, factors of regulating mechanical processes are mostly functional. Nevertheless, a combined approach of physical techniques and other disciplines related to cell and tissue development is need in advancing research on developmental processes. This would also help in establishing cell formation and development patterns, especially in modern disease diagnostic processes for cell-related diseases such as cancer and tumors.

References

Chelluri, L. K. (2012). Stem Cells and Extracellular Matrices. CA, USA: Morgan & Claypool Publishers.

Janmey, P., & Miller, T. (2010). Mechanisms of mechanical signaling in development and disease. Journal of cell science, 1(1), 9-18.

Mammoto, A., Mammoto, T., & Ingber, D. (2012). Mechanosensitive Mechanisms in Transcriptional Regulation. Journal of Cell Science, 125(13), 3061-3073.

Mammoto, A., Mammoto, T., & Ingber, D. (2013). Mechanobiology and Developmental Control. Annual Review of Cell Development Biology, 29(1), 27-61

Provenzano, P., & Keely, P. (2011). Mechanical signaling through the cytoskeleton regulates cell proliferation by coordinated focal adhesion and Rho GTPase signaling. Journal of Cell Science, 124(1), 1195-1205.

Girlfunk Jewelry Company’s E-Commerce Business Plan

Executive Summary

The Girlfunk Jewelry is a business that will specialize in the avant-garde line of sustainable jewelry targeting the celebrity customer segment. The business is based online and will have a strategic e-commerce platform for ordering handmade jewelry designs, which incorporate retro junk into high fashion futuristic funk. The business is actively committed to offering customized jewelry within the business values of originality, innovation, and aesthetic quality. As a new business venture, the Girlfunk Jewelry will proactively integrate the aspect of recycling materials to make its line of jewelry. The marketing environment in the US for Girlfunk Jewelry has been amenable to the affordable funky jewelry.

Besides, the Girlfunk Jewelry products guarantee unmatched comfort and quality for the clients. The Girlfunk Jewelry is interested in growing different brands out of the current jewelry products. Besides, the company has plans for rolling out an online store through social media and the company website. During the next five years, the Girlfunk Jewelry targets to increase product visibility, distributing, and diversification in the US market and beyond. The company’s vision is to be the leading business in the customized jewelry industry within the expansive US market. The Girlfunk products are customized trunk jewelry designed for the celebrity market for the female gender.

Girlfunk

The products are made from recycled materials and come in different variety. The products are designed to suit the needs of each client, since the customer is given opportunity to make modifications to suit his or her personality before delivery. In addition, the Girlfunk Jewelry products are very affordable as compared to products of main competitors despite similar or high quality status. The customized jewelry sector has a 19% stake in the jewelry and fashion industry in the US.

The Girlfunk Jewelry intends to capture at least 20% of this sector within the next three years. The main financial needs of the business are in the form of marketing and start-up costs. The financial need for the Girlfunk Jewelry is estimated at $106,800, which will be obtained through bank loan and personal savings. The Girlfunk Jewelry venture will be profitable since the products are unique and differentiated by quality, style, and affordability. The business will be located in West Hollywood because this place is strategic to reach the market. The target market consists of female celebrity clients interested in customized trunk jewelry within the region of Los Angeles.

Product or Service

Purpose

Girlfunk Jewelry is an upcoming avant-garde line of sustainable jewelry. This e-commerce business strives on handmade designs that incorporate retro junk into high fashion futuristic funk. Girlfunk is committed to delivering a line of jewelry that is aesthetic through its innovative and original concept. As an upcoming independent jewelry label, Girlfunk encourages the use of recycled materials to create channels in the form of body armor jewelry. The Girlfunk is ready to enter the US marketplace, not only due to its unique design process, but also because its drive to let the world know about the unique designs. Besides, the business intends to use the online platform to reach clients who do not have time to visit stores to make orders, since they will be able to do so via the Girlfunk website. This means that customers will only visit the jewelry store collect their ordered products that are handcrafted. The business intends to address the current shortfall in the handcrafted jewelry through the unique Girlfunk products that are made from recycled materials and customized to the taste of each client (Mariotti 23).

Limitations

In order to understand the limitations of the Girlfunk Jewelry brand, a SWOT analysis was carried out and the results tabulated below.

Strengths Weaknesses

  • Clear product differentiation
  • Strong brand image
  • Positive urban influence
  • Established online store

  • Failure to focus on the low-end market
  • High inventory costs

Opportunities Threats

  • Strong market presence depicts the ease of entry into new regions
  • Better collaboration with subsidiary brands or businesses

  • Fierce competition
  • High supplier power reduces profits
  • The threat of counterfeiting products of Girlfunk Jewelry is very high

From the SWOT analysis, some of the limitations that Girlfunk will encounter in the beginning stage of business include limited financing due to high startup costs, tough competition from established brands, and limited product line due to the time consuming concept of handcrafting. Besides, being a sole proprietor up against already established online e-commerce brands, the Girlfunk Jewelry may face the limitation of slow market penetration since this kind of business depends on customer referral and predetermined preferences. Lastly, being a new venture, the Girlfunk Jewelry will face the limitation of balancing human resource management and investing more profits in the business to guarantee sustainable growth and market expansion (Mariotti 41).

Government approvals

County of Los Angeles

Fictitious business name for doing business as a statement. This applies to all direct selling establishments when the business name does not include the surname of the individual owner or owners.

The state of California

Los Angeles Sellers Permit by the Board of Equalization (BOE) for persons interested in engaging in business in CA with intention to sell tangible goods on personal property.

City of Los Angeles

Business license in the form of a Business Tax Certificate, which applies to all direct selling establishments and is required for all entities doing business within the perimeters of city limits.

Liabilities

The Girlfunk Jewelry online platform has to adopt several strategies to ensure that information of the customer is protected. These policies are influenced by the need to ensure that safety and security over the cyberspace is guaranteed. Thus, the introduction of a Secure Online Shopping System (SOSS) by the site is vital towards protecting customer information. Secure online shopping system is a platform where consumers are able to make orders on particular product and payments using their credit cards. The SOSS platform ensures the safety and security of those cards. Besides, the site will offer password protection system in collaboration with the customer (Mariotti 33).

As part of their security policy, every customer is required to choose a strong password which should be changed frequently. To ensure that the business is protected, the Girlfunk Jewelry will get technology liability insurance to provide protection against many threats that might interfere with the e-commerce platform such as computer viruses, cyber hacking, DOS (denial of service invasions), and hard drive crashing among others. This will ensure that the business and customers are protected 24/7.

Related product spin-offs

In order to appeal to the target client and differentiate the jewelries from others in the market, the Girlfunk Jewelry will roll out a series of related product spin-offs. For instance, the Girlfunk will have special jewelry hangers to protect its products when not in use. The hangers will be made classy, shinny, and oval shape to make them different from those of other competitors. The jewelry hanger will be slim and light-weight velvet torso, which has a shape of a dress to easily fit in any closet since Girlfunk’s products are very large and often compared to a garment such as chainmail. The modifications in the jewelry hanger will make it easy for the client to store each piece of the jewelry separately to minimize chances of being destroyed and reshaped in storage (Mariotti 45).

Secondary products/services

The secondary products that can be created to generate additional profit for the Girlfunk Jewelry are delivery service, customization service, and special packaging service for a small fee. The product delivery service will be designed for customers who cannot find time to visit the store. At a small fee of between $10 and $100, customers will be able to request for delivery of their order within all states in the US. Under customization service, product price will increase by a proportion for further adjustments that a customer requests for on the finished product. The additional fee for customization will depend on the customers’ taste and preferences. The unique packaging will be reserved for customers presenting the jewelry as gifts to different classes of individuals. The fees charged for special packaging will also depend on taste and preference of each customer (Mariotti 31).

Market

Current industry and industrial trend

The US fashion industry has experienced steady growth as more customers embrace renowned brands such as Dooney & Bourke, Kate Spade LLC, and Michael Kors, and the new entrant called the Girlfunk Jewelry. The US fashion industry has an estimated market value of over $700 billion. The jewelry sector represents 19% of the market share. Despite the economic swing of 2007-2008 financial years, the players in this industry managed to recover and are currently experiencing an average growth of 20% annually (U.S. Census Bureau par 9). At present, the jewelry sector commands 6% of the total market value of the consumer purchases across the US.

The market share is anticipated to expand further to 15% by the year 2016. The jewelry sector at present is controlled by Dooney & Bourke, Kate Spade LLC, and Michael Kors, who have managed to establish a household name for their brands (U.S. Census Bureau par 9). Moreover, promotional services adopted by these companies have spurred the growth of jewelry production in the US market.

Growth potential

The adoption of efficient and reliable technology in the marketing of the jewelry products positively skewed the market to the advantage of the Girlfunk business. Based on the annual growth and market share for the handcrafted jewelry, the Girlfunk Jewelry is positioned to benefit in the future because the industry is highly attractive, especially in the customized brands. The company can use flexible sourcing, retail distribution, and product focused differentiation to survive the impact of these competitors. As a result, the annual sales will increase by 20% each year.

The Girlfunk Jewelry can utilize retail distribution to further expand its presence in markets like Japan, China, and Europe. It can apply product differentiation strategy to expand and position itself as a fashionable jewelry house. The Girlfunk Jewelry’s scope of operations may be characterized by retailing different jewelry apparels to target women and female children market segments. For instance, Girlfunk Jewelry may create renowned brands for a number of commodities like female head jewelry, trunk jewelry, and neck jewelry. In addition, the Girlfunk Jewelry may roll out series of grand strategies such as concentration, market development, product development, vertical integration, market penetration, and retail distribution strategies to expose its numerous products across the globe as the most competitive brand.

Competition profile

In order to survive the competition, the Girlfunk Jewelry has positioned itself through a strategic competitive profile discussed below.

Strong brand

Girlfunk Jewelry has established a brand image that enables it to attract customers with less effort as opposed to most of its less established rivals. The entrants have to invest heavily in promotion and advertising for them to attract new customers and maintain their customers (Kotler and Keller 33). The established brand image has enabled the company to cut on its cost and get increased levels of profitability.

Steady commitment to quality

Strong commitment to quality and product innovation enables the company to get the right experience for their customers. This has been possible through the recruitment of employees with the right skills and knowledge. These employees are further trained to understand the company production strategies (Kotler and Keller 35). Moreover, the company conducts more market research to ascertain customer thoughts and changing demands.

Expanded market

Girlfunk Jewelry has an active presence in the US with an expanding presence in emerging markets including China, Japan, and Europe. In the next five years, revenues from sales will double annually since the current market penetration strategy is likely to increase the revenues.

Market experience

Having been in the jewelry sector for more than two years, the Girlfunk Jewelry has acquired enough experience to compete favorably in the industry. It has had sufficient time to learn from its weaknesses and develop long-term strategies that will anchor it through the future of the market. As a way of adopting the emergent technological changes, the Girlfunk Jewelry has invested in technological creativity to suit its consumer changing needs. Finally, the company will be able to win more customers with its strategically-placed and ambient stores with conspicuous features (Kotler and Keller 24).

Target market

Psychographics refers to “the study of the values, personality, attitudes, opinions, lifestyles, and interests” (Cheverton 26). Purchasing trends continue to progress proportionately to evolving psychographics. Consumer behavior is increasingly being influenced by a host factors including; wealth propensity, behavioral proclivities, globalization, cultural discernment, and enhanced education. This has driven the acceptance of branding and particular store brands as people become aware of their value. They are willing to evolve their lifestyles more to sample store brands as much as national brands (Bowden 65).

In the context of the Girlfunk Jewelry, psychographics refer to the data on the lifestyles of its customers, which they use in creating customer profiles. This information is important to the company, especially when it comes to market segmentation. In particular, Girlfunk Jewelry has used this information in market segmentation on the basis of lifestyles, social class, and personality attributes. The target market is divided into young digerati and prism segments as discussed below.

Young Digerati: Youthful customers

The strategy entails active marketing the Girlfunk Jewelry, product to the young Americans since this group has low expenses, but with discretionary income and are very much interested in differentiated jewelry products (Kotler and Keller 39). Through the digital marketing strategy that stresses on proactive connection to fashionable lifestyle, the company will be in a position to penetrate this market without having to alienate other customers (U.S. Census Bureau par 14). This group is ethnically diverse and consists of 25.19% of the US households and they frequent social media (U.S. Census Bureau par 9).

Prism Segment: Middle-aged customers

This group consists of middle-aged customers who consist of 32.39% of the total US households. This group has active online lifestyle and own majority of the smart phones and other electronic gadgets, which can access the internet. This group is ethnically diverse and has high disposable income (U.S. Census Bureau par 4). Therefore, e-marketing strategies will be effective in reaching this segment to promote the Girlfunk Jewelry products (Kotler and Keller 39).

Market penetration

Short term strategies

The short term advertising strategies is the use of social media and business website to reach the targeted clients. The main objective of the digital marketing plan is to attract the younger customers’ market through the website and a twitter fun page in order to increase the customer traffic in its jewelry stores. The objective aims at packaging the Girlfunk Jewelry as a favorite of the younger customers who frequent social media and actually share a common communication culture. Apparently, this segment forms the largest bracket of those who visit jewelry stores. The use of social media to attract this market segment is achievable since the target market frequents social media as a site for interaction and purchase of jewelry products (Bowden 64). The budget for short term advertising strategies will be about $3,000 since use of social media is affordable.

Long-term strategies

The long-term strategies will be search engine optimization and continuous use of social media advertisement for at least five years. Search engine optimization for the Girlfunk Jewelry website can be achieved through installing plugins that possess extra features such as page navigation, thumbnail, and customized page numbers (Kotler and Keller 15). Specifically, this proposed system in Google will consist of a multi tab page that will serve different areas and services to online customers. The main categories may be Girlfunk Jewelry ordering menu, e-newspaper/magazines and brochures related to the common brands of the Girlfunk Jewelry, shopping (duty free) for customized Girlfunk Jewelry options, and a guide to cost for each type of the Girlfunk Jewelry product(Kotler and Keller 29).

When implementing SEO in the Google search, it is necessary to revise the algorithms constantly for the search result of the Girlfunk Jewelry website to remain at the top (Bowden 68). This can be achieved through revising the content to ensure that all the information in the website pertains directly to the needs of potential clients. Thus, constant blogging on the website and recruiting other independent bloggers to blog about the website will give the Girlfunk Jewelry website a competitive advantage in marketing its product in the expansive US market (Kotler and Keller 18).

The SEO may also be tailored to include a unique cookie which is transferable to the users of the Girlfunk Jewelry website. The unique cookie for the website will be transferred to all primary and secondary visitors to this site hence broadening the spread information on this website in the US. Optimizing the SEO has the potential of making the website go viral within six months since the unique cookie will spread to the primary and secondary users (Kotler and Keller 19). The risk of using this option may be the high cost of constantly optimizing the SEO and hiring unprofessional bloggers who may compromise the elements of trust in dealing with the potential clients (Cheverton 23). However, the benefits in relation to the Girlfunk Jewelry surpass the demerits.

Cost of digital marketing strategies

Cost forecast
Direct Cost of Sales 2014 2015 2016 2017 2018
SEO 21,000 24,500 25,345 26,500 27,500
Social Media 12,400 14,300 14,350 14,300 14,300
Subtotal Direct Cost of Sales 33,400 38,800 39,695 39,800 40,800

The cost of digital marketing is summarized in the table below.

Cost of digital marketing

Financial Cash flow Report

Cost of doing business

Expenses Expected Monthly Cost ($) Expected Yearly Cost ($)
Rent 1000 12,000
Salaries and Wages 4,800 57,600
Technological Equipment and Furniture 1,200 14,400
Advertising and Other Promotions 500 6,000
Utilities: Heat, Electricity, etc. 400 4,800
Telephone and Internet 200 2,400
Insurance 600 7,200
Miscellaneous 200 2,400
Total 8,900 106,800

Expected revenue

The business targets to sell 3,000 jewelries to customers within the end of the first year of operation. Since each product will cost an average of $50, the expected revenue is calculated below.

Expected revenue= Cost of each jewelry * Number of customers

=50*3,000

=$150, 000

The Girlfunk Jewelry 12-Month Income Statement.

Cash Flow Budget Statement for the Year 2016 (Monthly)
Particulars Start up Jan Feb March April May June
Estimated Sales Units 200 300 400 450 500 500
Sales Revenue 8,000 9,000 9,500 10,000 10,500 10,500
Cash Inflow
Accounts Receivable 8,000 8,000 9,000 9,000 10,000 10,000
Initial capital 36,800
Long-term Loan 70,000
Total (A) 106,000 8,000 8,000 9,000 9,000 10,000 10,000
Cash outflow
Accounts Payable 2,000 2,000 2,500 3,000 3,400 3,400
Worker wages 4,800 4,800 4,800 4,800 4,800 4,800
Rent 1,000 1,000 1,000 1,000 1,000 1,000
Electricity and Utilities 400 400 400 400 300 300
Other Admin expenses 200 200 200 200 200 200
Sales Promotion 400 500 1,500 2000 600
Interest 1,200 1,800 2,000 2,000 1,300
Property, Plant and Equipment 30,000
Loan Repayment
Total (B) 30, 000 6,700 7,700 8,100 8,000 7,600 7,900
Net cash (A) – (B) 76,000 -3,500 -3,800 -3,100 -1,800 -1,200 -1500
Opening balance 70,400 67, 300 63, 400 60,300 59,100 57,300
Closing Cash 76,400 67,300 63, 400 60,100 59,100 57,300 55,900
Particulars July Aug Sep Oct Nov Dec Total
Estimated Sales Units 500 550 550 650 850 900 3,000
Sales Revenue 8,000 10,000 10,000 12,000 16,000 14,000 160,000
Cash Inflow
Accounts Receivable 8,000 10,000 10,000 12,000 16,000 14,000 160, 000
Initial capital 36,800
Long-term Loan 70,000
Total (A) 8,000 10,000 10,000 12,000 16,000 8,000 266,800
Cash outflow
Accounts Payable 2,000 3,000 3,500 4,000 4,000 4,000 46,400
Worker wages 4,800 4,800 4,800 4,800 4,800 4,800 57,600
Rent 1,000 1,000 1,000 1,000 1,000 1,000 12,000
Electricity and Utilities 400 400 400 400 400 400 4,800
Other Admin

Expenses

200 200 200 200 200 200 2,400
Sales Promotion 400 600 500 800 500 5,600
Interest 2,000 2,300 2,000 2,300 14,600
Property, Plant and Equipment 30,000
Loan Repayment 6,700 6,700 7,100 5,800 6,600 7,800 31,200
Total (B) -1,700 -1,700 -1,100 800 1,200 600 106,500
Net cash (A) – (B) -1,700 -1,700 -1,100 800 1,200 -1000 50,200
Opening balance 48,000 47, 300 49, 400 49,700 51,200 50,200
Closing Cash 49,300 46, 400 49,300 50,100 51,200 50,200

The Girlfunk Jewelry Balance Sheet As at 30th December 2016.

Assets
Current Assets
Cash in Bank 22,000
Cash Value of Inventory 18,000
Prepaid Expenses (insurance) 7,200
Total Current Assets 47,200
Fixed Assets
Machinery & Equipment 30,000
Furniture & Fixtures 9,200
Real Estate / Buildings
Total Fixed Assets 39,000
Total Assets 76,200
Liabilities & Net Worth
Current Liabilities
Accounts Payable 16,000
Taxes Payable 6,000
Notes Payable (due within 12 months)
Total Current Liabilities 22,000
Long-Term Liabilities
Bank Loans Payable (greater than 12 months) 5,000
Less: Short-Term Portion
Total Long-Term Liabilities 5,000
Total Liabilities 25,000
Owners’ Equity (Net Worth) 51,200
Total Liabilities & Net Worth 76,200

Girlfunk Jewelry Statement of changes in equity (Per Owner) As at 31 December 2014.

Common stock Additional paid in capital Retained earnings Other comprehensive income Treasury stock Total stockholder’s equity
Opening balance 1,000 16,000 15,000 0 0 31,000
Changes 2,416 2,416
Closing balance 1,000 16,000 17,416 0 0 30,416

Return on investment = Gains – (Investment costs/Investment costs)

Return on investment for the business

  • Gains $16, 000
  • Investment cost $12, 000
  • Gains – Investment costs $4, 000

Therefore, return on investment is 4,000/12,000 = 37.5%

From the above calculations, the business is likely to break even within six months. Through financial planning, the Girlfunk Jewelry business may be in a position to correctly forecast the profits and manage assets and costs associated with running the business (Kotler and Keller 29). In addition, financial planning facilitates pricing and managing of business assets since its variables operate on efficiency and optimal operation (Kotler and Keller 15).

Profit Analysis

Adjustments can be made on the cost of each product to average at $60. This means that the business will receive revenues of $30,000 more within the same period. This will reduce the payback period to 4.5 months.

Location

Characteristics of location

The business will be located in West Hollywood. The location in Los Angeles gives the Girlfunk Jewelry the much needed ease to reach the market since the main products, which are fashion apparels, will target the high income residents within Los Angeles. Besides, the Los Angeles location makes the company have a strategic reach of the market since most of the targeted customers are celebrities living within the area.

As a result, the distribution pattern will be efficient and sustainable in the short-run and long-run (Bowden66). West Hollywood and its surrounding are inhabited by established business people and celebrities. The celebrities, who form a significant percentage of the population in the region, comprise of people from various fields such as the acting industry and the sports people. Shopping is part of life among most people in the West Hollywood area. The expenditure of most of the people in West Hollywood is relatively high; taking into consideration of the fact that they have high income (Kotler and Keller 15).West Hollywood is a home of various foundations established by celebrities, and various events are held in the region throughout the year (U.S. Census Bureau par. 16).

Population

In the case of Girlfunk Jewelry, located in West Hollywood, there are approximately 35,288 people living in the neighborhood, according to the United States Census Bureau as of the year 2013 (U.S. Census Bureau par 4). In 2008-2012 American Community Survey, among the population of 34,572 people, 44% are female. A dominating 29.2% of the 2012 total population in the city ages from 25-34 years. Also, the second highest estimate is 17.7% of subjects who are 35-44 years old. From a broader age range of 15-44 years, 54.3% of the total population is represented under the category (U.S. Census Bureau par 8).

Competition

The West Hollywood location has more than ten other businesses selling jewelry. This will reduce the number of customers visiting the Girlfunk Jewelry store since the businesses must share the clients. However, the business model of the Girlfunk Jewelry is very unique in terms of products and services offered (Kotler and Keller 25). Thus, the effects of competition will be minimal in the chosen location.

Site factors

The location on the main street within West Hollywood improves the visibility of the Girlfunk Jewelry. The average annual rent is $12,000 for the space that the business will occupy. The location is very secure since there is an adjacent police station 100 meters away. There are ample parking spaces around the main street and the area experiences average traffic. Pedestrians can easily access the proposed store from the intersections in the four main streets. The good communication network guarantees efficiency in the distribution channel for the Girlfunk Jewelry (Kotler and Keller 29).

Works Cited

Bowden, John. “The Process of Customer Engagement: A Conceptual Framework.” Journal of Marketing Theory & Practice, 17.1 (2009): 63-74. Print.

Cheverton, Philip. Key marketing skills: Strategies, tools, and techniques for marketing success, London, UK: Kogan Page, 2004. Print.

Kotler, Philip, and Kevin Keller. Marketing management. 14th ed. 2012. New Jersey, NJ: Pearson Prentice Hall. Print.

Mariotti, Steve. Entrepreneurship: Starting and Operating a Small Business, New York: Prentice Hall, 2007. Print.

U.S. Census Bureau. Community Facts. 2013. Web.

Corporate Financial Analysis And Evaluation

Corporation Interim Reporting

Interim reporting refers to “the reporting of the financial results of a period which is shorter than a full financial year” (“IAS 34 — Interim Financial Reporting,” 2019). The interim reporting by publicly listed companies involves the preparation of financial statements including balance sheet, cash flow statement, income statement, and changes in equity statement on a quarterly basis. It is not mandatory for companies to do interim reporting under US GAAP and IFRS and there is no defined frequency of reporting.

However, they provide a checklist that companies must follow for preparing interim financial reports and supporting documentation. IAS 34 and ASC 270 require companies to provide a complete or condensed form of financial statements. It is not possible for companies and auditors to perform extensive reviews of business activities and financial accounts. Therefore, interim reporting is mostly unaudited.

Corporation Financial Statement

The hypothetical financial statement entailing interim reporting is submitted in an Excel workbook.

Corporation: GAAP and IFRS

The requirements of interim reporting by the US GAAP and IFRS are similar. They do not expect all companies to provide interim reports as it is not mandatory for them. They both require companies to follow the prescribed checklist including the application of consistent accounting principles and format and the completeness of financial information. Firstly, there is a difference in the allocation of costs in interim periods as the US GAAP (ASC 270) considers interim periods “as integral parts of an annual reporting period” as opposed to the IFRS (IAS 34) (Ernst & Young LLP, 2018).

The US GAAP requires cost allocation to each interim period, whereas the IFRS requires expected cost benefits over interim periods to be recognized as deferred assets. Secondly, under the US GAAP, companies use the annual worldwide tax rate, whereas the IFRS requires them to use the tax rate applied to a particular jurisdiction where interim reports are prepared (Kieso, Weygandt, & ‎Warfield, 2016).

Corporation Segments

Segment reporting is a process that allows companies to identify business activities or areas from which they generate revenue and incur expenses (Beams, Anthony, Bettinghaus, & Smith, 2017). The US GAAP (ASC 280) requires matrix-style organizations to report segments based on their products or services instead of geography or other bases.

Furthermore, the disclosure of segment liabilities is not needed. On the other hand, IFRS 8 requires all companies to use the management approach for identifying segments (business or geography) and also disclose segment liabilities. The segment reporting under the US GAAP is submitted in an Excel workbook.

Corporation Transparency

The segment reporting based on products and services is useful for improving transparency. Such reporting helps in tracking the business activities of a company and identifying its high or low performing divisions. Shareholders need disaggregated information that could help them in evaluating the firm’s sustainability and future growth potential. They are better informed about the impact of the firm’s decisions on its financial performance, and they can determine whether its management is responsible for making strategies that will improve its earnings (Beams et al., 2017).

Corporation: Suggestions to Improve

It is suggested that companies should use different measures for segment reporting. A firm, which operates in different markets and sells various products, should not limit its reporting to a single basis of reporting, e.g., geography or business. It should also provide details of strategies and their impact on different segments.

Moreover, companies should also provide details of each segment’s liabilities. It will help in estimating every contribution and evaluating financial performance (Kieso et al., 2016). It is also recommended that companies should report the operational results and details of their international segments’ assets and liabilities before and after foreign currency translation. This will help in assessing the real impact of foreign operations on the group’s business.

Corporation: Impact

The companies, which are operating in multiple markets, are exposed to the exchange rate risk as they have to translate transactions denominated in foreign currencies in their financial accounts reported in their base currency. All such transactions could have different values if the exchange rate changed. Favorable exchange rate movements can increase the value of the company’s assets and earnings from its operations in a foreign market, whereas unfavorable changes increase its liabilities and lower its asset-value and profitability (Kieso et al., 2016).

Corporation: Two Methods

The temporal method uses historical exchange rates for converting foreign currency transactions. It implies that this method records financial transactions by using the exchange rate prevailing on the date of their occurrence. On the other hand, the current-rate method translates all foreign currency transactions by using the current exchange rate on the date of the preparation of financial reports (Kieso et al., 2016). Companies more commonly use this method for reporting purposes. Functional currency refers to the primary currency used in a foreign market. The use of the two currency-translation methods depends on the functional currency of the foreign country is indicated in Table 1.

Table 1. Impact of Functional Currency.

Functional Currency Translation Method Translation Adjustment
US Dollar Temporal Net gain or loss added to the net income.
Foreign Currency e.g. British Pound Current-rate method Shown as a separate of Other Comprehensive Income.

Corporation: Translation Process

The hypothetical example of currency translation is provided in the Excel workbook.

References

Beams, F. A., Anthony, J. H., Bettinghaus, B., & Smith, K. (2017). Advanced accounting (13th ed.). New York, NY: McGraw-Hill/Irwin.

Ernst & Young LLP. (2018). US GAAP versus IFRS – The basics. Web.

IAS 34 — Interim Financial Reporting. (2019). Web.

Kieso, ‎D. E., Weygandt, J. J., & ‎Warfield, T. D. (2016). Intermediate accounting (16th ed.). Hoboken, NJ: John Wiley & Sons.

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