Capital Mortgage Insurance Case Essay Example

Executive Summary Merrill Lynch currently dominates the relocation services market. In line with CMI’s vision to expand and diversify, they recognize the significance of entering the relocation services market. Doing so would complement their existing services and enable them to compete more effectively against Merrill Lynch. As a result, CMI conceived the idea of establishing a “residential real estate financial services company” (Lewicki 576). On March 1st, CMI presented their proposal to the MetroNet Third Party Equity Committee, who subsequently accepted it.

With the approval of the committee, Randall and Dolan initiated discussions with CTS in March and April. CMI recognizes the worth of collaborating with Eliott Burr, a well-connected executive, and his team. While CTS is eager to be acquired, they have concerns about their ownership situation after the acquisition. Although there has been open communication regarding CTS operations, CMI is cautious about the proposed acquisition’s value and its impact on the relationships among all parties involved, including MetroNet.

On May 24th, the teams will gather to discuss and negotiate CMI’s offer of acquiring CTS. CMI’s main focus is to expand their financial services capabilities and create a strong network capable of competing with Merrill Lynch. Their primary objective is to acquire CTS at a reasonable price, in line with the vision presented to and approved by MetroNet. Additionally, they aim to retain key management personnel and establish a solid relationship with Elliot Burr.

Conservation of good relationships with the CTS owners makes a collaborative strategy more effective to implement for the long run. If a deal is not reached, CMI’s BATNA would be to either build a relocation services in-house or try to get a similar company. As there are currently no other known targets for the latter, and the former could be expensive and time consuming, a negotiated deal is the strong predilection. CMI has some negotiating power because they are aware that CTS is struggling financially, and are desperate for a buyer.

The owners’ intention in the negotiation is being undermined by this desperation. CMI, however, possesses power through their strong vision for the future. They have a clear vision, support from MetroNet, and are paving the way for collaboration among independent parties to compete with Merrill Lynch. On the contrary, CTS’ main focus is to maximize the sale price of the company. The owners have personally invested significant amounts of money and time into the company and wish to see a return on their investments.

CTS is motivated to sell the company quickly because it is draining their resources. In order to secure their profits, CTS wants to maintain partial ownership after the sale. This could be used as a bargaining tool in negotiations. CTS’s main source of power is their strong internal network, followed by their influence over MetroNet through CTS members on the board of directors. If the relationship between CMI and CTS were to deteriorate, CTS could persuade MetroNet to withdraw support from CMI.

Finally, it is known that CMI openly committed to acquiring CTS in an approved proposal, and there is prenegotiation pressure on CMI to follow through on their commitment. CTS negotiators are aware that CMI is just as desperate to buy as they are to sell. In order for a successful collaborative strategy to be achieved, there needs to be a strong level of conviction, honesty, and effective communication among all parties involved. Additionally, both CMI and CTS must be dedicated to understanding each other’s needs and demonstrate a sincere willingness to adapt their approach.

Both parties involved in the acquisition must be open to modifying their views, understanding that the combined effort can yield greater results. The aim is for CMI to successfully acquire CTS due to several reasons: CMI’s requirement to expand their business by serving more high-ratio loan clients and gaining access to the advantages provided by the MetroNet network. By doing so, CMI can generate increased profits for their mortgage insurance business without significant cost expansion.

According to a consultant’s report, the key to success for a relocation business is to offer services at a lower cost than if clients were to do it themselves. Therefore, it is crucial for CTS to provide services at a reasonable cost. The more services offered within their corporation at an optimal level, the higher the potential revenue per customer. Since CTS plays a significant role in generating real estate sales commissions for the Burr and Lehman affiliation, it is imperative for CMI to ensure similar opportunities for these partners in the newly merged entity. This will help maintain good relations with Elliott Burr, the networking expert who will bring in a steady flow of new business.

To establish a collaborative strategy, it is essential to focus on the connection between parties and the desired outcome. Reaching an agreement on a feasible price for CMI’s parent corporation and all key partners of CTS is crucial. However, CMI must not solely focus on the outcome during the negotiation process. The executives at CMI have a strong relationship with Mr. Burr, and they must ensure that even if the negotiation does not conclude in anyone’s favor, the relationship with him remains intact.

Considering CMI’s perspective, although their parent company approved $9 million for expenses, they were unwilling to spend more than $600K plus the book value of CTS for 100% ownership. Conversely, CTS believes they are worth $6.25 million, which includes $5 million plus an 80% stake.In addition, it appears that some executives at CTS are more focused on recovering their initial investment rather than effectively competing with ML in the employee relocation industry. To address this issue, it is important to clearly outline the potential options available. Considering that both parties have differing price expectations for CTS, CMI must devise alternative offer arrangements.

It is crucial to ensure that these alternative configurations consider CTS’ interest while maintaining CMI’s strategic advantage and not compromising their goal of creating a diversified financial company. After devising a collaborative strategy, CMI could begin the negotiation with CTS on May 24th, addressing the following points: provide research on CTS’ logistics and agree on assessment metrics, develop CMI’s vision for the mortgage services company that can surpass Merrill Lynch, and reassure CTS associates regarding the security of their investments.

Hotel Advertisement

American people from the 20th century (sass) through the early 21st century (present). Advertising Concepts Advertisements come In many different forms from the paper press, to radio and television, Internet, billboards, and even celebrity branding. It Is used to draw consumer business by creating a need or want for specific products or services . Advertisements have been utilized to target mass audiences as well as target smaller specific audiences. With the continual advancement of technology, advertising techniques will continue to be reinvented even though its purpose has remained the same for centuries.

According to William Barbara, from the Advertising Educational Foundation (20051 advertising can be traced back as far as the 1 sass during the early stages of globalization. Advertisements were printed in newspapers to sell wares from new worlds and sparked dreams of prosperous lives in a foreign country. The circulation life of advertisements is usually short lived as they are replaced often to keep consumers Interested in a product. However, advertisements that are preserved can be useful In piecing together Images of what the society that created them was like (Barbara, 2005).

Kellogg: A Brief History In February of 1906 the Kellogg brothers, Will Keith and John Harvey, established the Battle Creek Toasted Corn Flake Company . When the company created their incredibly successful cereal Toasted Corn Flakes in 1922, they shortened their name to what is known today as the Kellogg Company . On October 6, 1 951, William Keith Kellogg passed away leaving the company solely to his brother John Harvey which explains why the majority of consumer’s only recognize the name and signature of John Harvey.

The Kellogg Company continued forward and now produces and markets a large number of products to include over a hundred different cereals . Kellogg has used various methods and strategies throughout their history to promote the company and Its brands. Their advertisements tend to focus on health, popularity of the time, and family values. They are also well known for offering premiums to market their products. In fact, the concept of Including prizes In cereal packaging actually began with the Kellogg Company . The first premium offered was when they purchased the product in stores .

Their marketing strategy established and produced a countless number of different cereal box prizes throughout the decades . Along with Kellogg advertising methods, the premiums they utilized also low insight in to what society may have been like when they were in distribution. SASS The sass was the time of World War II and was also the time when the United States economy was on track to recover from the Great Depression . In support of the American war efforts Kellogg provided packaged K-rations for the United States military forces. Rice Crispier Treats became a popular food to mail in care packages to deployed service men and women .

Engineering personnel from the military even used the company’s “machine shop to manufacture parts for the Manhattan Project . One of the largest influences of the decade was the introduction of the television commercial. Kellogg advertisements from this era focused on the war efforts and family values. Women started making more of the purchasing decisions during that time, yet the advertisements appear to reinforce the stereotype of women simply being mothers and homemakers. Press advertisements were very wordy, emphasized the idea of “one big happy family’, focused toward white consumers, and “Mother Knows Best” was the company’s slogan. Sass During the sass, industrial manufacturing and home construction was on the sis and the American economy continued to rise . With the sting of the Korean War and the Cold War starting, political styles were a little more traditional and many public Congressional hearing being held. The overwhelming fear of communism, the Red Scare, and McCarthy created a society of conformity with very conservative behaviors yet Americans at the time appeared to be more materialistic than previous decades. The sass lead to the Kellogg Company introducing some of the cereals that are still popular today; like Cocoa Crispier, Corn Pops, Frosted Flakes, etc… Kellogg was ally focusing on health and created the very first high-protein cereal. This decade was also the introduction of “Tony the Tiger as the sportscaster for Kellogg Frosted Flakes” which targeted children on Saturday morning television (Kellogg, 2013, Para. 6). The sass’s was a time of huge expansion for the Kellogg Company throughout the United States. Advertisements from this decade were more simplistic and got right to the point.

Unlike advertisements from the sass, there was a lot less verbiage. Since society in this time was becoming more materialistic, the advertisements seem to focus on getting consumers to try new things. This was, after all, the time of “keeping up with the loner’s” so many people were trying to be the first in the neighborhood to own the latest and greatest. The advertisements started to become more colorful and focused more on reaching consumers on an emotional level rather than presenting facts. There was still no sign of racial integration and white consumers remain the primary target. Sass Society in this decade was more complacent in the earlier years. However, the sass would prove to be a time of great changes for Americans. There was growing racial tension, military involvement in Southeast Asia was escalating, a beloved reserve known. This new generation created an entirely new culture that was outwardly rebellious toward conformity and the conventions of the prior generation . This decade was the start of a new America and the increase of the generation gap with new fashions, free sex, communal living, increasing open use of drugs, and protests.

The 1960 was the beginning of a much more colorful culture. The Kellogg Company began to expand on a more global level and was even a part of the historical Apollo 11 moon landing with the company’s cereal being breakfast for the astronauts. They also introduced a number of new products in theses. It was the earth of Front Loops, Frosted Mini-Wheat, Pop-Tarts, and Kellogg Product 19 (the first 100% fortified cereal) Just to name a few. Kellogg cereal advertisements focused on societies growing interest in nutrition and began to have a more modern approach.

Since the Kellogg were supporters of abstinence and segregation, there is no reference to the colorful society surrounding them in their advertisements . More photographs of the actual products were used and the company focused on making the advertisements more visually appealing. This decade showed an increase of Kellogg funding toward television advertising which can be seen with the immemorial utilizing the very popular band of the time, the Monkeys. Sass and SASS Interest in nutrition was growing ever more prominent in America during the Sass.

The Kellogg Company responded to this by being the first to list the amount of sugar in its cereals on the packages” which is even shown in their advertisements (Kellogg, 2013, Para. 8). This ends up being ironic because The American Dental Association ended up lodging a complaint with the Federal Trade Commission in regards to the sugar content of presented cereals . The company’s response was to begin publishing its nutrition policy and increasing consumer education. The sass brought confirmation about the importance of a diet that includes grain.

Kellogg quickly began making health claims about their high-fiber cereals like Kellogg All-Bran . This decade lead to Kellogg improving its global manufacturing capabilities. The Kellogg Company had always felt a strong social responsibility but finally began to support “non-traditional” social organizations like “the United Negro College Fund and the Statue of Liberty-Ellis Island renewal” (Kellogg, 2013, Para. 9). With the baby-boomer generation growing past the Kellogg Company’s target age audience, sales began to decline.

With the aging market and lack of interest, the late Sass was the end of PEP cereal which had been around since 1923 . The company did not give up though and continued to focus efforts on its cereal brands and ready- to-eat breakfasts. Advertising for the Sass did not change much from the precious decade using basic type print and keeping the same basic television presentations. However, it is a time when we finally start to see some true integration when it comes to advertising.

Gabby Douglas became the first African American Gold medalist in gymnastics and the Kellogg Company rushed in to make a deal for her to be the bookkeepers for their Corn Flakes brand. Sass and sass The Sass were difficult years for the Kellogg Company because of increased competition and reduced sales. However, they remained in the top of the leader Kellogg Institute for Food and Nutrition Research and acquired Worthington Foods which was the top producer of soy-based alternatives .

The company began to focus more effort than ever toward nutrition and health with the introduction of their new lines of cholesterol lowering foods and organic lines to meet consumer demand . Kellogg Company celebrated its 10th Anniversary in 2006, and looks forward to arraying forward the legacy of the company’s founder, W. K. Kellogg, by continuing to provide consumers with great-tasting, high-quality foods and programs that help promote health and well-being. Conclusion Kellogg advertisements changed over the years and reflected the social climate of the times.

Keynesian Economics And Classical Economics

The essay examines the distinctions in macroeconomic thought between various schools, specifically focusing on Keynesian and classical perspectives. While economists often incorporate elements from multiple theories, these two approaches have had a significant impact on economic thinking and policy. Named after John Maynard Keynes, Keynesian economics dominated the field from the 1930s to the 1960s and continues to be influential today, with some economists identifying as “new Keynesians.” The central tenet of this approach is a belief in wage and price rigidity, leading many Keynesians to advocate for active government macroeconomic policy in order to achieve satisfactory economic growth. This theory emerged during the Great Depression when output was declining but inflation was not a concern. Consequently, according to the Keynesian model, prices remain stable while changes in aggregate expenditures determine equilibrium real GDP. The accompanying graph illustrates a basic Keynesian model within an analysis of aggregate demand and supply.

The AS curve is a horizontal line at a fixed price level, Pl. Changes in aggregate demand, from DAD to DAD, result in changes in real GAP without altering the price level. However, modern economists do not support the belief that the aggregate supply curve is always horizontal regardless of real GAP level. The Figure on the right depicts an aggregate supply curve that is more indicative of current Keynesian economics. In the Keynesian region, which represents low levels of real GAP, the curve is flat. In this region, an increase in aggregate demand leads to an increase in output but does not cause prices to rise.

This section of the aggregate supply curve reflects the perspective of Keynesian economists who believe that high unemployment does not cause inflation. As real GDP rises and industries reach their maximum production levels, the aggregate supply curve becomes upward sloping. Keynesians argue that there is limited understanding about economic factors such as prices and wages. This lack of information during wage negotiations can lead to workers and companies being unaware of present and future price changes. Additionally, numerous labor contracts specify fixed wages for prolonged periods.

Keynesian economics posits that wages and prices are rigid in the short term and cannot promptly adjust to new price levels. Consequently, the government assumes a crucial role in stabilizing the economy by overseeing overall demand. Advocates of Keynesianism contend that the economy is not consistently in balance. For instance, if labor demand declines, the equilibrium wage (the cost of labor) ought to decrease as well. This would consequently reduce individuals’ willingness to work for a lower wage, ultimately leading to decreased employment.

According to Keynesians, the government should intervene actively in order to restore economic equilibrium. They argue that firms choose to lay off workers instead of decreasing wages because they believe that maintaining high wages for remaining employees is crucial for morale and productivity. As a result, wages become inflexible. This rigidity is also evident in the inflexibility of prices in goods markets according to Keynesian economics. Before Keynes revolutionized the field of economics in the 20th century, classical economics was the dominant theory.

Classical economics states that real GAP is influenced by aggregate supply, while the equilibrium price level is influenced by aggregate demand. The classical aggregate demand and supply diagram on the right represents the classical economist’s perception of the global economy. The vertical aggregate supply curve implies that the equilibrium level of output (income) is solely determined by the factors affecting aggregate supply, and that the economy typically operates at full employment.

When the aggregate supply curve is vertical, changes in aggregate demand, from DAD to DAD, solely impact the price level without influencing the equilibrium output. Classical economics presumes perfect flexibility in prices and wages to ensure quick market clearing. This excludes fixed-price or fixed-wage contracts and assumes that individuals are aware of all price changes and respond by requesting wage increases as compensation.

Classical economists argue that during a recession, people tend to engage in non-labor activities more often. These activities may include returning to school, retiring early, working remotely, or simply enjoying leisure time. The reason for this behavior is that real wages are lower during economic downturns. However, as the economy recovers and wages increase, individuals gradually replace their non-labor activities with more working hours. This ongoing substitution between labor and leisure suggests that a significant portion of unemployment is voluntary. In other words, unemployed individuals choose not to accept job offers if the wages offered are below their reservation wage or due to external factors influencing their decision.

Classical economics is based on the idea of a free-market, with minimal government intervention. This enables individuals to make economic decisions in their own self-interest, ensuring resources are allocated according to market participants’ preferences. Supporters of classical economics argue that the economy can consistently maintain and reach its natural level of real GDP. Although occasional factors may impact the economy and lead to deviations from this level, supporters believe that automatic adjustment mechanisms exist.