Financial Statement Analysis of Amazon.Com

Financial Statement Analysis of Amazon. com, Inc. Introduction The purpose of this essay is to perform financial statement analysis on Amazon. com, Inc. (NASDAQ: AMZN ). We start with an introduction of Amazon and its industry. We then evaluate the company’s financial position, liquidity, operating capability and financial flexibility using different ratios. To evaluate the financial performance of Amazon. com, Inc we disclose recurring NICO and do full ROE disaggregation. Amazon. com’s stock price increased from $44. 29 per share at the end of fiscal year 2004 to $134. 2 per share at the end of fiscal year 2009. Earnings per share increased from $0. 63 to $2. 06. The stock closed at $118. 87 on 02/01/2010. Recommendation Amazon. com is a fast growing E-Commerce company. Although facing the recent U. S. and global economic down turn and intense competitions from various industries, its sales increased 28% in 2009, diluted earnings per share increased 31%. Based on our a nalysis, we project the company to continue maintain the high growth rate. We project the two year target price range of Amazon’s stock to be $193 to $209. The stock is currently undervalued. Consequently, our recommendation of Amazon. com is BUY. Industry Analysis Amazon. com, Inc. is an American-based multinational electronic commerce company. Headquartered in Seattle, Washington, Amazon was founded in 1994. As one of the largest online retailers in the world, Amazon claims to offer â€Å"Earth’s Biggest Selection†. In addition to online retailing, Amazon also offers programs that enables seller to sell their products on Amazon. com and to fulfill orders through Amazon. It earns fixed fees and revenue share fees etc. hough those transactions. Amazon turned its first profit in the fourth quarter of 2001 and maintained high growth rate since then. We believe that the below are the key factors important to the future success of Amazon. com: * Successful in efforts to expand into international market segments – Amazon needs to further expand internationally to maintain its sustainable growth. * Successful in optimizin g fulfillment process and operating its fulfillment centers – Amazon needs to continue to expand and optimize the operation of its fulfillment centers. Successful in finding new revenue streams – Amazon needs to seek new ways to diversify revenue generation and drive its overall growth. * Manage growth effectively – Amazon’s global expansion increases the complexity of the business. Financial position, liquidity, operating capability and financial flexibility Financing structure of Amazon. com Table 1 summarizes how Amazon. com was financed as of each of the last 6 fiscal year ends. As of December 31:(in millions) | | | | | | | 2009| 2008| 2007| 2006| 2005| 2004| Operating liabilities| $ 8,447 | $ 5,233 | $4,006 | $ 2,685 | $1,929 | $ 1,620 | Financing liabilities| 109 | 409 | 1,282 | 1,247 | 1,521 | 1,855 | Equity| 5,257 | 2,672 | 1,197 | 431 | 246 | (227)| Total Assets| $13,813 | $ 8,314 | $6,485 | $ 4,363 | $3,696 | $ 3,248 | | | | Table 1| | | | Amazon’s fixed assets additions steadily increased between fiscal year 2004 and 2009. Its possession of marketable securities increased each year other than 2007, which was due to the anticipation of an acquisition in 2008. At the same time, Amazon. om has been aggressively paying off its long term debt. Its debt continues to decrease between 2004 and 2009. The debt to total assets ratio dropped from 57% in 2004 to only 1% in 2009. Between 2006 and 2008, Amazon repurchased total 17 million shares of common stocks. Overall, Amazon. com shows good financing structure and operating capability over the past five years. Buy decreasing its debt level, Amazon’s management team shows well ou t looking of the company. Liquidity Three liquidity ratios of Amazon in the past 5 years are presented in table 2. The liquidity ratios of Amazon’s competitor, Ebay, are also presented for 2008 and 2009. The three liquidity ratios show Amazon has very good liquidity, which means it could easily satisfy current liabilities with current assets. Comparing to Amazon, Ebay is even more liquid as it could satisfy its short term liabilities purely by cash and cash equivalents. | | Amazon. com| |   | eBay| | | 2009| 2008| 2007| 2006| 2005| 2004| 2009| 2008| Current Ratio (to one)| 1. 33| 1. 30| 1. 39| 1. 33| 1. 52| 1. 57| 2. 32| 1. 70| Quick Ratio (to one)| 1. 04| 1. 00| 1. 07| 0. 99| 1. 22| 1. 27| 2. 32| 1. 70| Cash Ratio (Acid Ratio) (to one)| 0. 86| 0. 79| 0. 84| 0. 80| 1. 04| 1. 10| 1. 10| 0. 86| | | Table 2| | | | | | Financial Flexibility Financial flexibility (Solvency and leverage) is a company’s ability to adapt to unforeseen events and opportunities. Leverage means using debt (or other third party funds) to increase earnings for the owners. Table 3 presents some financial flexibility and leverage ratios of Amazon. com from 2005 to 2009 and for Ebay from 2008 to 2009. Amazon. com is a fast growing company and in the fiscal year ended 2004, they had a negative total equity, which could skew the ratios. Therefore, we did not present the ratios in 2004. From table 3 we can see that at the end of fiscal year 2009, both Amazon. om and eBay have high financial flexibility due to low or even zero long-term debt. Their usages of leverages are both low. Although a company should try to use leverage to increase earnings for the owner, in the current economical environment, have low or zero long-term debt is actually an advantage, which means they don’t need to rely on creditors to maintain their high growth rate. Overall, Amazon. com has good operating capability, high liquidity and high financial flexibility. One thing to note is that in the current economy environment, while a lot of companies are seeking for credit yet they could not find it, Amazon. om is using cash to paying off its debt. This shows that the company’s operation is healthy and the management team is confident about the future growth of the company. | | Amazon. com|   | | eBay| | 2009| 2008| 2007| 2006| 2005| 2009| 2008| Financial Leverage| 2. 8| 3. 8| 6. 7| 11. 9| 365. 5| 1. 4| | Debt to Assets| 1%| 5%| 20%| 29%| 41%| 0%| 0%| Debt to Equity| 2%| 15%| 107%| 289%| 618%| 0%| 0%| Debt to Capital| 2%| 13%| 52%| 74%| 86%| 0%| 0%| Liabilities to Equity| 1. 63| 2. 11| 4. 42| 9. 12| 14. 02| 0. 34| 0. 41| Liabilities to Assets| 62%| 68%| 82%| 90%| 93%| 25%| 29%| | | | Table 3| | | | Operations and Profitability As shown in Table 4, we reconciled Amazon’s NICO as reported to â€Å"recurring NICO† for 2004 – 2009. The diluted net earnings per common share – as reported and â€Å"recurring NICO† per common share are included too. We also included similar reconciliation for Ebay’s fiscal year 2009. Table 5 shows the complete disaggregation of profit margin and return on equity. From the ROE disaggregation we can see that between 2004 and 2009, Amazon. com maintained a gross profit margin between 22% and 24% and operating margin between 3. 6% and 6. 4%. Especially, since 2007, its operating margin stabilized at around 4. % with a slight increase in 2009. Its profit margin steadily increased 0. 2% each year from 3. 3% to 3. 7%. Amazon. com’s ROE decreased over the years due to their pay back of most of their debt. Overall, Amazon. com maintained stable operating efficiency in recent years. At the same time, its overall profit efficiency is in a sli ght uptrend. Amazon. com has negative operating cycle, which means Amazon doesn’t pay its suppliers until after it receives the payment of the sales. Therefore, Amazon doesn’t need to hold much inventory while it can hold the money for a longer period of time. This is the advantage of the online retailing. Its operating cycle decreased from -27. 58 days in 2006 days to -37. 16 days in 2009, which shows improved operating efficiency over the years. Amazon. com’s operating margin and profit margin both were pretty stable with a slight increase in 2009. We expect its profitability continue to maintain at the same level or slightly increase. Amazon. com’s operating cycle and Asset Turn Over Rate both continue to drop in the past three years (annual rate around 20% and 5% separately), which shows its improvement in operating efficiency. We expect Amazon. com continue to improve its operating efficiency. Table 4 Table 5 Business and Investment Risks As a result of our analysis, we discovered the following business and investment risks that could result in downgrading of Amazon’s stock. Intense competition – Amazon’s business is intensely competitive. It has many competitors in different industries, including retail, e-commerce services, digital content and digital media devices, and web services. The intense competition has corresponding negative impact on prices, which in turn would hurt profit margins. For example, to compete with Apple, Amazon has to lower the price of its Ebook reader – Kindle. Weakening of the U. S. or global economies — A softening of demand caused by a weakening of the U. S. or global economies may result in decreased revenue or growth. Taxation Risks – Currently, Amazon doesn’t collect sales or other taxes on shipments of most of its goods into most states in the U. S. This situation could change in the future due to regulation changes. This could decrease its ability to compete with traditional retailers. Growth Potential and Recommendation As a fast growing company, Amazon. com has a diluted recurring NICO per common share CAGR of 27% over the past five years. The diluted recurring NICO per common share increased 35% in 2009. The sustainable growth rate in 2009 was 23%. We expect Amazon to continue to maintain its growth rate. Therefore, we project the future growth rates of Amazon to be between 25% and 30%. The two year target diluted recurring NICO per common share would be between $3. 22 and $3. 48. We project Amazon’s P/E ration will be around 60. Therefore, the two year target price range for Amazon would be $193 to $209. The closing price of Amazon. com on 02/01/2010 was $118. 87. As the result of the above analysis, our recommendation of Amazon. com is BUY.

Media Worksheet

What were the major developments in the evolution of mass media during the 20th century? During the 1900’s magazines along with newspapers became the leading literature for media. When the 1940’s rolled around radio was invented and became the new way to get in touch with the masses. Folks often tuned into to get the news on what was going on during the war. Even though radio was new there was still a high demand for the newspaper as a way to get and stay informed on different things.Then in the1950’s television became the new source for information and resources for mass media. Television was everything all rolled up into one and the people loved it. In 1962 technology grew and they came up with the Satellites which gave the masses or the American Culture access to news all around the world. Today we can all just see how far technology has came and how endless the possibilities may be for the future. There are many forms of communication and it just continues to grow and communication has become almost instant these days.There is a never ending demand for more speed, more apps and new computers with high performance and so many other ways to communicate and relay information to the masses. People want instant answers to their questions and concerns and mass media makes it happen for the people. Technology only seems to grow more and more as the demand for new ways to communicate grow with it. There is always the next best thing right after the next best thing to have and buy in way of, phones, computers, and I-pads for social networks and so on.How did each development influence American culture? Mass media has developed strongly over the past years. The development of mass media has had a big influence on the American culture in many ways. It seems today, that mass media has endless possibilities to reach people. Initially in American culture we only communicated orally. In the past people depended on teachers and story tellers to obtain knowledge. One of the beginning developments in mass media was the ability to print.As far back as the 1400’s there were books in the starting stages of becoming available to people the mass media audience. Then we had the development of the Telegraph as a way of communication that was instant, and it did away with the need to transport written information. The creation of the telegraph opened the doors to cell phones, radio and fax machines. In the Twentieth century we entered the phase of electronics. This new age of information brought television to the American culture and lead to other resources like satellite and computers.Then we moved into the digital phase which gave a wealth of power to a common person. So as we can see mass media has had a profound affect on American culture in ways we have evolved in communication. No longer relying on one certain source to gain knowledge or information, we now have many avenues of media and communication that are instant and avai lable and will only continue to become better, which allows the American culture to stay in touch, get informed, and help them better and faster with communication and recourses.

Cost Effectiveness And Commitment

Human resource managers in organizations have various tasks to carry out in an organization. One of the tasks is carrying out cost effectiveness in an organization. They also have the responsibility of ensuring that there is commitment both at the individual level and organizational level. Carrying out cost effectiveness in an organization has got its own effects both positive and negative. Human resource managers need to ensure that the consequences of cost effectiveness and commitment are reconcilable. In each and every organization, there is normally the pressure of reducing cots so that profits are maximized.As human resource managers develop a cost reduction strategy, it is important that there be some reconciliation with the commitment in the organization. Before looking at the extent that consequences of cost effectiveness and commitment reconcile one has to have the broader picture of the effects of reducing costs within an organization. (Condrey, 1998) Cost reduction or cost effectiveness can be carried out through various means. One of them is through minimizing the number of employees within the organization.There are some cases where human resource managers are compelled to carry out retrenchment of some employees in order to minimize costs. This means that the few employees that remain in the organization have to carry out multitasking. Cost effectiveness in an organization can also be implemented by reducing employee’s bonuses and allowances. This includes scraping off of medical allowances from employees’ salaries. The other way that cost effectiveness is carried out by human resource managers is through introducing of technology. This includes having computers and internet in an organization.Instead of having messengers in an organization, use of emails is incorporated. This is very cost effective. Human resource managers also increase employees’ working hours so that there is more productivity in an organization. All these ventures carried out with the motive of enhancing cost effectiveness have got various consequences to an organization. For instance when retrenchment is carried out, there is a likelihood that that the remaining employees will do their best at work. When salaries are reduced and also allowances and bonuses reduced, this can greatly de-motivate employees. Maund, 2001)Research indicates that it is a very tricky venture to incorporate cost effective practices like the ones that are listed above without affecting or compromising the organization’s growth potential by having employees being less committed. While carrying out cost effectiveness in an organization is a venture of trimming the fat, human resource managers have to be very careful such that they do not cut into the bone too. This simply means that everything carried out within an organization to help minimize costs has to be very well planned and the consequences of the same well evaluated.Many human resource managers just carry out cost effectiveness without having any buy in from the employees in the organization. Even as this venture is carried out, there is the need of identifying the core competencies in relation to improving the entire efficacy within the organization. Outsourcing is also one of the consequences or the outcomes of cost effectiveness. This has got adverse effects on the general commitment of employees. Employees can feel that they are not that important or rather qualified to carry out the tasks within the organization.That is why it is important that consequences of carrying out cost effectiveness within an organization be clearly evaluated such that they do not have such adverse effects on employees’ commitment. (Wintermantel, 1997) There are various steps that can be taken by human resource managers in the motive of implementing cost effectiveness. This includes contracting out some of the business in the organization that is not very core in nature. One has to und erstand the consequences of these ventures can affect the company’s relationship with customers such that they change focus and become less committed to the company’s products or services.In this case, whatever step that is taken has to be done with great caution and after very extensive consultation such that an equilibrium state can be reached. This is whereby there is cost effectiveness and yet the organization continues to experience growth. The extent to which the consequences of cost effectiveness and commitment can reach a reconcilable state is ensuring that proper planning is carried out. Cost effectiveness as many scholars say is not rocket science. It is said that anyone can actually carry out cost cutting in an organization, but very few do it well such that the organization suffers a great deal.For the consequences of cost effectiveness and commitment to reconcile the whole process has to be carried out very efficiently and effectively. The following consid erations have to be put in place. †¢ One has to remember that money is not everything †¢ Change has to be carried carefully When costs in an organization are cut, there is great realignment that occurs in an organization. Cost effectiveness sometimes means elimination of departments, people, customers, research and development projects and even initiatives.This affects the Company’s activities and therefore human resource managers need to know that it is not just an issue of what or who to eliminate. Rather it is an issue with adequate preparation for the same, anticipation and consequences of the changes that help in overall determination of the success within an organization. The extent to which the desired consequences of cost effectiveness and commitment can merge is just having an initial focus in the whole venture. The human resource manager has to clearly ascertain that the desired change in cost effectiveness in the organization is actually very necessary â € ¢ How the success will be measured†¢ The areas that have priorities be clearly defined †¢ How the consequences of cost effectiveness will be managed The other way through which the consequences of cost effectiveness and commitment can be merged is through building of local support within the organization and also simple listening to the local voices within the organization. It is said that good listeners are quite hard to find. This is where there is picking up of messages that are conveyed through gestures, expressions silence and behavioural cues.This is quite important when carrying out cost effectiveness in an organization. Carrying out cost effectives in an organization is known to be a very difficult task. This is the case especially when employees or team members speak different languages and come from different cultures. For instance in multilingual environments, problems are bound to occur in relation to intent and meaning of speech. Human resource managers ha ve the hard task when carrying out cost effectiveness such that not only people from a certain tribe have to be laid off.This has got its own effects on the commitment of employees that remain in the organization. Human resource management consequences of commitment and cost effectiveness are only reconcilable when various measures are put in place. This includes empowering employees in the organization to develop solutions which can be owned locally. Human resource managers need to set the vision and then have the team coached. This allows the local stakeholders to own the whole process of ensuring cost effectiveness. This makes employees be held to their commitment.Cost effectiveness change can only be effective or successful when the projects have people who are empowered in control and planning of the whole process. (Thomson, 2003) Commitment can be build to ensure success among employees, vendors, customers, local managers and partners. It is good that good communication networ ks be carried out so that so that commitment of the stakeholders within the organization is enhanced. Human resource managers have to clearly understand that success within an organization is not just in monetary values. It is also through commitment of stakeholders within the organization too. Wintermantel, 1997)Top human resource manager in an organization has to demonstrate simultaneously the commitment to listening, cost reduction and listening from employees and other stakeholders within the organization. One of the critical tools is having effective communication. This helps a great deal to maintain the commitment of employees within the organization even if ventures of cutting costs are implemented. Cost reduction is known to be a matter of survival for very many organizations. While there can be consensus on this issue, the challenge normally lies in delivering the whole process of cost reduction. ConclusionThe desired human resource management consequences of commitment and cost effectiveness are reconcilable. This is when proper measures are considered when implementing cost effectiveness within the organization. Communication is a very important factor that has to be considered when carrying out cost effectiveness. Proper communication has to be carried out to the various stakeholders within the organization like customers, vendors and employees. Change even if it is in line with cost effectiveness has to be carried out carefully. Human resource managers need to know that success in an organization is not just in monetary terms only.

Les miserables: character analysis

Jean ValjeanJean Valjean is a central character of Les Miserables. His story is that of misery, pain, and injustice. Valjean is an epitome of change. He makes transitions from one kind of man to another, as dictated by his drastic experiences in life. Valjean’s life is a story of how an honest and good man can be hardened by society in general, and prison in particular.Because of Valjean’s unfortunate experience in prison, he hardens into a criminal and a social outcast. This transformation in Valjean’s life is a recognition of the observed truth and pattern of human behavior, wherein man changes, either for better or for worse, as a result of external forces such as society. The most important part of Valjean’s personality is his resilience and positive attitude towards life and change in general. He accepts the positive effect of other people in his life, and learns to love and care for such people.Ultimately, however, the good character of Valjean surfa ces, and even the bishop realizes that, as shown by this passage:â€Å"The bishop approached him and said, in a low voice, ‘Do not forget, ever, that   Ã‚  Ã‚  Ã‚  Ã‚   you have promised me to use this silver to become an honest man.' Jean    Valjean, who had no recollection of any such promise, stood dumbfounded. The   Ã‚   bishop had stressed these words as he spoke them. He continued solemnly,   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   ‘Jean Valjean, my brother, you no longer belong to evil, but to good. It is your soul I am buying for you. I withdraw it from dark thoughts and from the spirit of   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   perdition, and I give it to God!†FantineFantine is one of the characters in Les Miserables who lived the less appealing life. She had been deprived of good opportunities since her childhood, such as education and care. Thus, she grew up to be an uneducated girl whom everyone else found easy to victimize.Fantine can easily be categori zed as a victim of society, since she had been deprived of education without her fault, and yet society readily found her corrupt and unfit for fruitful activity and relationships. A lot of people took advantage of her lack of knowledge, education and experience, and thereafter left her out in the cold. Fantine’s character is a perfect illustration of the bigotry in human society and the story of her life is but a perfect example of the way injustice ruins lives.Brought by her experiences, Fantine learned to have a different view of morality, as expressed in her statement, â€Å"[T]he guilty one is not he who commits the sin, but the one who causes the darkness.†CosetteThe character of Cosette is in many respects similar to that of Valjean, an effect largely influenced by the latter’s taking charge over her education and upbringing. Thus, like Valjean, Cosette exhibits her kindheartedness and morality through her actions, thereby manifesting that her initial exp erience with the cruel Thà ©nardiers did not corrupt her character. Cosette, at one point in the story, said, â€Å"[W]e bow to the man who kneels. A faith is necessary to man. Woe to him who believes in nothing.† Such a statement reflects her belief about man, and shows how pure Cosette’s character has remained.Fortunately for Cosette, she had not been exposed to the kind of cruelty and hardship that Valjean went through, although she expressed resentment over Valjean’s overprotective stance. When viewed as a whole, Cosette’s character does not provide a lot of conflict, she being one of the lucky personalities in the story.

The Chiefdoms of Powhattan and Ukaguru Term Paper

The Chiefdoms of Powhattan and Ukaguru - Term Paper Example The chiefdom leader ensured that labor loss is minimized. The chiefdom focused on agricultural crop growing. The chiefdom’s most popular crop is the corn. Maize is eaten by the chiefdom members as a regular part of their daily meals. Corn is the most important wealth of the Chiefdom. However, the agricultural practices of the Chiefdom were not enough to ensure a stable economic condition. Statistics indicate that the chiefdom members planted corn plants that generated two corn ears on each plant. Consequently, 2,700 corn plants were harvested in one acre of land alone. In terms of statistics, 15 bushels of corn per person were harvested every year in each household corn plot1. B. Tanganyika Chiefdom. There are unique descriptions of the Tanganyika Chiefdom. Beer drinking is one of the popular activities of the Tanganyika Chiefdom. Cattle theft is also one of the seemingly illegal activities some of the Tanganyika chiefdom residents. The Tribe is located in East Africa. In the cattle theft, a member of one tribe of the Tanganyika Chiefdom steals the cattle of another tribe of the Tanganyika Chiefdom. There is an ambivalent interaction between the people of the Tanganyika Chiefdom2. The people of the Chiefdom are farmers and herdsmen. During the prior wars, the Kaguru members hid among the mountain cliffs of the Kaguru Plateau to defend themselves against their attackers. The Kaguru members of the Chiefdom were metal craftsmen. ... The peasants lived only at the expense of the chief authority and elite privilege. The field laborers worked to feed English settlers, the Elite, and finally themselves, in respective order3. The Virginian settlers commanded the Powhatan chiefdom to plant food. When the harvest arrived, the settlers harvested the food. Wahunsonacock, the people’s leader, controlled the surplus crops. The peasants eagerly obey Wahunsonacock’s commands. To ensure loyal compliance, Wahunsonacock used coaxing to persuade the peasants to obey his every command, without hesitation. Wahunsonacock went out of his way to create a sense of solidarity between himself and his subjects. To ensure solidarity, Wahunsonacock dressed like a peasant, in deerskin breechclout, moccasins, racccon cape or mantle4. As leader, Wahunsonacock was surrounded by the tallest warriors, had more than 11 favorite wives, and several servants maintaining his physical appearance. On the other hand, the Kaburu People of T anganyika are divided into matrilineal groups. Some of the clans have certain rights to own or use land and political power. This concept is dominant in many areas of the chiefdom. The Kaguru Matrilineal clan system is the group’s government organization type. The headman is the leader of the groups. The headman manages the land and other government affairs. The Kaguru people live in little hamlet groups of 3 to 20 huts or even in only one lone homestead. The Kuguru government architecturally set up the people’s homes located in the settlements are bigger than the valleys5). 2. Economics and exchange. In terms of economics and exchange, the Production in excess of household needs is surplus6. the economic is based on

Language Assessment for Korean High school students learning English Essay

Language Assessment for Korean High school students learning English - Essay Example Once the correct techniques and tools are adopted, the learning of English language, like any other language, becomes extremely easy and an effortless exercise. Not only learning a language but testing the skills acquired by learners, is also paramount in achieving the goal of teaching English to students from the non-speaking English background. It is seen that there has been a tendency among social class to attach social values and prejudices to different types of language use, depending on the circumstances they are exposed to. Language socialization is a newly emerging area of study that concerns the process in which a language learner, either a child or an adult, acquires the communicative competence of a target language, and function of the language in that process (Hymes, 1972). In the language socialization perspective, the relationship between the caregivers or teachers and children or students is critical, where the language is the key means of socialization. The major international routine of foreign language classrooms focuses on the initiation, response, and follow-up (IRF), where initiations turn could be a greeting, a question or a drill prompts; a response turn may elucidate an answer or response: and a follow-up turns an evaluation or comment. (Mehan, 1985; Ohata, 1994: van Lier, 1988).  As we have seen, th e need for the English language as the global language for any transaction is often emphasized and the proficiency in the English language communication is a must in the development of individuals, thereby of the global economy. According to Wentworth (1980), the socio-cultural meaning is constantly created and reformed through social interaction between the members and novices of society, and language plays a great role in this process.  

Analyzing Value Net for Omni Hotel & Resort Essay

Analyzing Value Net for Omni Hotel & Resort - Essay Example Customers that are satisfied with their experience are highly likely to tell their friends about it. A second way customers could add value to the firm is by becoming recurrent customers of the company. Rivals – The company faces competition from direct and indirect rivals. All four and five star hotels in Texas are direct competition of Omni Hotels. Homes that rent their facilities for short monthly contracts are an indirect competitor of the firm as well as condos. Three direct competitors of Omni Hotels in the Corpus Christ marketplace are Days Inn Beach, Radisson Hotel, and Knights Inn. The rivals of the company represent a threat to the business organization. Omni has over 50 hotels across the United States (Omnihotels, 2011). The Corpus Christi hotel can add value and turn this threat into an opportunity by forming marketing alliances with other competitors. All the registered hotels in Corpus Christi can form a cash pool to advertise the region to tourist inside and outside of the United States. Such an initiative would increase the total tourism money that the region receives which would benefit the entire hospitality industry. Suppliers – In the hospitality industry suppliers have little power over hotels. Hotel chains such as Omni enjoy several competitive advantages including power to buy in bulk and take advantage of economies of scale, high variety of supplier options, and greater brand value than their suppliers. Several key suppliers that Omni Hotel must emphasize include food suppliers, cleaning suppliers, and bathroom supplies. The food suppliers are instrumental toward the success of hotel operated restaurants. Tourists are willing to pay a premium prices as long as they receive superb service and quality food. The organization can add value in its supply acquisition by advertising to the customers that they can take for free any supplies in from the room such as