MGT534 Corporate Governance
Submitted to Prof:- Nimit Takkar
Name:- Shrey gohil
Roll:- 1713066
Case analysis :-These people are fiduciaries…..
Overview
Three vignettes taken from decided cases are used to explain the fiduciary obligations
of loyalty and care, the corporate opportunity doctrine, and the business judgement
rule. a classic test of loyalty the care and procedure directors should use when
approving a merger or sale of the company ; and the board's role and process in
hiring, firing, and severance decisions.
SWOT Analysis
Strength
The qualities and resources that Loyalty Gorkum may use to develop a sustained
competitive edge in the marketplace are its strengths. Physical resources such as land
and buildings, human resources, historical experiences and triumphs, activities and
procedures, and financial resources are all positive characteristics of five main
resources and skills.
- Loyalty Gorkum's strong balance sheet and financial statement can let it invest in
new and diverse projects, diversifying the revenue stream and increasing Return on
Sales and other metrics.
Loyalty is based on a strong brand equity and brand awareness. Gorkum works in a
domestic market with some of the most well-known brands. Brand recognition,
according to Lena G. Goldberg, is important in attracting new clients looking for
solutions in Entrepreneurship-related industries.
- Managing Regulations and the Business Environment – Loyalty Gorkum operates in
a regulatory and government-dictated environment. In the field of entrepreneurship,
the firm must navigate the environment by forming strong relationships with lobbying
groups and political networks.- Loyalty Gorkum's Diverse Product Portfolio – Loyalty
Gorkum's product and brand portfolio allows it to simultaneously target diverse
segments of the domestic market. Loyalty Gorkum has been able to diversify its
revenue sources and profit mix as a result of this.
- Because current customers are particularly loyal to Loyalty Gorkum, superior
product and service quality can help the company grow its market share. According to
Lena G. Goldberg's study These People Are Fiduciaries, there is ample evidence that
Loyalty Gorkum can compete with other global firms in the international market with
such a high quality of products and services.
Weakness
- Low profitability, which may limit new project investment – While Loyalty
Gorkum's financial statements are steady, the company's 5-7 percent profitability in
the future may result in a lack of cash to invest in new initiatives.
- Competitors can readily copy the Loyalty Gorkum business model – The business
model of Loyalty Gorkum, can be simply reproduced by industry participants.
Opportunities
Artificial Intelligence Advancements - Loyalty Gorkum can leverage artificial
intelligence advancements to better predict consumer demand, cater to specific
segments, and create better recommendation engines.
- Rising Consumer Disposable Money – Loyalty Gorkum can take advantage of rising
disposable income by developing a new business model in which customers pay
gradually for utilising its products. Loyalty Gorkum can leverage this tendency to
expand in adjacent areas Entrepreneurship, according to Lena G. Goldberg of the
These People are Fiduciaries case study.
Threats
- The growing dominance of digital players such as Amazon, Google, Microsoft, and
others may limit Loyalty Gorkum's manoeuvring space and put increased pressure on
marketing budgets.
- Customers are moving toward a mobile-first environment, which could stifle growth
if Loyalty Gorkum does not have a full mobile strategy in place.
What is PESTEL Analysis
Political, Economic, Social, Technological, Environmental, and Legal elements that
influence the macro environment in which Loyalty Gorkum operates are referred to as
PESTEL. In the case study These People Are Fiduciaries, Lena G. Goldberg provides
significant information about PESTEL variables.
Political Factors
- Political agreement among various political parties on tax rates and investment
programmes. Over time, the country has attempted to lower the entry hurdle and
simplify the tax system.
- Low risk of armed conflict – Based on research conducted by international foreign
policy institutes, it is safe to assume that the likelihood of a country engaging in
military war with another state is extremely low
Economic Factors
- The movement of the foreign exchange rate is also a sign of economic stability. The
forex influx and outflow should be carefully considered by Loyalty Gorkum. Due to
the unpredictable foreign market, a number of Loyalty Gorkum competitors have lost
money in countries such as Brazil, Argentina, and Venezuela.
- As stated by Lena G. Goldberg. Consumer discretionary income, household debt,
and the functioning of local financial markets should all be regularly monitored by
Loyalty Gorkum.
Social Factors
- Loyalty Gorkum must examine leisure activities, social attitudes, and power
structures in society before releasing any new items because they will influence
product demand.
- Economic demographic fluctuations are a good social indication for Loyalty
Gorkum to forecast not just the general market trend, but also demand for Loyalty
Gorkum products among its main client categories.
Technological Factors
- The widespread availability of mobile phones has resulted in a generation whose
major source of entertainment and information is a mobile phone. Loyalty Gorkum's
marketing strategy needs to be adjusted accordingly.
- As a result of artificial intelligence and machine learning, speed will become more
important than planning. In order to operate in such an environment, Loyalty Gorkum
will need to develop strategies.
Environmental Factors
Environmental regulations may have an impact on Loyalty Gorkum's cost structure.
In some markets, it may have an even greater influence on the cost of doing business.
- Loyalty Gorkum's branding, marketing, and corporate social responsibility (CSR)
initiatives are all being influenced by consumer activism.
Legal Factors
- In some of the markets where Loyalty Gorkum operates, intellectual property rights
could pose a legal danger.
- Health and safety regulations in a lot of markets where Loyalty Gorkum operates are
inadequate, affecting the level of competition..
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