Zappos Case Study

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Tim Cook

Tim Cook's managerial style could be broadly defined as democratic. Rather than standing in complete contrast to former Apple CEO Steve Jobs, Cook appears to have adopted some of the legendary entrepreneur's existing practices and developed a uniquely blended leadership. It was clear that Cook lacked the bold visionary style of Steve Jobs but Apple employees described him as charismatic and thoughtful. Rather than attempt to simply continue the legacy of Jobs' autocratic leadership style, Cook has played to his strengths and placed emphasis on advancing cooperation among Apple's arsenal of talent. This is extremely indicative of the democratic style of management, which encourages consensus building, particularly among high-level employees prior to mutually consented decision making.

In its last year, Apple reported net revenue of $215.64 billion, a substantial sum. On that revenue, it generated gross profit of $84.26 billion. Its operating expenses, split between research and development (R&D) and sales, general, and administrative (SG&A), totaled $24.24 billion. As a simple calculation shows, Apple generated $60 billion in operating income and, less taxes and including in "other income," its net income worked out to $45.69 billion. One thing is crystal clear, Apple is a phenomenally run business that gets a lot of mileage from its operating expenses. Its ability to build desirable products and effectively market them in such an efficient manner is highly impressive and, should Apple keep it up, could serve to generate additional shareholder value in the future.

Apple Inc. stock has increased tremendously in the last 2 years. Because Apple has been the top dog in their field is because they become more innovative and creative to make their customers happy. For example, Apple has created an ‘Apple Watch’ so you don’t have to take or carry your phone everywhere you go which makes it easier for people to communicate more. Also Apple separates themselves from other phone companies like Samsung and do things differently within their business.

Marvin Ellison

Since taking over J.C. Penney’s top spot in August, Ellison has pushed the importance of private brands as part of a three-pronged plan to bring the company to $1.2 billion in earnings before interest, taxes, depreciation and amortization by 2017. The plan also includes emphasizing “omnichannel” shopping and increasing revenue per customer. The company announced it will reintroduce appliances in its stores, a strategy Ellison believes will increase revenue per customer.

J.C. Penney is beginning 2017 with a much more realistic sales outlook. Management expects comp sales to be roughly flat this year. Gross margin should rebound by 20 to 40 basis points, driven by better inventory management. Meanwhile, operating expenses will decline again. As a result, J.C. Penney has forecast that adjusted EPS will surge to a range of $0.40 to $0.65 this year. Moreover, the company will be profitable without relying on real estate gains, as it did in 2016. Free cash flow should also bounce back as J.C. Penney realigns its inventory. J.C. Penney's turnaround remains fragile. However, the long-struggling department store chain continues to make gradual progress toward sustainable profitability.

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