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1) Chip and Dan Heath offer us 6 qualities that make ideas sticky, all wrapped up in a clever acronym: Simple Unexpected Concrete Credible Emotional Stories (SUCCES). • Simple: Simplicity is achieved when an idea is stripped down to its core, to the most essential elements that make it work. Simple does not have to mean short (but it helps); what is important is that the single most important thing be highlighted. • Unexpected: The best ideas represent a break from the everyday, the ordinary, the status quo. Once our attention is grabbed, sticky ideas refuse to let go, holding our interest by creating in us a need to discover the outcome, to see how things work. . Concrete: We must present our ideas in term of sensory information. This is where most of the business communication goes awry. Speaking concretely is the only way to ensure that our idea means the same thing to everyone in the audience. • Credible: Sticky ideas give us a reason to believe they’re true (even when they’re not). Statistics are useful, though they suffer from a lack of concreteness. Another source of credibility is personal experience. Ideas that can be put to question are more reliable. • Emotions: Give your audience a reason to care about your idea. Sticky ideas resonate with us on a level below our immediate consciousness. Sticky ideas appeal to our wishes, desires, and hopes, and interlock with our image of ourselves. We are wired to feel things for people not for abstractions. • Stories: Stories foster our imagination to widen our horizon of dwelling into different thoughts and feelings. Besides satisfying a number of the other principles of stickiness – offering surprises, concrete details, and emotional resonance – stories act as simulation chambers, allowing us to come to their morals on our own terms.

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Ginsberg Company is a recently formed, publicly traded company. At the end of its most recent fiscal year, the company reported the following information.

(a). Sales revenues were 13,680,000, and 360,000 units were sold. Credit sales were 10,000,000. Uncollectible accounts associated with credit sales are estimated to be between 3% and 4%.

(b). At the beginning of the year, 140,000 units of inventory were on hand at a unit cost of 10 per unit; during the year, 250,000 units were purchased at 10.50, and, later, 150,000 units were purchased at 11.50 per unit.

(c). Plant assets included equipment with a book value of 3,375,000 and buildings with a book value of 8,260,000. The equipment has an estimated remaining useful life of between four and seven years. The buildings have an estimated remaining useful life of between 25 and 35 years.

(d). Intangible assets (excluding goodwill) cost 1,200,000 and have a remaining useful life of no less than 10 years.

(e). The company has the option of adopting a new accounting standard for the fiscal year. If the standard is adopted, the cumulative effect of the accounting change, before the tax effect, will be a loss of 1,100,000.

(f). The company’s tax rate is 34%. Other operating expenses were 6,245,000. Interest expense was 460,000. There were 500,000 shares of common stock outstanding throughout the year.

Management has not yet made decisions about how to treat items a through e. A choice is necessary in each instance. The chief financial officer has asked you to determine the range of net income that might be reported depending on the choices that are made.

Required Prepare two different pro forma (projected) income statements for the year.

A. With the first income statement, show the minimum net income the company could report under GAAP.

B. With the second income statement, show the maximum net income that could be reported under GAAP.

C. What does this suggest to you about comparing the reported net income of one firm versus the others?

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Open the Trust SPSS data-set and perform the following operations:

a. The variable q64 (country) is a nominal variable with five response categories, each corresponding to a country. Transform it into five dummy variables, one for each country, by using the COMPUTE command (you may find it easier by exploiting SPSS syntax

b. Create a MULTIPLE RESPONSE SET (see SPSS Help and the DATA menu) for the dummy variables recording the point of purchase (q8a to q8d) and name it as POP

c. Using the CUSTOM TABLE command under the ANALYZE/TABLE menu, create a frequency table to show the proportion of points of purchase across countries (POP by q64)

d. Create a pie chart showing the proportion of points of purchase for the whole data-set.

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The purpose of this exercise is to get you familiar with strategy terms introduced and defined in this chapter. Let’s apply these terms to the Cohesion Case on Nestlé S.A. (traded as NSRGY). Instructions Step 1 Go to the Nestlé Global corporate website. Scroll to the bottom of the site and find Investors; click on Publications and download the most recent Annual Review report. The Annual Review contains excellent information for developing a list of internal strengths and weaknesses for Nestlé. Step 2 From your college library website, download a copy of Standard & Poor’s Industry Surveys for the food industry. This document will contain excellent information for developing a list of external opportunities and threats facing Nestlé. You could also refer to Citi group’s credit cards page, IBIS World, ValueLine, and Mergent Online, if these sources are available in your college library. Step 3 Using the Internet, find out and print information about Nestlé’s two major competitors: Danone (DANOY) and Mondelēz International (MDLZ). Step 4 Using the Nestlé Cohesion Case and with the help of the information gathered above, identify what you consider to be Nestlé’s three major strengths, three major weaknesses, three major opportunities, and three major threats. Each factor listed for this exercise must include a percentage (%), number (#), dollar ($), or ratio (employees per share) to reveal some quantified fact or trend. These factors provide the underlying basis for a strategic plan because a firm strives to take advantage of strengths, improve weaknesses, avoid threats, and capitalize on opportunities. Estimate the numbers as needed. Step 5 Through class discussion, compare your lists of external and internal factors to those developed by other students and add to your lists of factors. Keep this information for use in later exercises at the end of other chapters. Step 6 Be mindful that whatever case company is assigned to you or your team this semester, you can start to update the information on your company by following the steps listed for any publicly held firm.

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