Argument Analysis Advertising Assignment Example | Topics and Well Written Essays - 750 words

Argument Analysis Advertising - Assignment Example Yet the notion of advertisement in persuading the consumers remains the same. Over the last 10 years the advertisement media have developed immensely principally led by the digital media revolution (Kelley & Jugenheimer, 7). The paper will seek to analyze the reason behind the changing structure of advertisement with logical underpinnings. The backdrop will be online advertising. 2. Online advertisement- A dominating business Online advertising in the present world has become one of the most significant businesses generating huge revenues related to the web based businesses. The development of the websites at very cost effective structure has led the smaller web sites like that of the blog sites earn huge revenue. The online internet marketing forms the nucleus of the estimated aggregate e-commerce economy worth $34 billion. In the year 2008, online advertising in the United States of America accounted for around 8.8 percent of all forms of advertising. The potential of the online ad vertising is also boosting as per the estimates of the market analysts (Evans, 2). 2.1 Supply side analysis The suppliers get the ease in carving out a niche in their business by driving consumers directly to the sites which is basically a large platform where the consumers can explore the varieties of goods and services and purchase them by making few mouse clicks. The cost of advertising is highly minimized in this case. The enhanced technologies lead the suppliers in executing efficient business operations matching the exact needs of the customers. The networking chains also get amplified in the online advertisement. As an instance it can be said that if a person has visited an organization’s website and possess interest in the industry then they can recommend it to other people interested in business which is an example of precision marketing. Online marketing also comes with much lower risks as with the development of the technology it helps the entrepreneurs in judging properly the status of the business and making cost benefit analysis (Mapping the Display landscape, 8). There are many other supply side causes that led to the rapid development of online advertising but the scope of discussion is limited and hence the relevant ones are elucidated. 2.2 Demand side analysis The consumers can shop their favorite stuffs sitting in the comfort of the room at the expense of just a few clicks and they possess greater control over the content they view on the website as compared to traditional media like television. Majority of the online advertising inventory possess a real time and customized platform for the particular viewer (Evans, 2). As compared to the traditional advertising, the consumers are no longer just receivers at one end of the communication but also actively take part in the marketing process with the inclusion in the development as well as that of the distribution of the advertisements. The consumers collaborate in the structuring of mar keting and develop a more efficient personal relationship with the companies (Liu, 5). The online advertising allows the economy for the reduction of the amount of resources which are allocated in developing content for the purpose of

Kant and Hobbes Comparison Essay Example | Topics and Well Written Essays - 750 words

Kant and Hobbes Comparison - Essay Example Both philosophers believe in pragmatism and ethics. But Kant’s practical philosophy is concerned with the unwritten rules that govern human action while Hobbes believes that human actions are directed towards self-interest based on ethical egoism. With this, Hobbes argues that since humans tend to do things based on their self-interest, conflicts may arise when the interest of one overlaps with another or is in opposition to another. This can only be solved if humans allow others to pursue their own self-interest by doing things that will not hamper another’s pursuance of self-interest. That is the only way to resolve the conflict between human actions. Hobbes also argues that the pursuit of self-interest does not mean doing the good thing rather it is maximizing one’s chance to survive or to be happy. This is very different from Kant’s wherein his pursuit of self-interest is based upon what is right, not merely to be happy or to survive. Thus, he pursues the idea of good will. The idea of good will is basically doing what is morally right, so if an action requires injustice or cruelty, then it should be set aside as it is not morally right. Example, if doing a courageous act such as facing a battle in war and the war affects innocent people, then it is not morally right to do so. .... Answering to an invitation, whether we say yes or no, is an imperative of etiquette. It is unethical not to bother answering to an invitation when we look into etiquette. Hobbes’ morality is formed from human nature and empirical conditions rather than categorical imperatives. Kant argues against this as he believes that morality is not pursuance of self-interest rather it is to secure human freedom and equality. Hobbes’ morality is man-made and not God-given. Humans make decisions based on human nature, based on one’s self-interest or the preservation of one’s life, dignity or freedom. On the other hand, Kant’s morality is God-given as it is based solely on moral principles, of doing morally right things and not doing those that opposes good will. Hobbes uses instrumental reason while Kant uses pure practical reason. Kant believes that one’s actions are based on an autonomous will instead of being a slave to one’s passions, as Hobbesà ¢â‚¬â„¢ morality is based upon. For example self-preservation for Kant is a duty, a moral good based on Christian ethics, thus, saying that suicide is a sin. Hobbes will interpret suicide as an immoral thing to do because it does not in any way pursue self-interest to be happy or to survive. This shows that Hobbes sees self-preservation not as a duty rather it is part of the pursuit to survive and to gain happiness and contentment. Let’s take another example in stealing. Stealing, for Kant, is wrong because it is a sin based on Christian ethics, because of categorical imperatives wherein it is immoral because it is not morally right to do so. On the other hand, Hobbes finds stealing as an opposition to the social contract, that is, it steps on another’s pursuit to self-interest, which is protection of one’s

Microsoft Corporation Case Analysis Essay Example for Free

Microsoft Corporation Case Analysis Essay Industry Evaluation Software is an integral part of todays uncertain economy, as the push for greater globalization and efficiency drives much of the spending in business markets around the world. In order to maintain a competitive edge in an increasingly competitive global market, companies are spending more and more on hardware and software infrastructures (Yahoo!Finance, 2006). Microsoft is among 413 companies that produce and distribute application software products and services. These companies are all part of the Application Software industry within the technology sector, which is dominated by one software giant; Microsoft. More specifically, Microsoft is categorized into the Developmental Tools, Operating Systems, and Utility Software subindustry, which includes companies that design, develop, market, and support software for developing, testing, and debugging applications; for computer maintenance; and for desktop management (Hoovers.com, 2006). Microsoft, Oracle Corp, CA Inc., and SAP Aktiengesellschaft, with a four-firm concentration ratio of 39% dominate the industry. Most of the other 411 firms in the industry specialize in smaller niches, providing specialized software services such as accounting, business management, etcetera, and have profits under $1 billion per year. For this reason, the computer application industry has monopolistic competition (MSN Money, 2006). The top-selling software company is currently Microsoft, with $41.4 billion in sales in 2005, and is joined in the competitive arena by other top sellers such as Oracle Corp. with $12.9 billion and SAP Aktiengesellschaft with $10.4 billion. Other industry leaders in sales include CA Inc., Intuit Inc., Adobe Systems Inc., B.M.C. Software, Compuware Corp., and Novell Inc., each experiencing revenues exceeding $1 billion during 2005. Within the Developmental Tools, Operating Systems, and Utility Software subindustry, top competitors include Microsoft, International Business Machines (IBM), SAP Aktiengesellschaft, and Computer Associates International, who ranked a respective first, second, third, and fourth in application software sales (Yahoo!Finance, 2006). The Computer Software industry is largely dominated by Microsoft, which commands 54% of market sales among its top ten competitors, as listed above. The following chart details the market share of these ten main players in the industry (Yahoo!Finance, 2006): Within the legal environment, the software industry has been shaken by  several recent regulations that are revitalizing industries within the business market of the United States. Among them are the US Patriot Act, which dictates that companies providing financial services must have the ability to detect the occurrence of money laundering; the Sarbanes-Oxley Act, which mandates that companies provide real-time disclosure of events that might affect their financial performance and deep records of e-mail and instant messages exchanged between employees (Yahoo!Finance, 2006). Finally, antitrust laws have been an ongoing threat to the industry. Microsoft has finally reached a settlement after an ongoing antitrust investigation, and agreed to allow manufacturers to include competing software with Windows and uniformly license its operating systems (Antitrust Case Filings, 2006). New technological developments are revitalizing the software industry. The most recent and significant development includes a new set of web-friendly applications that, as of yet, has no official name. These web services can be assembled from standardized building blocks, meaning that any number of applications may be assembled in a variety of ways. Because of this, companies are able to develop enterprise applications to run on a wide range of software and hardware infrastructures and cater to the specific demands of their respective market segments. The companies that will maintain market share in the up-and-coming web era are those that are able to develop products that will be compatible on a wide range of hardware platforms. Massive consolidations have recently become characteristic of the software industry. Largely due to acquisitions, IBMs software holdings have grown a great deal. Small specialists companies face the greatest danger from large software providers such as Oracle, who recently acquired PeopleSoft and Siebel for $10.3 and $5.9 billion, respectively. If growth slows in their subindustries, these small companies who cater to specific niches become vulnerable to large companies offering extensive suites of enterprise applications that serve a variety of functions such as the industry leaders (Yahoo!Finance, 2006). Following suit after other mature industries such as electronics and apparel,  a large number of IT and software providers have begun outsourcing much of their manufacturing and RD functions to countries outside of the United States. Software companies are now able to hire manufacturers and product developers in countries such as India, Mexico, and China for much less than it would cost in the U.S. (MSN Money, 2006) The tragedy of the September 11 terrorist attacks as well as other post 9/11 attacks prompted another significant trend in the software industry when the United States government cranked down on security. By restructuring their communication systems, they opened a door to struggling software providers who began to provide new, more secure applications to governmental departments and agencies (Yahoo!Finance, 2006) A final trend reflects the popularity of Linux and other open-source code operating systems. While the Linux operating system is probably the most widely known and widely used open source code, the idea of open source is gaining momentum and popularity. Companies that provide their products for a nominal subscription fee and generate income based on training and support services have adopted the open source concept as a counter-intuitive business model, with which they counter the more traditional selling of products for profit model (Hill and Jones, 2005). Once online collaboration and word processing applications are fully developed and grow in usage and popularity, the researchers predict that the software industry will see a rise in sales of those kinds of products, and possibly a decline in the sale of PC compatible product that serve the same types of functions. The reason for this is that once these tools are available, consumers will realize that they may access and edit their documents or projects from any computer or PDA with internet access, without having to worry about being on the specific machine or machines that contain the documents they need. Currently, almost all users of open source software are computer-savvy programming professionals. In the future however, more consumers will use this type of software for business and personal use. This is forecasted by a  growing number of applications developed from open source codes such as Linux, as well as increasing popularity of these programs. If this comes to pass, then Linux and other open source applications and operating systems may accumulate market share, thus depriving it from Microsoft and Oracle. Strategic Evaluation Microsoft supports a number of values that translate into goals that the company strives to attain. These goals include doing business with honesty and integrity; to have passion for customers, partners, and technology; to be open and respectful, to take on big challenges and see through them; constructive self-criticism, self-improvement, and personal excellence; to help foster growth and innovation, and to be accountable to customers, shareholders, partners, and employees for commitments, results, and quality. These goals, however, are immeasurable, intangible, and unspecific. There is no timeline for achieving them, and no way to determine whether or not they have been acheived. There are, however, more specific goals that the company hopes to attain that are specific, measurable, attainable, realistic, and tangible. Goals for the future include making technology available to one quarter of a billion people by 2010. Another goal is to fuse together Windows development and Web development to enrich Windows applications (Stu, 2003). By doing this, Microsoft may be able to convince consumes to use the rich application features of Windows. Another goal is to unify the disparate Windows communications and enterprise technologies into a common and simple framework that is competitive with Java Enterprise Edition. Microsoft needs to provide an alternative to this model unless it wants to see Java retain its lock on the server software market. This goal is consistant with Microsofts approach of taking the lead in developing a new computing standard. (Microsoft, 2006) The mission statement of Microsoft Corporation is At Microsoft, we work to help people and businesses throughout the world  realize their full potential. This is our mission. Everything we do reflects this mission and the values that make it possible.- Microsoft, 2006 The mission statement is clear in representing Microsoft as dedicated in providing the best products to help its customers achieve and realize their full potential. The mission statement is strong, and is very personable by saying At Microsoft, and repeating that this is Microsofts mission statement. The statement repeats itself in the third sentence, saying, everything we do reflects helping everyone in the world understand his or her full potential. Using words to repeat parts of the mission statement makes it bolder to the reader. The statement is broad enough to allow the company to expand into unfamiliar markets or businesses, or both. However, it is narrow enough that it focuses the company on aiding people in reaching their fullest potential. By adhering to this mission statement, employees at Microsoft look to the customers, not the shareholders, as the reason the company exists. It is clear to express that the company does not exist solely to make a profits or please shareholders. It reflects the desire of the management at Microsoft to make a difference in the world and help those who wish to success do so. Functional Review Marketing Analysis Microsoft focuses on the development of software, which includes products such as Office, Project, Visio, FoxPro, and more. The software packages aide in the creation of business documents, databases, and projects, as well as helps consumers manage their day-to-day lives. Microsoft has seven different product divisions: Client, Server and Tools, Information Worker, Microsoft Business Solution, MSN, Mobile and Embedded Devices, and Home and Entertainment (Microsoft, 2006). The Client segment has responsibility for engineering, product delivery, and technical architecture for the Windows product family. It also handles Microsofts  relationships with personal computer manufacturers, including multinational and regional original equipment manufacturer accounts (SEC, 2006). Server and Tools is responsible for the server system products and all related services. These services include providing advice for requirements needed for the system to operate properly, custom solution services, and business application planning for the operating systems. Information Worker involves licensing software to several types of users such as small to large corporations, homes, and specialized categories like students. This division releases a major change in software every two to three years. Microsoft Business Solutions deals primarily with developing and marketing offerings to manage financial, customer relationship and supply chain management functions for small and midsize businesses, large organizations and divisions of global enterprises. MSN is accountable for delivering online services that look to empower users by bringing them to the people and information that matter most. The Mobile and Embedded Devices section is responsible for the marketing and development of products that extend the advantages of the Windows platform to many types of devices. The Home and Entertainment segment is in charge of production, development, and marketing for the Xbox video gaming system (SEC, 2006). Another way Microsoft is continuing to broaden their customer base is by establishing itself into the gaming industry. An example of this is the innovative Xbox 360 Microsoft launched during the 2005 Christmas season. Microsoft has begun to explore new markets, like television, with the rising success of the Xbox 360 and the changing demographics. Microsoft realizes that demographics are changing to a younger generation and efforts must be made to accommodate their needs as well. (Wikipedia, 2006) In the past, Microsofts target market has been men of the ages of eighteen through thirty-four. The company is currently expanding the market it targets by experimenting with two methods of reaching the seventeen and younger age group. The first is through the gaming industry, with the release of the Xbox gaming system. The company is also developing a television show to reach this age group (Goo, 2006). Another strategy Microsoft is pursuing involves meeting its global clientele where they are  in terms of their economic and financial needs (Evers, 2006). These changes in strategy and products reflect Microsofts goal of expanding its target market. While there is risk involved with these changes, there is also the potential for returns above a normal profit. Another way Microsoft is continuing to broaden their customer base is by establishing itself into the gaming industry. An example of this is the innovative Xbox 360 Microsoft launched during the 2005 Christmas season. Microsoft has begun to explore new markets, like television, with the rising success of the Xbox 360 and the changing demographics. Microsoft realizes that demographics are changing to a younger generation and efforts must be made to accommodate their needs as well. (Wikipedia, 2006) Microsoft has established a presence in the international market. The headquarters, including most of the research and development centers, is located in Redmond, Washington. The company has several manufacturing facilities to meet supply needs on a global scale. These facilities are located in various places such as: Dublin, Ireland, Humacao, Puerto Rico, Reno, Nevada and Singapore just to name a few locations. Microsoft currently employees 40,081 in North America and 63,564 world-wide to help them meet growing demand for their products (Microsoft, 2006). Microsoft uses a wide variety of media to influence the demand of their products. Traditional types of advertising are used for global campaigns including television, print, and Internet (Microsoft.com, 2006). The company uses computer magazines to compare companies or products such as the case of Linux versus Microsoft. Microsofts goal is to reach a certain target market. In addition, Microsoft is implementing a new advertising campaign using the Internet in competition with Yahoo and Google. In the campaign, customers will be asked to fill out a survey; from there the data will be used to display personal ads of interest to the consumer. If a consumer chooses not to fill out the survey the company will provide them with general ads that are generated from the search. The goal in the long-run is to learn the customers want and needs for future purchases (Oser, 2006). The manufacturing function for most of Microsofts products is outsourced. A vendor supplies the parts needed to assemble the Xbox gaming system. This outsourcing strategy can be a drawback on two counts. Firstly, Microsoft relinquishes some control of the pricing of this product because it cannot control the manufacturing costs. Secondly, there is a threat of the manufacturer leaking product knowledge to Microsofts competitors. At the same time however, Microsoft has no legal obligation to the manufacturer, and can manufacture these products internally. Microsoft employs several vendors to supply parts that Microsoft manufactures. These components are purchased at a discount rate, and Microsoft keeps excess inventory in stock in case of shortages (Microsoft, 2006). The company has decided to do an 18 month campaign to advertise the differences between Microsoft and Linux giving the benefits of using our products. Some advantages to Microsofts products include: being user-friendly software and applications, as well as having a strong reputation in that area. Therefore, the cost would be greater to retrained employee how to use Linux software in the business industry for server application use. In dealing with more recent security issues, Microsoft Internet Explorer (IE) has a code-flaw in the browser that makes it vulnerable to hackers. This flaw can allow hackers to infect a system with various code-scripts, which puts the system under attack. To have security issues associated with the companys name can produce a bad reputation. Microsofts goals are to have compassion for customers, for partners, and technology. The company wants to train and make technology available to a quarter of the billion people in the world by 2010. In addition, Microsoft shows passion towards customers by offering specialized advertisements to expose the varied selection of products to the consumer. Another goal is to exhibit openness and respectfulness, which will gain a huge amount of respect from the consumer. This is achieved by receiving feedback from our employees, government agencies, and community leaders which will lead to improve Microsofts business. Microsoft is staying on task of taking on large challenges by endeavoring to change their demographics of customers. In addition, the  company takes constructive criticism, and uses this as a way to improve; criticism in forms of comments and suggestions. Microsoft will accomplish this task through research and development and feedback. Other goals are to give personal excellence, and have accountability to customers, shareholders, partners, and employees for commitments, results, and quality. These achievable tasks would help Microsoft stay in the business for years to come (Microsoft, 2006). Production Analysis Microsoft alters its products to me needs of its global customers. The company translates the text and changes the appearance of its applications to make them understandable in that language. This is one reason Microsoft has a reputation for being developing user-friendly applications for its consumers. Other tasks the company is involved with include processing orders, payment options, processing needed information, and supplier management (Microsoft.com, 2006). These tasks are essential to maintaining good relations with Microsofts customers and suppliers. In addition, these tasks make it possible to make necessary changes when there are problems in distribution or manufacturing of Microsofts software. Microsoft outsources all of its manufacturing function except for a few, including the assemblage of the Xbox 360. A vendor supplies the needed parts for this product. This action can be a drawback because it limits Microsoft in its ability to control pricing aspects of this product. There is also the threat that suppliers will share the knowledge of this product with Microsofts competitors. Although this is a threat, Microsoft is under the no legal obligation to continue working with that supplier. Several vendors supply parts for all other products Microsoft assembles. Components for these products are purchased at a discount. Microsoft keeps an inventory of spare parts on hand if needed (Microsoft, 2006). Management Analysis Bill Gates and Paul Allen founded Microsoft in 1975, and in a few years, they  expanded to Bellevue, Washington from Albuquerque, New Mexico. From there, Microsoft began creating and developing new and revolutionary technology. In 1981, IBM introduced its personal computer with Microsofts 16-bit operating system, MS-DOS 1.0 (Microsoft, 2006). Because of its quality, this operating system became popular. Microsofts stock went public. Over the next twenty years, Microsoft created more technical and versatile operating systems such as Windows 95, 98, and the current Windows XP. This success has lead to worldwide expansion creating thousands of jobs. Microsoft is the worlds largest software company with over 50,000 employees in various countries as of May 2004 (Microsoft, 2006). Microsoft has become a needed portion of the personal computing market in which many PC retailers have sold their machines pre-equipped with Microsofts software. Because of its large and substantial business, Microsoft was found to be a monopoly among computer software and because of this, Microsoft has experience financial success. In 1998, a lawsuit found that Microsoft was using its monopoly power to defeat its competitors (Reference.com, 2006). Microsoft appealed and showed how changing their companys operations would bring the financial success down increasingly. A board of directors, who play a major role in decision-making and many fundamentals of the company, run Microsoft. The Chief Executive Officer is Steven Ballmer who joined with Microsoft in 1980 and was the first business manager hired by Bill Gates (Microsoft, 2006). In 1998, Ballmer was appointed President and this gave him full responsibility for running the corporation. 2 years later, he became CEO (in 2000) and this gave him full privilege over all the managers and staff of Microsoft. Following Ballmer is James I. Cash, Jr, Dina Dublon, Bill Gates, Raymond V. Gilmartin, Ann McLaughlin Korologos, David F. Margaurdt, Charles H. Noski, Helmut Panke and Jon A. Shirley. A lot of talent and skill is required to work in any position at Microsoft. They seek out motivated individuals who are experienced in communications and leadership. The purpose for finding such trained individuals is to lower training costs of the company. The Corporate Operations is Microsofts backbone, constructing, managing, and running the various services that support the companys 50,000 employees (Microsoft, 2006). This statement shows that Microsoft is dependent on two sections of their management staff; the corporate and administrative services. These departments are responsible for management, public relations, providing company-wide administrative support, building new office space, and other tasks. Financial Analysis Microsoft Corporation has achieved excellence in since 1975 in the application software industry. They finished the 2005 fiscal year with a market capitalization of $288.20 billion, doubling the closest competitor, IBM which came in second in market capitalization with $131.00 billion, and an industry average of a low $136.51 million (Hoovers, 2006). Microsoft Corporation has been enjoying a steady growth in revenue over the past three fiscal years. This has been achieved with the growing popularity of PC use in the world over this time period. Microsofts preliminary estimates showed a growth of worldwide PC shipments from 11% to 13%, and total server hardware shipments grew approximately 13% to 14% during the 2005 fiscal year compared to fiscal year 2004 (Yahoo! Finance). This has caused a growth in revenue of 8% from $36,835 million to $39,788 million from fiscal year 2004 to 2005 (U.S. SEC). This revenue growth was driven by growth in licensing of Windows Server operating systems and other server application, licensing of Windows Client operating systems through OEMs, and increased licensing of Office and other Information Worker products (Yahoo! Finance). The 2004 fiscal year ended with an overall growth of $4,648 billion from the previous fiscal year 2003, an increase of over 12%. Over the past five years, Microsoft Corporation has generated revenue of over $162 billion. This is an increase of 73% and about $75 billion of this is derived from net cash flow from operations. Shareholders received a return of $69 billion of this revenue in dividends and stock repurchases. With the launching of the Xbox 360, Windows Vista, and newer versions of existing software in 2006 fiscal year, Microsoft expects to have an equal or larger  increase of the past five years in the next five years (Microsoft, 2006). Net income for the fiscal year 2005 was $12,254 which is an increase of $4,086 million from the 2004 fiscal year. This is due to small decreases in operating expenses from the previous year with emphasis on research and development, a decrease of over $1.5 billion. Although decreasing in fiscal year 2005, a large jump in expenses occurred from fiscal year 2003 to 2004. Microsoft increased their total operating expenses by $5,159 million to $27,801 million in fiscal year 2004. Although decreasing expenses worked for the fiscal year 2005, decreases in research and development in the future might cause the industry to get the edge on Microsoft and revenues decrease (Microsoft, 2006). Operating income has also increased substantially during these two fiscal years with a total increase of 61%. Although it had a 5% decline from fiscal year 2003 to fiscal year 2004, operating income jumped from a marginal $9,034 million in 2004 to an excellent $14,561 million in fiscal year ending 2005 (U.S. SEC). According to Yahoo! Finance, the operating income increase for fiscal year 2005 was driven by a decline in stock-based compensation expense; increased revenue in Server and Tools, Client, and Information Worker; and a reduction in legal costs associated with major litigation. Some key ratios will point out Microsofts position in accordance to the industry. Holding a total debt to equity ratio of 0.00, compared to 0.03 of the industry, Microsoft has showed that they have successfully controlled their assets without any debt, dating back as far as fiscal year 1996. The total debt to total asset ratio also confirms these successes with a low 0.33. This has a great statistic from an investor or shareholders eyes because there is potential for a high payout. Microsoft has a current ratio of 2.8, compared to the industries average of 2.3. This shows us that Microsoft can pay off any debt that may occur, and can continue operating with cash left over. The quick ratio is currently at 2.5 with an industry average of 2.1. Because this number is so close in comparison with the current ratio, this tells us that Microsoft is not dependent on their inventory. These three financial ratios show us that Microsoft Corporation  is achieving excellence in comparison to the industry (MSN, 2006). Both the gross profit margin and the net profit margin percentages will show us the financial health of the company. Microsoft Corporations net profit margin is over 7% higher that the industries average, at 30.8% compared to 23.5%. This tells us that 31.6% of the companys revenue can be kept as profit. Fiscal year 2005 is an increase of 8.6% from fiscal year 2004 and a small decrease of 0.2% from fiscal year 2003. Their gross profit margin is 87.3%, compared to 82.6% of the industries average. Although the industries average of these two ratios is healthy as well, Microsoft still holds better percentages (MSN, 2006). The companys price ratios will show some different trends in comparison to the industry from the other ratios presented. Although the earnings per share (EPS) are currently much higher than the industry average and the previous year, it is lower than some of the direct competitors. The EPS in the fiscal year 2005 was 1.13, which is considerably higher than the industries average of 0.15. This is not a bad ratio if you own share in the company, but two of the closest competitors is producing a much higher rate; Googles EPS is at 5.021 and IBMs is at 4.875. Although this might turn some investors away, numbers have been improving over the past three years. Fiscal year 2003 had an EPS of only $0.70 but increased to $0.76 in fiscal year 2004. The large increase came in fiscal year 2005 when EPS increased almost $0.40 to $1.13. With the latest innovations Microsoft has developed, these numbers will increase as investors see the future of Microsoft. Microsoft price-to-earnings (P/E) ratio is more attractive than EPS with a ratio of 22.9. Although conservative investors may feel this number is too high, this ratio is much better than the industry average of 27.3 which might influence these investors to invest in Microsoft instead of the direct competitors (MSN, 2006). Management effectiveness ratios like return on assets (ROA) and return on equity (ROE) will show us how well the management at Microsoft Corporation is doing. With an ROA of 19.4%, over 5% higher than the industry average of 13.9%, Microsoft is very profitable in relation to the total assets of the  company. This is a substantial increase from 8.8% and 12.6% in fiscal year 2004 and 2003 respectively. The profit per dollar, or ROE of Microsoft, is 29.5%. This is close to 7% higher than the industry average of 22.6% and 18.6% than fiscal year 2004. This shows that Microsoft Corporation is achieving a higher profit from their investors per dollar in comparison to the industries. Although there was a large increase from fiscal year 2004 to 2005, a decrease of 5.5% occurred between fiscal year 2003 and 2004 (MSN, 2006). The efficiency of the company is struggling in comparison to the industry in one way, inventory turnover. The inventory turnover is currently much lower than the industries. With a low 8.1 compared to 28.4 of the industry average, Microsofts inventory turnover might indicate poor sales. Both Microsoft and the industry average of asset turnover are 0.6, indicating that 0.6 of every dollar is revenue. Microsoft is doing a better job than the industry in comparing the accounts receivable turnover, but not a significant amount. The accounts receivable turnover is at 5.7 with an industry average of 5.2. Both Microsoft and the industry are collecting payments from its customers in a timely manner. They are, however, significantly behind SP 500 which has an accounts receivable turnover ratio of 7.5 (MSN, 2006). A thorough research of cash flows will show the company heading in the right direction. Net operating, investing, and financing cash flows all increased from the fiscal year 2004 to 2005. Fiscal year 2005 showed an increase of 14% to $16.61 billion in cash flow from operations. This is derived from an increase in cash receipts from customers driven by the 8% revenue growth of the company. Cash payments decreased by approximately $1.8 billion from the previous year from binding legal settlements. These factors played the major role in the increase of operating cash flow. Keeping operating cash flows down was payments to the 7% increase in full-time employees added during the fiscal year 2005. This is a great recovery from fiscal year 2004 considering operating cash flow dropped by $1.17 billion from fiscal year 2003. Over two billion of this was from the Sun Microsystems settlement and the European Commission fine. The small offsetting gain is from increases cash receipts  from customers. Net financing cash flow showed a large increase from $2.36 billion in fiscal year 2004 to $41.08 billion in fiscal year 2005. This increase is driven by an additional $34.38 billion of cash dividends paid, and an additional $4.67 billion in cash used for common stock repurchases in fiscal year 2005 from fiscal year 2004. Net financing cash flow did have a substantial decrease from fiscal year 2003 to 2004 of almost $3 billion. However, this decrease is due the company not repurchasing common stock in the fourth quarter of fiscal year 2004 and an increase of $628 million from stock issuances of employee stock option exercises. An increase of $872 million in cash dividends during this fiscal year offset the numbers provided. Net investing cash flow for fiscal year 2005 was $15.03 billion, an increase of $18.37 billion from the previous year. Investment maturities that occurred to fund cash dividends paid increased by $23.59 billion in fiscal year 2005. Offsetting this figure was the decrease of $5.32 billion in cash from sale activity and investment purchases. Cash used for investing was $3.34 billion in fiscal year 2004, a decrease of $3.88 billion from fiscal year 2003 (Microsoft, 2006). Model Analysis The Boston Consulting Group Matrix is a representation of the status of Microsoft in the current market. There are four different categories that fall under the matrix, Stars, Cash Cows, Question Marks and Dogs. The highest category and most self-efficient is the Stars with very high growth and high share. Next in the matrix: Cash Cows, which are low in growth and high in shares. The third category in the matrix is the Question Marks which are high in growth and low in shares. Last are the Dogs which are very low in both growth and shares. Microsoft would be placed in the Stars category simply because the company is constantly growing and is very self-sustaining. Strategic Alternatives 1. Develop a Microsoft version of open source software by exploiting Microsofts distinctive competency for developing software. This will give  Microsoft an edge in the open market by allowing it to effectively compete with current alternatives to Microsoft products, such as Linux, Sun Systems, and other open source/free software products. This alternative will give Microsoft the opportunity to increase its revenues by offering support services and training for these products. 2. Acquire Red Hat Inc. or another successful Linux provider. By combining the rising popularity of the open source concept with the ongoing success of Microsofts application software, the image of Microsoft will improve and launch the company into the increasingly popular open source market. 3. Improve current product line. Increase research and development spending to improve the dependability and security of current products. Then, implement an advertising campaign through several mediums to stress the superior quality of Microsofts products.

Drugs in the Treatment of Gastrointestinal Disease

Drugs in the Treatment of Gastrointestinal Disease Introduction Many of the drug groups discussed elsewhere in this book have important applications in the treatment of diseases of the gastrointestinal tract and other organs. Other groups are used almost exclusively for their effects on the gut; these are discussed in the following text according to their therapeutic uses. Drugs Used in Acid-Peptic Diseases Acid-peptic diseases include gastroesophageal reflux, peptic ulcer (gastric and duodenal), and stress-related mucosal injury. In all these conditions, mucosal erosions or ulceration arise when the caustic effects of aggressive factors (acid, pepsin, bile) overwhelm the defensive factors of the gastrointestinal mucosa (mucus and bicarbonate secretion, prostaglandins, blood flow, and the processes of restitution and regeneration after cellular injury). Over 90% of peptic ulcers are caused by infection with the bacterium Helicobacter pylori or by use of nonsteroidal anti-inflammatory drugs (NSAIDs). Drugs used in the treatment of acid-peptic disorders may be divided into two classes: agents that reduce intragastric acidity and agents that promote mucosal defense. Agents that Reduce Intragastric Acidity Physiology of Acid Secretion The parietal cell contains receptors for gastrin (CCK-B), histamine (H2), and acetylcholine (muscarinic, M3) (Figure 62-1). When acetylcholine (from vagal postganglionic nerves) or gastrin (released from antral G cells into the blood) bind to the parietal cell receptors, they cause an increase in cytosolic calcium, which in turn stimulates protein kinases that stimulate acid secretion from a H+,K+ ATPase (the proton pump) on the canalicular surface. In close proximity to the parietal cells are gut endocrine cells called enterochromaffin-like (ECL) cells. ECL cells also have receptors for gastrin and acetylcholine, which stimulate histamine release. Histamine binds to the H2 receptor on the parietal cell, resulting in activation of adenylyl cyclase, which increases intracellular cyclic adenosine monophosphate (cAMP) and activates protein kinases that stimulate acid secretion by the H+,K+ ATPase. In humans, it is believed that the major effect of gastrin upon acid secretion is mediated indirectly through the release of histamine from ECL cells rather than through direct parietal cell stimulation. In contrast, acetylcholine provides potent direct parietal cell stimulation. Antacids Antacids have been used for centuries in the treatment of patients with dyspepsia and acid-peptic disorders. They were the mainstay of treatment for acid-peptic disorders until the advent of H2-receptor antagonists and proton pump inhibitors. They continue to be used commonly by patients as nonprescription remedies for the treatment of intermittent heartburn and dyspepsia. Antacids are weak bases that react with gastric hydrochloric acid to form a salt and water. Their principal mechanism of action is reduction of intragastric acidity. After a meal, approximately 45 mEq/h of hydrochloric acid is secreted. A single dose of 156 mEq of antacid given 1 hour after a meal effectively neutralizes gastric acid for up to 2 hours. However, the acid-neutralization capacity among different proprietary formulations of antacids is highly variable, depending on their rate of dissolution (tablet versus liquid), water solubility, rate of reaction with acid, and rate of gastric emptying. Sodium bicarbonate (eg, baking soda, Alka Seltzer) reacts rapidly with hydrochloric acid (HCL) to produce carbon dioxide and sodium chloride. Formation of carbon dioxide results in gastric distention and belching. Unreacted alkali is readily absorbed, potentially causing metabolic alkalosis when given in high doses or to patients with renal insufficiency. Sodium chloride absorption may exacerbate fluid retention in patients with heart failure, hypertension, and renal insufficiency. Calcium carbonate (eg, Tums, Os-Cal) is less soluble and reacts more slowly than sodium bicarbonate with HCl to form carbon dioxide and calcium chloride (CaCl2). Like sodium bicarbonate, calcium carbonate may cause belching or metabolic alkalosis. Calcium carbonate is used for a number of other indications apart from its antacid properties (see Chapter 42). Excessive doses of either sodium bicarbonate or calcium carbonate with calcium-containing dairy products can lead to hypercalcemia, renal insufficiency , and metabolic alkalosis (milk-alkali syndrome). Formulations containing magnesium hydroxide or aluminum hydroxide react slowly with HCl to form magnesium chloride or aluminum chloride and water. Because no gas is generated, belching does not occur. Metabolic alkalosis is also uncommon because of the efficiency of the neutralization reaction. Because unabsorbed magnesium salts may cause an osmotic diarrhea and aluminum salts may cause constipation, these agents are commonly administered together in proprietary formulations (eg, Gelusil, Maalox, Mylanta) to minimize the impact on bowel function. Both magnesium and aluminum are absorbed and excreted by the kidneys. Hence, patients with renal insufficiency should not take these agents long-term. All antacids may affect the absorption of other medications by binding the drug (reducing its absorption) or by increasing intragastric pH so that the drugs dissolution or solubility (especially weakly basic or acidic drugs) is altered. Therefore, antacids should not be given within 2 hours of doses of tetracyclines, fluoroquinolones, itraconazole, and iron. H2-Receptor Antagonists From their introduction in the 1970s until the early 1990s, H2-receptor antagonists (commonly referred to as H2 blockers) were the most commonly prescribed drugs in the world (see Clinical Uses). With the recognition of the role of H pylori in ulcer disease (which may be treated with appropriate antibacterial therapy) and the advent of proton pump inhibitors, the use of prescription H2 blockers has declined markedly. Chemistry Pharmacokinetics Four H2 antagonists are in clinical use: cimetidine, ranitidine, famotidine, and nizatidine. All four agents are rapidly absorbed from the intestine. Cimetidine, ranitidine, and famotidine undergo first-pass hepatic metabolism resulting in a bioavailability of approximately 50%. Nizatidine has little first-pass metabolism. The serum half-lives of the four agents range from 1.1 to 4 hours; however, duration of action depends on the dose given (Table 62-1). H2 antagonists are cleared by a combination of hepatic metabolism, glomerular filtration, and renal tubular secretion. Dose reduction is required in patients with moderate to severe renal (and possibly severe hepatic) insufficiency. In the elderly, there is a decline of up to 50% in drug clearance as well as a significant reduction in volume of distribution. BID, twice daily; HS, bedtime. Clinical Uses H2-receptor antagonists continue to be prescribed but proton pump inhibitors (see below) are steadily replacing H2 antagonists for most clinical indications. However, the over-the-counter preparations are heavily used by the public. Gastroesophageal Reflux Disease (GERD) Patients with infrequent heartburn or dyspepsia (fewer than 3 times per week) may take either antacids or intermittent H2 antagonists. Because antacids provide rapid acid neutralization, they afford faster symptom relief than H2 antagonists. However, the effect of antacids is short-lived (1-2 hours) compared with H2 antagonists (6-10 hours). H2 antagonists may be taken prophylactically before meals in an effort to reduce the likelihood of heartburn. Frequent heartburn is better treated with twice-daily H2 antagonists (Table 62-1) or proton pump inhibitors. In patients with erosive esophagitis (approximately 50% of patients with GERD), H2 antagonists afford healing in less than 50% of patients; hence proton pump inhibitors are preferred because of their superior acid inhibition. Peptic Ulcer Disease Proton pump inhibitors have largely replaced H2 antagonists in the treatment of acute peptic ulcer disease. Nevertheless, H2 antagonists are still sometimes used. Nocturnal acid suppression by H2 antagonists affords effective ulcer healing in most patients with uncomplicated gastric and duodenal ulcers. Hence, all the agents may be administered once daily at bedtime, resulting in ulcer healing rates of more than 80-90% after 6-8 weeks of therapy. For patients with ulcers caused by aspirin or other NSAIDs, the NSAID should be discontinued. If the NSAID must be continued for clinical reasons despite active ulceration, a proton pump inhibitor should be given instead of an H2 antagonist to more reliably promote ulcer healing. For patients with acute peptic ulcers caused by H pylori, H2 antagonists no longer play a significant therapeutic role. H pylori should be treated with a 10- to 14-day course of therapy including a proton pump inhibitor and two antibiotics (see below). This regimen achieves ulcer healing and eradication of the infection in more than 90% of patients. For the minority of patients in whom H pylori cannot be successfully eradicated, H2 antagonists may be given daily at bedtime in half of the usual ulcer therapeutic dose to prevent ulcer recurrence (eg, ranitidine, 150 mg; famotidine, 20 mg). Nonulcer Dyspepsia H2 antagonists are commonly used as over-the-counter agents and prescription agents for treatment of intermittent dyspepsia not caused by peptic ulcer. However, benefit compared with placebo has never been convincingly demonstrated. Prevention of Bleeding from Stress-Related Gastritis Clinically important bleeding from upper gastrointestinal erosions or ulcers occurs in 1-5% of critically ill patients as a result of impaired mucosal defense mechanisms caused by poor perfusion. Although most critically ill patients have normal or decreased acid secretion, numerous studies have shown that agents that increase intragastric pH (H2 antagonists or proton pump inhibitors) reduce the incidence of clinically significant bleeding. However, the optimal agent is uncertain at this time. For patients without a nasoenteric tube or with significant ileus, intravenous H2 antagonists are preferable over intravenous proton pump inhibitors because of their proven efficacy and lower cost. Continuous infusions of H2 antagonists are generally preferred to bolus infusions because they achieve more consistent, sustained elevation of intragastric pH. Adverse Effects H2 antagonists are extremely safe drugs. Adverse effects occur in less than 3% of patients and include diarrhea, headache, fatigue, myalgias, and constipation. Some studies suggest that intravenous H2 antagonists (or proton pump inhibitors) may increase the risk of nosocomial pneumonia in critically ill patients. Mental status changes (confusion, hallucinations, agitation) may occur with administration of intravenous H2 antagonists, especially in patients in the intensive care unit who are elderly or who have renal or hepatic dysfunction. These events may be more common with cimetidine. Mental status changes rarely occur in ambulatory patients. Cimetidine inhibits binding of dihydrotestosterone to androgen receptors, inhibits metabolism of estradiol, and increases serum prolactin levels. When used long-term or in high doses, it may cause gynecomastia or impotence in men and galactorrhea in women. These effects are specific to cimetidine and do not occur with the other H2 antagonists. Although there are no known harmful effects on the fetus, H2 antagonists cross the placenta. Therefore, they should not be administered to pregnant women unless absolutely necessary. The H2 antagonists are secreted into breast milk and may therefore affect nursing infants. H2 antagonists may rarely cause blood dyscrasias. Blockade of cardiac H2 receptors may cause bradycardia, but this is rarely of clinical significance. Rapid intravenous infusion may cause bradycardia and hypotension through blockade of cardiac H2 receptors; therefore, intravenous injections should be given over 30 minutes. H2 antagonists rarely cause reversible abnormalities in liver chemistry. Drug Interactions Cimetidine interferes with several important hepatic cytochrome P450 drug metabolism pathways, including those catalyzed by CYP1A2, CYP2C9, CYP2D6, and CYP3A4 (see Chapter 4). Hence, the half-lives of drugs metabolized by these pathways may be prolonged. Ranitidine binds 4-10 times less avidly than cimetidine to cytochrome P450. Negligible interaction occurs with nizatidine and famotidine. H2 antagonists compete with creatinine and certain drugs (eg, procainamide) for renal tubular secretion. All of these agents except famotidine inhibit gastric first-pass metabolism of ethanol, especially in women. Although the importance of this is debated, increased bioavailability of ethanol could lead to increased blood ethanol levels. Proton Pump Inhibitors Since their introduction in the late 1980s, these efficacious acid inhibitory agents have assumed the major role for the treatment of acid-peptic disorders. Proton pump inhibitors (PPIs) are now among the most widely prescribed drugs worldwide due to their outstanding efficacy and safety. Chemistry Pharmacokinetics Five proton pump inhibitors are available for clinical use: omeprazole, lansoprazole, rabeprazole, pantoprazole, and esomeprazole. All are substituted benzimidazoles that resemble H2 antagonists in structure (Figure 62-3) but have a completely different mechanism of action. Omeprazole is a racemic mixture of R- and S-isomers. Esomeprazole is the S-isomer of omeprazole. All are available in oral formulations. Esomeprazole and pantoprazole are also available in intravenous formulations . Proton pump inhibitors are administered as inactive prodrugs. To protect the acid-labile prodrug from rapid destruction within the gastric lumen, oral products are formulated for delayed release as acid-resistant, enteric-coated capsules or tablets. After passing through the stomach into the alkaline intestinal lumen, the enteric coatings dissolve and the prodrug is absorbed. For children or patients with dysphagia or enteral feeding tubes, capsules may be opened and the microgranules mixed with apple or orange juice or mixed with soft foods (eg, applesauce). Lansoprazole is also available as a tablet formulation that disintegrates in the mouth, or it may be mixed with water and administered via oral syringe or enteral tube. Omeprazole is also available as a powder formulation (capsule or packet) that contains sodium bicarbonate (1100-1680 mg NaHCO3 ; 304-460 mg of sodium) to protect the naked (non-enteric-coated) drug from acid degradation. When administered on an empty stomach by m outh or enteral tube, this immediate-release suspension results in rapid omeprazole absorption (Tmax The proton pump inhibitors are lipophilic weak bases (pKa 4-5) and after intestinal absorption diffuse readily across lipid membranes into acidified compartments (eg, the parietal cell canaliculus). The prodrug rapidly becomes protonated within the canaliculus and is concentrated more than 1000-fold by Henderson-Hasselbalch trapping (see Chapter 1). There, it rapidly undergoes a molecular conversion to the active form, a reactive thiophilic sulfenamide cation, which forms a covalent disulfide bond with the H+,K+ ATPase, irreversibly inactivating the enzyme. From a pharmacokinetic perspective, proton pump inhibitors are ideal drugs: they have a short serum half-life, they are concentrated and activated near their site of action, and they have a long duration of action. Pharmacodynamics In contrast to H2 antagonists, proton pump inhibitors inhibit both fasting and meal-stimulated secretion because they block the final common pathway of acid secretion, the proton pump. In standard doses, proton pump inhibitors inhibit 90-98% of 24-hour acid secretion (Figure 62-2). When administered at equivalent doses, the different agents show little difference in clinical efficacy. In a crossover study of patients receiving long-term therapy with all five proton pump inhibitors, the mean 24-hour intragastric pH varied from 3.3 (pantoprazole, 40 mg) to 4.0 (esomeprazole, 40 mg) and the mean number of hours the pH was higher than 4 varied from 10.1 (pantoprazole, 40 mg) to 14.0 (esomeprazole, 40 mg). Clinical Uses Gastroesophageal Reflux Disease (GERD) Proton pump inhibitors are the most effective agents for the treatment of nonerosive and erosive reflux disease, esophageal complications of reflux disease (peptic stricture or Barretts esophagus), and extraesophageal manifestations of reflux disease. Once-daily dosing provides effective symptom relief and tissue healing in 85-90% of patients; up to 15% of patients require twice-daily dosing. GERD symptoms recur in over 80% of patients within 6 months after discontinuation of a proton pump inhibitor. For patients with erosive esophagitis or esophageal complications, long-term daily maintenance therapy with a full-dose or half-dose proton pump inhibitor is usually needed. Many patients with nonerosive GERD may be treated successfully with intermittent courses of proton pump inhibitors or H2 antagonists taken as needed (on demand) for recurrent symptoms. In current clinical practice, many patients with symptomatic GERD are treated empirically with medications without prior endoscopy, ie, without knowledge of whether the patient has erosive or nonerosive reflux disease. Empiric treatment with proton pump inhibitors provides sustained symptomatic relief in 70-80% of patients, compared with 50-60% with H2 antagonists. Because of recent cost reductions, proton pump inhibitors are being used increasingly as first-line therapy for patients with symptomatic GERD. Sustained acid suppression with twice-daily proton pump inhibitors for at least 3 months is used to treat extraesophageal complications of reflux disease (asthma, chronic cough, laryngitis, and noncardiac chest pain). Peptic Ulcer Disease Compared with H2 antagonists, proton pump inhibitors afford more rapid symptom relief and faster ulcer healing for duodenal ulcers and, to a lesser extent, gastric ulcers. All the pump inhibitors heal more than 90% of duodenal ulcers within 4 weeks and a similar percentage of gastric ulcers within 6-8 weeks. H pylori-Associated Ulcers For H pylori-associated ulcers, there are two therapeutic goals: to heal the ulcer and to eradicate the organism. The most effective regimens for H pylori eradication are combinations of two antibiotics and a proton pump inhibitor. Proton pump inhibitors promote eradication of H pylori through several mechanisms: direct antimicrobial properties (minor) and—by raising intragastric pH—lowering the minimal inhibitory concentrations of antibiotics against H pylori. The best treatment regimen consists of a 14-day regimen of triple therapy: a proton pump inhibitor twice daily; clarithromycin, 500 mg twice daily; and either amoxicillin, 1 g twice daily, or metronidazole, 500 mg twice daily. After completion of triple therapy, the proton pump inhibitor should be continued once daily for a total of 4-6 weeks to ensure complete ulcer healing. Recently, 10 days of sequential treatment consisting on days 1-5 of a proton pump inhibitor twice daily plus amoxicillin, 1 g twice daily, and followed on days 6-10 by five additional days of a proton pump inhibitor twice daily, plus clarithromycin, 500 mg twice daily, and tinidazole, 500 mg twice daily, has been shown to be a highly effective treatment regimen. NSAID-Associated Ulcers For patients with ulcers caused by aspirin or other NSAIDs, either H2 antagonists or proton pump inhibitors provide rapid ulcer healing so long as the NSAID is discontinued; however continued use of the NSAID impairs ulcer healing. In patients with NSAID-induced ulcers who require continued NSAID therapy, treatment with a once- or twice-daily proton pump inhibitor more reliably promotes ulcer healing. Asymptomatic peptic ulceration develops in 10-20% of people taking frequent NSAIDs, and ulcer-related complications (bleeding, perforation) develop in 1-2% of persons per year. Proton pump inhibitors taken once daily are effective in reducing the incidence of ulcers and ulcer complications in patients taking aspirin or other NSAIDs. Prevention of Rebleeding from Peptic Ulcers In patients with acute gastrointestinal bleeding due to peptic ulcers, the risk of rebleeding from ulcers that have a visible vessel or adherent clot is increased. Rebleeding of this subset of high-risk ulcers is reduced significantly with proton pump inhibitors administered for 3-5 days either as high-dose oral therapy (eg, omeprazole, 40 mg orally twice daily) or as a continuous intravenous infusion. It is believed that an intragastric pH higher than 6 may enhance coagulation and platelet aggregation. The optimal dose of intravenous proton pump inhibitor needed to achieve and maintain this level of near-complete acid inhibition is unknown; however, initial bolus administration (80 mg) followed by constant infusion (8 mg/h) is commonly recommended. Nonulcer Dyspepsia Proton pump inhibitors have modest efficacy for treatment of nonulcer dyspepsia, benefiting 10-20% more patients than placebo. Despite their use for this indication, superiority to H2 antagonists (or even placebo) has not been conclusively demonstrated. Prevention of Stress-Related Mucosal Bleeding As discussed previously (see H2-Receptor Antagonists) proton pump inhibitors (given orally, by nasogastric tube, or by intravenous infusions) may be administered to reduce the risk of clinically significant stress-related mucosal bleeding in critically ill patients. The only proton pump inhibitor approved by the Food and Drug Administration (FDA) for this indication is an oral immediate-release omeprazole formulation, which is administered by nasogastric tube twice daily on the first day, then once daily. For patients with nasoenteric tubes, immediate-release omeprazole may be preferred to intravenous H2 antagonists or proton pump inhibitors because of comparable efficacy, lower cost, and ease of administration. For patients without a nasoenteric tube or with significant ileus, intravenous H2 antagonists are preferred to intravenous proton pump inhibitors because of their proven efficacy and lower cost. Although proton pump inhibitors are increasingly used, there are no controlled trials demonstrating efficacy or optimal dosing. Gastrinoma and Other Hypersecretory Conditions Patients with isolated gastrinomas are best treated with surgical resection. In patients with metastatic or unresectable gastrinomas, massive acid hypersecretion results in peptic ulceration, erosive esophagitis, and malabsorption. Previously, these patients required vagotomy and extraordinarily high doses of H2 antagonists, which still resulted in suboptimal acid suppression. With proton pump inhibitors, excellent acid suppression can be achieved in all patients. Dosage is titrated to reduce basal acid output to less than 5-10 mEq/h. Typical doses of omeprazole are 60-120 mg/d. Adverse Effects General Proton pump inhibitors are extremely safe. Diarrhea, headache, and abdominal pain are reported in 1-5% of patients, although the frequency of these events is only slightly increased compared with placebo. Proton pump inhibitors do not have teratogenicity in animal models; however, safety during pregnancy has not been established. Nutrition Acid is important in releasing vitamin B12 from food. A minor reduction in oral cyanocobalamin absorption occurs during proton pump inhibition, potentially leading to subnormal B12 levels with prolonged therapy. Acid also promotes absorption of food-bound minerals (iron, calcium, zinc); however, no mineral deficiencies have been reported with proton pump inhibitor therapy. Recent case-control studies have suggested a modest increase in the risk of hip fracture in patients taking proton pump inhibitors over a long term compared with matched controls. Although a causal relationship is unproven, proton pump inhibitors may reduce calcium absorption or inhibit osteoclast function. Pending further studies, patients who require long-term proton pump inhibitors—especially those with risk factors for osteoporosis—should have monitoring of bone density and should be provided calcium supplements. Respiratory and Enteric Infections Gastric acid is an important barrier to colonization and infection of the stomach and intestine from ingested bacteria. Increases in gastric bacterial concentrations are detected in patients taking proton pump inhibitors, which is of unknown clinical significance. Some studies have reported an increased risk of both community-acquired respiratory infections and nosocomial pneumonia among patients taking proton pump inhibitors. A small increased risk of enteric infections may exist in patients taking proton pump inhibitors, especially when traveling in underdeveloped countries. Hospitalized patients may have an increased risk for Clostridium difficile infection. Potential Problems Due to Increased Serum Gastrin Gastrin levels are regulated by intragastric acidity. Acid suppression alters normal feedback inhibition so that median serum gastrin levels rise 1.5- to 2-fold in patients taking proton pump inhibitors. Although gastrin levels remain within normal limits in most patients, they exceed 500 pg/mL (normal, The rise in serum gastrin levels in patients receiving long-term therapy with proton pump inhibitors raises a theoretical concern because gastrin may stimulate hyperplasia of ECL cells. In female rats given proton pump inhibitors for prolonged periods, gastric carcinoid tumors developed in areas of ECL hyperplasia. Although humans who take proton pump inhibitors for a long time may exhibit ECL hyperplasia in response to hypergastrinemia, carcinoid tumor formation has not been documented. At present, routine monitoring of serum gastrin levels is not recommended in patients receiving prolonged proton pump inhibitor therapy. Other Potential Problems Due to Decreased Gastric Acidity Among patients infected with H pylori, long-term acid suppression leads to increased chronic inflammation in the gastric body and decreased inflammation in the antrum. Concerns have been raised that increased gastric inflammation may accelerate gastric gland atrophy (atrophic gastritis) and intestinal metaplasia—known risk factors for gastric adenocarcinoma. A special FDA Gastrointestinal Advisory Committee concluded that there is no evidence that prolonged proton pump inhibitor therapy produces the kind of atrophic gastritis (multifocal atrophic gastritis) or intestinal metaplasia that is associated with increased risk of adenocarcinoma. Routine testing for H pylori is not recommended in patients who require long-term proton pump inhibitor therapy. Long-term proton pump inhibitor therapy is associated with the development of small benign gastric fundic-gland polyps in a small number of patients, which may disappear after stopping the drug and are of uncertain clinical signifi cance. Drug Interactions Decreased gastric acidity may alter absorption of drugs for which intragastric acidity affects drug bioavailability, eg, ketoconazole, itraconazole, digoxin, and atazanavir. All proton pump inhibitors are metabolized by hepatic P450 cytochromes, including CYP2C19 and CYP3A4. Because of the short half-lives of proton pump inhibitors, clinically significant drug interactions are rare. Omeprazole may inhibit the metabolism of warfarin, diazepam, and phenytoin. Esomeprazole also may decrease metabolism of diazepam. Lansoprazole may enhance clearance of theophylline. Rabeprazole and pantoprazole have no significant drug interactions. Mucosal Protective Agents The gastroduodenal mucosa has evolved a number of defense mechanisms to protect itself against the noxious effects of acid and pepsin. Both mucus and epithelial cell-cell tight junctions restrict back diffusion of acid and pepsin. Epithelial bicarbonate secretion establishes a pH gradient within the mucous layer in which the pH ranges from 7 at the mucosal surface to 1-2 in the gastric lumen. Blood flow carries bicarbonate and vital nutrients to surface cells. Areas of injured epithelium are quickly repaired by restitution, a process in which migration of cells from gland neck cells seals small erosions to rees Drugs in the Treatment of Gastrointestinal Disease Drugs in the Treatment of Gastrointestinal Disease Introduction Many of the drug groups discussed elsewhere in this book have important applications in the treatment of diseases of the gastrointestinal tract and other organs. Other groups are used almost exclusively for their effects on the gut; these are discussed in the following text according to their therapeutic uses. Drugs Used in Acid-Peptic Diseases Acid-peptic diseases include gastroesophageal reflux, peptic ulcer (gastric and duodenal), and stress-related mucosal injury. In all these conditions, mucosal erosions or ulceration arise when the caustic effects of aggressive factors (acid, pepsin, bile) overwhelm the defensive factors of the gastrointestinal mucosa (mucus and bicarbonate secretion, prostaglandins, blood flow, and the processes of restitution and regeneration after cellular injury). Over 90% of peptic ulcers are caused by infection with the bacterium Helicobacter pylori or by use of nonsteroidal anti-inflammatory drugs (NSAIDs). Drugs used in the treatment of acid-peptic disorders may be divided into two classes: agents that reduce intragastric acidity and agents that promote mucosal defense. Agents that Reduce Intragastric Acidity Physiology of Acid Secretion The parietal cell contains receptors for gastrin (CCK-B), histamine (H2), and acetylcholine (muscarinic, M3) (Figure 62-1). When acetylcholine (from vagal postganglionic nerves) or gastrin (released from antral G cells into the blood) bind to the parietal cell receptors, they cause an increase in cytosolic calcium, which in turn stimulates protein kinases that stimulate acid secretion from a H+,K+ ATPase (the proton pump) on the canalicular surface. In close proximity to the parietal cells are gut endocrine cells called enterochromaffin-like (ECL) cells. ECL cells also have receptors for gastrin and acetylcholine, which stimulate histamine release. Histamine binds to the H2 receptor on the parietal cell, resulting in activation of adenylyl cyclase, which increases intracellular cyclic adenosine monophosphate (cAMP) and activates protein kinases that stimulate acid secretion by the H+,K+ ATPase. In humans, it is believed that the major effect of gastrin upon acid secretion is mediated indirectly through the release of histamine from ECL cells rather than through direct parietal cell stimulation. In contrast, acetylcholine provides potent direct parietal cell stimulation. Antacids Antacids have been used for centuries in the treatment of patients with dyspepsia and acid-peptic disorders. They were the mainstay of treatment for acid-peptic disorders until the advent of H2-receptor antagonists and proton pump inhibitors. They continue to be used commonly by patients as nonprescription remedies for the treatment of intermittent heartburn and dyspepsia. Antacids are weak bases that react with gastric hydrochloric acid to form a salt and water. Their principal mechanism of action is reduction of intragastric acidity. After a meal, approximately 45 mEq/h of hydrochloric acid is secreted. A single dose of 156 mEq of antacid given 1 hour after a meal effectively neutralizes gastric acid for up to 2 hours. However, the acid-neutralization capacity among different proprietary formulations of antacids is highly variable, depending on their rate of dissolution (tablet versus liquid), water solubility, rate of reaction with acid, and rate of gastric emptying. Sodium bicarbonate (eg, baking soda, Alka Seltzer) reacts rapidly with hydrochloric acid (HCL) to produce carbon dioxide and sodium chloride. Formation of carbon dioxide results in gastric distention and belching. Unreacted alkali is readily absorbed, potentially causing metabolic alkalosis when given in high doses or to patients with renal insufficiency. Sodium chloride absorption may exacerbate fluid retention in patients with heart failure, hypertension, and renal insufficiency. Calcium carbonate (eg, Tums, Os-Cal) is less soluble and reacts more slowly than sodium bicarbonate with HCl to form carbon dioxide and calcium chloride (CaCl2). Like sodium bicarbonate, calcium carbonate may cause belching or metabolic alkalosis. Calcium carbonate is used for a number of other indications apart from its antacid properties (see Chapter 42). Excessive doses of either sodium bicarbonate or calcium carbonate with calcium-containing dairy products can lead to hypercalcemia, renal insufficiency , and metabolic alkalosis (milk-alkali syndrome). Formulations containing magnesium hydroxide or aluminum hydroxide react slowly with HCl to form magnesium chloride or aluminum chloride and water. Because no gas is generated, belching does not occur. Metabolic alkalosis is also uncommon because of the efficiency of the neutralization reaction. Because unabsorbed magnesium salts may cause an osmotic diarrhea and aluminum salts may cause constipation, these agents are commonly administered together in proprietary formulations (eg, Gelusil, Maalox, Mylanta) to minimize the impact on bowel function. Both magnesium and aluminum are absorbed and excreted by the kidneys. Hence, patients with renal insufficiency should not take these agents long-term. All antacids may affect the absorption of other medications by binding the drug (reducing its absorption) or by increasing intragastric pH so that the drugs dissolution or solubility (especially weakly basic or acidic drugs) is altered. Therefore, antacids should not be given within 2 hours of doses of tetracyclines, fluoroquinolones, itraconazole, and iron. H2-Receptor Antagonists From their introduction in the 1970s until the early 1990s, H2-receptor antagonists (commonly referred to as H2 blockers) were the most commonly prescribed drugs in the world (see Clinical Uses). With the recognition of the role of H pylori in ulcer disease (which may be treated with appropriate antibacterial therapy) and the advent of proton pump inhibitors, the use of prescription H2 blockers has declined markedly. Chemistry Pharmacokinetics Four H2 antagonists are in clinical use: cimetidine, ranitidine, famotidine, and nizatidine. All four agents are rapidly absorbed from the intestine. Cimetidine, ranitidine, and famotidine undergo first-pass hepatic metabolism resulting in a bioavailability of approximately 50%. Nizatidine has little first-pass metabolism. The serum half-lives of the four agents range from 1.1 to 4 hours; however, duration of action depends on the dose given (Table 62-1). H2 antagonists are cleared by a combination of hepatic metabolism, glomerular filtration, and renal tubular secretion. Dose reduction is required in patients with moderate to severe renal (and possibly severe hepatic) insufficiency. In the elderly, there is a decline of up to 50% in drug clearance as well as a significant reduction in volume of distribution. BID, twice daily; HS, bedtime. Clinical Uses H2-receptor antagonists continue to be prescribed but proton pump inhibitors (see below) are steadily replacing H2 antagonists for most clinical indications. However, the over-the-counter preparations are heavily used by the public. Gastroesophageal Reflux Disease (GERD) Patients with infrequent heartburn or dyspepsia (fewer than 3 times per week) may take either antacids or intermittent H2 antagonists. Because antacids provide rapid acid neutralization, they afford faster symptom relief than H2 antagonists. However, the effect of antacids is short-lived (1-2 hours) compared with H2 antagonists (6-10 hours). H2 antagonists may be taken prophylactically before meals in an effort to reduce the likelihood of heartburn. Frequent heartburn is better treated with twice-daily H2 antagonists (Table 62-1) or proton pump inhibitors. In patients with erosive esophagitis (approximately 50% of patients with GERD), H2 antagonists afford healing in less than 50% of patients; hence proton pump inhibitors are preferred because of their superior acid inhibition. Peptic Ulcer Disease Proton pump inhibitors have largely replaced H2 antagonists in the treatment of acute peptic ulcer disease. Nevertheless, H2 antagonists are still sometimes used. Nocturnal acid suppression by H2 antagonists affords effective ulcer healing in most patients with uncomplicated gastric and duodenal ulcers. Hence, all the agents may be administered once daily at bedtime, resulting in ulcer healing rates of more than 80-90% after 6-8 weeks of therapy. For patients with ulcers caused by aspirin or other NSAIDs, the NSAID should be discontinued. If the NSAID must be continued for clinical reasons despite active ulceration, a proton pump inhibitor should be given instead of an H2 antagonist to more reliably promote ulcer healing. For patients with acute peptic ulcers caused by H pylori, H2 antagonists no longer play a significant therapeutic role. H pylori should be treated with a 10- to 14-day course of therapy including a proton pump inhibitor and two antibiotics (see below). This regimen achieves ulcer healing and eradication of the infection in more than 90% of patients. For the minority of patients in whom H pylori cannot be successfully eradicated, H2 antagonists may be given daily at bedtime in half of the usual ulcer therapeutic dose to prevent ulcer recurrence (eg, ranitidine, 150 mg; famotidine, 20 mg). Nonulcer Dyspepsia H2 antagonists are commonly used as over-the-counter agents and prescription agents for treatment of intermittent dyspepsia not caused by peptic ulcer. However, benefit compared with placebo has never been convincingly demonstrated. Prevention of Bleeding from Stress-Related Gastritis Clinically important bleeding from upper gastrointestinal erosions or ulcers occurs in 1-5% of critically ill patients as a result of impaired mucosal defense mechanisms caused by poor perfusion. Although most critically ill patients have normal or decreased acid secretion, numerous studies have shown that agents that increase intragastric pH (H2 antagonists or proton pump inhibitors) reduce the incidence of clinically significant bleeding. However, the optimal agent is uncertain at this time. For patients without a nasoenteric tube or with significant ileus, intravenous H2 antagonists are preferable over intravenous proton pump inhibitors because of their proven efficacy and lower cost. Continuous infusions of H2 antagonists are generally preferred to bolus infusions because they achieve more consistent, sustained elevation of intragastric pH. Adverse Effects H2 antagonists are extremely safe drugs. Adverse effects occur in less than 3% of patients and include diarrhea, headache, fatigue, myalgias, and constipation. Some studies suggest that intravenous H2 antagonists (or proton pump inhibitors) may increase the risk of nosocomial pneumonia in critically ill patients. Mental status changes (confusion, hallucinations, agitation) may occur with administration of intravenous H2 antagonists, especially in patients in the intensive care unit who are elderly or who have renal or hepatic dysfunction. These events may be more common with cimetidine. Mental status changes rarely occur in ambulatory patients. Cimetidine inhibits binding of dihydrotestosterone to androgen receptors, inhibits metabolism of estradiol, and increases serum prolactin levels. When used long-term or in high doses, it may cause gynecomastia or impotence in men and galactorrhea in women. These effects are specific to cimetidine and do not occur with the other H2 antagonists. Although there are no known harmful effects on the fetus, H2 antagonists cross the placenta. Therefore, they should not be administered to pregnant women unless absolutely necessary. The H2 antagonists are secreted into breast milk and may therefore affect nursing infants. H2 antagonists may rarely cause blood dyscrasias. Blockade of cardiac H2 receptors may cause bradycardia, but this is rarely of clinical significance. Rapid intravenous infusion may cause bradycardia and hypotension through blockade of cardiac H2 receptors; therefore, intravenous injections should be given over 30 minutes. H2 antagonists rarely cause reversible abnormalities in liver chemistry. Drug Interactions Cimetidine interferes with several important hepatic cytochrome P450 drug metabolism pathways, including those catalyzed by CYP1A2, CYP2C9, CYP2D6, and CYP3A4 (see Chapter 4). Hence, the half-lives of drugs metabolized by these pathways may be prolonged. Ranitidine binds 4-10 times less avidly than cimetidine to cytochrome P450. Negligible interaction occurs with nizatidine and famotidine. H2 antagonists compete with creatinine and certain drugs (eg, procainamide) for renal tubular secretion. All of these agents except famotidine inhibit gastric first-pass metabolism of ethanol, especially in women. Although the importance of this is debated, increased bioavailability of ethanol could lead to increased blood ethanol levels. Proton Pump Inhibitors Since their introduction in the late 1980s, these efficacious acid inhibitory agents have assumed the major role for the treatment of acid-peptic disorders. Proton pump inhibitors (PPIs) are now among the most widely prescribed drugs worldwide due to their outstanding efficacy and safety. Chemistry Pharmacokinetics Five proton pump inhibitors are available for clinical use: omeprazole, lansoprazole, rabeprazole, pantoprazole, and esomeprazole. All are substituted benzimidazoles that resemble H2 antagonists in structure (Figure 62-3) but have a completely different mechanism of action. Omeprazole is a racemic mixture of R- and S-isomers. Esomeprazole is the S-isomer of omeprazole. All are available in oral formulations. Esomeprazole and pantoprazole are also available in intravenous formulations . Proton pump inhibitors are administered as inactive prodrugs. To protect the acid-labile prodrug from rapid destruction within the gastric lumen, oral products are formulated for delayed release as acid-resistant, enteric-coated capsules or tablets. After passing through the stomach into the alkaline intestinal lumen, the enteric coatings dissolve and the prodrug is absorbed. For children or patients with dysphagia or enteral feeding tubes, capsules may be opened and the microgranules mixed with apple or orange juice or mixed with soft foods (eg, applesauce). Lansoprazole is also available as a tablet formulation that disintegrates in the mouth, or it may be mixed with water and administered via oral syringe or enteral tube. Omeprazole is also available as a powder formulation (capsule or packet) that contains sodium bicarbonate (1100-1680 mg NaHCO3 ; 304-460 mg of sodium) to protect the naked (non-enteric-coated) drug from acid degradation. When administered on an empty stomach by m outh or enteral tube, this immediate-release suspension results in rapid omeprazole absorption (Tmax The proton pump inhibitors are lipophilic weak bases (pKa 4-5) and after intestinal absorption diffuse readily across lipid membranes into acidified compartments (eg, the parietal cell canaliculus). The prodrug rapidly becomes protonated within the canaliculus and is concentrated more than 1000-fold by Henderson-Hasselbalch trapping (see Chapter 1). There, it rapidly undergoes a molecular conversion to the active form, a reactive thiophilic sulfenamide cation, which forms a covalent disulfide bond with the H+,K+ ATPase, irreversibly inactivating the enzyme. From a pharmacokinetic perspective, proton pump inhibitors are ideal drugs: they have a short serum half-life, they are concentrated and activated near their site of action, and they have a long duration of action. Pharmacodynamics In contrast to H2 antagonists, proton pump inhibitors inhibit both fasting and meal-stimulated secretion because they block the final common pathway of acid secretion, the proton pump. In standard doses, proton pump inhibitors inhibit 90-98% of 24-hour acid secretion (Figure 62-2). When administered at equivalent doses, the different agents show little difference in clinical efficacy. In a crossover study of patients receiving long-term therapy with all five proton pump inhibitors, the mean 24-hour intragastric pH varied from 3.3 (pantoprazole, 40 mg) to 4.0 (esomeprazole, 40 mg) and the mean number of hours the pH was higher than 4 varied from 10.1 (pantoprazole, 40 mg) to 14.0 (esomeprazole, 40 mg). Clinical Uses Gastroesophageal Reflux Disease (GERD) Proton pump inhibitors are the most effective agents for the treatment of nonerosive and erosive reflux disease, esophageal complications of reflux disease (peptic stricture or Barretts esophagus), and extraesophageal manifestations of reflux disease. Once-daily dosing provides effective symptom relief and tissue healing in 85-90% of patients; up to 15% of patients require twice-daily dosing. GERD symptoms recur in over 80% of patients within 6 months after discontinuation of a proton pump inhibitor. For patients with erosive esophagitis or esophageal complications, long-term daily maintenance therapy with a full-dose or half-dose proton pump inhibitor is usually needed. Many patients with nonerosive GERD may be treated successfully with intermittent courses of proton pump inhibitors or H2 antagonists taken as needed (on demand) for recurrent symptoms. In current clinical practice, many patients with symptomatic GERD are treated empirically with medications without prior endoscopy, ie, without knowledge of whether the patient has erosive or nonerosive reflux disease. Empiric treatment with proton pump inhibitors provides sustained symptomatic relief in 70-80% of patients, compared with 50-60% with H2 antagonists. Because of recent cost reductions, proton pump inhibitors are being used increasingly as first-line therapy for patients with symptomatic GERD. Sustained acid suppression with twice-daily proton pump inhibitors for at least 3 months is used to treat extraesophageal complications of reflux disease (asthma, chronic cough, laryngitis, and noncardiac chest pain). Peptic Ulcer Disease Compared with H2 antagonists, proton pump inhibitors afford more rapid symptom relief and faster ulcer healing for duodenal ulcers and, to a lesser extent, gastric ulcers. All the pump inhibitors heal more than 90% of duodenal ulcers within 4 weeks and a similar percentage of gastric ulcers within 6-8 weeks. H pylori-Associated Ulcers For H pylori-associated ulcers, there are two therapeutic goals: to heal the ulcer and to eradicate the organism. The most effective regimens for H pylori eradication are combinations of two antibiotics and a proton pump inhibitor. Proton pump inhibitors promote eradication of H pylori through several mechanisms: direct antimicrobial properties (minor) and—by raising intragastric pH—lowering the minimal inhibitory concentrations of antibiotics against H pylori. The best treatment regimen consists of a 14-day regimen of triple therapy: a proton pump inhibitor twice daily; clarithromycin, 500 mg twice daily; and either amoxicillin, 1 g twice daily, or metronidazole, 500 mg twice daily. After completion of triple therapy, the proton pump inhibitor should be continued once daily for a total of 4-6 weeks to ensure complete ulcer healing. Recently, 10 days of sequential treatment consisting on days 1-5 of a proton pump inhibitor twice daily plus amoxicillin, 1 g twice daily, and followed on days 6-10 by five additional days of a proton pump inhibitor twice daily, plus clarithromycin, 500 mg twice daily, and tinidazole, 500 mg twice daily, has been shown to be a highly effective treatment regimen. NSAID-Associated Ulcers For patients with ulcers caused by aspirin or other NSAIDs, either H2 antagonists or proton pump inhibitors provide rapid ulcer healing so long as the NSAID is discontinued; however continued use of the NSAID impairs ulcer healing. In patients with NSAID-induced ulcers who require continued NSAID therapy, treatment with a once- or twice-daily proton pump inhibitor more reliably promotes ulcer healing. Asymptomatic peptic ulceration develops in 10-20% of people taking frequent NSAIDs, and ulcer-related complications (bleeding, perforation) develop in 1-2% of persons per year. Proton pump inhibitors taken once daily are effective in reducing the incidence of ulcers and ulcer complications in patients taking aspirin or other NSAIDs. Prevention of Rebleeding from Peptic Ulcers In patients with acute gastrointestinal bleeding due to peptic ulcers, the risk of rebleeding from ulcers that have a visible vessel or adherent clot is increased. Rebleeding of this subset of high-risk ulcers is reduced significantly with proton pump inhibitors administered for 3-5 days either as high-dose oral therapy (eg, omeprazole, 40 mg orally twice daily) or as a continuous intravenous infusion. It is believed that an intragastric pH higher than 6 may enhance coagulation and platelet aggregation. The optimal dose of intravenous proton pump inhibitor needed to achieve and maintain this level of near-complete acid inhibition is unknown; however, initial bolus administration (80 mg) followed by constant infusion (8 mg/h) is commonly recommended. Nonulcer Dyspepsia Proton pump inhibitors have modest efficacy for treatment of nonulcer dyspepsia, benefiting 10-20% more patients than placebo. Despite their use for this indication, superiority to H2 antagonists (or even placebo) has not been conclusively demonstrated. Prevention of Stress-Related Mucosal Bleeding As discussed previously (see H2-Receptor Antagonists) proton pump inhibitors (given orally, by nasogastric tube, or by intravenous infusions) may be administered to reduce the risk of clinically significant stress-related mucosal bleeding in critically ill patients. The only proton pump inhibitor approved by the Food and Drug Administration (FDA) for this indication is an oral immediate-release omeprazole formulation, which is administered by nasogastric tube twice daily on the first day, then once daily. For patients with nasoenteric tubes, immediate-release omeprazole may be preferred to intravenous H2 antagonists or proton pump inhibitors because of comparable efficacy, lower cost, and ease of administration. For patients without a nasoenteric tube or with significant ileus, intravenous H2 antagonists are preferred to intravenous proton pump inhibitors because of their proven efficacy and lower cost. Although proton pump inhibitors are increasingly used, there are no controlled trials demonstrating efficacy or optimal dosing. Gastrinoma and Other Hypersecretory Conditions Patients with isolated gastrinomas are best treated with surgical resection. In patients with metastatic or unresectable gastrinomas, massive acid hypersecretion results in peptic ulceration, erosive esophagitis, and malabsorption. Previously, these patients required vagotomy and extraordinarily high doses of H2 antagonists, which still resulted in suboptimal acid suppression. With proton pump inhibitors, excellent acid suppression can be achieved in all patients. Dosage is titrated to reduce basal acid output to less than 5-10 mEq/h. Typical doses of omeprazole are 60-120 mg/d. Adverse Effects General Proton pump inhibitors are extremely safe. Diarrhea, headache, and abdominal pain are reported in 1-5% of patients, although the frequency of these events is only slightly increased compared with placebo. Proton pump inhibitors do not have teratogenicity in animal models; however, safety during pregnancy has not been established. Nutrition Acid is important in releasing vitamin B12 from food. A minor reduction in oral cyanocobalamin absorption occurs during proton pump inhibition, potentially leading to subnormal B12 levels with prolonged therapy. Acid also promotes absorption of food-bound minerals (iron, calcium, zinc); however, no mineral deficiencies have been reported with proton pump inhibitor therapy. Recent case-control studies have suggested a modest increase in the risk of hip fracture in patients taking proton pump inhibitors over a long term compared with matched controls. Although a causal relationship is unproven, proton pump inhibitors may reduce calcium absorption or inhibit osteoclast function. Pending further studies, patients who require long-term proton pump inhibitors—especially those with risk factors for osteoporosis—should have monitoring of bone density and should be provided calcium supplements. Respiratory and Enteric Infections Gastric acid is an important barrier to colonization and infection of the stomach and intestine from ingested bacteria. Increases in gastric bacterial concentrations are detected in patients taking proton pump inhibitors, which is of unknown clinical significance. Some studies have reported an increased risk of both community-acquired respiratory infections and nosocomial pneumonia among patients taking proton pump inhibitors. A small increased risk of enteric infections may exist in patients taking proton pump inhibitors, especially when traveling in underdeveloped countries. Hospitalized patients may have an increased risk for Clostridium difficile infection. Potential Problems Due to Increased Serum Gastrin Gastrin levels are regulated by intragastric acidity. Acid suppression alters normal feedback inhibition so that median serum gastrin levels rise 1.5- to 2-fold in patients taking proton pump inhibitors. Although gastrin levels remain within normal limits in most patients, they exceed 500 pg/mL (normal, The rise in serum gastrin levels in patients receiving long-term therapy with proton pump inhibitors raises a theoretical concern because gastrin may stimulate hyperplasia of ECL cells. In female rats given proton pump inhibitors for prolonged periods, gastric carcinoid tumors developed in areas of ECL hyperplasia. Although humans who take proton pump inhibitors for a long time may exhibit ECL hyperplasia in response to hypergastrinemia, carcinoid tumor formation has not been documented. At present, routine monitoring of serum gastrin levels is not recommended in patients receiving prolonged proton pump inhibitor therapy. Other Potential Problems Due to Decreased Gastric Acidity Among patients infected with H pylori, long-term acid suppression leads to increased chronic inflammation in the gastric body and decreased inflammation in the antrum. Concerns have been raised that increased gastric inflammation may accelerate gastric gland atrophy (atrophic gastritis) and intestinal metaplasia—known risk factors for gastric adenocarcinoma. A special FDA Gastrointestinal Advisory Committee concluded that there is no evidence that prolonged proton pump inhibitor therapy produces the kind of atrophic gastritis (multifocal atrophic gastritis) or intestinal metaplasia that is associated with increased risk of adenocarcinoma. Routine testing for H pylori is not recommended in patients who require long-term proton pump inhibitor therapy. Long-term proton pump inhibitor therapy is associated with the development of small benign gastric fundic-gland polyps in a small number of patients, which may disappear after stopping the drug and are of uncertain clinical signifi cance. Drug Interactions Decreased gastric acidity may alter absorption of drugs for which intragastric acidity affects drug bioavailability, eg, ketoconazole, itraconazole, digoxin, and atazanavir. All proton pump inhibitors are metabolized by hepatic P450 cytochromes, including CYP2C19 and CYP3A4. Because of the short half-lives of proton pump inhibitors, clinically significant drug interactions are rare. Omeprazole may inhibit the metabolism of warfarin, diazepam, and phenytoin. Esomeprazole also may decrease metabolism of diazepam. Lansoprazole may enhance clearance of theophylline. Rabeprazole and pantoprazole have no significant drug interactions. Mucosal Protective Agents The gastroduodenal mucosa has evolved a number of defense mechanisms to protect itself against the noxious effects of acid and pepsin. Both mucus and epithelial cell-cell tight junctions restrict back diffusion of acid and pepsin. Epithelial bicarbonate secretion establishes a pH gradient within the mucous layer in which the pH ranges from 7 at the mucosal surface to 1-2 in the gastric lumen. Blood flow carries bicarbonate and vital nutrients to surface cells. Areas of injured epithelium are quickly repaired by restitution, a process in which migration of cells from gland neck cells seals small erosions to rees

Walmart Business Analysis

Walmart Business Analysis Contents (Jump to) Walmart’s Current Strategy Organizational structure, culture, and control systems SWOT Analysis for Walmart Porter’s Five Analysis of Walmart Key Strategic Issues at Walmart Personal SWOT Analysis Financial Analysis of Walmart Recommendations Walmart store Inc. is not only the retail giant, but also is the largest grocery chain in the world. Walmart store Inc. was founded in 1962. Samuel Walton and his brother J.L. Walton open their first Walmart Discount City in Rogers, Arkansas (Walmart History, 2010). For Walmart store Inc., their common mission is: Save people money so they can live better (Walmart corporate, 2010). Compared with their main competitors such as Target and K mart, Walmarts 2009 sales were almost 50% more. Because of its giant size and buying power, Walmart can buy its products at very low prices, exchanging high purchase volumes for low cost then passing the savings onto its customers (Wikinvest Walmart, 2010). Walmart has 8,900 stores around the world in three different business segments of retail stores that including: Walmart stores, Sams Club and Walmart international. All of them offer different kinds of merchandises including electronic appliances, groceries, furniture, apparel and health beauty stuffs etc. For their business segment, they have over 54% of the companys stores are located in the United States, and the others international stores are mainly located in central and south America and China. The company mainly focuses on offering the lowest prices to attract its consumers. Walmart totally earned $408 billion revenue in 2010, increase 1% compare to 2009 (Wikinvest Walmart, 2010). In 2009, Walmart earned $255.7 billion in the domestic segment of the companys revenue. For Walmart stores segment are further categories into three different formats including: Supercenters, Discount stores and Neighborhood Stores. For the Sams club, it is the second largest membership-only retailer club ( Costco is the first largest membership-only retailer) in United States belong to Walmart Inc., their main customers mostly are offices, convenience stores, motels, restaurants and schools etc. (Wikinvest Walmart, 2010). For now, Walmart has total 3,121 international stores all over the world including in Mexico, Japan, Canada, China and countries in central and South America. However, recently Walmart begins to slow down their growth rate in the United State and turn their main focus onto its international stores to develop growth. For international stores locations altogether earned total $98.6 billion revenue in 2009, compared to the sales of 2008, is increased 9.1% (Wikinvest Walmart, 2010). Strategic History of the Industry The whole retail industry in the United States has over $4 trillion annual revenue. The main retail companies are including Walmart, Home Depot, Kroger, Costco, and Target. Some of the large companies dominate some retail sectors such as mass merchandisers and grocery stores, other sectors like auto dealers and convenience stores are fragmented. However, retail industry still has many small and specialty retailers are single-store operations (Hoover, 2011). The economy deeply affects the retail demand. In other words, retail demand depends on the economy. Many different kinds of economic factors such as job growth, recession, personal income, consumer confidence and interest rates can strongly affect consumer spending behavior. When during recessionary periods, the bad economy can affect the retail sales growth rate slow drastically or even sales revenue decline. While the retail spending grows rapidly when in the period of strong economy growth, for example consumers will spend more on grocery when they have more income. However, the rising interest rates will affect consumer purchase behavior and consumer ability to finance large amount of purchase such as purchasing cars (Hoover, 2011). Strategic History of Walmart Store Inc. In the early stage of strategic history for Walmart, they always unchanged their vision always low price for their customers. Until 1990s, Walmart announced that they planned to go global. They wanted to look for international markets for the reasons as following: First of all, Walmart has facing very strong competition in United States such as Target and K mart. These two firms had aggressive expanding their business and had started sharing Walmarts market share. Secondly, the market in the United States is already saturated; it was becoming difficult for the company to continue its growth rate. Thirdly, the US population is accounted for only 4% of the worlds population and if they want to expand their global market, China had the potential massive growth due to their huge population of over 1.3 billion people. The last reason is, globalization opened up new markets in China and created opportunities for discount stores such as Walmart (Walmarts Cost Leadership Strategy, 2004). On the other hand, Walmart is using the strategy that cooperates with local suppliers to purchase their products, even though the organizational culture is standardized with the home country. This strategy is not only use to the products purchasing, but also adapted to the local cultures and stores decoration and designed are also changed to meet local taste all around the world (Walmarts Cost Leadership Strategy, 2004). Organizational mission statement As we know, the mission statement for Walmart is every day low price. In order to insist their mission, Walmart implemented three approaches in the market. First, it increased the local purchasing in order to reduce the purchasing costs and also suit consumers needs in different places. Secondly, it maintained a good relationship with their suppliers, satisfied them by paying within 3-7 days during its initial years. Thirdly, it established distribution centers (DC) and computerized its management system to improve efficiency and reduce costs (ICFAI, 2005). Business Level Strategy For these several years, Walmart has been trying hard on expand its stores outside the United States. It through two different to expand their international business market: new store construction and acquisition. Acquisition strategy of supermarket chains had been a part of Walmarts entry and  store expansion strategy in Canada, Mexico, Brazil, Japan, China and Great Britain (The Walmart Puzzle, 2008). Over all, the Walmart strategies were including: multiple store segments, lower daily prices, lots of name-brand merchandise, reduce operating costs, emphasized customers satisfied service, wide selection products, disciplined expansion into new geographic markets, and using acquisition to enter foreign market (Walmart Store Inc., 2010). However, no matter Walmart are in which foreign country, their company vision always low prices is never changed. The companys low distribution costs and cost-efficient supply chain management are the big reasons why Walmart is so success and at the same time reduce the products prices. Walmart has get into distribution efficiency compare with their competitors because of its rural store locations. Current strategy for the major operations/functions of the company Current strategies for Walmart are including low costs, high volume, increase customer satisfaction and expansion strategy. Walmart creates name recognition and customer satisfaction, and combined the retailer with the reputation of offering the best prices. They also expand their new business segments to different sectors such as pharmacies, automotive repair, and grocery sales to increase their sales revenue. Expansion strategy: The company realized that building a new store will allow for increase market share value. After their success in the rural areas, Walmart moved to urban areas and then moved to surrounding areas. The expansion strategy made Walmart the number one retail store in the United States. As Walmart continue its expansion domestically, the firm decided to go international. Furthermore, Walmart realized that acquiring an existing retail firm is necessary for expand domestic and international markets. Therefore, Walmart by acquire retail store which enable to expand locally and internationally. Always low prices make customers live better strategy is believed the strongest strategy used by Walmart. The firm developed the idea of dealing directly with the manufacturer and with the power control by Walmart will enable it to get the best deal from the manufacturers and suppliers. Organizational structure, culture, and control systems Saving people money to help them live better was the mission for Walmart. Hence, Walmart negotiates different suppliers and understanding their cost structure in order to reduce the price. Walmart has to be certain that the manufacturers were doing their best to cut down costs. Also, Walmart believed in establishing a long-term relationship with their suppliers. Walmart had 129 distribution centers located at different locations all over the US. Over 80,000 items were stocked in these centers. Walmarts own warehouses directly supplied 85 percent of the inventory, as compared to 50-65 % for competitors. Shipping costs for Walmart is about 3 % which is lower than its competitors, 5%. The distribution centers ensured a steady and consistent flow of products to support the supply function (Walmarts Cost Leadership Strategy, 2004). Walmarts logistics infrastructure was its fast and successful transportation system. The distribution centers were serviced by more than 3,500 company owned trucks. To make its distribution process more efficient, Walmart also uses a logistics technique called cross-docking. In this system, the finished goods were directly picked up from the manufacturing plant from suppliers, and then directly supplied to the customers. The system reduced the handling and storage of finished goods, eliminating the role of the distribution centers and stores (Walmarts Cost Leadership Strategy, 2004). SWOT Analysis for Walmart Store Inc. (S)trengths Reputation Brand Name: Walmart is a powerful brand and pioneer in the retail industry with the wide spread network of stores. It has a reputation for low price, convenience and a wide range of products all in one store for customers. Walmart has captured about 10% of the retail market in the U.S. and continues to expand. Walmart stores continue to open all over the country making Walmart a household name. Walmart has also been widely acknowledged for its social responsibility actions. The company has donated to a variety of charitable organizations and has been accredited for bringing jobs and wealth to less developed communities. Offer Low Prices: Walmart uses its enormous size and buying power to pressure its suppliers into extremely low prices, offering orders of high volumes of merchandise in exchange for low prices. The good thing about Walmart is that its shifts the low cost advantage to customers and available the products at lower prices. It has loyal customer base because it meets the expectation of customer by always delivering the goods at lower prices at compare to its competitors. Expand Global Market: Walmart has aggressively expands its international market over the past few years and has experienced global expansion. For example its purchase of the United Kingdom based retailer ASDA. Technology: Technology is strength to Walmart with its inventory control system that was recognized as the most sophisticated in retailing. The technology linked all the stores to the headquarters and the companys distribution centers. It also enables the warehouse of which the goods are ordered, and direct the flow of goods to the store and proper shelves. Supply chain and logistics management: Supply chain and logistics management are one of the strengths of Walmart. This allows Walmart to utilize the Just- in-time inventory concept and avoid the pilling up inventory to save the extra cost for maintaining inventories in the warehouses. Human Resource: Walmart always keen to provide training to their employees to improve the customer service level. The firm hire locally, provides training programs for its employees. Walmart also gets its employees involve and encourage them to make use of words like: we, us, and ours. It also provides stock ownership and profit sharing with great contribution from the H. R of the firm. Walmart was named one of the best 100 firms to work for. Cross-docking inventory system: Using the cross-dock technique, Walmart was able to effectively leverage their logistical volume into a core strategic competency. Walmart operates an extensive satellite network of distribution centers serviced by company owned trucks. Its satellite network sends point of sale (POS) data directly to 4,000 vendors. Each register is directly connected to a satellite system sending sales information to Walmarts headquarters and distribution centers. (W)eaknesses Employee turnover: Walmart has high employee turnover which costs more money and time for company to train the new employee. Bad publicity: Walmart is currently facing a gender discrimination lawsuit. Their female employees accuses that they were discriminated against in matters regarding pay and promotions. And also, Their female managers were accounted for the minority group in the company. Lock of flexibility: Walmart sell very wide range kinds of products for example like clothes, food, pharmacy or stationary which lack of flexibility compare with other more focused competitors. Other competitors may have the ability to make changes and improve on a certain product lines when the needs of their customers change. Walmart, however, may have too much merchandise and not be able to focus in on sectors that need to be improved. Some products have poor quality: Although Walmart provides low price of products, however, customers sometimes complain about the poor quality of few products. Facing difficulty in International market: It is hard for Walmart to expand their business out of US to totally different countries all around the world. Moreover, Walmart has to facing different culture and customer behavior in different countries, for example Walmart facing difficulty to expand the market in China. (O)pportunities Customers: Because Walmart provides low price to their customers, so they are able to attract more customers. Furthermore, customers basically are able to purchasing everything in one store that satisfied their needs. Walmart 24 hours stores also satisfied their customers. Diversified store types: Walmarts different store types and new locations provide more opportunities to exploit new market. Stores diversified from local, small-based sites to large super centers. International Expansion: No doubt that continued expand the international market is a huge opportunity for Walmart. Walmarts oversea stores have experienced significant growth. There are actually tremendous opportunities for future growth in developing countries and Asian markets than in the United States such as China and India. Creating strategic alliances and licensing agreements with other global retailers are ways to move into different countries. (T)hreats Competition: Walmart faces different strong competitions locally and internationally. Walmart main competitors are including Kmart, Target, Carrefour and Costco wholesale. In 2010, the Net Profit Margin for Walmart is 3.59%, Target 4.22%, Costco wholesale 1.69%, Carrefour 0.38%, respectively (Hoovers, 2010). Target is Walmarts direct competitor in the US, offering a range of general merchandise in a similar store format (Wikinvest, 2010). Economy Recession: The revenue for Walmart is affected by economy recession. Good economy is an opportunity for great business, because customers will have more money to spend. If the economy is great, there will be more jobs and people will shop more. However, if the economy is bad, there will be fewer jobs and people will shop less. Also, with the high price of gasoline and its effect on the economy, Walmart will certainly be affected the most. Strategy imitation: Walmart strengthens its competitive advantage on low-cost products. Other competitors may imitate their low-cost strategy to take over their market shares. Low Brand Loyalty: In the retail industry, customers would like to choose the product with the lowest price. In other words, customers do not care about the brand or which retail stores, if Costco has the exactly same chips that sell cheaper than in the Walmart, then customers will choose to buy the chips in the Costco not Walmart. TOWS MATRIX STRENGTHS WEAKNESSES Reputation Brand Name Bad publicity Offer Low Prices Lock of flexibility Expand Global Market Some products have poor quality Technology Facing difficulty in International market Supply chain and logistics management Employee turnover Human Resource Cross-docking inventory system OPPORTUNITIES OPPORTUNITIES-STRENGTHS OPPORTUNITIES-WEAKNESSES Customers Build on its already efficient distribution system to further expand in the U.S and globally. Walmart should be awareness and strict to control of the quality of the product in order to keep their customers basis. Diversified Store Types Expand diversified store types to International market in order to increase profit in International market. Set higher employment standards through enhanced training to keep their employees have best performance. International Expansion Duplicated the successful delivery logistic management and the distribution centers into International market. Continue to build on cost efficient pricing and production due to expansion. Go into new markets and buy out their local retailers to gain market share. THREATS THREATS-STRENGTHS THREATS-WEAKNESSES Competition Buy raw materials or products from local suppliers to hold a better political status within the local community further to compete with their competitors. Human resource department should set a benefits long-term promotion program or standard and training program for their employees in order to decrease the employee turnover. Economy Recession Create their own brand of products and increase the quality of products in order to establish customers loyalty. Establish joint venture partnerships or long-term relationship with local retail companies to get the advantages in the International segment. Strategy imitation Develop strong RD and technology to enhance the competitive advantage and avoid imitation from other competitors. Low Brand Loyalty Five Forces Analysis for Walmart Store Inc. Threat of entrances Low The threat of new entrance in the grocery and discount retailer industry is very low. New entrants have to face with the strong low-price competition among exist giant retail companies like Walmart, Costco and Target. New entrants need to invest large amount of capitals to establish their brand recognition, service, and variety of product offerings that Walmart, Target, and others competitors continue to improve on each day. In addition, existing companies can drop prices lower in order to force a new competitor out of the market. Therefore, the threat of entrances is low. Power of buyer-High Customers have many choosing opportunities and consider about products very details. They want the product now and they want it with the best service, best quality and reasonable price. Customers also enjoy increasing choice of products and choose one product that has the best quality and better price. For example, if customers find out Target sells an exactly product that has better quality and price than Walmart, and then they will choose to buy it in Target instead of Walmart. Power of Suppliers   Low The bargaining power of suppliers is very low. Walmart is very famous on giving pressure to their suppliers to cut their price lower and lower in order to offer the lowest price to their customers. On the other hand, become the supplier of Walmart is a very fierce competition. In 2004, about 10,000 new suppliers applied to become Walmart vendors. However, only about 200, or 2%, were ultimately accepted by Walmart (Gwendolyn Bounds, The Wall Street Journal). Therefore, the bargaining power of suppliers is low. Rivalry High The competition in the US grocery and discount retailer industry is very high. The main competitors for Walmart in the local market are Kmart and Target. These companies also have to face competition from wholesalers such as BJs, Costco and even the international market such as Carrefour. Walmart has adopted a cost leadership generic strategy. In the past, most companies have not been able to match Walmarts strategy everyday low prices. However, Walmarts barrier to entry (economies of scale) and strength (supply-chain management) can be easily imitated with sufficient resources. Therefore, retailers are in a fierce competition that see who can offer their customers the lowest price. Threat of substitute Low The threat of substitutes in this industry is low because only few companies have ability to offer such a variety of products available instantly and also low prices. One possible substitute is online shopping; however, customers usually do the online shopping for clothes or other stuffs but not for food or grocery shopping. Therefore, the threat of substitute is low. Key Strategic Issues Issue #1: Open too many new stores close to existing stores lead to new stores taking over the market shares from existing stores. Status Quo Wal- Mart depends on opens many new stores and expands into new market to increase the long-term sales and income growth. However, because of Walmarts large size of expansion, new stores are effects the sales on existing stores. For example, Walmart builds a store relatively close to an already existing store, the new store might take away customers from the old store thus decrease the sales in existing stores (Walmart, 2010). Evolutionary Change (Incremental Improvement) In order to solve this problem, Walmart expands their business segment into international market instead of domestic market. For example, Walmart opened 5 times number of stores in the international market in 2010 compared to domestic stores; most of stores are in Mexico, China, and Central America (Walmart, 2010). Revolutionary Change (Huge/Drastic Change) Walmart is also aggressively to open business segments in India if the country opens up the sector to foreign direct investment. India has retail market more than 1 billion; no doubt India is a huge opportunity for Walmart. However, retailers that carry multiple brands (like Walmart) are restricted to wholesale outlets in India. After Indias policy change, Walmart is allowed to expand superstores and generate revenue in India (Walmart, 2010). Specific tactics to implement the strategy Walmart needs to establish long-term relationship or joint venture with local retail company to get into the market in India. Although in 2006, Walmart announced that it had tied up with Bharti Enterprises Ltd. (Bharti) to get into the Indian retail sector. Bharti was a diversified company, and one of the biggest mobile telephone service providers in India (Walmart and the Indian Retail Sector, 2007). However, because of the government policy, the small retailers groups and the Left parties against allowing the company into India are all the barriers that Walmart has to face it. Issue #2: International competitors Status Quo In order to expand and improve the sales revenue for the economy recession especially in the domestic market, Walmart has been aggressively expand its business segment into international market. However, the local big retailers or small retailers groups are against Walmart to get into their market to take over the market shares because of its low price strategy (Walmart, 2010). Evolutionary Change (Incremental Improvement) Improve its supply chain, logistic and technology segment to lower its delivery and operation costs in order to compete with local big retailers such as Britains Tesco, Frances Carrefour, and Germanys Metro (Walmart, 2010). On the other hand, retail business segment is hard to create products differentiation, because commodity products are all the same for customers. The only way that gains the market shares for retail stores is not only low price but also quality of products. Therefore, Walmart should awareness of its quality of products to attract more customers even in the international market. Revolutionary Change (Huge/Drastic Change) Walmart should acquire and purchase the local retail companies in order to get into the international market. On the other hand, establish long-term relationship with local suppliers to have the win-win situation for their cooperation. Specific tactics to implement the strategy In the beginning of year 1, 2 and 3, Walmart should first focus on improving its supply chain, logistic and technology improvement in order to compete with local big retailers on its lower operation, delivery costs and high quality of products. For the long-term tactics, Walmart should deeply penetrate into the local market, understand different cultures and customers behaviors and then cooperate with local suppliers to establish long-term partnership. Personal assessment SWOT Analysis of myself in relation to the organization (What can I offer to the organization?). (S)trengths: International expansion (China): Walmart is extremely aggressively penetrated into the market in China. Also, no doubt that China has 1.3 billion populations which accounted for the most majority population in the world, creates a huge business opportunity for Walmart. Therefore, Walmart needs a manager who can speak fluently Mandarin and English, and really understand about Chinese culture and Chinese customers behavior. Hence, I can offer Walmart my knowledge to develop more opportunity in Chinas market in order to maximize the profits. (W)eaknesses: Lack of working experience: Even though I can speak fluently Mandarin and understand the Chinese culture and customers behavior; however, I still lack of working experiences. I do have some part time working experience such as working in starbucks, but do not have full time working experiences. (O)pportunities: Because of my professional knowledge (bachelor and master degree are both business management) are expertise on this field which can offer Walmart a professional employees or manager. Moreover, my family also has business in China, Hangchow, which makes me has understanding and interested about China. I can provide Walmart establish partnership with local suppliers and establish long-term relationship with them to compete with local retails competitors. (T)hreats: Many applicants around the world: There is still having many talented applicants around the world apply to get into this company. Some of the applicants have high education degree and business knowledge and also have ability to speak many different kinds of languages. Therefore, I am in extremely fierce competition. Not every business segment in Walmart is my expertise: I have weakened and lower advantages compared to local American because of the speaking and cultural differences. Furthermore, the company does business in many different retail formats, including supercenters, food and drugs, general merchandise stores, cash and carry stores, membership warehouse clubs, apparel stores, soft discount stores and restaurants. However, not every business segment in Walmart is in my field of expertise. Financial Analysis 2010 Annual Sales (Figure2-1) (Source: Hoovers, 2011, http://0subscriber.hoovers.com.leopac.ulv.edu/H/company360/competitiveLandscape.html?companyId=11600000000000) As you can see in Figure 2-1, this is 2010 annual sales for 4 main retail stores in the United States. They are including Walmart, Target, Costco Wholesale and Carrefour. Walmart has almost $400 billion sales in 2010. Compared to other competitors, annual sales for Walmart was much higher than other companies. Carrefour annual sale in 2010 was around $100 billion. Annual sales for Target and Costco were just around $50 billion in 2010. 2010 Net Profit Margin (Figure2-2) (Source: Hoovers, 2011, http://0subscriber.hoovers.com.leopac.ulv.edu/H/company360/competitiveLandscape.html?companyId=11600000000000) In Figure 2-2, net profit margin in 2010 for Walmart was 2.98%. Target was higher than Walmart which had 3.69% net profit margin in 2010. Other two competitors, Costco and Carrefour were both under 1.84% in net profit margin in 2010. Figure 2-3 (Source: Hoovers, 2011, http://0subscriber.hoovers.com.leopac.ulv.edu/H/company360/competitiveLandscape.html?companyId=11600000000000) The Return on Asset ratio is useful in measuring how efficiently a company uses its assets to generate profit. By definition, ROA is calculated by dividing the Net Income by the total asset of a company. Refer to Figure 2-3, ROA for Walmart from 2006 to 2010 are much higher than its competitors. Walmarts ROA were around 9% to 10% each year, compared to its competitors which were all much lower than Walmart. This basically means that Walmart utilizes its assets well enough to generate profit in comparison with their competitors. However, ROA in 2007 for Target is higher than Walmart, Target 9.29%, Walmart 9.05%. Targets major competitive advantage over Walmart lies in its customer base: the average household income for Target customers is about $50,000 a year, whereas the average yearly income for a Walmart customer is only $35,000 Figure 2-4 (Source: Hoovers, 2011, http://0subscriber.hoovers.com.leopac.ulv.edu/H/company360/competitiveLandscape.html?companyId=11600000000000) The return on Stockholders Equity (ROE) ratio measures the percentage of profit earned on stockholders investment in the company. In other words, return on equity  measures a corporations profitability  by revealing how much  profit a company generates  with the money shareholders have invested.  Ãƒâ€šÃ‚   In Figure 2-4, ROE for Walmart were around 20% from year 2006 to 2010, compared to other competitors which are higher than others. Figure 2-5 (Source: Hoovers, 2011, http://0subscriber.hoovers.com.leopac.ulv.edu/H/company360/competitiveLandscape.html?companyId=11600000000000) Net profit Margin is an indication of how effective a company at cost control