Case Study of Best Buys Inc Expansion

Case Study of Best Buys Inc Expansion Best Buys, Inc has emerged as a special electronic retailer in US and other areas operating from Richfield, Minnesota. The main strategy for international expansion used by BBI is MA with dual branding by creation of competition between acquired stores and Best Buys. The case study shows that the strategy has been successful and workable in western world. Within reduction of trade barriers by China and allowing 100% FDI in retail segment, BBI is trying to follow same strategy in China. But Chinese market being totally different from the Western context, BBI has faced challenge to cut across the dual branding strategy. The report highlights the main strategic issues raised followed by recommendations. PESTEL Framework The PESTEL framework is devised to understand the strategic issues underpinning the business from external sources (Johnson, Scholes Whittington, 2008) Figure A-1: PESTEL Analysis PEST Factor Key Points Implications for BBI POLITICAL (Opportunity for BBI to expand in different Chinese market.) Liberalization in Chinese retail market from 2004 Reduction in entry barriers like compulsion of domestic partners. Big market for imported product. (www.Businessinasia.com) Increase in competition from stronger global players of retail business. Growing knowledgeable domestic retail players. ECONOMICAL (Constrains from free directive growth in China) Shift to market oriented economy. Relatively high domestic savings rate. Uneven economic development among different states of nation. Growth in manufacturing sector. (CIA, 2010) MOST IMPORTANT Need for appropriate market segmentation to target specific people and Chinese province. Require to restructure its cost base to suit by sourcing its materials from China to satisfy the cost conscious needs of small towns and cities. SOCIAL (Opportunity for BBI for establishing its brand in strong position on customer mind.) Increase in middle class people. Rising income of newly educated class. Focused on functional aspects of products. (CIA, 2010) Potential opportunity of making profits by targeting young educated individuals in metro cities. TECHNOLOGICAL (Threat for BBI due to unprotected IPR.) No laws on Intellectual property rights (IPR). Improved technological due to spillover effect from other MNCs. ENVIRONMENTAL LEGAL (Opportunity for BBI to keep away potential entrants.) High legalities for land acquisition. Procedural delays to grant permission. Being first international company in retail segment gives advantage to earn profits and create efficiency (Kotler, 1997). 3.0 PORTER FIVE FORCES: By analyzing the competitive nature of Chinese retail market, market position of BBI can be assessed to formulate strategy to neutralize these forces (Porter, 1985; Lynch, 2007). Force Strength and Implication for BBI Competitive Rivalry BBI caters only to CE retailing. Consolidation of retail segment has increased challenge. Emerging established domestic players. HIGH Innovative marketing is the key strength for BBI. Well known for its customer centricity. Powers of Suppliers Increasing domestic electronics suppliers. Global suppliers with high bargaining power. LOW BBI presence established with sourcing office developed good relationship with local suppliers. Power of Buyers Low brand recognition while buying product. Consumers preference for national brands. Products bought on basis of price and functionality. MEDIUM Although the power of buyers is medium BBI should make sure that it should reach its distributed customer through its distribution channel due to presence of vast regional difference. Threats for New Entrants Highly fragmented Chinese retail market. Entry of global retail players. Newly emerging domestic players. HIGH Concentrate to differentiation from others. Focus on targeting both segments of customers. 4.0 SWOT analysis: Factors Implication for BBI Strength Presence in China for sourcing electronic products since 2003. Innovative marketing skills. Established brand in US and surrounding regions. Developing and maintain relationship with established suppliers. Personal relationship is basis of business in China. Weakness Being a foreign MNC. Lack of knowledge for operating in Chinese customer segments. Lack of quality human resources. Acquisition of Five Star has reduced the foreign liability and increased local knowledge. Retail training of International Standards for employees. Opportunity Highly fragmented market. Increased demand for branded products in Tier 1 cities. Income growth in Tier 2 cities. Establish retail chain to create brand awareness. Need for creation of robust distribution network. Threats Rampant price wars. Entering global players. High domestic savings rate. Consumers differing away to purchase on credit terms. Cost focused strategy for price sensitive segment and focused differentiation branded products in Tier 1 segments (Johnson et. al., 2007) 5.0 Key Strategic Issues: Analyzing internal and external factors various key findings have been listed below with their strategic implication on BBI. Key strategic findings Analysis tool Key findings Strategic Implications on BBI PESTEL Analysis Huge differences in living standards. Increase in disposal income. High savings rate among middle income group. Establish stores to cater both segments to maintain both requirements: Functionality for cost focused and Differentiation for Tier 1 segment. PORTER FIVE FORCES Strong domestic competitors. Global competitors entering the market. Leveraging on first mover advantage, establish relationship with suppliers and buyers. SWOT Lack of local knowledge of different Chinese regions. Domestic retailers driving on price wars. Consumers buying less on credits. MA can fulfill local knowledge and developing relationship with established with local suppliers can cut cost low. 6.0 Strategy Formulation: TOWS Matrix: Different strategic options are formulated using TOWS matrix to address the strategic issues highlighted in analysis. INTERNAL FACTORS IN CHINA Strengths Weakness Established brand name Best Buys. Relationship with Chinese suppliers. International player. Well versed with new innovative technology. Acquisition of Five Star (75% Share). Experience in retail segment. Small number of BBI stores. Lack of retail skilled employees. Lack of local knowledge. Foreign liability. EXTERNAL FACTORS Opportunities Competitors lack of International retail standards and technology. Emerging markets Increasing young educated preferring branded goods. SO Strategic options Dual brand strategy Five star for cost focused and Best Buys for focused differentiation. Influencing young customer segment in Tier 1 market. WO Strategic options Increase on developing retail skilled employees. Increasing promotional packages. Reducing cost using technology. Threats Global economic crises. Legal regulations. Lower cost competition. High savings rate. Low credit purchase. ST Strategic options Developing brand recognition. MA with domestic retailers. Leveraging on suppliers potential. WT Strategic options Good product offerings Zero percent interest rate on EMI credit purchase. (Source: Johnson et al., 2008, p367) 7.0 Recommendation: A detail explanation and classification of strategies on basis of Ansoffs Matrix is detailed in appendix A. A primary analysis has been carried out using number of performance indicators to eliminate options which may not be suitable for BBI, leaving the 3 most appropriated strategies which can be followed. A combined approach of incremental market development and penetration followed simultaneously. First Stage: Create brand awareness and recognition among Chinese customers. Influence young educated customer segment. Second Stage: Use of dual branding strategy for two different segments Cost focused for customers believing in functionality and cost; Focused differentiation for brand conscious customers.

Classroom Observation Critique Essay

The goal of using think aloud in reading a text is to help students develop the ability to monitor their reading comprehension and use strategies to facilitate understanding. Studies show that students who verbalize their thoughts while reading score significantly higher on comprehension tests. The Teacher The teacher has a pleasing personality, which I think the reason that draws pupils’ eyes to the teacher’s face and listen to her voice. For the whole duration of my teaching profession, I have observed that the teacher’s appearance greatly affects students’ attention. The more beautiful the teacher is, the more attentive the students are, especially at the opening of classes. This led me to recall my elementary and high school years when I liked more my pretty teachers than those that are not so pretty. As a teacher right now, this can be very subjective and should not to be the sole basis in assessing teacher performance. However, every teacher should strive to look at their best every day. The teacher is confident and shows mastery of the subject matter. I believe this is very important because it is where we build trust from our students. And because the students trust you, they are more than willing to open themselves and ask you everything they need to know. The teacher answers the students’ questions in a simple and understandable way. In this manner, there is total understanding on the part of the students. Every teacher should make sure that all questions and clarifications raised by the students must be thoroughly answered and cleared. The teacher maintains discipline and control of the class. I believe this is one strong aspect of classroom management. At the beginning of the class, the teacher sets the mood where she is enthusiastic and maintains a warm and friendly atmosphere conducive to learning. She also avoids making embarrassing remarks about the student’s ideas or actions. In return, the students respect and admire her. She successfully establishes rapport with her students. The Teaching Procedure Introduction/Before Reading The teacher starts with a class discussion: What strategies do good readers use to make meaning of the text? In a class size of 20-30, each student is given the chance to speak of his/her thoughts. This follows that smaller class size is more well-attended to by the teacher compared with 40-50 students in a class, where, only a fraction of the students speak up because it would take a lot of time and the teacher is obliged to proceed to the next activity. After which, the teacher presents the term â€Å"think aloud† to the students and have them brainstorm and report on how it might be used in reading. The groups of four (4) actually make the correct guesses on how they understand the term given. Then, the teacher distributes the bookmarks with different strategies of thinking aloud written on it. Later, strips of paper with definitions of the strategies are distributed for matchmaking. Before the answers are revealed, the students are tasked to what they think of the strategies. In this kind of activity, the students get to compare their reports/answers with the list given and survey themselves how often they use these active reading strategies before. During Reading Students receive three post it notes. They label them: BEFORE READING, DURING READING and AFTER READING. The use of colorful post it notes in this activity keeps the flow of active participation. Colors, especially the bright ones, add life to our classroom activities. This is because colors stimulate our creative expression, lending excitement and interest. The use of small things like the bookmarks and post its, enhances students’ manipulative tendencies. They are also readily available and very handy. Teachers should keep a stack of these. As the teacher models think aloud, students write down on their post it notes what strategies the reader uses before reading, during reading, and after reading. This involves the teacher thinking out loud when working through the problems in the text and demonstrating processes for the students. However, the attention of students is very important. They have to listen and observe well. Then, one after another, the students read the remaining paragraphs in the class and model the kind of think aloud strategy he/she chooses. This is the part where students are provided with enough practice, collaboration, repetition and hands on activity until the students learn on their own. The above activities, as a whole, give more teacher involvement at first; then later, there is less teacher involvement, that is, he/she should only guide the students while they have total responsibility in attaining the required skill. After Reading The class conducts 3-2-1 activity—3 things learned, 2 things liked about the lesson, 1 question one still have. Again, each one has the chance to speak in front. Questions and interpretations are clarified, where the students remember what they have individually created in their minds from the text. This serves the primary purpose of post reading activity which is to provide the students the chance to ask questions concerning their assignments and extension of lesson. Enrichment Activity The students are grouped into four and read a copy of a poem that is unfamiliar to each group while using think aloud strategies. â€Å"The future belongs to those who believe in the beauty of their dreams.† – Eleanor Roosevelt

Infant Learning Brain Development Essay - 1098 Words

INFANT LEARNING Infant learning and brain development is fragile and contingent upon numerous intrinsic and extrinsic factors. The most critical time frame for infant brain development is from the second trimester to the first three months of life (Marshall, 2011). During this time, neural pathways are forming, areas of the brain are maturing, and brain development is rapid. From infancy until the age of 3 years, neural pathways are still being formed in response to stimulation and for this reason, it is extremely important for caregivers and parents to be aware of the many factors that can influence brain development in infants (Marshall, 2011). Popular Psychology Common beliefs regarding infant learning tend to focus on the issue of†¦show more content†¦Therefore, the rapidly developing cognitive functions of infants necessitate even more rapid and consistent sleep cycles to foster their learning. Sleep plays a role in the memory consolidation process when the baby is awake. It has not yet been determined if infants can learn while asleep (Tarullo, Balsam Fifer, 2011). Environmental Factors Among the many environmental factors that can affect infant learning, prenatal cigarette exposure has proven to be a topic of interest in behavioral teratology due to the large number of health effects it is associated with. Some of the health effects of prenatal cigarette exposure include: lower birth weight, smaller head circumference, lower IQ, attention dysfunction, hyperactivity and other conduct problems, as well as school failure (Mezzacappa, E., 2011, p. 881-891). There are some human studies that investigate the cognitive deficits related to prenatal cigarette exposure which include: auditory, visual attention, and working memory issues. Social Development Gazing plays a central role in the social and cognitive development of a child. It is documented that from the age of 3 months, a child will begin to develop perceptual learning. An example of this hypothesis was tested with an actor holding a stuffed kitten in front a 1 year old. The 1 year old stared at the kitten longer, therefore the infant’s desire for what the actor was holding caused the infant to interpret the actor’s behavior asShow MoreRelatedParental Influence On Children s Cognitive Development1260 Words   |  6 PagesAbstract: The following literature review contains different articles that support how relevant is parental influence on their children’s cognitive development. Since a child is born, parents play such an important role in their children’s cognitive development, that failing at doing the proper steps of assuring a correct development in their children affects their children’s academic success in life. 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According to the U.S. Department of Education, â€Å"Children develop much of their capacity for learning in the first three years of life, when their brains grow to 90 percent of their eventual adult weight† (Start Early, Finish Strong). Seeing that the most substantial brain development occurs during the first three years of life, infants and toddlers should be frequently rea d aloud toRead MoreArticle Review : School Readiness For Infants And Toddlers1076 Words   |  5 PagesReadiness for Infants and Toddlers? Really? Yes, Really!† (Petersen, 2012) demonstrated an interesting point of view to consider for upcoming early childhood educators and teachers. Sandra Petersen, MA a writer and a teacher in the early childhood field have coauthored three early childhood textbooks. She focuses mainly on the infants and toddlers and expresses the importance of having a strong developing brain. With that in mind if children were to have a strong start in their development the brain thenRead MoreEssay Infant Language Development 1662 Words   |  7 Pagescan be inferred through studying linguistic development in children and the cognitive and communicative abilities of primates as discussed by Bridgeman (2003). This essay illustrates the skills infants have that will eventually help them to acquire language. The topics covered are firstly, the biological as pects, the contribution of the human brain to language development? Secondly, key theories of language development will be considered. Is the development innate? Is there a critical period? ThirdlyRead MoreInfancy and Early Childhood Development Essay1157 Words   |  5 PagesInfancy and Early Childhood Development Samantha Trudeau PSY/375 June 27, 2011 Heather Harrison Infancy and Early Childhood Development An infant’s brain is something quite similar to a blank video tape. 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Among them, the idea of universal grammar in which is usually credited to linguist Noam Chomsky, remains the most notable and controversial theory over time. He introduced and developed the theory from 1950s toRead MoreThe subtlety of language acquisition has been the most fundamental question in the study of1500 Words   |  6 PagesThe subtlety of language acquisition has been the most fundamental question in the study of linguistics and human development. From Bow-wow Theory to Yo-He-Ho Theory, the major theories on language origins and learnability emerged at mid-20th century and has been heavily debated ever since. Among them, the idea of universal grammar in which is usually credited to linguist Noam Chomsky, remains the most notable and controversial theory over time. He introduced and developed the t heory from 1950s

Essay Lester Little, Anger in Monastic Cursing - 1215 Words

In Lester Littles, Anger in Monastic Curses, we see how, through liturgical cursing, monks can express a form of anger that is acceptable and appropriate for monastic culture. This form of anger does not undermine monks religious status in the feuding and vengeful culture of this time. Liturgical cursing is used to formulate emotions of anger in a way that is appropriate for monastic culture to participate in. In Aelred of Rievaulxs, Spiritual Friendship, we see a similar scenario in which Aelred seeks to find an appropriate form of friendship for monks to engage in, apart from the not virtuous version that aristocratic culture practices. Both forms of anger and friendship seek to not undermine monastic culture and status. While†¦show more content†¦While Aelred does believe that friendship does exist in monastic culture, as well as all cultures, he seeks to find an appropriate version of friendship. Aelred explains, Now the spiritual, which we call true friendship, is desir ed not with an eye to any worldly profit or for any extraneous reason, but for its own natural worth and for the emotion of the human heart, so that its fruit and reward is nothing but itself(Aelred, 64). In this passage, Aelred explains how spiritual friendship is the purest and only acceptable form of friendship for monastic culture. He describes that friendship should be for no other purpose than for the use of human connection, expecting nothing material in return from a friend. When introducing this concept, Aelred seeks to provide a new type of friendship, for monks, that is separate from the aristocratic, carnal and worldly, friendships that are not virtuous and thus unacceptable in monastic culture. In Lester Littles, Anger in Monastic Curses, Little seeks to form an appropriate form of anger in monastic culture. Like Aelred, Little rejects anger in its current form practiced in medieval culture as being appropriate for monks. In medieval culture, feuding and vengeance is th e acceptable way for people to express anger, however, for monks, this is not virtuous. Little explains how liturgical cursing allows for monks to express anger in a way that does not undermine their religious status. Liturgical cursing, in simplest form,

Atomic Weapons And The Atomic Bomb - 1709 Words

On August 6th, 1945 Akihiro Takahashi, a 14-year old boy, never made it to school. Instead, he was engulfed in a â€Å"tremendous heat† and left on the side of a Hiroshima street to watch his own flesh melt off his body (Takahashi). Later that week, despite surviving the dropping of the atomic bomb on her city, Eiko Taoka would watch helplessly as her infant son died of radiation poisoning--something she blames herself for to this day (Taoka). There are thousands of stories like these, and each one describes the incredible destructive power behind atomic weapons and the deep wounds they leave behind. Even now, seventy years after that fateful day, writers and filmmakers utilize the terror induced by the thought of atomic warfare in their†¦show more content†¦This move was largely due to the hardships experienced on American soil during the Great Depression and its losses in World War I (American Isolationism). However on December 7th, 1941, the isolationist stance hel d by the United States was shattered when the Japanese attacked Pearl Harbor and war was officially declared on Japan, Germany, and Italy (American Isolationism). This war would go on for another four years, taking with it close to 50 million lives and devastating not only families, but entire nations (By The Numbers). Due to the incredible loss of life, the United States understood that ending the war, especially the ongoing war in the pacific, was of paramount importance. Unfortunately for the Japanese, it would be its country’s own sense of pride and nationalism that brought its undoing. Despite being overpowered, without resources, and lacking a functioning navy, the Japanese government refused to surrender to the United States (Powers). Many have speculated that a contributing factor may have been Japan’s ancient belief in â€Å"bushido†--an old Samurai idea that â€Å"the supreme sacrifice of life† was the â€Å"purest of accomplishments† (Po wers). This suggested that the Japanese army was willing to fight until they had exhausted all their resources, all their lives, and left their country in ruin. While he knew that continuing the

Is the Nfl Too Dangerous Free Essays

IS THE NFL TOO DANGEROUS? BY ALEXANDER COLON Football is one of America’s most beloved sports and with the super bowl coming up; fans of the sport are getting ready for the big game. I am an avid football fan myself and love playing it as much I enjoy watching it. What I have come to notice recently, is how the lives of football players are drastically changed when they are off the field. We will write a custom essay sample on Is the Nfl Too Dangerous or any similar topic only for you Order Now Football is a full contact sport, if you’re not prepared or unprotected at any given time during a play, you could end up limping off the field nursing injuries or even leave the game on a stretcher. Football players risk physical injuries every time they set foot on the field, and everyone is aware of that. What most people don’t know is that after players football careers are done and over, they face more problems than just a sore body every morning. Some players even play through these painful times in their career without even mentioning it, because they fear they will be dropped from the roster. In recent research it has been found that mental trauma is occurring in football players leaving them mentally unstable or damaged later in life. This brings about the argument of football being too dangerous or a fair contact sport that all precautions for injuries are being tended to. When a fan watches a football game they don’t think about what the players go through off the field but only of the performance they are putting on the field. It is believed that every football player knows the risks of playing and has the knowledge that they might injure themselves physically. What a lot of the players don’t know is that they might damage their brains and develop things later in life like CTE. Chronic traumatic encephalopathy (CTE) has common symptoms like sudden memory loss, paranoia, and depression during middle age. It is also known to cause dementia pugilistica, which was what a lot of boxers fell victim to but now more football players are being linked to it. NFL players get paid millions to do their job, something most people would kill for, and some people think that the reward is worth the risk. NFL players truly do put their lives on the line when they go out to play but the fame and money is compensation enough for the risks they take in some people’s opinions. In my opinion if you’re playing in the NFL then you are getting paid more than enough for what you’re risking. Even if their brains are messed up they have enough money to live comfortably for the rest of their lives. What the NFL should do is make players sign a waiver informing them of the possibilities that they might contract a disease from getting hit to many times and hopefully this would make them more comfortable with the repercussions. How to cite Is the Nfl Too Dangerous, Essay examples

Implementation of Responsible Business Strategy

Question: Discuss about the Implementation of Responsible Business Strategy. Answer: Introduction: Mr. Harburn was the director of Harburn Group Australia Pty (Harburn Group). The company dealt with financial, mortgage broking and share broking services. The sole shareholder of the company was Harburn Investment Pty Ltd. In the year 2007, Mr. Harburn sold the financial service client list of the company to reduce the workload. In July 2007, Mr. Harburn decided to buy a boat for his wife, Ms Chivers. On 19th of July 2007, Ms Chivers entered into a contract to purchase the boat, which was worth $385,219.35. The Harburn Group paid the purchase price of the boat in four installments for the entire months of July and August 2007. On 5 August 2007, Ms Chivers became the sole registered owner of the boat. In 2008, Mr. Harburn sublet the Harburn business and shifted to another country and in 2011; the Harburn Group went into liquidation. The liquidators brought a legal action against Mr. Harburn and his wife on the grounds of violating his directorial duties under sections 181 and 182 of the Corporations Act 2001 Act and irrational director-oriented transactions. Is Mr. Harburn liable for the breach of sections 181 and 182 of the Corporations Act 2001? Is Mr. Harburn liable for exercising unreasonable director-oriented transactions? A transaction is said to be director-related transaction if: Any transaction of payment is made by the company (S 588 FDA (1) (a)) (Murray 2014). Director of the company makes the payment (S 588 FDA (1) (b)) (Klettner, Clarke and Boersma 2014) The payment is made to a close relative of the Director of the company (S 588 FDA (1) (b)) (Knepper et al 2015). A reasonable person would not have entered into the transaction in similar situation (S 588 FDA (1) (c)) According to the section 181 of the Corporation Act 2001, a director of a company must discharge the directorial duties with good faith (Bird and Gilligan 2016). The transactions must be in the best interest of the company and for a valid purpose. This section is subject to civil penalty under section 1317 E of the Act (Bruce 2013). According to section 182 of the Corporations Act 2001, the Directors, employees and other officers must not use their positions for their own advantage or advantage of some other person (Dhaliwal et al. 2014). The directors, employees and other officers must not take undue advantage of their position or cause damage to the company (Gerner-Beuerle, Paech and Schuster 2013). Section 588 FDA (1) (c) states that a reasonable person in a company would not enter into any such transactions that is detrimental to the company (Hedges et al 2016). It is the primary duty of the Directors, employees and other officers of the company to act in the best interest of the company; to enter into transactions that are beneficial to the company (Fleischer 2015). According to section 588 FDA (3)(a), a transaction is said to be unreasonable director-related transactions irrespective of the fact that a creditor is or is not a party to the transaction of the company (Hayne 2014). In Kalls Enterprises Pty Ltd v Baloglow, (2007), where the transaction involves risk, the interest of the creditors must be taken into consideration. The court emphasized on the fact whether the payments made by the company for the boat were unreasonable director-related transactions or not under section 588 FDA of the act. The section was considered by the court as it mentions the factor that amounts to unreasonable director-related transactions. In his defense, the respondents claimed that in order to determine whether a transaction is a voidable issue, on part of the directors of a company, the particular transaction and the parties to the same must be identified under section 588 FDA (1) (a) and (b) of the Act. Under part (a) of the Act, the company must be a party to the transaction and under part (b) of the Act, the other party must be the person to whom the payment is made by the company (Keay 2014). Accordingly, the first respondent Mr. Harburn purchased the boat for the second respondent Ms. Chivers. Although both the respondents entered into the contract, only the second respondent signed the contract and became the sole registered owner of the boat. The reason that the payments were made by the company is to exempt the second respondent from the liability to pay the price of the boat. Therefore, Mr. Harburn was not a party to the particular transaction. The contention was rejected by the court on the ground that the since the company made the payments to exempt the second respondent from paying the purchase price, it is payment made to a close relative of the director on his behalf which amounts to unreasonable director- related transactions. Moreover, the transaction instead of being beneficial was more detrimental to the financial status of the company. In fact, the second respondent was neither a director nor an employee; or a creditor or a shareholder of the Harburn Group. Yet she was in a more advantageous state than the company was as she was discharged from her liability to make payments for the boat at the cost of the company. She was Mr. Harburn tried to convince the court that the payments made for the boat were made from his dividends. The court rejected his contention on the ground that no sufficient evidence was adduced to support the fact that any such dividend was paid. The respondent, Mr. Harburn, claimed that there was no obligation to consider the best interest of the creditors just because of the financial status of the company. He also claimed that his own interest is the same as the interest of the company. This contention was rejected as well, on the ground that there was no sufficient evidence to prove the fact that the sole shareholder of the company had given his consent to the payment of the purchased boat. The court was of the opinion that the respondents involvement and awareness about the transaction also did not imply the consent of the shareholder. To this, the court stated that the administrators of a company responsible for the management must not use the property of the company as its own. Section 182 of the Act lay down that directors of a company must not take undue advantage of their position for their own benefit or for the benefit of any other people. The court observed that the payments made for the boat was a lump sum amount and the amount was drawn out of the company funds. Moreover, the sole shareholder of the company did not give his consent to the payment for the purchased boat. The court observed that Mr. Harburn has committed the breach of his directorial duty to discharge his duties and exercise his powers for a valid and proper purpose under section 181(1) (b) of the Act. At the time of purchasing the boat, Mr. Harburn was very well aware of the commercial and financial conditions of the company. Despite his knowledge about the circumstances, he made such lump sum payment out of the company fund. This was clearly a breach of his directorial duty to act in good faith and in the best interest of the company as stated under section 181 (1) (a) of the Corporations Act, 2001. Furthermore, Mr. Harburn has taken advantage of his position for his wife, Ms. Chivers that caused damage to the financial and commercial status of the company, thus, infringing the right to act in a way that is not detrimental to the company mentioned under section 182 of the Act. Mr. Harburn also failed to adduce evidence to support his contention regarding the shareholders assent to the payment made by the company for the purchased boat. After perusing the evidences adduced, the court ordered the second respondent, Ms. Chivers to pay a sum of $385,219.35 along with the interest amount, under section 588 FF. The section deals with the unreasonable director-related transactions. The interest amount shall be calculated from the date of the liquidators demand until the date of the Judgment. The court ordered Mr. Harburn to pay a sum of $385,219.35 in the form of compensation to the company. In addition to that amount, the court ordered him to pay the interest amount as per section 1317 H as a penalty for infringing the directorial duties mentioned under section 181 and 182 of the Corporations Act, 2001. The evaluation of the compensation and the interest amount shall be from the date the payments were made out of the company funds until the date of judgment. The liquidators of the company adduced evidence regarding the liabilities and incomes of the company. The court was of the opinion that the time when the company was making payments for the purchased boat, its financial circumstances were uncertain. The commercial circumstances were so uncertain that it could easily give rise to the question of insolvency of the company. In the case of Slaven v Menegazzo (2009), at the time of transaction the financial condition of the company was not determinable. Mr. Harburn tried to convince the court that he was not obliged to consider the interest of the creditors. The court rejected his contention based on the case of Kinsela v Rusell Kinsela Pty Ltd that stated where the question of insolvency is involved the interests of the creditors must be taken into consideration (Tan, L., 2013). The liquidators alleged Mr. Harburn on the grounds of unreasonable Director-related transactions. The factors that determine the unreasonable director-related transactions are mentioned under S 588 FDA. In Buzzle Operations Pty ltd v Apple Computer Australia Pty Ltd (2011) and re employ Pty ltd (2013), it has been stated that voidable transactions occur when a Director makes any payment from the company fund in favor of someone who is a close relative of the director. In New Cap Reinsurance corp ltd v renaissance reinsurance Pty ltd, other officers of the company received no benefit because of the voidable transactions. Mr. Harburn was alleged to have infringed his statutory duties as the director of the company under sections 181 and 182 of the Corporations act 2001. The company suffered financial loss due to the lump sum payments it had to make for the purchased boat (McCarthy 2013). The precedent followed regarding this allegation was the case of Wardley Australia Ltd v The state of Western Australia (1992) wherein the company suffered significant loss on the date of payment. Reference List Bird, H. and Gilligan, G., 2016. Deterring corporate wrongdoing: Penalties, financial services misconduct and the Corporations Act 2001 (Cth).COMPANY AND SECURITIES LAW JOURNAL,34(5), pp.332-359. Bruce, M., 2013.Rights and duties of directors. Bloomsbury Publishing. Dhaliwal, D., Li, O.Z., Tsang, A. and Yang, Y.G., 2014. 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