Air Canada shares hit their highest point in stock in more than a year on last Friday. This is achieved by their cost cutting plan and a strong load factor.

As stated by the carrier in Air Canada, the cost per available mile decrease by between 3 and 3.5 percent compare with the cost in last year. They decreased costs in many aspects including food, beverages, distributions and supply. Furthermore, the revenue generated by the Pacific market contributed a lot to stronger the highest point of their stock. Air Canada has expanded their international market by increasing the number of international flights and flaying routes. The airline’s system load factor which used to measure the average filled seats across the flights also decreased compare with last year.

The good out come generated form reaching highest stock value leaded by the costs cutting is not only internal but also external. For internal benefit, the cost saving lead bigger difference between revenue and cost, in other words, profit is increased. However, the customer’s satisfaction might decrease. For the external gain is that both CIBC and BMO increased their target share price of Air Canada. 

Resources:http://www.bnn.ca/News/2013/10/4/Air-Canada-shares-rally-on-lower-costs-higher-loads.aspx

Ford Motor Company (also known as Ford) is an American multinational automaker, sells automobiles and commercial vehicles under the Ford brand and luxury cars under the Lincoln brand. According to the company executives on Monday, Ford is overhauling its production methods in order to reduce the downtime during production and to increase the flexibility during the production.

According to Ford, the global expansion began in 2011.The new aims, if things happen as Ford expected, by 2015 there will be new assembly plants in China and India, additionally with new power train plants in Brazil, China, India and Russia. By 2017, the number of global vehicle platforms should be reduced to nine from 15. For maximizing the efficiency, every plant will be supposed to produce average four different vehicles. Additionally, as Ford stated, by 2017 90 percent of their factories in different countries will boost production run time by more than 30 percent and production will run three shifts a day.

The international location by Ford gives more opportunities to access the resources, lower transportation costs and collect local market information such as changes in consumer tastes. Combined with more flexible production methods which allow quick respond to changing consumer tastes, the valuable market information will help to generate more profits for Ford. Though the costs of building new plants and changing production methods are high, the benefit will be seen in the long run.

Burger King, based in Miami, is the second-largest fast food hamburger chain in the world with locations in 80 countries. Recently, Burger King launched their new product, fries with lower calories and some fat. Compare with Burger King’s biggest competitor McDonald’s fries, the new fries has 40% less fat and 30% fewer calories. By working with the one third of all frozen French fries supplier in the world, the new fries were developed. In addition, according to Burger King, McCain can’t sell the fries to other fast-food clients.

This new launched fries may lead a huge increase in Burger King’s profits. The reason is that for fast food companies, selling fries generates huge profits since there is usually a huge difference between the cost of purchasing frozen fries and the price of fries. The increasing sales of the new launched fries make this outcome better. Moreover, the new fries help Burger King to attract more customers. They deal with the growing concern of obesity and health issue. Burger King also names the new launched fries differently in different regions, for example, in English-speaking Canada, the fries are called Gratifries while in Quebec, they are called Magnifrites. As Burger King North America president Alex Macedo explained, using different name because they tested better with consumers. These all increase competiveness of Burger King when compete with its major competitor McDonald.

Link:http://www.bnn.ca/News/2013/10/4/Burger-King-tries-to-fatten-margins-with-skinny-fries.aspx