This would explain the difference in gross profit and sales revenue. 2. The economy seems to be a concern as; people are not flocking to the best of the best any longer and may be searching for alternative products. In tough times even a strong market share can erode with the search for comparable products at a lessor price. It appears that this very issue may be vexing Elite.
Low customer satisfaction is another internal weakness that is crucial to the success of CanGo. Another internal weakness includes severe communication issues within CanGo’s management and employees. External threats such as competition, plays a big role in the future success of CanGo. Your organizations internal organizational strengths such as online growth, and cost advantage offers great potential if properly utilized. Another external threat includes economic slowdown.
Businesses that take a substantial amount of time to make of sell a product will need a higher level of working capital. It is important for businesses to work out the right level of working capital you will need. If the working capital is too high, the business has surplus funds which are not earning a return; and low may indicate that the business is facing financial difficulties. From the scenario, analyze TFC’s cash budget to determine key methods in which the budget may be optimized (e.g., by renegotiating terms and conditions on some of its payables, etc.). If you believe that there is room for improvement, recommend key strategies for TFC to use in order to optimize its cash budget.
In short-term relationships we tend to trade in things, such as swapping or borrowing items or buying drinks, in long term relationships the trade is more emotional. Adams (1963) noted that "the presence of inequity will motivate a person to achieve equity or reduce inequity, and the strength of motivation to do so will vary directly with the amount of inequity." The Equity theory came about as a result of previous studies in disruptive justice and concerns that for a relationship to be successful then there must be some balance, which was summarised by Walster, Walster and Berscheid (1978) in their four principle approach. Generally people will try to get the most out of a relationship while trying to avoid any unpleasant experiences. Although we all like to get what we want
Without prior market penetration of an organization’s competetitors, the usefulness and effectiveness of properly marketing a new product or service can be quite burdensome. This is due to the fact that an organization runs a major risk of constantly striving to maintain its customer base, as the new type of product or service has not yet been introduced into the maintstream. Additionally, pricing may be an issue based upon: Should pricing be very low to attract new buyers?, or Should pricing be set high to offset initial entry into a new marketplace? These are the questions that an organization must face, but for the most part, being a
E. Usually when operations get close to capacity limits, costs go up. Bottlenecks are more common, there may be congestion in the plant, and production could slow down. These costs need to be considered when setting a price for a special order that will move an organization out of its normal operating range (relevant range). In addition, managers need to think about whether the business will lose some customers because demand cannot be filled. ------------------------------------------------- 4.42 Make or Buy, Qualitative Factors - The Vernom Corporation A.
This increases the inherent risk: * There could be problems like slow moving inventory for Target, Kmart or Officeworks * Also consumer preferences and tastes change frequently so this also increases the risk for slow moving stock * There are a lot of cash dealings. This increases sensitivity of theft, fraud and inventory valuation, the level of account balance might be considered inherently risky. Cash payments will increase risk associated with theft or fraud because of the fact that cash is more easily diverted than customers check or credit card payment. * Foreign exchange rates fluctuations: * Trading goods in foreign currency increases inherent risk, because foreign currency transactions may not be recorded accurately due to purchases and export to overseas particularly in coal business. In the first half of the year earnings for the Resources division have increased, due to higher export coal prices.
M4–Analyse the reasons why costs need to be controlled to budget In this assignment I will analyse the reasons why costs need to be controlled to budge. If costs are not measured by Debenhams then their profits will be badly affected therefore budgeting is one process to regulate costs as it gives the organisation an approximation or a target on what their cost and revenue should be. A business has to budget and control expenditure in order to see what has been received and paid out, otherwise unrestrained spending could occur and decline could happen. One of the difficulties that could occur if costs are not controlled to budget is: high fixed cost per item which decreases businesses profit and ability to compete. Debenhams are very effective at controlling its costs to budget as the results were good for sales revenue throughout 2013.
Scarcity is limitedness, which leads to choice making whereby one good or service is chosen which leads to opportunity cost. The alternative foregone is opportunity cost. Opportunity cost is whet you forego or give up one thing that you want to get something else that you believe you want even more. What role do they play in the making of managerial decisions? Scarcity cost: In making managerial decisions, we must first consider that our resources are limited.
• A differentiator must control its cost structure to ensure the price of its products does not exceed the price customers are willing to pay for them • When differentiation stems from the design or physical features of the product, differentiators are at great risk of being imitated ▫ Example? • When differentiation stems from superior service or reliability, or from any intangible source a company is much more secure. ▫ Example?