Managers need to be careful of overpricing or under-pricing goods due to allocation of costs to each product. As was shown with the Wilkerson case on further analysis of costs using the activity based costing method the company had been under-pricing some goods while over pricing others. This was affecting their profits and their ability to make sound business decisions on the pricing of products to meet market demands. 6. Activity based costing is more complex to use however used correctly should improve the accuracy of allocating indirect costs to cost objects.
SIM - Napoli Case Analysis – Napoli is facing various challenges and a lot come from cultural differences between the different acting differences. In this analysis I want to focus on the strategic challenges he is facing. The main problem I see that he is trying to force a business plan that worked well in Europe with the Swatch project onto an Indian project. Further, his Indian managers had submitted twice orders for non-standardized products whiles this was against all of the Napoli’s strategy to only sell standardized products. Further, Schindler’s Indian business faced cost pressures due to sharply increased import tariffs that were not calculated for and a rise in transfer prices from the goods imported from European subsidiary.
The manufacturing cost for LL Beans and the price at which the item is sold are relevant to the decision of how many units of that item to stock because with this the profit margin of each item is calculated giving an optimal balance of how much to of the item to stock. Question 3: What information should Scott Sklar has available to help him arrive at a demand forecast for a particular style of men’s shirt that is a new catalog item? Scott sklar needs the forecasted demand and the actual demand of the past new items of LL beans because he does not have access to past demand of the item. Moreover because not enough information is available, Scott Sklar can use the trends of similar products that competitors offer. With these collected information Sklar can analyze and find a trend in particular items.
Buyer Power Market size Size and value of each order Differences between competitors Price sensitivity Ability to substitute Cost of changing Buyer Power Market size Size and value of each order Differences between competitors Price sensitivity Ability to substitute Cost of changing Competitive Rivalry: Many competitors? Differences in the quality of competition? Switching costs for customers? Can you ensure customer loyalty? Cost of leaving the market?
Components of Supply Chain Management (SCM) The main elements of a supply chain include purchasing, operations, distribution, and integration. The supply chain begins with purchasing. Purchasing managers or buyers are typically responsible for determining which products their company will sell, sourcing product suppliers and vendors, and procuring products from vendors at prices and terms that meets profitability goals. Supply chain
Discuss when, and why to use single-sourcing and when and why to use multiple sourcing E.x. include advantages and disadvantages/challenges with the two sourcing principles/concepts When deciding whether to use single or multiple sourcing, the management has to evaluate suppliers out of quality, delivery, technology and suppliers support. Single sourcing is common when the product and/or service are directly linked to the core- competence and the demand for JIT is important for the buying firm. Firms using single source will get a better price (economic of scale) and also a better contact with the supplier and more. However single sourcing can be devastating for a firm, worst scenario the firm would not receive any products.
1. What are pricing objectives that firms may pursue? Answer : 1) Profit-Oriented * Designed to maximize price relative to competitors' prices, the products perceived value, the firm's cost structure, and production efficiency. Profit objectives are typically based on a target return, rather than simple profit maximization. 2) Volume-Oriented * Sets prices In order to maximize dollar or unit sales volume.
This alternative requires consideration of the opportunity cost of eliminating in-house production of the finished coating. While Guillermo may be engaging in self-interested behavior, the owner must consider that each financial transaction has at least two sides. Sellers will also be acting in their own financial interest. Therefore, decisions regarding making or buying certain products hinges on a detailed financial cost analysis. Guillermo’s analysis also highlighted competitors’ actions regarding industry changes.
Which customer needs are we satisfying? characteristics Newness Performance Customization “Getting the Job Done” Design Brand/Status Price Cost Reduction Risk Reduction Accessibility Convenience/Usability Customer Relationships What type of relationship does each of our Customer Segments expect us to establish and maintain with them? Which ones have we established? How are they integrated with the rest of our business model? How costly are they?
The success of strategies depends on ability of an organization to satisfy customer needs better than its competitors in market. Krishna & Vasant (2006). Therefore it can be said that marketing mix strategies in retail are highly influenced by the customer’s needs and requirements and strategies adopted by competitors. That aim of marketing mix strategies in retail sector is to satisfy specific customer needs with price strategy that can make some profit for the organization (Kurtz et al,2009) Blankson(2010) explain that retail marketing mix strategies should aim to create distinct image in the mind of consumer while mix can vary on the basis type of specific market requirements. Many elements can be placed to form marketing mix of any organization but most significant elements are given as follows (i) Store location (ii) Merchandise and Category Management (iii) Pricing (iv) Inshore marketing (v) Customer Relationship Management These retail marketing mix strategies at Argos are discussed here in detail (i) Store Location:- The selection of store location is most significant and important decision and success of business heavily relies on this decision.