Case Study of Week
Analysis of the template is most suitable for Kinkead. The reason is based on the case, electricity meters (EM), power tools (EI) products for customers to perform the same basic function. So their alternatives, so it needs to calculate a sales combined variances template, template B did not provide this data. Part B Answer: According to the relationship between the BCG matrix, analysis of market share and market growth.
First, for the EM 499 286 According to Table, the variance of the size of the market is unfavorable, the size of the market because their budget is 800000, but the actual market size of 650000, it does not implement the expectations. The EM market share difference to 0, with 10% of the actual and budgeted position, it will not change. Therefore, they are a cash cow. Therefore, EM is the Cash Cow. Additionally, the Kinkead has been a leading Australia firm, and EM is the older but still dominant technology.
Followed by EI table EI of the variance of the size of the market for 374,464 budgets, the size of the market for 250,000, lower than the actual market size of 363,500, more than expected. The market share variance is 241,321 Unfavorable which has decrease from 10% to 8%. Therefore, EI question mark. In addition, EI technology is new, or experiment. EI’s future is uncertain. Part C Answer: They seek cash cow product strategy, so there are two aspects of the important aspects of the performance, EM, reduce production costs and increase market share.
More particularly, their market share of the difference does not change, which means it is a mature stage, and manufacturing has been standardized. So the company should take some new measures to reduce production costs. Secondly, the company should increase their market share, such as increased management fees. EI use of labeling strategies, there are three aspects of performance is very important to the EI. The first is the R & D performance; they should increase R & D costs continue to research new technologies for enterprises to create more profits in the future.
Followed by market share, companies need to increase their market share of the product EI, because it is the mark phase of the problem, the future is uncertain. Thus, increasing its market share will change in the future star. Finally, production and sales is also very important, EI, because only effective production, to meet customer demand, increase the number of sales. Part D Answer: Assessment of the electromagnetic properties of the first actual sale price of $ 29, less than the standard price of $ 30, but only sold 65,000 units lower than planned sales of 80,000 units.
There are two reasons led to this situation, first of all is their total market demand has been shrinking. Second, the actual sales commission EM is only $ 1, but the EI commission is $ 14. 9, which could lead salespeople do not want to sell the product. To evaluate the EI performance, the first problem is underpriced. Although the actual selling price is $153 which is higher than $150, the sale volume is 29,000 units which is large than budget 25,000 units.
Secondly, although the size of the market from EI budget increase 250,000 units 362,500 units, the EI market share is not meet expectations, it has dropped from 10% to 8%. This means that the performance of the EI Company is not satisfied. Third, the staff may lack experience, because the actual manufacturing cost is $ 42. 1, higher than the standard $ 40. Finally, from a fixed cost analysis can be found, $ 121,000 of costs and unfavorable actual production costs are higher than the planned $ 11,000, from $ 1,388,000 to $ 1,399,000. Therefore, enterprises should improve production efficiency.
On the other hand, the overall performance of EM and EI, and a profit of $ 51,000, cost of sales decreased $ 5,000 plans to invest $ 250,000 of the actual value of $ 245,000. The sales mix variance data can be found, there are more people choose EI, because the EI sales mix variance is $ 1,789,714! EM sales mix variance is $ 1,253, 571 should not be. The reason may be that the sales staff did not want to sell products EM, actual sales commission EI is 14. 9 dollars, but the commission is only $ 1. Second, EI is a new product and new technology, which will attract more customers to buy and more popular than the old.