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Introduction
This paper presents an analysis of market data provided in Table 1 and 2 (both of which are market indicators for a competitive market). Firm ‘A’ is personified and the business strategies, tactics, and plans for driving a prospective market have been discussed appropriately with references made periodically to factual and theoretical justifications.
Table 1: Market indicators for a competitive market.
Emphatically, the deliberation on the market performance is conducted with the context provided below:
- A summary of Period 0 (starting) situation for Firm ‘A’ and employed an initial strategy;
- Firm A’s performance objectives and actual performance;
- Key strategic moves that led to success for Firm ‘A’;
- How Firm ‘A’ is projected for the future; and
- Important lessons learned from the simulation experience.
A Brief Summary of the Period 0 (Starting) Situation for Firm ‘A’ and Employed Initial Strategy
The principal aim of getting a company started is to achieve financial profit, to make money, or earn appreciable returns! There may also be other necessities that could bring about one starting a company/industry. But what the reason would be for getting a business started, there must be a stable and well-defined growth layout. There must be the satisfaction of customers. There must be resources to keep the company up and ahead.
Table 2: Industrial performance reflecting the competitive market progressive report from period 0.
Resources, in this case, include materials and labor-drives. Without very well defined and stratified structures or goals, a company no matter the liquidity will collapse. From Table 1, it can be seen that quite a several firms have demonstrated workable market strategies.
For example, Alec capitalizes on the economy offers safer products, and has achieved a 13.00% market index. On the other hand, Alfa is a business based on family delivery, has emphasized safety, and achieves a 7.50% market index. This lag behind Alec could be consequent of limitations in family patronages of the product from the Alfa group. It can notice however that the strategy sales better than Beaut which capitalizes on luxury and offers higher stylish products- yet the firms achieve a net market index of 4.10%.
Lately, to have a better understanding of market drift, firms have employed the application of data mining in evaluating products as they attract marketing. Even though data mining is only an emerging concept in addressing market expectations, it is already a one-stop point for the unification of parallel/distribution processes, visualizations, artificial-intelligence, machine-learning, as well as statistical visualization of market trends.
This tool could also be seen as a process involving the review of a pattern, an association, an anomaly, and a statistically relevant structure for projecting market expectations (Maskell and Baggaley, 2003, p.231). The significance of this important tool in aiding knowledge-based marketing discoveries, the realization of emergent phenomenal, and enhancing the general understanding of analytical situations is tremendous. This could be effective for a better position market index for the firms in Table 1.
Firm A’s Performance Objectives and Actual Performance
It is not just enough to start a company but it is worth ensuring that there is the availability of a quality product for the maximum benefit and satisfaction of the customer through a price check. For Firm ‘A’, there was a staffing inadequacy that made the actualization effective product production and distribution. To deal with the problem of staffing, which is internal to the company, there is a need to scout for staff, especially online through freelance marketing.
In Africa, where much of the population constitutes young desperate youths, a well-defined strategy which may be in the form of community incentives may be adopted by Firm ‘A’ and this will market the product through the people. The cost of maintaining staff will then be reduced.
Generally, the performance objectives of the firm ‘a’ are as follow:
- Promotion of fairness, efficiency, and maintain an orderly market;
- Aid customers in retailing fair transactions; and
- Improve the capabilities of business and enhance the efficiency of a return index.
Firm ‘A’ could also utilize cost allocation as a tool for ensuring its equitable running. Cost allocation entails a way of attributing costs to specified cost-centers in an organizational setting. Usually, the allocation of costs by companies is necessitated by the need to adequately satisfy the sharing of relevantly incurred costs. This can be likened to spreading costs across end-users. The allocation of costs is therefore a mere assignment of costs to several units that constitute a company.
In a multidivisional business that requires security services for the protection of its infrastructure, for instance, the various units that constitute the business will be incorporated in costs for securing the required security. Allocating costs to the various departments of a company is usually done arbitrary (as practiced by coca-cola international, for instance). One other firm that has adopted the use of cost allocation effectively is CPK.
CPK is a household name in restaurant service and offers California-style cuisine, represented through creative pizzas, pasta, soups, sandwiches, appetizers, and desserts. Opened on March 27, 1985, by the attorney’s Rick Rosenfield and Larry Flax, CPK is currently owned, licensed, or franchised at 265 locations in 321 states and 10 foreign countries.
This makes it a chain company with networked units that are centrally controlled from its managerial framework. The chain has two directions of development, the full-service restaurants, and the CPK/ASAP concept which focuses on the fast-casual service in significantly smaller restaurants.
The consideration of CPK here for an analysis of its cost allocation is limited to the year 2010, and is based on the company’s systematic administration through which it has achieved distinct allocation of cost to its various sects. The performance credibility and an effective cost allocation of CPK have been reflected in its rating by Forbes magazine as been self-made, and on enlistment as one of America’s best small companies. This rating takes into consideration the fact that CPK has annual revenues in the range between $5million and $750 million, being publicly traded at least for a year.
Key Strategic Moves that Led to a Success for Firm ‘A’
Recently, business operatives have realized the need to adopt the use of social media in reaching out to customers. The tool is so far turning in impressive results – and the need for attractive branding of software is made pronounced. Jive is directly engaged in the process of designing sophisticated but user-friendly software that targets attracting customers on mediums like Facebook/Twitter. But apart from this, a company must have a clearly defined target and sectionalize its production line to benefit demand.
Caterpillar Inc (Abbreviated as CAT on the NYSE) as one leading global company, by revenue, for instance, has consistently led its industrial sector in the United States in past few decades and at the same time competing in the global market basically from a domestic-manufacturing-base (DMB) recording over half of the sales made to overseas clients.
In its last quarterly report in 2010, this was reflecting when the company presented a $707million profit; an increment of 91.0% as of what was obtained a year earlier. The profit was realized through an increment of about 31.0% in sales/revenues which amounted to $10.40billion for the quarter.
Firm ‘A’ therefore adopted a customer-based marketing approach- this fresh approach constituted four elements as noted by Hutt and Speh:
- “Growing the core business, pursuing acquisitions, concentrating on emerging business opportunities and;
- “Doubling investments in investments in emerging markets’ (Hutt and Speh, 2009, p.505).
These guidelines were generally grown through:
- “Drive scale in large markets;
- “Take higher related share in small markets;
- “Go for customization
- “Manage customer retention;
- “Develop local and differential products
- “Extend private labeling
- “Fill in product white spaces, and
- “Plan for cannibalization” (Hutt and Speh, 2009, p.513).
However, to improve upon these market strategies:
- Firm ‘A’ will support second-language training to ensure employees meet their position requirements — with a focus on those in administrative, clerical, and commerce positions. Second-language training will also support the Department’s succession planning by enabling career progression, particularly into EX positions;
- Enhancing diversity and employment equity remains a priority for Firm ‘A’, and efforts in 2010–2011 will concentrate on targeted recruitment for visible minorities across the Department, and for women, persons with disabilities, and Aboriginal people. Also, there will be focused attention on creating a workplace that encourages and supports diversity and professional growth for all Firm ‘A’ employees through the various sector and departmental awareness initiatives;
- Projected turnover for a variety of groups — including commerce officers, statisticians, economists, and policy officers — will create opportunities to attract new employees and help current employees develop new skills and competencies;
- Firm ‘A’ will advance work aimed at modernizing intellectual property (IP) legislation to better facilitate innovation and ensure effective rights enforcement, decrease uncertainty for businesses and inventors, support the commercialization of ideas, and support inventors who operate on a global scale by aligning to laws. Work will include support for the introduction and passage of copyright legislation that balances the needs of creators and users;
- Firm ‘A’ will work with the Communications and Marketing Branch to implement a strategy to promote awareness of the rights and responsibilities of the stakeholders in the insolvency system and to encourage compliance with the legislative framework;
- To ensure the orderly and effective succession of executive talent, sectors will enhance learning, training, development, and mentoring opportunities to ensure executive feeder groups have the critical management competencies and effective leadership skills needed to take on leadership roles vacated due to retirements; and
- Firm ‘A’ will employ the implementation of new technologies, tools, and systems to address service delivery needs, including collaboration, case management, customer management, reporting, web portal, content management/web publishing, and similar common systems that may arise (Johnson, 2011, p.47).
How Firm ‘A’ Projects for the Future
Every institution, organization, or company has forces by which it stands or weakness that if not appropriately curtailed hampers its advancement systematically. The analysis of Firm ‘A’ is dependent on its progressive activities over the years. To achieve a reliable expected market, there is a need for the administration of firm ‘A’ to consider previous and present market situations by analysis.
Traditional tools for analyzing profit/costing are more effective when used in expressing market values. A particular significant role that management plays (using these tools) has to do with the identification and elimination of non-value-adding activities in the entire chain-value (Alan, 1997, p.57). The fundamental target of management has to do with the promotion of activities that add value to the market structure (Barry, 1998, p.122).
There could be incidences whereby there is a disjoint between strategy and tactics majorly not been deliberate, and this would clearly define the target of triggering the operation of the organization. Activities that do not add value to the profitability of the organization are capable of generating an increased production cost, inefficiency, and consequently, result in loss of profit. For an institution or an organization to continue to be active in terms of performance and value creation, there is the need to monitor constantly the performance of the system particularly using cost-value analysis.
Cost value presents an analysis of various business aspects in an institution or an organization in terms of opportunity-cost and economic-rents (Gulfer, 2010, p.88). Cost value as a market monitoring tool is effective in determining the aspect or unit of a business that is worth expansion, selling, or shutting down (Schermerhorn, 2004, p.9). This constitutes a very vital aspect of evaluating the market or an economy, particularly in terms of self-assessment as well as planning (Armstrong and Philip, 2010, p.98).
If a boom is to be achieved by Firm ‘A’, the production must supersede the breakeven point. Breakeven analysis is an expression of the breakeven quantity which has been very effective in the determination of the breakeven point. Mathematically:
BEQ= FC/P-VC …. (Equation 1)
Defining the terms from equation 1:
F C = Fixed-Costs; P = Price-Charged-per-unit; and V C = Variable-Costs-of-production.
Important Lessons Learned from the Simulation Experience
It is clear from the investigative analogy that Firm ‘A’ is aware of a customer-diverse demand, and then a competitive market. These, and a threat in the market, are significant for proper analysis of the prospect of the market. Investigations have also revealed that Firm ‘A’ could also utilize cost allocation as a tool for ensuring its equitable running.
Cost allocation entails a way of attributing costs to specified cost-centers in an organizational setting. The allocation of costs by companies is necessitated by the need to adequately satisfy the sharing of relevantly incurred costs. The need to adopt the use of social media in reaching out to customers is equally emphasized. This strategy will distinguish the company and its products which are not just fanciful but also available to most customers in a compact form.
There are two ways of reaching the target — finding new customers for existing products, processes. They are the industrial equivalents of consumer “Big Box” stores and can take revenue (Hutt and Speh, 2009, p.509).
Conclusion
As an effort to bring about an increment in profit realized from the market transaction, there is the need to understanding articulately the precise expenditure/cost as well as income ratio of an organization, especially in the 21st century. It is the responsibility of management to put in place necessary strategies in decision processes for the increment of the flow of case without comprising structural components that are comparable with bottom-line and expected profit margin. This paper is built on the need for users to be in enhancing marketing processes in the 21st century.
This paper presents an analysis of market data provided in table 1 and appendix 1 (both of which are market indicators for a competitive market). Firm ‘A’ is personified and the business strategies, tactics, and plans for driving a prospective market have been discussed appropriately with references made periodically to factual and theoretical justifications
Reference List
Alan, D., 1997. Political Handbook of the World 1997. Binghamton, NY: CSA.
Armstrong, G. and Philip, K., 2010. Marketing: An Introduction. New York: Pearson & Prentice Hall.
Barry, T., 1998. Statesman Yearbook 1998-99. New York: St. Martin’s Press.
Gulfer, H., 2010. Ethics in International Business. LA: Weldom House Press.
Hutt, M. and Speh, T. 2009. Business Marketing Management. New Delhi: South- Western Cengage Learning.
Johnson, H. H., 2011. Consortium for Advanced Manufacturing-International. New York: Longman.
Maskell, P. and Baggaley, Y., 2003. Practical Lean Accounting. New York: Productivity Press.
Schermerhorn, J. 2004. Core Concepts of Management. Canada: John Wiley & Sons, Inc.
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