Venture and Feather Shredder Strategic Positioning and Differences
1. Strategic position is the choice a company makes after reviewing the industry in relation to its competitors and how the competitors operate. Such choices are based on value creation and how those values will differ from the competitors. The strategic position helps a company to create its own market space and attract more consumers to its products. Strategic positioning may involve factors such as lower operating costs for the company or premium pricing. Venture’s strategic positioning is based on the low cost of maintenance of their shredders. Ventures operating cost within the two-year period is estimated to be 500 US dollars while that of Feather is about 700 US dollars. Venture has, therefore, position itself based on low maintenance cost as compared to Feather. This Positioning style will attract more consumers to Venture as they will be willing to save money on the operating and maintenance cost. Consequently, Venture has emphasized themselves in regards to this strategic position by stressing their low maintenance and operating costs to consumers.
On the other hand, Feather’s strategic position is based on the firm’s reputation and their ability to deliver goods under a shorter timeline. The difference in delivery time between the two companies differ by a whole one week. Such a smooth and efficient delivery time is key in attracting consumers who want their goods delivered faster. Feather’s strategic positioning is also based on the reputation of good service. Many consumers are attracted by the guarantee of good quality service. Feather Company has therefore maintained this reputation over time. The difference between the two modes of strategic position differ in that Venture’s model is inclined more towards product operation and maintenance while Feather’s is based upon external factors such as delivery time and brand image.
2. Competitive positioning is creating the value of marketing by differentiating one’s value as opposed to that of the competitors. Consequently, this gives the business a niche in the market, allowing the business to attract more customers, retain the available ones and develop a marketing share. Through their cost leadership, Venture Company is able to set a lower price than Feather due to their lower cost in production while consequently offering the consumer with the same benefits. This cost leadership gives Venture the opportunity to be flexible with the consumers. The company can, therefore, absorbs consumer requests such as lowering the prices and increasing the quality of their machine. The company has also lots of choices in strategies, for example, they can set the price at the same level with Feather and still maintain profitability or reduce the price and attract increase the market share. On the other hand, fast delivery will help Venture company to tap into a larger market share. The contemporary consumers focus more on fast delivery. By reducing their delivery times, Venture increases their success rate in the market. Since Venture and Feather are at a price competitive environment, fast delivery can result in a competitive advantage. In their management accounting information, Venture should focus on emerging market trends and how consumers respond to their new product and cost leadership. This will enable the company to understand any existing gap in the market and also evaluate the ever-changing consumer’s wants. By collecting feedback from the customers, the company will be able to plan for future changes in order to remain relevant in the industry.
Importance of Delivery Time on Competitive Advantage
Centralized management structure is whereby the top management has the sole decision in making decisions concerning matters affecting the business. This type of management is hierarchical. On the other hand, a decentralized management system is one which the decision-making process has been delegated to staff at the lower level of management. The lower level managers, therefore, have the power to make decisions for the company. This type of management shows a bottom to a top flow of information. The management of Modern Travel Company should embrace a decentralized system of management, in their bid to provide an integrated transport system. This management system will allow the regional managers to have a wider span of control, fewer hierarchical tiers and a smooth flow of ideas from the regional branches. Additionally, this type of management will allow the top managers of Modern Travel Company to relieve themselves of excess day to day decision making. This will allow those managers to focus more on critical problems and strategies. The decentralized management system in Modern Travel Company will also provide opportunities for the regional managers to gain experience in management, therefore, facilitating their promotions. Further, in the decentralized management structure, the regional managers are in a better position to make more informed decisions concerning the transport management system. This is because these managers are exposed directly to the local conditions in the regions they operate. For example, the regional manager knows about the consumer behavior in their areas, such as the preferred mode of transport, the terrain of their operating area and the price to set in order to remain competitive. This shows that the regional manager knows of the culture of the local people and more importantly the local language. Another advantage of a decentralized system for Modern Travel Company is flexibility. In a competitive environment, business should make decisions fast. Consequently, the regional manager can make a timely decision after analyzing the situation. Another importance of this system is that it improves decision making and teamwork. This is because the regional managers and employees are involved in sharing of the decision making powers and are given freedom of action and autonomy. This sharing integrates the managers and employees as one and develops further the spirit of decision making. Additionally, this system of management enables the regional managers of Modern Travel Company to take initiatives by giving them autonomy and authority. This further increases their creativity by allowing them to implement key strategies in the transport control system.
1. Budgeting is among the key management issues and is part of the management control process. In line with the budgeting process, the manager should show integrity by applying ethical principles in the process. Some of the undesirable actions in the budgeting process include over budgeting. This is where the managers of an organization allocate more resources than necessary to different variables in the organization. Over budgeting affects the short-term and long-term performance as the organization may in future lack the requisite funds to support future projects. This is because the funds have not been depleted in the budgeting proposal process. Poor planning is another undesirable action in the budgeting process. This is the situation whereby the managers fail to consider future events in the budgeting process. This results in allocating finances to the project without establishing the overall advantage of the project to the organization. Poor planning affects the short-term and long-term performance in that the finances allocated to project may not result in significant results. This may, therefore, results to allocating money to non-beneficial programs. Additionally, poor planning may cripple the organization financially and limit the implementation of future projects.
Implications for Management Accounting Information System
2. Budgetary slack is the deliberate overestimation of budgetary expenses or underestimation of revenue of the budget to allow flexibility for the proposed budget. This issue has been on contention in several platforms with some terming the situation as unethical. To counter budget slack, there is the need to have a good rapport between the managers and the employees in order to propose effective budget estimation. Through this interaction, different ideas can be tabled and the best decision arrived at. Interaction also boosts the relationship between the working staff and also develop the confidence of the subordinates. Trust is an important factor in any working environment. Through regular interaction, this trust can be developed among the working staff allowing the managers to delegate key decisions to the subordinates. Such action can motivate the staff as they feel appreciated allowing them to be discreet in the budget formulation process. Additionally, interaction enables the subordinates to practice integrity. This is important because the employees will be honest in any duty that they handle. Integrity is important in the budget formulation process as those involved in the budget proposing process will be ethical and follow the prescribed guidelines and rules. Consequently, the interaction will enable the management and subordinates to be diligent and shy away from overestimations of expenses and underestimation of revenues.
3. Practicing discretion is essential for every business manager. It involves the freedom and autonomy to make decisions. Critically, it involves the task hand and how to apply personal judgment to make key integral decisions. Budgetary discretion involves allowing the employees to make a key decision in the budget formulation process. It also involves giving the employees room to exceed the budget. This is key them breathing room to propose costs and exceed the proposed costs. Giving the employees the ability to exceed the cost helps in ensuring the employees do not inflate the budget. Managers can allow the subordinates to exceed budget in a situation where the expenses are changing. For example, the budget allowance for purchasing products can be exceeded because the price of goods is not constant. Additionally, budget discretion can happen when the expected revenue is not known. This allows money to cover for an additional cost. Another situation is when the proposed budget may face budget cuts. In this situation, exceeding the cost will ensure the initial budget is not affected after the cut. Lastly, managers can allow discretion to cater for any issue that may arise within the course of the financial period.
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