Cost Accounting and Management Decisions Essay Example for Free

Cost Accounting and Management Decisions Essay If you are using the Blackboard Mobile Learn iOS App, please click View in Browser† Click the link above to submit your assignment. Students, please view the Submit a Clickable Rubric Assignment in the Student Center. Instructors, training on how to grade is within the Instructor Center. Assignment 1: Cost Accounting and Management Decisions Due Week 8 and worth 240 points Conduct research on a U.S. manufacturing company that produces two (2) or more products. Write a five to six (5-6) page paper in which you: 1. Describe the company researched, indicating the primary products manufactured. 2. Examine the effect of changes in the variable cost / fixed cost structure of the company on cost- volume analysis decisions by managers. 3. Analyze the current cost system used by the company to determine manufacturing costs and examine the benefits of using an activity-based cost system over the traditional system for management decisions. 4. Compare the company’s sales and cost of sales forecast to the actual sales and costs of sales in the current financial statement. Evaluate strategies management can implement in response to changing conditions affecting budgetary planning and forecasting. 5. Use at least three (3) quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources. Your assignment must follow these formatting requirements: 1. Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions. 2. Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the  required assignment page length. The specific course learning outcomes associated with this assignment are: 3. Examine the assumptions of cost-volume-profit analysis. 4. Discuss the allocation of costs to divisions, plants, departments, contracts, and products. 5. Analyze activity-based costing and activity-based management. 6. Analyze the advantage of budgeting, the preparation of a master budget, and other forms of planning. 7. Use technology and information resources to research issues in cost accounting. 8. Write clearly and concisely about cost accounting using proper writing mechanics. Click here to view the grading rubric.

Hitlers Rise to Power :: World War II History

Hitler's Rise to Power Adolf hitler was born in brannau, austria on the 20th of april 1889. His parents belonged to the settled middle class and his father led a thrifty but successful life. At aged 18, hitler moved to vienna where he settled for five years. He described that period of time as the worst years of his life. As a struggling artist, he tried to gain entry into the vienna academy of fine arts but was refused admission. It was in vienna that hitler was influenced by lanz von libenfels and developed very strong nationalist and anti-semitic views. In may 1913, he left for munich. During ww1 in august 1914, he enlisted in the army. he fought on the western front for 4yrs and was awarded the iron cross for bravery. he remained in the army and was given the job of spying on newly developing political parties. One such party was the german workers party founded by anton drexler in 1919. hitler was so impressed at the first meeting by what he saw and heard that he decided to join the organisation. by 1920, he was leader of this party and changed the name to the national socialist workers party, commonly known as the nazi party. The nazis forme their own small army called the SA(sturm abteilung). they were easily recognised by the brown coloured shirts they wore. the SA were used to protect the nazis at any meetings or conferences that were held. hitler made the swastika the emblem of this party. early recruits included ernst rohm, rudolf hess, heinrich himmler and josef goebbels. With the weimar government facing economic and ploitical crisis in 1923, hitler decided to make a bid for power. this came in the form a the munich putsch. On 8th november 1923, nazi's took over a beer hall in munich. many people were killed. hitler was arrested two days later and was sentenced to 5yrs in landsberg castle. he only served 9months of this sentence. while in prison, hitler wrote his famous book 'mein kampf'- my struggle. this book was a long boring insight into the mind of hitler and his anti-semitic views. During his time in prison the nazi party had disintegrated , and its members had become divided. hitler had to spend the next 4yrs rebuilding the party and giving it a solid organisational base. Hitler believed in a true german race devoid of impurity which could be achieved by the elimination of all inferior races.

Duality in The Tale of Two Cities Essay

A Tale of Two Cities stands out in the list of Charles Dickens’ compositions because the book is so different from anything he ever wrote. Novels that Dickens wrote before and after A Tale of Two Cities have been centralized around the Victorian culture, while A Tale of Two Cities takes place in Revolutionary France and England. Others venture so far as to say that a reader that has enjoyed A Tale of Two Cities will not like Dickens’ other works and vice versa. The stark differences found between A Tale of Two Cities and other classics, such as David Copperfield and Great Expectations, have not stopped A Tale of Two Cities from becoming an instant classic and one of Dickens’ most powerful works of literature (â€Å"A Tale of Two Cities† 354). The book opens, â€Å"It was the best of times, it was the worst of times. It was the epoch of belief, it was the epoch of incredulity. It was the season of darkness, it was the spring of hope. We had everything befo re us, we had nothing before us. We were all going direct to heaven, we were all going the direct other way† (Dickens 17). From the very beginning of the book, the parallels that are commonplace in Dickens begin to occur throughout A Tale of Two Cities (O’Mealy 245). Throughout A Tale of Two Cities, Charles Dickens uses characterization, setting, opposing themes, and human nature to reinforce this central theme of duality. The setting in a Tale of Two Cities never stays the same, although it does fairly predictably stay between the countries of England and France. The first element of duality found in A Tale of Two Cities is outlined in these two cities’ relationships to each other. Although the wording of the title says a lot for itself, the two cities do play an enormous part in the book and the way Dickens compares them. The duality of these two cities helps highlight certain aspects that might not have otherwise noticed. Both the similarities and the dissimilarities described make the cities of London and Paris mirror each other on some level. In the very beginning of A Tale of Two Cities, Dickens describes both cities as very grim and hopeless places because of the time period in which the book is set. Both countries are described as  having headstrong kings who ignore the interest of the common man and believe very strongly in their right to have total, almost divine, control over all of their subjects. Religion in England had spiraled downward from communicating with Spirits to superstitious practices. France also was less reliant on religious revelations and concentrated more on cultural traditions and practices. In England, a person who committed even the most minor offense was subject to be hanged. France was a bit more lenient in the severity of punishment for such small crimes, but still was extreme. At the end of A Tale of Two Cities, the two countries where compared through the personalit ies of a French woman, Madame Defarge, and an Englishwoman, Miss Pross. The differences between the two cities are established very well through these comparisons (â€Å"Dickens’ A Tale of Two Cities† 202). Even the cities of Paris and London had many parallels in their different descriptions. Joseph Carton describes both the cities as being â€Å"earthly cities† and that the â€Å"city of God† only existed in his visions. Right before Carton is exiled to the guillotine, he has a vision that there will be a third city that will replace both London and Paris and all of their earthly imperfections (Davis 230). Duality is not only revealed in setting in the place A Tale of Two Cities occurs in, but also the time period in which the book was set. The French Revolution was a time in history in which extreme poverty and extreme wealth clashed and resulted in an internal rejection of all social systems that had been the norm up until this point. Dickens himself reveals he is also divided in his opinion of the French Revolution. Throughout the book, Charles Dickens has an ambivalent attitude towards the French Revolution and seems not to be able to side with either the central government or the peasants. He does not display acceptance at all, and instead seems to view the entire Revolution in a very unsettling light. Charles Dickens does not offer his blunt opinion, as do so many other books written in this time period, but instead offers perspective by developing characters on both sides of the Revolution. Dickens displays his viewpoints based on the discreet musings of Manette. For example, Th e sister of Manette Defarge is raped by her very own brother and is murdered by Marequis St. Evermondes, who is a from a rich French family and represents the aristocratic aspect of the French Revolution. Manette sees the crime in action. Not only is Manette not able to stop it, but he is also imprisoned  for being a witness to the dreadful scene. These musings revealing Dickens’ viewpoints are based on the understanding that change will not come in a day and that years of very complicated give and take will have to occur in order for the Revolution to come full circle (Stout 30). Another very valuable attribute to the duality of Charles Dickens’ writing is the constant contrasting between thesis and antithesis occurring in the central themes of the book. For example, the theme of death is contrasted with the theme of resurrection. The themes of death and life are very closely intertwined in A Tale of Two Cities (Griffith 362). The two build off of one another in order that the other can exist. In the first book of the novel (which is divided into three separate books), the title is â€Å"Recalled to Cities†. Dr. Manette had been in prison for almost 25 years with very minimal human interaction. He is considered dead to humanity and to the productive world. In many of Dickens’ works, prison is a symbol for the grave. Critics say this may be because Dickens’ own father was absent during his own childhood due to his imprisonment at Marshasea. After Manette is released from prison, he is finding himself free for the first time in all t hese years to do what he pleases. The sense of both release and relief that he feels in this moment can only be compared to resurrection. When Mr. Lotty travels from Paris to get Manette from prison, he views himself as actually picking up a body and taking it home. Lotty thinks to himself that it is as though Dr. Manette has been buried for so long that his body is beginning to fall apart when he finally is able to be free. The quote â€Å"Get out at last, with Earth hanging around his face and hands, he would suddenly fall away to dust,† from Lotty displays these beliefs. Lacre, the doctor’s daughter, also shares these beliefs that person who is emerging from prison after long years of imprisonment will have to be brought back to life. Dr. Manette cannot quite let go of the hold the thought of death and rebirth has had on him. He struggled with a post-imprisonment mental disorder, sometimes known as cobbing, for some time, but finally is released by his daughter to b egin the process of forgiving Darnay for the crimes he committed against the St. Evermondes. This final release to do something as innately human as to forgive serves as another metaphor for resurrection (A Tale of Two Cities 359) The themes of order and disorder also play a large part in the development of A Tale of Two Cities. The antithesis of these two opposing  themes also supports the overarching theme of duality. The book is set during the incredibly jarring years of the French Revolution. During these days, there is absolutely no way to predict whether or not the day will bring total calamity or some sense of peace, much like the ocean and its uncertain weather. Dickens tends to use a lot of imagery involving the sea when describing the order and disorder of a particular situation. The mobs of people standing in the town square during the heat of the Revolution were described as â€Å"the living sea†. Charles Dickens also uses the metaphor that Ernest Defarge was a man who was â€Å"stuck in a whirlwind†. Both Ernest Defarge and his wife were very active members of the Revolutionary and were constantly risking their lives for the greater good of the Revolution. Disorder breaks loose aga in as Darnay returns to Paris. He arrives in direct concordance to the September massacres that take place during that time. This was done deliberately by Dickens to demonstrate how the disorder of the French Revolution finds its way seeping into the lives of really anyone who lived during that time. The uncertainty between whether order or disorder will protrude the next chapter is something that is signature in Dickens’ writing in A Tale of Two Cities (â€Å"A Tale of Two Cities† 354). The contrast of characters is also a testament to the overarching theme of duality. Many of the characters play off of each other and are made stronger by the next. A couple even demonstrates the literary device of doppelganger. A doppelganger is a opposite to a character that helps bring out certain aspects of both the characters For instance, Ernest Defarge and Mr. Lotty are considered doubles of each other. They start out in near the same position, but then react in opposite ways. B oth Defarge and Lotty would identify themselves as businessmen. They also both cared for Dr. Manette during his time in prison. While Defarge becomes more and more resentful and filled with hatred, Mr. Lorry becomes more and more redeemed by his total change of heart and composure that his love for Darney induces (Lindsey 368). Another example of doppelganger in character is Charles Darnay and Sydney Carron and how these two opposites play off of one another. A doppelganger is a opposite to a character that helps bring out certain aspects of both the characters. The two are not merely spiritual and mental doppelgangers, but they also are basically physical replicas of each other. Sydney Carron and Charles Darnay were so physically indistinguishable that  Sydney Carron was executed because the executors thought he was Charles Darnay. Critics suggest that Carron and Darnay represent the two opposite sides of the same psyche. Charles Darnay was on trial for allegedly spying, his brilliant lawyer found a way to release him from jail by showing the witness Carron. The witness disclosed that he no longer felt like his account was legitimate because of the similarity in the two men’s physical features and he felt it very well could have been a mistake. This case of mistaken identity occurs again when Cart on takes Darnay’s place on the gallows and no one catches the mistake (A Tale of Two Cities 354). In some ways other than in a physical context, however, the two men are opposed. Darnay, for example, is obsessed with the idea of making right the evils that his uncle, Marquis St. Evermonde, is responsible for. His uncle is the one who viciously raped Manette’s sister and also serves as an example for the leading French social class. Darnay travels to Paris in the heat of the September massacres and is almost killed in the heat of one. His entire reason for traveling to France, however, was to try to save Gabelle, who was a servant for the family some time back. However, Darnay is unsuccessful in his attempts. On the other hand, Carney discloses to Lucie those years ago he was a very lazy and unproductive member of society. Carton, however, is regarded as a brilliant lawyer, who just has been held back because of his substance abuse problems. He has just recently finally become successful in developing a bid for Darnay’s release from the prison, and therefore secures even more his status as a legitimate lawyer. The result of his successes, however, is ultimately his life when he sacrifices his own for Darnay. Darnay, conversely, has led a very moral and upstanding life but is not as successful of a character as Carton in most perspectives. He works long and hard but is usually not rewarded for his efforts. Darnay really is only successful as a passive figure in his marriage. Darnay and Carton seems to start at the same place, but then start to switch places as the story progresses. For instance, at the beginning of the book, Carton is presented almost as an antagonist. He seems to n ot be able to get his life together. He struggles with alcoholism and cannot seem to nail out his priorities. Conversely, Darnay seems to be the exact opposite. He seems to have everything together and then by some poor twist of luck lands himself a convicted prisoner. Towards the end of the book though, Carton on the other  hand, turns around his ways and becomes a much more productive and moral member of society, especially when he sacrifices his own life for Darnay and takes his place on the gallows (Lindsey 362). The similarities between Carton and Darnay do not stop with appearance and having personalities that over time turn into each other’s. The characters are also both in love with the same girl. Both Carton and Darnay seem to be very generous in their motives but express these motives in completely different ways. While Carton seems to be a bit of a misfit in society and does not really have anyone to that needs him, he can be more self-sacrificing than Darnay. Darnay has a family at home who needs him and so he cannot be as liberal in how he chooses to display his generosity. Darnay is very well organized and seems to be much more logical when it comes to his emotions and how he controls them. Carton is a very emotion oriented character who just is led mostly by impulse and does not seem to weigh out pros and cons as Darnay sensibly does. Both characters want the same thing ultimately, but choose different ways of expressing these interests. Carton’s gesture of complete s elflessness highlights the fact that there is good in spite of all the inhumanity of the French revolution. Carton takes an action that should display cruel justice and turns it into something that shows purity and redemption also showing the duality of his character. This scene also supports the theme of death and resurrection. (Tale of Two Cities 359). Charles Dickens also uses characterization to display some of his own views on the French revolution. Davis Woman notes that Dickens’ weak development of his characters in A Tale of Two Cities is not just a common flaw in his writing or due to some laziness on his part. Instead, this ambiguity of whom the characters really are actually paints a portrait into his deeper feelings about what is going on socially in this time. The characters are not individuals who Dickens has created to stand alone. They are vessels that seem to transport certain behavioral patterns that Dickens wants to display in A Tale of Two Cities. The characters’ reactions to events and dialogues are not to envelop who they are as a character and the part they play in the book. Instead, they show different sides of the revolution that the author wanted the reader to see through first hand experience. He also uses doppelganger and doubles in order to get  that point across to the reader. The characters in A Tale of Two Cities are very repetitive in their thought and behaviors and are not usually given to change except in the sense of Carton. As the characters are formed throughout the book, we become aware of social implications we normally would not have been aware of. As the reader becomes critical of Carton for his abuses of alcohol and being very lazy over all, we start to question our own judgment as the character of Carton starts to improve as a person. When he emerges as a hero at the end of the book, the reader realizes how many other individuals were judged prematurely during this time for not acting like a part of the social norm. To the contrary, the reader starts to form generalizations about Darnay’s character and again turn out to be wrong. At the end of the book, the reader is confused about the author’s meaning in Darnay and Carton’s morality (Stout 30-31). In A Tale of Two Cities, the author uses the character’s flaws to point out many things about the duality of human nature. Carton’s alcohol problems highlight many issues not only in his own personal life but also draws parallels throughout the book about the universal truth that humans are not just what meets the eye, but also have many deep-rooted streaks that they are purposefully hiding from the world. Carton seems to be the novel’s character whose morality is called into question, but in reality, it should be Darnay. He may not seem like he is the type of person to struggle inwardly with substance abuse issues such as alcohol, but inwardly, he is the one who hosts the most ethical and moral issues. Carton is lost in a daily routine that includes hurting his body with alcohol with his daily patterns that can hardly be managed. The internal motivation for man is something that is not known to the outside observer (Sims 219). â€Å"It is a wonderful fact to re flect upon, that every human creature is constituted to be that profound secret and mystery to every other. A solemn consideration when I enter a great city by night. That everyone of these darkly clustered houses encloses its own secrets, every room is teeming with its own secrets† (Dickens 15). Carton reveals his love to Lucie in a way that can only be described as ambivalent. Dickens’ use of paradox and doubles is only exemplified further through Carton’s very complicated and tangled love affair with Lucie, although it is very one sided. Dickens’ usage of the symmetry in constructing paradox does not stop short of the plot, however, and uses it in his grammar as well. Dickens’  uses the one sided tricolons to demonstrate this symmetry. Dickens is known for this type of anaphora. For example, when Carton is going to visit Lucie to tell her that he is in love with her, he tells her that he is in love with her â€Å"fondly, dearly, disinterestedly, devoted.† This quadruplet set of words embodies both paradox and two sets of doubles and is a prime example for Dickens style. In a speech to Lucie’s fa ther, later in the passage, he uses another set of these descriptive quadruplets. Carton’s words are supposed to be seen as persuasive and not judgmental, although they seem to come off as both (Patterson 30). Charles Dickens integrates many different pairs of characters, places, and themes that make it near impossible for the reader to read A Tale of Two Cities without gathering some feeling and understanding more about the book than just the plot. Although A Tale of Two Cities is different from Dickens’ other works, it remains a powerful piece of literature that provokes thought and shows purposefulness in a dark time in the history of France. The duality in A Tale of Two Cities displays the idea that there is a silver lining against every cloud and events are not always as stark and hopeless as they seem. There is a different side to every story (â€Å"A Tale of Two Cities† 558-360). Works Cited â€Å"A Tale of Two Cities,† Novels for Students. Ed. Sheryl Ciccarelli and Marie Rose Napierkowski. Vol. 5. Farmington Hills: Gale, 1999. 351-360. Print. Davis, Paul. Charles Dickens from A to Z: The Essential Reference to His Life and Works. New York: Checkmark, 1998. Print. Dickens, Charles. A Tale of Two Cities. New York: Penguin, 2007. Print. â€Å"Dickens’s A Tale Of Two Cities.† Explicator 53.4 (1995): 204. Academic Search Premier. Web. 27 Jan. 2013. Griffith, George V. â€Å"Criticism: A Tale of Two Cities.† Novels for Students. Ed. Sheryl Ciccarelli and Marie Rose Napierkowski. Vol. Five. Farmington Hills: Gale, 1999. 362-364. Print. Lindsey, Jack. â€Å"A Tale of Two Cities,† Novels for Students. Ed. Sheryl Ciccarelli and Marie Rose Napierkowski. Vol. Five. Farmington Hills: Gale, 1999. 362-364. Print. O’ Mealy, Joseph H. â€Å"Dicken’s A Tale of Two Cities,† Explicator 42.2 (1984):10,3. Academic Search Premier. Web. 15 January 2013. Patterson, Frank M. â€Å"Dickens’s A Tale of Two Cities.† Explicator 47.4 (1989): 30. Academic Search Premier. Web. 27 Feb. 2013. Sims, Jessica. â€Å"Dickens’ A Tale of Two Cities.† Explicator. 63.4 (2005): 219-222. Academic Search Premier. Web. 15 January 2013. 1999. 362-364. Print. Stout, Daniel. â€Å"Nothing Personal: The Decapitation Of Character In A Tale Of Two Cities.† Novel: A Forum On Fiction 41.1 (2007): 29-52. Academic Search Premier. Web. 27 Feb. 2013.

Evaluate the business model of a company - Free Essay Example

Sample details Pages: 17 Words: 5121 Downloads: 10 Date added: 2017/06/26 Category Statistics Essay Did you like this example? Q1: Using an appropriate model, evaluate the business model of a company of your choice, describing how the company differentiates itself from its competitors and sustain competitive advantage. 1. Executive Summary Cummins started off as diesel engine manufacturing company since 1919 and now growing as power leader in the world. Cummins expand network through company- owned distributor, independent distributor and dealer to serve customer globally. In 2009, Cummins reported net income of $428 million in $10.8 billion of sales [1]. Cummins have been diversifying its business to broad range of products from power generation, filtration technology, turbo technology, fuel system, emission controls and air handling [2]. Due to external pressure and growing market in Asia, Cummins recently setup Centre of Excellent in Singapore focus more on Marine and Offshore market. In this post module assignment, competitive strategy will only focus on Cumminss marine and offshore business. In this PMA, the value curve is based on own industry experiences assumption. However, analysis on financial will based overall Cummins business listed in stock market which named CMI. Don’t waste time! Our writers will create an original "Evaluate the business model of a company" essay for you Create order 1.1. Vision Statement Making peoples lives better by unleashing the Power of Cummins [3]. Cummins believe in by developing new technology will lead to better living for the people. 1.2. Mission Statement Cummins mission statement as quoted below [3] Motivating people to act like owners working together Exceeding customer expectations by always being first to market the best products Partnering with our customers to make sure that they succeed Demanding that everything we do leads to a cleaner, healthier, safer environment Creating wealth for all stakeholders. 1.3. Cummins compare with Industrial leader Statistic Industry Leader CMI CMI Rank Market Capitalisation BHEL.BO 979.41B 23.52B 35 / 379 P/E Ratio (ttm) ROR.L 4,276.81 22.76 81 / 379 PEG Ratio (ttm, 5 yr expected) PRY.MI 9.01 1.23 27 / 379 Revenue Growth (Qtrly YoY) PPRW.OB 196.10% 21.70% 111 / 379 EPS Growth (Qtrly YoY) MXH.DE 1749.70% 36.80% 82 / 379 Long-Term Growth Rate (5 yr) MNTX 75.00% 12.03% 47 / 379 Return on Equity (ttm) SHS 94.04% 25.29% 36 / 379 Long-Term Debt/Equity (mrq) 15.833 N/A Dividend Yield (annual) HYG.TO 7.70% 0.90% 21 / 379 Figure 1 Financial Analysis CMI Vs Industry Leader [4] Figure 1 shows overview financial analysis of Cummins (CMI) compare within industry leader [4]. Cummins rank 35 among 379 diversified machinery industries in industrial goods sector for market capitalisation. Cummins stock values increase more than triple over the past 3 years and promise future growth with its business strategy [4]. 1.4. Ocean Strategy Ocean strategy has been introduced by W.C. Kim and R Mauborge since 2004. Starting then, this strategy is adopted and implemented successfully in various organisations globally. Recently, Malaysias Prime Minister Datuk Seri Najib Razak shared his experience on Ocean Strategy when dealing with increasing crime in the country [5]. He is using Blue Ocean Strategy as management tools in order to promote thinking out of the box. Key successful activities such as leveraged untapped resources when replaced police with soldier doing patrolling around countrys border and conduct training for new police force in the underutilised army facilities. This initiative save a lot of money from government and promote cross functioning role among government agency [5]. The principle of the ocean strategy is treating market as universe. There are two oceans available in the universe named Red Ocean and Blue Ocean. Red Ocean defined as known competition. In this Ocean, product is already well defined and competitors only able to compete with price [6] .Customer expectation on the product almost generic and not much technology can be developing in this area. For diesel engine in marine and offshore market, the competitors for Cummins include Caterpillar, MTU and Mitsubishi. How Cummins can break trough become market leaders? Cummins apply Blue Ocean Strategy when dealing with its business. Blue Ocean Strategy defines as untapped market which no competition and industries that do not exist at this point of time [6]. This in return will resulting higher profit compare with conventional approach. This clearly shows in W.C. Kim and R Mauborge studys on business launches in 108 companies. They summarize revenue and profit impact of business launches shows in Figure 2. In this study, 86% business launches within own boundaries (Red Oceans) and 14% business launches looking for new opportunities (Blue Oceans) [6]. Red Oceans approach focus on existing customer by improving their product and study shows that this resulted 62% on total revenue and 39% on total profit. In contrast, 14% of the businesses launches by creating blue oceans can bring in higher return which about 61% of the total profit [6]. Cummins spend heavily on research and development for past 5 years as shown in Figure 3. In 2010 alone, Cummins invest 414million in new technology development [2]. One of recent Blue Oceans initiatives is setting Marine and Offshore Centre of Excellent in Singapore. This business focus on the Packaging instead of selling conventional type of bare diesel engine like other competitor such as CAT, MTU and Mitsubishi. Figure 4 shows pictorial view on the value added components into bare diesel engine 1.5. Strategy Canvas Figure 5 shows strategy canvas of the marine and offshore diesel engine. X-axis represents critical success factors of the markets competition and Y-axis correspond to values perceived by marine and offshore customer. Marine and offshore is a mature and establish market. Engine makers always compete with price, image, brand, delivery, product performance and service availability. Cummins performs averagely in critical successful factors. However, in order to compete in the competitive market, Cummins break through conventional way by creating new team to focus on product value added specifically for marine and offshore customer. Cummins applied Blue Ocean strategy. Figure 6 shows Red Ocean strategy from others diesel engine maker and Blue Ocean strategy from Cummins. Q2: Using either Porters generic strategies or the Strategy Clock, identify examples of organizations following strategies of differentiation, low cost or low price, and stuck-in-the middle or hybrid. How successful are these strategies. 2. Porters 5 forces generic Strategies Using the five forces framework, creative strategists may be able to spot an industry with a good future before this good futureis reflected in the prices of acquisition candidates Michael Porter [7]. Porters five forces: Threat of New Entrants: Analyse potential new comer to market is important to understand potential future competitors Bargaining Power of Buyers: Buyers is the party that create demand for industry, understand buyers requirement will help to maintain competitive advantages. For example, bargaining power of buyers is high if product is standard. Threat of substitute products or service: Buyers always look for alternative or cheapest way to get products or service. Substitute product can bring the overall industry price lower Bargaining Power of Supplier: Supplier supply raw material or service to manufacturer. Bargaining power of supplier is high when to many buyer and less supplier in the market Rivalry among existing competitors: Current fast moving industry, its important understand the strategy of existing competitors. Example: How competitor gain competitive advantages or product differentiation. Porters 5 Forces allowed the company undertand and analyse own industry struture and futher help the management to decide on companys strategy. According to Porter, organisation is able to gain competitive advantanges by strategies the company using one of the Porters Generic Strategies as shown in Figure 8; 1) Cost Leadership, 2) Differentiation, 3) Focus [8]. 2.1. Cost Leadership Strategies Cost leadership strategies emphasize on low cost in company strategies. Company will offer low per-unit cost product or service to customer that sensitive to price. In order to become low cost provider, company can practise integration strategies (backward, forward and horizontal). There are few factors that will affect the strategies include economies of scale, learning curve, productivity, company structure, relationship with supplier and quality control. Several example organizations that practice this are Wal-Mart (general merchandiser), Air Asia (budget Airline) and Macdonalds (Fast Food) [9]. In this PMA, I will use Air Asia as example to study its business model and look into company successful factor. Air Asia strategy as illustrate in Figure 9, the company mission is to continue to be the markets carrier low cost provider. In order to compete with other aircraft carrier and achieve company vision for Lowest cost airline, Air Asia implement a few strategy to reduce operation cost. Strategy implemented as per below: 2.1.1. Keep operation cost low- NO frills In order to compete in this competitive market, Air Asia able to keep operational cost low by implementing few NOs in the strategy [10]: NO meal: No food or drinks will be provided free in the in-flight service. NO frequent flyer program: NO Membership or rewarding program which commonly used for others airline like Kris flyer for Singapore Airline and Skymiles for Delta airline. NO Seat assignment Ticket: In order to keep administrative cost low NO Entertainment: NO news paper and entertainment system such as movie, games and music. No ticket : Ticketless replaced conventional type printed ticket No waiting lounge: NO lounge provide in the airport 2.1.2. Single air craft fleet In order to streamline the operation, Air Asia phasing out its 14 Boeing B737 in 2010 and replace by only operate single air craft which is A320. Few advantages of using single aircraft as stated below Keep inventory cost low Saving cost in service and maintenance such as keeping same model of spares parts. No duplicated resource due to difference Air Craft experience needed Reduce time and training cost due to only one model. This allowed the company avoid going to through the expensive learning curve process and also may dissatisfied demanding customer. Michael and Nikos study on the organisation learning curves for customer dissatisfaction across airlines. They plotted estimate U-Shaped learning curve as show in Figure 10 and show evident that complaint rates followed U-shaped function of experience Able to increase fuel efficiency and improve productivity 2.1.3. Simplified distribution system Air Asia design simple user friendly system for customer to book and check- in their ticket. Customers are able to check in using own mobile as shown in Figure 11. This ticketless system is able to reduce waiting time for customer queuing to check- in at the airport counter. 2.1.4. Point to point network ( 4 hrs) All Air Asia flight is running by point to point network within 4 hours radius or less as its business model. This model only carry passenger from point A to point B without any connecting flight. This in order to keep operation cost simple in order to reduce costs [10]. 2.1.5. Optimum Aircraft Utilization Another way to keep operating cost low and maximizes profit, Air Asia increase productivity by optimise flight utilisation. Air Asia is the fastest in the region by achieving 25 minute turnaround time. Air Asia is able to achieve equal or more than 75% for last 5 years on the load factor. Once, Air Asia achieve close to 100% load factor for Bali Perth route. Load factor is defined by AirAsia as numbers of passengers as a percentage of number of seats flown [10]. On top of that, Air Asia applies Tier based system for ticketing which depend on supply and demand. When demand is low, the price is low. When demand is high the ticket price will also go high. This system is efficient especially during low season allowed Air Asia maintain the reasonable high percent load factor, 2.2. Differentiate Strategies Differentiation strategies offer service or product which unique perceived by customer. Differentiation strategies do not guarantee good payback especially current standard product offered in the industry is more than enough to meet customer expectation. There will a risk on implementing this strategy and need to study carefully on customer requirement before implementing. Product value added, extra servicing, products flexibility and better compatibility are some of the features that can create differentiate in the industry. Cost is not an issue in this strategy; hence company can demand higher price if customer strongly attached to offered differentiation features. Typical move in this strategy is product development. Organisations that apply these strategies include Apple (Lifestyle product), Raul Lauren (Apparel) and Maytag (Home appliance) Apple is applying differentiate strategies compare with other competitors in the industry by selling lifestyle product instead of conventional electronic gadget. In first 6 months of 2011, Apple spends 1.2 billion in research and development. This is about 40% increase compare with 2010 [13]. One of the successful examples when Apple launches iPad during 2010 and Steve Jobs defined iPad as entirely new category of mobile devices. Apple sold more than 15 million units worldwide after launching [14]. 2.2.1. Innovative and creativity product Apple is a trend leading company in the market. The company famous in creating innovative products and able to capture a significant market share after launching new products. Apple spends heavily in research and development because the company believe RD are critical for future growth and are able to create competitive advantages 2.2.2. Wide range of software and applications Apple created another successful platform for customer to download software and application. Traditional, example like phone, other competitor just focus on few simple features which only contains game, photography function, movie and some basic feature. By introducing new approach, Apple created The App Store. Now The App Store has more than 350,000 apps available for iPhone, iPad and iPod touch globally. The apps offered wide range of application from games, entertainment, utilities, social networking, music and others. In Jan 2011, Apple announces that more than 10 billion apps have been downloaded . 2.2.3. Apple store Unlike others competitors store which only focus on products price and feature, Apple differentiate by giving customer different shopping experience in the store. Apple design Apples retail store to give the patrons good impression of stylish, clean, fashion and stream-lined. The product like i Phone, iTunes and etc will placing in a place that customer can try out the features and application. 2.2.4. Provide good service and maintenance Apple provides good service respond compare with others competitors like Samsung and Nokia. In Singapore, Apple provides one to one exchange for i Phone if there is defect and still under warranty. This is different from some of the competitors, depend on the level of repair, some will take about 2 to 3 weeks. This will create some issue for some consumer that only has one hand phone. 2.3. Focus Strategies Focus strategies offers product or service to fulfil the requirement for targeted groups of customer in the industry [9]. Focus strategies can be categorized into 2; Focus cost leadership which focus on low cost solution in narrow market and Focus differentiation provide customised product or service to niche market [16]. Market penetration and market development can be use when applying focus strategies [9]. Focus strategies beneficial when competitors are not able to support on unique requirement of certain group of customer. Organisation which pursuing this strategies include IKEA (Furniture), Ferrari (Automotive) and Federal Express (logistic) 2.3.1. Focus Cost Leadership Strategy IKEA is the Swedish global furniture company that applied focus cost leadership strategy in their business strategy. IKEA offering wide range of home furnish product with low price so that many people can afford to purchase. In order to achieve the strategy, IKEA apply below concept: 2.3.1.1. Design and develop base on price In order to keep competitive price, IKEA design and develop product base on price. The price is fix even before the product is launch. The designer will have to work directly with supplier to ensure meeting low cost by optimised productivity, material efficiency and process improvement [17]. 2.3.1.2. Reduce logistic, handling and operating cost In order to reduce logistic, handling and operating cost, IKEA designer always consider flat-pack transportation and self-assembly during design and development phase. Flat-pack furniture is often delivered in multiple sub assemblies together with simple instruction manual and required customer to perform self assembly. This modular concept is able to save transportation, handling and operating cost. For example, assembled furniture tends to be more bulky and is more expensive to store in warehouse and transportation. Besides, that, IKEA is able to save operating cost by reduce one Assembly process in production . 2.3.1.3. Self-Service in IKEA Store In order t keep the operating cost low and reduce the needs of sales assistance, IKEA design the flow of store layout and display the product effectively by using actual room concept. For example, sofa is placed in living room section and bed is placed in Bed Room section. All the furniture is clearly labelled and useful information like dimension is easily located in the display product [17]. 2.3.2. Focus Differentiate strategy Ferrari is applying focus differentiate strategy by develop high performance car within automotive industry. Ferrari focus on high end consumer compare with other automotive competitors like Honda, Toyota or Ford which target more broad customer. Below is the strategy for Ferrari: 2.3.2.1. New Way of Purchase Car Ferrari compete created innovative approach by introduce new way of purchase car Premium Ownership Program to serve its target customer. This program include insurance, maintenance, warranty , Ferrari tailored made driving course and pit stop service which provide the customer mind free after owning and driving Ferrari car [18]. 2.3.2.2. Innovative Technology Ferrari developed own software to meet customer service expectation such as rapid response times, up to date database and personalise customer service. One of the latest features such as, the customer can view the look of the vehicle and change the preference in Service configurator system even in pre-order stage [19]. 2.3.2.3. Best Dealer Ferrari believes choosing the right strategic partner or dealer is the right way to serve the customer. In order to motivate the dealer, Ferrari created prestigious award Podio Awards for supplier or business partner recognition. 2.4. Stuck in the middle or Hybrid Strategies Porter does not recommend Stuck in the middle or Hybrid strategies if the company want to achieve above average performance in the industry. Company must choose either one of the strategy in the Porters Generic strategy. He claimed that it is difficult for a company to strategies the business to produce low cost product but still remain unique perceived by customer [8]. However, Rodney Goon argues on Porters theory and commented some of the company such as Singapore Airline (SIA) are able to success using Hybrid strategy. Figure 12 shows business strategy applied by SIA which plotted by Rodney [21]. Singapore Airline have been awarded 2nd place in World Top Airline in 2010 by Skytrax in Hamburg [22]. Figure 13 shows main operating cost for SIA. Top 3 costs consist of Fuel, Aircraft and People [23]. In order to achieve competitive advantages, SIA apply below approach: 2.4.1. Become Market Leader Differentiation Strategy SIA founded in 1972 started as small airline company and now evolve become the world trend leading company for Airline industry. SIA become market leader by setting trend started since 1970s when introducing headsets, drink and choice of meals in Economy Class. Figure 14 shows overview on SIA trend setting for more than 39 years in the industry. In 1991, SIA introduce satellite- based telephone to enable passenger to call to ground during flying. In 1998, in order to improve the quality and standard of in-flight meal, SIA formed International Culinary Panel which involves renowned chef from all over the world. By doing this, the passengers are able to enjoy world class cuisine even during travelling. In order to improve customer service satisfaction, SIA introduce in-flight entertainment system named Krisworld which include Audio and Video system. Passenger can watch movie, listen to music and playing game during flying. In 2004, SIA reach another milestone by flying world longest non-stop flight from Singapore to New York (Newark). In 2007, SIA flying new Airbus design A380 which is world largest passenger Aircraft from Singapore to Sydney . 2.4.2. Brand Singapore Girl Differentiation Strategy SIA successfully improve its service compare with others competitors by creating unique iconic image for SIAs air stewardess as Singapore Girl and promote Youre a great way to fly started in 1972. This iconic brand is famous of caring, elegant and good looking girl whom will provide good service for the passenger during on board the plane. Singapore Girl has continuously won many awards in Airline and Travel Industry over the years . 2.4.3. Low Cost -Cost Leadership Strategy Everything behind The Scenes Is subject To Rigorous Control quoted by Rodney . SIA spend heavily on the area that customer can be seen as discussed above in order to remain premium in the industry but cutting cost for area that behind the scene in order to remain cost compatible. Total cost for Singapore airline is about 14.2% is the lowest in the market compare with other competitors like American Airline which labor cost is approximately 31% of total operating expense . Other than that, average price per aircraft purchase is less than other airline provider. This is due to SIA is the market leader in trendsetting and always working with aircraft builder like Airbus when there is new product launching. First purchase in world for A380 allowed SIA command a better purchase price. Q3: What are the major advantages and disadvantages of an integrative strategy? 3. Integrative strategy Organisation is able to gain competitive advantages by using integrative strategy. Integrative strategy can be categorized as vertical, backward, forward and horizontal integration. There are advantages and disadvantages when applying each concept and detail discuss as below: 3.1. Vertical Integration Vertical integration is business strategies which expand its business either through gaining control over company that distribute or selling its product (Forward integration) or taking control over company that provide the raw material for finish goods (Backward Integration). Figure 15 illustrate 4 typical stages for value added chain in PC industry (27). Example for Dell or Hewlett Packard, in order to produce a personal computer, assembly components such as chips, microprocessor and disk drive etc is needed from others manufacturing company (Intel/ Micron). Similarly, component parts manufacturing needs raw material like chemical, metal and ceramic to manufacture the component. Kyocera is one of the suppliers for those materials. Backward integration strategy in this case is trying to taking control over components parts manufacturing and raw material supplier. Whereas for forward integration strategy, PC maker try to gains control over the company that selling or distribute the final product such as OfficeMax and ComUSA [27] This company provide platform to reach end user. 3.2. Forward Integration Forward integration strategy involves increase ownership or control over retailers or distributor and illustrates in Figure 16. One of the effective mean of forward integration is through Franchising [9]. Approximate $2 trillion revenue created annually through franchising business every year globally. This equal to 4th largest Gross National Product in the world [28]. Advantages and disadvantages as discuss below: Advantages: Getting understanding customer better One of the companies using forward integration strategy successfully is Dell. Dell founded in 1984 by Michael Dell with one direction selling final products to customer directly [29]. By doing this, company able to reach end user and getting feedback instantly through companys distributor and retailer without filtering. Low development and training cost By introduce franchising; the company are able to reduce development and training cost. Franchisor will provide training, equipment and product to franchisee. This in order to skip the trial error phase for franchisee and able to help franchisee generate profit with less risk. Example companies like Subway, McDonalds and 7-eleven. Provide better services Company can provide better services through its own controlled network and services. Provide lower cost of sales In order to compete in this competitive world, price of the end product is always one of the critical successful factors for the company. Dell is using this strategy to reduce price bypassing third party involvement such as retailers etc. No mark up from other company in the finished goods Disadvantages: Increase bureaucratic cost Expanding business forward which also means that increase bureaucratic cost for whole value- added chain activities. Due to uncertain demand in current market, it will post some risk to the company Increase Inventory Getting control over distributors or retailer, indirectly manufacturer may have to manage whole product cycle inventory include end products. Company may incurred higher inventory cost if wrongly manage 3.3. Backward Integration Manufacturer need supplier provide raw material in order to produce its end products or service. Backward integration allowed company gain control toward supplier as shown in Figure 16. Advantages and disadvantages as discuss below: Advantages: Getting better quality control Company are able to apply standard quality plan throughout the value chain. This is especially important when dealing with sophisticated components such as crankshaft, piston and turbocharger for engine. By improving the quality of this critical component will increase competitive advantages among the rivals Reduce threat from powerful vendors By increasing control over the vendors, it will reduce threat from powerful vendors. Optimized supply chain Keeping track of so many suppliers is onerous says Mark Shimelonis of Xerox [9]. Nowadays, a number of companies following Japanese firms lead in managing the supply chain to ensure uninterrupted supplies and low prices. Lower structure cost Outsourcing is one of the examples of the backward strategy. Outsourcing strategy will able to reduce cost when company engaging third party specialist that performing charging lower than company own operate value-chain activity. Cummins outsource IT support to India Company and panel design to CMR or Auto Maskin to keep the company structure cost lower. Nike outsourcing its manufacturing plant in China due to lower labor cost [27]. Disadvantages: Technology change Technology change is inevitable in current competitive market. But backward vertical integration may lock a company way of doing business and prevent organisation changes due to technology change. One of the examples is when radio manufacturer acquired a manufacturer of vacuum tube in 1950s to reduce production cost. When, transistors replace vacuum tube in 1960s, the competitor rapidly change to latest technology. However for this radio manufacturer company, the management refuse to change and as the result, lost in the competitive advantages and cause business failure. Thus, backward integration can cause serious disadvantages when trying to match rapid technology change [27] Risk of information loss Increase control over the supplier which mean also potentially important information flow to the supplier. For example, Cummins need to provide important parameter and interfacing information in the engine control module to backward supplier like CMR and Auto Maskin in order to joints develop the engine protection panel. Technical drawing will be shared among backward supplier and manufacturer. Potential high cost Less supplier competition will lead to less efficiencies when produce a product. The backward support company will work in the comfort zone and less initiative. The manufacturer is forced to get the input from internal supplier even there will be some others external supplier can produce lower cost .As the result will cause potentially higher production cost . 3.4. Horizontal Integration Horizontal integration refers to company that use single industry strategy and seeking control over competitor in same market. A number of the company apply this concept as growth strategy. Merger and acquisition allowed the company to expand its core business and technical capabilities within the same industry [9] For example, recently Pfizer paid more than $3 billion to complete acquisitions of King Pharmaceuticals through merger. This is helping Pfizer to expand its prescription pharmaceutical business in pain treatment, Meridian auto-injector and animal health business which originate from Kings principal business. Advantages: Lowest cost structure Horizontal integration allowed the company expand within the same industry. This is especially posted advantages when fix cost such as equipment, specialise machine etc is high. Just imagine, if only 3 major competitors in the market, Company A merge with company B by acquisition. They have similar capacity in the plant in both companies. Now with new merger, New Company AB can close one of the plant and fully utilised the facilities to reduce manufacturing cost. For this competitive world, reduce manufacturing cost is essential to gain competitive advantages. On top of that, horizontal approach also allowed the company to save overhead cost by cutting down duplicate resources such as management, sales and production team [27] Pfizer-Wyeth merger is one of the examples. Pfizer combine both facilities; reduce number of manufacturing site by about 15 percent, and cutting 10% of its global workforce [32] More focus on the core product With horizontal approach, the company can more focus on its main core business. Company which is using single industry approach that only focuses on core product sometimes can name Stick to the kitting. This means that the company only focus on the things that they know and try to make it better [27] Example such as KFC focus on its global food market and IKEA focus on its home furnishing product. Increase Market shares and brand By reducing the competitors in the market, the company can increase market shares and become major player in the industry. Thus, this will improve company brand in the industry. Besides, through merging and accusation, the company have the economies of scale in the market. Company can demand better price from the supplier. Provide total package to customer Company are able to offer wide range of the product when dealing with customer. Merging of both company can allowed the company to offer product bundling. Disadvantages: Lack of innovative Horizontal approach expand the business within own industry. Old industry practice may still stick with the company when dealing with the business. Lack of innovative and creativity approach may lead to the company stay in Red Ocean instead of break through conventional rout to Blue Ocean Strategy that can bring more profit to the company as discussed in Chapter 1. Cultural Different The problem may arise when merging both with different cultural company. This especially when turnover rate is high for the functional leader in the acquired company due to restructuring [27].For example like International Company acquired China company, language barrier and culture different may create some operational issue. Become Industry dominant Company that apply horizontal integration strategy tendency become industry dominant and monopolize the market. The company will grow bigger and may have conflict with Federal Trade Commission (FTC) [27]. FTC is responsible for fair trading and promoting free competition. Horizontal merger guideline develop jointly from U.S department of Justice and the Federal Trade Commission to describe the principal techniques and main evidence on which agencies usually predict horizontal merger that may lead to fewer choice for the customer or end user [33]. FTC concerns on the merging company which may subsequently cause higher price, less innovative and lower quality to the end user. One of the examples is the merging of 2 Satellite radio Company; Sirius and XM merger which will have more than 18.5 million subscribers after combination and become second larger radio company in the country. The merging take about 16 month to battle with regulators regards on the market monopolize before FTC app roved the merger [34].