Review Exercise 5-24. Discuss the key issues facing Laurent and why you might suggest they choose to investigate implementing an ABC system.
1. What is Laurent's Competitive Strategy?
2. What are the implications of the marketing initiatives undertaken by Laurent?
3. Is increased product variety an argument to consider ABC?
4. How difficult might it be to convince management?
Role of Activity-Based Costing in Implementing
Strategy Laurent Products is a manufacturer of plastic
packaging products with plants located throughout Europe and
customers worldwide. During the past 10 years Laurent Products has
successfully developed a line of packaging materials and a unique
bagging system that present an important opportunity to increase
the productivity of checkout counters in grocery stores. The
plastic bags manufactured by Laurent are produced in several sizes
and different plastic film colors and may have attractive
multicolor printed designs on one or both sides to meet the
specification of a particular grocery store. The advantages
provided by the Laurent bagging system include the lower cost of
bags and labor at the checkout counter as well as improved customer
service. The system has contributed to significant growth in
Laurent’s sales in recent years.
Laurent’s success in the grocery chain market has attracted an
increasing number of competitors into the market. While the company
has been very successful in bringing out a series of new product
types with innovative labor-saving features for the grocery stores,
Laurent’s competitors have eventually been able to develop quite
similar products. The result has been increased competition with a
substantial reduction in Laurent’s prices.
As a result of the increased competition in the grocery chain
market, Laurent is planning to begin to focus on the small
independent grocery stores that purchase bags from large wholesale
distributors. The potential sales for this wholesaler segment is
about the same size as the grocery chain market but includes a much
larger number of independent store customers.
Page 163Investments in manufacturing equipment in recent years have
been to support two principal objectives: to increase capacity and
to reduce costs. The cost reduction initiatives principally
concerned material costs and reduced processing times. Over the
years, Laurent has chosen to invest in machines that are similar to
existing equipment in order to capitalize on the fact that the
process is relatively simple and that products can, with relatively
few exceptions, be processed on any machine in the plant. The only
major restriction is the number of colors that a machine can
accommodate on a single pass. Future investment proposals now being
considered are based on this rationale.
Answer :
1)
Because of the increased challenge in the grocery chain market, Laurent is intending to start to concentrate on the small independent supermarkets that buy packs from enormous wholesale distributors. The potential sales for this distributor section is about a similar size as the grocery chain however incorporates an a lot bigger number of autonomous store customers.
2)
The ramifications of the marketing activities embraced by Laurent are incorporate the lower cost of packs or bags and labor at the checkout counter just as improved client assistance. The system has added to huge development in Laurent's sales in recent years.
3)
The Activity Based Costing (ABC) framework is a strategy for accounting you can use to locate the total expense of activities important to make an item. The ABC framework appoints expenses to every activity that goes into production. Subsequently if there should be an occurrence of increment in number of items, it is smarter to comprehend the costing of every item seperately under ABC system.
4)
It is in some cases hard to persuade the administration or management because of their ongoing nature to utilize conventional system or traditional system of costing.
Nobody is in simplicity to pick new system of working rather than old one which was being used by them for a similar assignment or similar task.
There are difficulties hindering the utilization of ABC framework in organizations, for example, the trouble of the division of business attempted by the organization to the activities of clear and explicit, the absence of scientific qualifications and expert capable for executing ABC system.
Review Exercise 5-24. Discuss the key issues facing Laurent and why you might suggest they choose...
Review Exercise 5-24. Discuss the key issues facing Laurent and why you might suggest they choose to investigate implementing an ABC system. 1. What is Laurent's Competitive Strategy? 2. What are the implications of the marketing initiatives undertaken by Laurent? 3. Is increased product variety an argument to consider ABC? 4. How difficult might it be to convince management? Role of Activity-Based Costing in Implementing Strategy Laurent Products is a manufacturer of plastic packaging products with plants located throughout Europe...
exercise 9.5 Deli Meat Producer Case You have been hired by a producer of deli meats to investigate their recent decline in market share. The client wants an action plan to reverse the trend. Details The firm produces packages of sliced deli meats at all price levels (generic, mid-level, and premium). The market share loss is primarily in the premium category. The brand is relatively well-known. The higher-priced premium products carry a higher profit margin. Competitors maintained their price levels...
Case Study: Whole Foods Market Whole Foods Market is the world’s leading retailer of natural and organic foods, with 193 stores in 31 states, Canada, and the United Kingdom. According to the company, Whole Foods Market is highly selective about what it sells, dedicated to stringent quality standards, and committed to sustainable agriculture. It believes in a virtuous circle entwining the food chain, human beings and Mother Earth: each is reliant upon the others through a beautiful and delicate symbiosis....
Case Study: Whole Foods Market Whole Foods Market is the world’s leading retailer of natural and organic foods, with 193 stores in 31 states, Canada, and the United Kingdom. According to the company, Whole Foods Market is highly selective about what it sells, dedicated to stringent quality standards, and committed to sustainable agriculture. It believes in a virtuous circle entwining the food chain, human beings and Mother Earth: each is reliant upon the others through a beautiful and delicate symbiosis....
Identify the key stakeholder groups and their specific expectations of the organisation with reference to corporate social responsibility (CSR) and describe how CCA strives to improve their social impact? х Coca Cola Amatil.pdf Coca Cola Amatil (CCA) Bottled Water 1 of 4 When we hear the name Coca-Cola we might not instantly think of water. However Coca-Cola Amatil's brand, Mount Franklin, is the number one brand of bottled water in Australia. In a market crowded with hundreds of competitors, Mount...
please answer question 3. Please do take some updated information about Sears regarding their possible Bankruptcy and could the data be a tangible asset used for liquidation. Answr should be at least 2 paragraph. The shrinkage data, combined with sale and purchase data, has expanded the organization 2009, Sears decided to begin an initiativ closer to its customers. They wanted to achieve objective by implementing Big Data technol However, their IT capabilities were not up to the It is clear...
Case Study: Supply Chain Trends The Do- Green Solar Systems case addresses challenges faced by a Canadian manufacturer as a result of the CUSMA trade agreement. As you read through the case, think abou the challenges, risks and complexities in changing their supply chain from North Americanto Internationalmarkets. Do-Green Solar Systems Taylor Douglas, V.P of Do- Green Solar Systems, was evaluating the strategic position of the company. With the new Canada-United States Mexico (CUSMA) agreement in place and the uncertainty...
Questions: 1. What trends are happening as it relates to consumer retail purchases, online vs. in-store? 2. What challenges do traditional retailers face in trying to transition from in-store sales to online sales? 3. List and briefly describe at least three of the strategies that Target has implemented in its staffing system to better accommodate online sales. 4. What are the career implications of the trends described in this article? 5. From a consumer perspective, what are the relative advantages...
Identify the cost issues facing the firm in this case. Chrystal Moulding and Repairs Works (CMRW) is a successful SME based in Ashhurst, a small rural town close to Palmerston North. CMRW manufactures a variety of products and provides a range of services to clients. Work involves (a) moulding of plastics and other materials, (b) custom builds using plastic, fibreglass, kevlar, carbon fibre and other new age materials and (c) the repair of anything using these materials. George Hood, one...
What should Ajanta do about its recent order from SF? AJANTA PACKAGING: KEY ACCOUNT MANAGEMENT Sandeep Puri and Rakesh Singh wrote this case solely to provide material for class discussion. The authors do not intend to iustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the...