Publication of Nutrition Facts - Assignment Example

Price differentiation
Due to the extensive evaluation and analysis of your book of records given to our firm, I would like to recommend the following to the management of DSC. Markets are extremely competitive, and firms normally look for means of attracting prospective customers in a way to outdo their rivals in the market. Product differentiation, therefore, is the practice in which enterprises offer products or services with unique features to consumers. This approach will immensely help DSC gain a competitive lead over already in the market and potential investors.
Completive advantage
Duncan Shirt Company can achieve this strategy by charging Priority, Team, and Shop different prices and at the same time, these respective customers selling to different purchasers. A business that sells to different places with different costs differentiates its products from its competitors through the use of trademarks or advertising. This will allow customers to be associated with distribution in different packaging is capable to monopolize the market. This promotes brand loyalty among your customers. Brand loyalty is a significant asset as it upholds a company against the threat of competitors.
Innovation
Price differentiation will also encourage innovation, it is very important for Duncan Shirt Company to set itself apart from its rivals through transformational innovation to explore the market further and come up with a new product. This will also focus on improving the existing products. Innovation gives benefits to both stakeholders and customers by reinvigorating goods and improving fabrication processes will offer promising economies of scale. Differentiation will create a barrier to entry for new investors in the market because the customers will have associated with the existing product. A company that also offers a distinct product would be doing advertising to make it popular in the public eye, thus making it very difficult for new entry companies by restricting them since they lack the capital to advertise effectively. However, this cost should be reflected in the products by charging high-profit margins. Moreover, the tastes of customers do change with time and competitors are out to copy and imitate flourishing differentiators. For this reason, product differentiation should offer something which the customer value for long-term sustainment.
The causes of variances
Generally, extreme usage of materials is the main cause of unfavorable direct materials quantity variance. From the data give positive (annex) which is very favorable to the company. This may be due to substandard quality of materials, or poor workmanship with regard to production as well as the low supervisory role employed in the production department. Material wastage could have also caused this problem. Normally this role is played by production managers, thus should be held responsible for this variance. Nevertheless, purchasing department may also be blamed for procuring low-quality of materials at low prices which could mean substandard materials. The emphasis on variance analysis should be used to motivate the line managers together with workers to take control of their roles to achieve the goals of the company
Variance analysis should not be used in accusing conduct or as a means of beating line managers and workers over the head. Emphasize should be constructive rather than destructive in the sense of supporting the line managers and assisting them in meeting the goals that they have contributed to in the setting.
Budget is the most probable of evaluating the financial situation. Since accounting reflects backward, therefore, budget is the only way to forge ahead financially. It is my advice to the Duncan shirt company to create a favorable environment where every employee, from top to lower-level workers is involved in this invaluable exercise. It is a motivation to pursue your own idea. This should be addressed in meetings or seminars or sensitization.
2nd Quarter of 2013
The production budget for shirts
X-Large Large Medium Total
Match 40,000.0 60,000.0 80,000.0 180,000.0
April-May 160,000.0 240,000.0 320,000.0 720,000.0
Total 200,000.0 300,000.0 400,000.0 900,000.0
The minimum price for each type of shirt sold by DSC for each of the three customer groups: Priority, Team, and Shop. (It is assumed that all manufactured shirts were sold)
Sales (Unit) 400,000.00 500,000.00 2,275,570
(Manufacturing Costs): Priority Team Shop
Sales 6,029,700 3,284,300 3,284,300
Direct materials 505,200 276,000 494,350
Direct labor 345,100 188,500 366,250
Manufacturing overhead 207,060 113,100 219,750
Dyeing 1,050,000 560,000 770,000
Stamping 279,400 188,800 455,400
Embroidery 390,000 91,000 39,000
Total manufacturing cost 2,776,760 1,417,400 2,344,750
6.9419 2.8348 1.030401174
Profit margin 2 2 2
Proposed price per shirt 8.942 4.835 3.030
As can be seen from the figures it would be profitable for Duncan Shirt Company to add a net profit margin of $2. A gain decision to enter into the women’s sports shirt market in the US is a good strategy for market penetration as it will see the company expand its market shares with a negligible additional cost per shirt as shown below:
Duncan Shirt Company
Features of the Lady Wearer and Approximate Additional Cost
Feature required by Additional Cost
the lady wearer (per shirt) is $
Hanger (on inside of the collar) 0.02
Hanger (on the outside of shoulder) 0.04
Patch pocket 0.1
Embroidery on single sleeve 0.25
Double stitching (on V-neck etc.) 0.08
Additional cost 0.49
However, Duncan Shirt Company should consider the following before venturing US market;
Determine the amount that the company to expand internationally. A plan of a two-year lead time is very prudent for this market penetration. Moreover, the company should come up with terms and conditions of payment like advance payments, and sales on open accounts to a new customer should be avoided. I would also recommend the company a legal professional service that is familiar with US trade policies as this will make the company prosper in its business pursuit.
Best of luck Read More