Contributing Team members (with ID #)
Name of Case:Gibson Insurance Company
Problem definition: State the central issue in the case, as well as related minor issues. The central issue is the inefficiency in allocating cost for each product. This is because the existing support cost allocation method does not reflect its relative claim on the resources and thus, leads to insurance products being priced inaccurately in the company. Some of the minor issues include inefficiency in resource allocation and pricing decisions. Moreover, the profit figure has been decreasing although the sales volume increased. The corporate support cost has also been increasing alarmingly to sustain company’s growth since the recent acquisitions took place. Another issue would be inefficient and less streamlined processes in the company which leads to repeated steps and incurrence of additional costs.
Recommendations: State your overall aim, the specific actions to implement it, and how these actions will add value and/or save costs for the organisation. Our overall aim is to introduce an efficient cost allocation method to improve pricing accuracy of products. This can be done by first; adopting activity based costing (ABC) method as suggested by Hampton instead of the existing simple costing method in the company. ABC recognizes the relationship between activities, cost and products which helps to allocate cost per unit to products more accurately. The main activities that run the business must be identified and analyzed to determine cost driver for each activity. We agree to the four major activities suggested by Hampton however, disagree on her cost allocation basis as it does not seem to be practical and accurate. For example, customer service cost should be allocated based on the number of call minutes instead of number of incoming customer calls as it is more accurate and as for the policy acquisition, the number of steps involved in processing the policy should be replaced by number of labour hours in moving new policy applications to an in-force status. Thus, the allocation basis should be reviewed again based on the general ledger and replaced with more accurate basis. This would add value to the company by allowing efficient pricing allocation to create a competitive advantage in the market. It also helps the company to determine products that generate higher profit and allows more focus to be put on them to improve the company’s profitability.
Alternatives: State alternative actions and plans that were considered and why there were rejected in favour or your final recommendations. Alternative action considered is to separate the management of support activities of the respective companies instead of having Gibson to provide the services to all three companies. This means that Midwest and Compton will prepare their own cost accounts using the same new cost allocation basis employed by Gibson. It would be easier to track the costs of each company’s product and its profitability. Plus, it reduces the complexity involved in calculating the cost with Gibson doing it alone. However, this plan is rejected as the separation of management would results in higher operation cost as new equipments and accounting software need to be installed. It would also require hiring of additional staffs and training needs to be provided. This directly leads to higher cost, increased time consumption and overall results in inefficient use of resources
Numerical support: Show key evidence that informed your recommendations, e.g. additional calculations and/or numbers presented in the case. State their relevance and significance for your recommendations. Focus on the Strategic Management Accounting technique from the week’s lecture. Summary of total support cost per policy using activity-based costing (ABC)
...arenas such as Mice, Webcam, and Remotes. In order to fully understand Logitech’s success it is important to understand their strategy for growing but also their strategy for the issues they have faced. And ultimately deciding what will be their competitive advantage in the future.
In order to understand the strategy of Logitech is it imperative to conduct a brief external analysis, beginning with the general environment. The general environment focuses on demographic, economic, political/ legal, socio- cultural, technological, geographic, and physical environmental trends. These trends help analyze what the next strategic moves should be. In Logitech’s case it is crucial for them to analyze all seven trends but focus on the technological trends. Next, an industry analysis needs to be done in order to gain an idea of what kinds of competitive forces the industry will face. These forces are based off of five criteria: threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of new substitutes, and rivalry among existing competitors. The third step in conducting an external analysis is understanding the competitor’s objectives, strategies, and their capabilities. Logitech realized early on whom its competitors were, Creative Technology Ltd., Microsoft Corporation, and Royal Philips Electronics, and was able to differentiate its products from them.
Strategy is a set of commitments and...
INTERNATIONAL MARKETING CASE STUDY ANALYSISCASE – TOYOTA AND GENERAL MOTORS
The world’s largest car manufacturers Japan-based Toyota and and US-based General Motors [GM] have joined together in Australia to create a joint venture under a new company called United Australian Automotive Industries [UAAI].
This is hoped to see replication of same success as the New United Motor Manufacturing Inc venture between Toyota and GM in California, but this was not to be the case due to various internal and external factors.
The joint venture which involved a lot of process of analysis, study and negotiation spread over six months was not able to stand more than 2 years due to conflict of interests in benefit sharing and failure to forecast changes in the national economies, refusal to follow accepted strategy implementation between the two companies TMC and GMC.
Absence of strategy to tackle impact of international markets and economy fluctuations on the UAAI company’s performance. The venture being a multi national presence, should forecast changes in the economies. The appreciation of Yen against Australian Dollar lead to direct depreciation in Toyota’s profits but not UAAI’s. One partner benefitting and the other not is a matter of serious concern in keeping the joint venture afloat.
Disagreement to the...
...for all employees and management to see. The results should be consolidated with a task assigned and a well-developed plan of action. This is an opportunity to develop the corps values of the company leadership, as well, build growth within the company. Take the time to prioritize company goals, to include expectations of the employer and employees. Tackle the big and the ugly up front by making a statement. After all, your goal is to make the company successful and show growth through opportunity.
Result #1: 56% of Utiliscan felt their benefits were below average or poor.
Task: Identify comparable benefits packages to meet the company needs as well the employee
Action: Studying the labor market, employment trends and salary analysis based on job functions will assist Paul with Utiliscan, as it is a small business, creating budget constraints. . As the human resources director, Paul should negotiate better rates. His responsibility is to find health coverage and offer package incentives to his employees. A good example of this, high quality insurance that includes low premiums for his employees with high percentage rates of protection. American Blue Cross Blue Shield provides medical, dental, and hearing protection at reasonable rates for companies. Aside from medical requirements, Paul should address salary, wages and retirement benefits packages with his employees. Fidelity is an example of a investment firm that allows parole deductions...
...reducing the potential profits. The trickle down affect the
housing might have on smaller businesses that rely on Disneyland for their main income will be
adversely affected. It seems as if the Disney World resort mainly cares about their money. A
chance to build homes next to the resort was offered but Disney opposed the offer for some odd
reason. According to one of their workers “They want to make more money, but they don’t care
about their employees” said Gabrielde la Cruz. Some of the workers feel as though the resort
doesn’t care about them. There many workers who had to live in one room apartments with a big
family just because they couldn’t afford anywhere better they had to stay there. The issue in the
case is that many of the employees don’t have affordable housing.
The nonmarket stakeholders are the community, government, media, and non-
governmental organizations (Lawrence & Weber, 2011). The community surrounding
Disneyland benefits from the tourist visiting in their area. This increases revenues in various
businesses. The government benefits from taxes that support their city. The non-government
organizations consisted of businesses in the resort district and some local government officials
the support want to save the resort district from no-tourism projects (Lawrence & Weber, 2011).
The area that Sun Cal wants to build on is strictly mark resort area designed for...
...First Solar CaseAnalysis
Due to consideration of rising energy demand, global warming and nature of solar power, the solar industry has experienced a rapid development these years. First Solar, as one of the dominant companies in the industry, is suspected and scrutinized by CFRA for aggressive accounting practices. CFRA’s investigation aims at identifying potential risks in several areas, including revenue quality and recognition, inventory levels, customer and geographic diversification, warranty policies, production capacity growth, and supply chain. This case focuses on whether CFRA should flag First Solar and add it to the “biggest concern” list.
The stock of First Solar has always been popular among investors considering the company’s outstanding performance. The price-to-earnings ratios of First Solar from the last three years (2006 to 2008) were much higher than the industry average ratios. Therefore, it is reasonable to speculate that prospects for earnings in the future are great. Furthermore, positive opinions from the professional institutions, such as “outperform” and “buy”, gave investors much confidence. The analysts, as well as investors, believed that sustainable increasing earnings and new market expansion could provide solid growth prospects for First Solar.
Business Environment Analysis – PEST Analysis
Solar energy acting as a promising alternative energy marks a bright future of...
In the case “DaimlerChrysler: Post-Merger News”, DaimlerChrysler is facing the strategic issue of figuring out how to bring together the two cultural differences between Daimler-Benz AG and the Chrysler Corporation that would create a positive and profitable synergy for DaimlerChrysler as a whole, while regaining stockholders trust. As the post-merger integration process accelerates, they need to identify opportunities to increase sales, reduce purchasing costs, and create new markets for DaimlerChrysler.
DaimlerChrysler internal environment, the company went through many changes post-merger. Starting with the creation of the “Dream Team” in 1998, resignations of key members of the dream team led to a two-tiered board system: the supervisory board and the board of management. There was apparent unrest among top executives and a growing chasm between the Americans and Germans due to differences in management styles, processes, cultures and work styles. DaimlerChrysler implemented a variety of exchange programs designed to help the two companies meld an understanding of the cultural differences between the two and their respective countries. They created the Automotive Council, which allowed the sharing of innovation, knowledge, technologies and ideas between the two companies to drive future product integration. They also created the Executive...
...for both the members of Exclusive Golf and Country
Club (EGCC) and the Gentlemens' Club (GC) with more variety on movie selecton. The video
club needs to keep of its rental information and compute rental fees collected from VHS, VCD,
DVD and BlueRay rented out to members. The main goal was to make members have a more
convenient and comfortable environment to rent their videos.
To lend obscure videos to video club ….
Scope of the System
The scope of Video Club System is to record ….. It includes the barrowing... Activities of the
The selection…….. of members are outside the scope of the system.
Concept of Operation
Video Club Member……
Use Case Diagram
Problem Analysis of the Existing System
They are handling their members manually. This will cause them …….
The sales records of the club are not kept….
The details of their products are not kept in a well-organized manner and cannot be referred
when needed. The products sold, and the stock balance is not easily tracked, hence the shortage
or some time certain important products maybe out of stock, then in such a circumstance
customer satisfaction will be very much reduced.
Sometime they may ask the customer to pay for one product twice by mistake, such incident will
make to shrink the good relation and the trust of the customer, making to lose customers
confidence as well losing the...
...U.S Airlines Industry CaseAnalysis
U.S Airlines Industry CaseAnalysis
“Given the current instability in the global economy, there is much uncertainty as to the timing and strength of recovery in aviation demand” (Federal Aviation Administration, 2012, p. 32). A number of factors have affected the U.S. Airline industry; most of these factors are detrimental and threaten the viability of the legacy carriers, but also the long term success and survival of the low cost carriers. Without change in the current situation, many U.S. Airline companies will be at risk for complete loss.
Synopsis of the Case
In the past decade the U.S. Airline industry has endured devastating setbacks caused by terrorist attacks as well as foreign and domestic economic troubles, the manifestation of which can be seen through increased fuel costs, decrease in work force, and a steady decline in those who actually utilize airline services.
Relevant Factual Information
“Fuel prices represent the most volatile and unpredictable cost item for the airlines due to fluctuations in the price of crude oil” (Grant, 2010, p.41). Fuel expenses account for an estimated 40% of an airline’s operating budget, according to a 2009 study (Wensveen, 2010, p. 10). “The current price of crude oil is $96 per barrel” (Gorondi, 2013). There’s been a 10.8% decrease of people working in the U.S. Airline...