Business Strategy Case Study: Tartan Corporation

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Management Accounting
Part A :
2-36: Strategic positioning:
Describe Tartan's competitive strategy. On the basis of this competitive strategy, what recommendation would you make to task force?

As an industrial leader in home lighting system manufacturing, Tartan Corporation has been existing for more than 90 years, with its brands and products firmly holding the proprietary in the market, while competition and potential threats, on the contrary, are impelling Tartan Corp to strengthen itself strategically. Based on the charts given in the case material, products are well developed during different historical stages and distributed among various markets, yet sales volume of some products are declining while others increasing. Thus the overall competitive strategy of Tartan is maintaining the capacity to develop up-to-date home lighting facilities using advanced technological competence while sychronously focusing more on the products and services which gain more marginal benefits under the same circumstances of labour or mechanism facilities.

Generally speaking, the two mainstays as back up for the competitive strategy go into cost leadership and uniqueness. Being an everlasting issue for multinational manufacturers, cost saving could be executed in tight control, systematization of producing lines, intensive supervision of labour, process engineering skills, etc (Blocher, 2004). Thus cost leadership is more applicable in companies with full of trivial functional departments and procedures, however in Tartan, the main problem is to focus on uniqueness, i.e., products differentiation.

Products differentiation is widely adopted as a strategic method in multinational corporations to occupy different market segments. To comprehensively develop the properties and functions of new products that lead the research, specific teams, strong marketing with consumer insights investigation and internal managerial expertise are part of the constitutes (Day, 2004). Inferred from the sales report of the five product lines, Western soars its sales volume during the past years, indicating more input for this products. However, marginal benefits of the five products should be calculated accurately because the increasing sales doesn't necessarily mean profitability.

Further more, as on-site service, compared with physical products, is more distinctive and inimitable in human connection and flexibility, Tartan could emphasize more on after sales service which provides more marginal profits in a designated cost allocation in labour.

2-37 Develop a SWOT analysis for Tartan Corp. Based on Problem 2-36. The analysis should include two to three items in each category: strengths, weakness, opportunities, and threats.

Based on the competitive strategy summed in Problem 2-36, external and internal analysis of Tartan Corporation will be employed. Reputation is obviously the first strength of Tartan for its existence for more than 90 years and various products during each period, which as a result could save the budget in advertising for new products. Along with the evolution of consumer taste in home lighting facilities, marketing capability of Tartan to grasp the right consumer needs and consequential research and development followed by a fast reaction in promotion and sales is also a strength point of years of accumulation. Besides, the various product lines, as technological platforms for new products, also add competence for Tartan.

Opportunities for Tartan are firstly, changing sales mix leads to diversified products demand, which exploits potential market for its products, and secondly, the sharper demand for Western style products. Various demand in products provides the opportunity and motivation of Tartan to expand.

Ironically, the previously most valuable product became a burden because of the high cost of craftsmanship. Classic style products may need adjustment in resource allocation. One of the ostensible...
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