Blue Moon
Executive Summary
Blue Moons, Pty Ltd was a business specialising in the creation and production of sailing boats. Their traditional strategy was to offer clients with low cost products with reasonable short production time. However, due to incurring problems in relation to clients preferring products from competitors and the decline in profits and market share, Rob Inglis the owner of the business decided to implement a new strategy. The purpose of this report was to identify whether it is beneficial for Blue Moon’s to change its cost strategy to a differentiate strategy. The report details and list the strategically change the owner has considered undertaking to address the issue and the tools/techniques it should consider to include in its revised Management Accounting System. Analysis suggest that if Blue Moon’s transforms to a strategy which differentiates its product with other competitors, than the business will gain a handful of key success factors; more attraction by customers due to the quality and uniqueness of the product, may result in high profit and market share. It is suggested, that Blue moon should also consider the drawbacks in making this change. Rob Inglis should question how this alteration might impact on the financial position of the business, staff satisfaction, staff turnover. In conclusion, it is crucial to make this change sooner than later because it had been stated that the owner is ‘worried’ about its financial position and it had been noted that customer preference is changing due to the economic crisis and competitors. It seems that that the advantages of altering to a new strategy outweigh the disadvantages.
Table of Contents
Executive Summary 2
1. Introduction 4
2. Blue Moon, Pty Ltd. new business strategy 4 2.1 The Business Mission of Blue Moon, Pty Ltd. 4 2.2 The Competitive advantage of Blue Mood, Pty Ltd. 5
3. Key Success
Blue Moons, Pty Ltd was a business specialising in the creation and production of sailing boats. Their traditional strategy was to offer clients with low cost products with reasonable short production time. However, due to incurring problems in relation to clients preferring products from competitors and the decline in profits and market share, Rob Inglis the owner of the business decided to implement a new strategy. The purpose of this report was to identify whether it is beneficial for Blue Moon’s to change its cost strategy to a differentiate strategy. The report details and list the strategically change the owner has considered undertaking to address the issue and the tools/techniques it should consider to include in its revised Management Accounting System. Analysis suggest that if Blue Moon’s transforms to a strategy which differentiates its product with other competitors, than the business will gain a handful of key success factors; more attraction by customers due to the quality and uniqueness of the product, may result in high profit and market share. It is suggested, that Blue moon should also consider the drawbacks in making this change. Rob Inglis should question how this alteration might impact on the financial position of the business, staff satisfaction, staff turnover. In conclusion, it is crucial to make this change sooner than later because it had been stated that the owner is ‘worried’ about its financial position and it had been noted that customer preference is changing due to the economic crisis and competitors. It seems that that the advantages of altering to a new strategy outweigh the disadvantages.
Table of Contents
Executive Summary 2
1. Introduction 4
2. Blue Moon, Pty Ltd. new business strategy 4 2.1 The Business Mission of Blue Moon, Pty Ltd. 4 2.2 The Competitive advantage of Blue Mood, Pty Ltd. 5
3. Key Success
References: Accounting; Text and Cases. Anthony R. N., Reece, J.S., and J.H Hertenstein. 2003. Irwin. Pp 757-775 Management Control Systems. Anthony, R. N., and V. Govindarajan. 2004. Mcgraw Hill. Pp. Harold Averkamp (CPA) http://blog.accountingcoach.com/what-is-capital-budgeting/ Rosemary Peavler http://bizfinance.about.com/od/glossaryc/g/Cost-Plus- Cost Management; Strategies for Business Decisions. Hilton, R.W., Mayer, M.W., and F.H. Selto. 2006. Mc Graw Hill. Pp. 742- 767 RMIT Lecture slide; Accounting Behaviour Orgs, Week 1- 2, Laura Maran, 2013.