Essay about Baldwin Bicycle Company Case

The most suitable costing method Yeltin should adopt is the practical capacity in order to remove the factor of uncertain budgeted sales figure. For this approach and the practical capacity of 65000-22000 units, then the revised overhead costs come out to be $30. With the inclusion of material and labor costs, the cost of the cartridge stand at $52 and the additional royalty expense of $10 raises the overall per unit cost to $62. The selling price of the cartridge is fixed at $150. With this selling price, the gross margin is equal to $88. The gross margin percentage is equal to 59%. In comparison to the budgeted volume, the gross margin has increased by 14%. See below

As shown in Exhibit, profitability has been a concern to Kootenay - gross margins are below industry average of 28-50% for its complete bike products (Entrée; -0.83%, Dlux; 7.76%, and Ultra;-6.73%) where materials have represented a high percentage of the costs (58 – 74%). Selling frame alone has shown stronger profitability (23.33%) but overall returns needs to be improved (ROA/ROE are -14%/-22%).

This was favorable, but the Efficiency Variable was 100,000 unfavorable. This suggest that Competition Bike received a great price, but with the unfavorable Efficiency there were a lot of left over materials suggesting the material might not be the best quality. Direct Labor had a 150,000 Unfavorable Variance, but had a 50,000 favorable Efficiency Variance. The labor cost was up due to the high skill level needed for the bike manufacturing. The 50,000 favorable Efficiency Variance enabled the high skill labor to perform the task very efficiently. The Manufacturing Overhead had a 24,000 unfavorable Price Variance, and a 2426 unfavorable Efficiency Variance. The Advertising Cost had a 5,000 unfavorable Price Variance and a 1246 favorable Efficiency Variance. This suggest that Competition Bike spent more on Advertising in order to boost lagging sales, and the favorable Efficiency Variance shows that even though more was spent than budgeted, the money spent was efficient and worth the increase. The Transportation Out had a 3207 unfavorable Price Variance and a 2400 unfavorable Efficiency Variance. This suggest that Transportation cost were up due to increased fuel cost, and this increase in cost resulted in unfavorable Efficiency Variance due to transporting fewer bikes with increase in fuel cost.

Each of the following parts describes a firm that was an early mover in its market. In light of the information provided, indicate whether the firm’s position as an early mover is likely to be the basis of a sustainable competitive advantage, and explain why or why not. (2 points: 1 point each)

2. How have Deere’s business strategy choices strengthened or weakened its competitive position in the agricultural and construction equipment industries?

Jerry and Elaine went to a store which has a lot of antique staffs, and a lady’s bicycle with a pink frame and a basket caught Elaine’s eyes. Elaine decided to take the bike from the wall by herself. And then, Elaine fell backward because the heavy-weight bicycle. Besides, the backward falls resulted in impact to her neck, which made her painful. Because of that pain, she said the first person who heals her neck can get her bicycle. At that time, Kramer stayed at the house and heard the word that Elaine said. He said that he knows shiatsu and he can help Elaine. And then he really healed Elaine’ neck. After, he said that Elaine can give her bike to him any time. However, Elaine explained that what she said is just a joke, but Kramer took it seriously and he thought they had a deal. In addition, Elaine thought the treatment process took less than 10 seconds, so it was not worth a bike. Finally, Kramer avoided Elaine and took the bike without authorization. After few days, Elaine’ neck was get injured again when she was ready to get up. She went to Jerry’s house to argue with Kramer and thought Kramer should got back the bike, but Kramer said that was Elaine’s fault because she did not sleep in a wooden board for a week. They could not figure out a good way to solve the dilemma. In order to judge the owner of the bike, they decided to find an impartial mediator.

Michael Eubanks of Canadian Tire Corporation (CTC) is in charge of the implementation of a business intelligence (BI) system for the company. This implementation began in 2003 and was to be completed in 2005. In 2006, the project is only in the 2nd of 3 phases. He is now faced with a problem. The implementation is going much slower than he anticipated. His goal is to implement BI as soon as possible, so what does he need to do so that he can reach this goal?

Going into 2004, Bob Moyer planned to produce 10,000 bicycles at Mile High Cycles. Construction of his bicycles includes the utilization of three departments, frames, wheel assembly, and final assembly. During this year, Mile High Cycles ended up actually producing 10,800 bicycles to meet higher than expected demand. Bob is curious as to whether or not he was successful in maintaining costs to meet these higher levels of demand.

1. What is the competitive situation faced by Wilkerson? The critical product in term of market competition is the pumps of Wilkerson Company. The pumps are Wilkersons major product line with a production of about 12,500 units per month. Pumps currently have the lowest gross margin among all products, because competitors had been reducing prices on pumps and Wilkerson adopted its prices in order to remain competitive and to maintain the volume. 2. Given some apparent problems with Wilkersons cost system, should executives abandon overhead assignment to products entirely by adopting a contribution margin approach in which manufacturing overhead is treated as a period expense? Our conclusion is, that they should not adopt

3. Describe the competitive strategies used by each of Williams-Sonoma’s competitors. Which of these are most effective?

a On the basis of Michael Porter’s(1980) competitive strategies, how does Baldwin currently compete? Justify your answer. (25%)

Porter five forces analysis is strategic analyses tool to understand the level of competition within an industry. The attractiveness of the industry is found by analysing five forces. In this context, the attractiveness of the industry is how profitable the industry is for the business and unattractive industry is the one where there is "pure competition". firms are driven to normal profit. The five forces include threat of new entrants, threat of substitute products or services, bargaining power of customers, bargaining power of suppliers and intensity of competitive rivalry (Porter & Heppelmann, 2014; Porter, 1983). Here, we will use porter five forces to see how it applies to bicycle Industry.

“Porter’s five forces”: Introduction. “Porter’s five forces” is widely applied in today’s business world. Harvard Professor Michael E. Porter’s first HBR article “How competitive forces shape strategy” was published in 1979. It became revolutionary in the field of strategy. Porter’s subsequent work has brought big changes to the study of competitive strategy for corporations, regions, and nations. With assistance from his colleagues from Harvard Business School, Porter continues to update and extend his classic work, providing practical guidance for

As for South America, Harley-Davidson Inc. HOG +0.31% opened a permanent Latin America headquarters, joining a growing list of U.S. companies looking to tap into the emerging market. (By Melodie Warner in Market Watch) South America has a growing economy and a huge acceptance for an icon in the motorcycle industry like Harley Davidson. In the same way Japan embraced Harley “Their economy is a fast growing luxury market” p.c11.

The Buell division needs to continue to produce a quality motorcycle under Harley’s brand name