B
CASE ANALYSIS
Kyocera Corporation
Preface According to the footnotes on the initial page of this case study, it was written by Nancy Rothbard of the Harvard Business School for the purpose of discussion rather than for analyzing the handling of an administrative problem. The format is generalized and it gives a broad spectrum of information from which a student can extract pieces relevant to his or her area of study for a specific class. Since this case analysis is for a class in Strategic Cost Management, the main area of interest for this paper will be in the area of “cost management”. However, given the broad spectrum of information, the analysis is not limited
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This was because of the company’s focus on meeting the customer’s needs for specialized components.
The list of products below is a testament to that high-tech solutions label. • Electronic Components – The electronic components product group provided discreet electronic components to industries that manufacture consumer electronics and to manufacturers who provided specialized products with stringent specifications to governments and industry. Chip capacitors, chip resistors, Hybrid IC’s, and quartz oscillators. In addition, thermal print-heads were included within the electronics components group. Most of these items are low-price, high-volume products. • Semiconductor Parts - The semiconductor parts product group provided the substrates and components typically used in the more expensive integrated circuit packaging. These are used in expensive machinery that is used in industrial, military or other heavy duty applications where stringent specifications are desired. • Electronic Equipment – The Electronic Equipment group manufactured and distributed communications and I/T (information technology) equipment in the form of computer peripherals, video conferencing systems, and memory for sale to manufacturers of computers and consumer electronics. • Optical Instruments – The Optical Instruments product group made single-lens reflex cameras, 8 mm video camcorders, and compact cameras. • Consumer Related Products – The Consumer Related Products
Assuming that the company’s goal is to maximize profits, the current cost system is not an appropriate tool for strategic planning. The ambiguity of the overhead costs per product makes it difficult to accurately analyze the cause and effect relationships of changes and/or improvements to specific product line.
The purpose of this report is discussing the case of Wilkerson Company that confronting tough competition in price cutting in pumps which caused to a big drop of pre-tax operating income from 10% to 3%. After observing the existing costing allocation, we found out there is an issue on the existing costing report that the manager could not be able to see the real situation. In light of this, there will be brought to the discussion on the feasibility of using an alternative costing method – Activity based costing (ABC) in the latter paragraphs.
David C. Shaw prepared this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The
used piece of electronic apparatus in the world. It is probably one of the most
Essentially, with the current cost system, the managerial analysis is highly flawed due to a lack of crucial in-depth cost information, as indicated by:
Bhimani, A., Horngren, C., Datar, S., Rajan, M. et al. (2012) Management and Cost Accounting. 5th ed. Edinburgh: Prentice Hall, p.369 - 378.
Through GEARS, Solectron was able to organize the whole company into business units that focused on different aspects of the business ' Technology Solutions, Global Manufacturing, Global Services, and Global Materials Services. OEMs were able to outsource more of their functions to Solectron, which in turn allowed Solectron to become involved in customers’ product designs, parts procurement, assembling and testing. This freed up the customers to focus on core competencies, such as research, marketing and sales.
with a number of strategic issues facing a capital-intensive, mature industry. Their product costing system was
Essentially, with the current cost system, the managerial analysis is highly flawed due to a lack of crucial in-depth cost information, as indicated by:
It meant that the public was exposed to electronics and it meant that individual firms were created
Blocher E., Stout D., Juras P., Cokins G. (2013). Strategy and Master Budget. Cost Management. (6th ed., pp. 350-406). New york: The McGraw-Hill Companies. DOI:www.mhhe.com/blocher6e
The purpose of this paper is to answer a few important questions: Why do companies allocate costs? How do companies allocate costs? And how this cost allocation can affect the decision making of the company. It is important for the companies to find the proper method to allocate the costs. Cost allocation is an important issue in many companies because many of the costs associated with designing, producing and distributing products and services are not easily identified with the products and services that are created. It would have been easier for companies to allocate cost if costs were directly traceable with the products and the cost allocation would have been minor issue for the company. The decision-making
The most obvious hardware component is the computer case. The case is where size comes into play. A bigger case allows more room for components. A bigger case is most often used for servers. For basic home computing needs, a small or mid-sized case is most common. Cases also
A successful cost leadership strategy usually provides the entire firm with high efficiency, low overhead, limited perks, intolerance of waste, intensive screening of budget requests, and wide span of control efforts. However, some risks of pursuing this strategy are that competitors might imitate the strategy, thus, driving overall industry profits down; that technology breakthroughs in the industry may make the strategy ineffective; or that buyer’s interest may swing to other differentiating features besides price.
Hill, Charles W. L. and Gareth R. Jones. Strategic Management: An Integrated Approach. Mason, OH: South-Western Cengage Learning.