Based on ratios analysed earlier, it is proven that depreciation will affects the revenue generation as it reduces the initial assets’ cost. Depreciation policy used becomes one of the factors that cause the variation in company’s value. Next, general purpose of financial reporting will be more effective only when IASB itself does not determine the depreciation rate and useful life since economic benefits’ pattern, assets’ quality and economic factors which related to the PPE’s nature may vary for each other. Lastly, it is believed that other measurement models that are not listed by IASB are not effective to be used since they do not provide enough information to the financial information’s user. The investors may face the difficulties in making judgement whether to invest or not into the company.
However, when the monopoly firm is established, the monopolist may spend some money on advertisement to acquaint the consumers about his product. But he will spend on advertisement only once. On the other hand, due to large number of firms and existence of competition among them, expenditure on selling costs is essential under monopolistic competition. 5. The monopolist can charge different prices from different customers for the same product and can adopt the policy of price discrimination.
What do the first and second quarter results indicate about “Fair and Square” strategy? Are these two quarter results enough to validate or invalidate the changes made? JCP New “Fair and Square” strategy did not go well well with JCP Core customers. Based on the first and second Quarter results about “Fair and Square” strategy indicate a negative impact on JCP. Exhibits 3 and 14 show a decline in revenue between the 1st and 2nd quarter.
Our assumptions concerning client combine for this situation is that Sonance would drop the mass retail market client to signal they're centered solely on the custom and semi-custom installation markets. additionally, Sonance would think about reducing the worth of their Original Series Speakers to Dealers to $90 from $140. this might improve the Dealers' profit margin to seventy fifth, adequate SpeakerCraft's, though the margin web of installation prices would still be lower (see Exhibit 2). These assumptions would cause AN exaggerated Retention Rate through the Dealers sales of Original Series Speakers of eighty fifth and a better rate of 100 percent vs. 5%. Sonance would additionally increase their Retention Rate with Dealers for the present iPort product to eighty
This statistic illustrates the challenges companies face when trying to grow in competitive environments. Achieving even 1%annual growth requires increasing sales to customers, both existing and new, by 14%. Reducing customers’ loss can dramatically improve business and brand loyalty which leads to consistent and even greater sales since the same brand is purchased repeatedly (Giddens, 2010) . 3.6.2 Premium Pricing Ability Consumers are fewer prices sensitive when increasing the brand loyalty. Generally, they are willing to pay more for their preferred brand because they perceive some unique value in the brand that other alternatives do not provide.
In addition resellers and the companies benefit off of each other. But does this benefit normal consumer as well? From the literature on the ticket resale market, Leslie and Sorenson found that due to the resale, there was a 4.1% higher gross surplus than if there was no resale. The factor that might reduce and offset the gross surplus is the rent-seeking costs and additional transaction costs. However their results suggest that resale markets are in fact welfare-improving because the gains created by resale often outweigh the additional transaction and rent-seeking costs.
In exploring the implications of the five forces eliminating today’s competitors through acquisitions could reduce an industry’s profit potential, government policies could play a role by changing the relative strength of the forces, and use the forces to understand complements. This business could influence the key forces in its industry to create a more favorable structure for itself or to expand it altogether. Michael Porter has identified the three generic strategies. These strategies include cost leadership, differentiation and focus strategies. According to Porter, cost leadership emphasizes producing a standardized product at a very low per-unit costs for many buyers who are price-sensitive.
With regards to the private label, Freshgel, all that can be deduced from their pricing strategy is that the prices they set were not at a low enough level to entice consumers who would otherwise choose the two dominant brands in the industry. Their unit sales are considerably lower than that of their competitors and in order to achieve success their most likely strategy is to reduce prices even further. However, even if they witness an increase in unit sales, it is likely that their revenue will not increase substantially. In contrast, Store Two’s results are indicative of a slightly different relationship, as the correlation of the price and amount for sales is positive for Colgate. It is negative, but very close to zero in Prodent’s case.
If the single market has led to more competition, mark-ups should decrease in heavily protected and inefficient markets and a process of price convergence should be perceptible. Badinger (2007, p.135) found that “price mark-ups in manufacturing sectors have decreased by 32% since the launch of the single market”. Besides decreasing price mark-ups, increasing competition also encourages innovation. Griffith et al. (2010) in
Consumers tend to be more reluctant when purchasing goods so products end up being sold and not bought; this also affects customer satisfaction levels (Kotler, 2000). These methods will eventually lead to a dependency on sales to achieve the organization’s objectives regarding profit and growth. Overall the customer’s needs are not satisfied and therefore could in turn affect the business negatively by word of mouth and product dissatisfaction (Bhasin ,2016). The only positive outcome of the selling concept is a quick turnover of profit, which is in itself yet a short term