Discuss at least FIVE (5) benefits of JIT system. The benefit of using JIT system are:- 1) Lower Warehouse Costs Is it because storing excess inventory will cost a lot of money and if the number of goods that storing in inventory can be reduced, the cost of inventory also will reduces. The company that using JIT system may able to reduce the number of warehouse they needed and eliminate the warehouse that not necessary. 2) Better management decision The JIT system also help company managing their stock more efficiently and they handle their supply chains and use their parts to assemble products for their customers. So that, by reducing cost in warehouse managing, the company will experienced lower cost production for their product and can provide low price to their customer.
The bargaining power of Buyer. Here the company how easy it is for buyers to drive prices down. Again, this is driven by the number of buyers, the importance of each individual buyer to company business, the cost to them of switching from company products and services to those of someone else, and so on. If the company deal with few, powerful buyers, then they are often able to dictate terms to the company. Rivalry among existing Competitive.
2.3 Porter’s Generic Strategies Referring to Porter (1980), Porter’s five forces model of industry competition is a framework that tries to analyse the level of competition in the industry and corporate strategy competition. First, competition in the industry means that fierce competition in the same industry leads to lower the profit potential of the company. It may lead their company profit slightly reduce. Second is potential of new entrants into industry. This is because the market produces high return, so that will attract new businesses and lead to many new entrant.
After identifying where un-needed expenses are being used, managers can increase profits by reducing the total cost of logistics. Although this is very time consuming, the benefits outweigh the disadvantages, as there will definitely be a loophole that the company can exploit and bring in maximum revenues and low prices for its customers. Customer satisfaction is the most significant as it has a direct impact on the market share. Research shows that it is five times more expensive to bring in new customers than retaining old loyal customers. Another benefit that Multi Future can have through customer satisfaction is that the customer needs are also identified and this can help them align their services
Among the success factors is IKEA executed a cost effective approach concerning its business strategy. Through minimizing expenses and removing waste such as shipping, IKEA could put lower pricing details than competitors who have the same features. Moreover, IKEA developed a one of a kind product strategy. Considering consumer developments, they placed product priorities by placing a price by using a common matric which is a lot lower than the competitors. Furthermore, they motivated the designers and suppliers to be more competitive so that they can decrease the expenses and get a wider range of designs to select from.
Adverse selection is an economics term means an undesired result happens which the quantity and the price of goods or services altered because of sellers and buyers have different or imperfect market information. For example, executives may more willingly issue shares when the share price is overvalued compared to the real value, buyers will finally buy the overvalued shares and lose money. If the company charges an average price but only the consumer who can pay more buy, the company takes a financial loss by paying out more benefits. Due to adverse selection may lose some of the customers, and we assume that every company should be profit maximization, moral hazard is more widespread than adverse selection in a company. We will discuss few major issues regarding tackling moral hazard under the CG requirements: Issue 1 – executives should act in the best interests of the company and
2.2 Bargaining power of buyer Another aspect of porter 's five forces model is bargaining power of buyers. The bargaining power of buyers refers to how much buyer can put pressure to the business in order to get them improve by providing better customer service, higher quality products and forcing the industry to down the prices. The bargaining power of buyer affects the seller 's competitive environment and the ability to achieve profitability in an industry. There will be a decrease in potential profit and increase in competition among seller in the industry if there is a strong buyer. On the other hand, if there is a weak buyer then the industry become less competitive and the potential profit of the seller will increase.
Accelerated Buy Backs Introduction to Share Buybacks: A share buyback, also known as repurchase, means that the company purchases its own shares in order to reduce the outstanding shares in the open market. The reduction in the number of shares outstanding in the market eliminates any potential threats from the shareholders who may be looking for a controlling stake in the company. Using a buyback, the company invests in itself, which improves the proportional share of earnings; this steps up the valuation of a stock. When active investors believe that the company’s stocks have not performed in line with the market, they carry out buyback programs. Introduction to Accelerated Buybacks: An “accelerated” buy back is also known as an accelerated share
Companies outsource their CRM systems mainly because they want to improve their customer satisfaction: demand route or they want to reduce their costs in CRM: supply route (Kartik et al 748-769). Companies may be forced to outsource their CRM systems if their own systems are failing in giving their customers the best utility. In such cases, poor human resource especially in the front desk office is the main cause and as such, the company outsources the services to professional companies that would generate efficiency and further increase their shareholder value. Similarly, if a company concurs that it will be cheaper to outsource CRM services than to incur the costs, outsourcing will be done in a bid to reduce their production costs and consequently increase their shareholder
The budget may be used to evaluate the actions of a manager within the business in terms of the costs and revenues over which they have control. Without a budget, an organization will be highly inefficient and ineffective. Why costs need to be controlled to budget? Costs need to be controlled to earn profit, to survive and be competitive, to pay other bills, to run the business successfully, to have big picture of expenses and how much you could spend in the over all, and to make money at the bottom line. If we don't control the cost, your competitors get the customers and if you don't control the budget, your purchasers don't have to be competitive.