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The analysis has revealed something about different types of cost strategies that can be used by TTC. From this entire analysis and discussion, it is clearly found that the position of the company is highly efficient and polarized, and they are managing the things with perfection. It is also found that there are certain strategies that might not be efficient for the company, however, certain recommendations have been posted to overcome on the challenges.
Scope
Organization is a place wherein people belong to different demographics and mind-set work together for the achievement of a single goal that was communicated to them. There is hundreds of employees work in an organization. Organizations have ben categorized according to their size, usage and capabilities. There are two main forms of organizations, such as Private Organization and Public Listed Organizations. Both of these types of highly tactful and material from the viewpoint of a company (Aladwani 2001). This particular assignment is very broad in nature, as it requires to analyze the cost management strategies of Treasury Trophy Company (TTC), through which different perspective. The analysis has revealed something about different types of cost strategies that can be used by TTC. However, they have to select only a single one for their productivity. Some of the major pricing strategies that discuss in the same aspect are as follows.
Penetration Cost Strategy
The first cost management strategy which is likely to identify and discuss here is Penetration Cost Strategy. It is one of the most integral and widely uses Costing Strategies in the Context of the TTC. Penetration Cost Strategy is a type of Strategy in which the organizations are entitled and obliged to charge the minimum price of their products from their customers. In other words the cost incurred by the company on the managerial activity of the product is located on a lower scale that allows them to minimize their ending price accordingly (Foils man et al. 2001). This particular strategy is highly efficient for the TTCs, and sometimes suits them. It basically found very interactive for the TTCs which are entering in a new region, and number of companies is already operating there. Most of the companies throughout the world are now focusing over the same factor to apply this particular cost strategy for their betterment and development. Management of a company used this particular strategy because they are well-aware about the internal control and management of the company through which they can maximize their core potential in the market. Proper research is required prior than the implication and execution of this particular strategy on the context of a company, which is highly essential for the company to maintain their core attentiveness in the market. In short, this particular cost-pricing strategy is essential, which can work extremely well in the context of TTCs in all over the world, and its importance cannot be overlooked.
Cost-Plus Strategy
The 2nd cost management strategy which is likely to identify and discuss here is Cost-Plus Strategy. It is one of the most integral and widely uses Costing Strategies in the Context of the TTCs. Cost-Plus Strategy is a type of Strategy in which the organizations are entitled and obliged to charge the price which are marginally higher than their original cost from their customers. In other words the cost incurred by the company on the managerial activity of the product is located on a lower scale that allows them to add marginal profit over its cost (Fen wick et al. 2006). This particular strategy is highly efficient for the TTCs, and sometimes suits them. It basically found very interactive for the TTCs which are entering in a new region, and number of companies is already operating there. Most of the companies throughout the world are now focusing over the same factor to apply this particular cost strategy for their betterment and development. Management of a company used this particular strategy because they are well-aware about the internal control and management of the company through which they can maximize their core potential in the market. Proper research is required prior than the implication and execution of this particular strategy on the context of a company, which is highly essential for the company to maintain their core attentiveness in the market. In short, this particular cost-pricing strategy is essential, which can work extremely well in the context of TTCs in all over the world, and its importance cannot be overlooked.
Competitive Cost Strategy
The 3rd cost management strategy which is likely to identify and discuss here is Competitive Cost Strategy. It is one of the most integral and widely uses Costing Strategies in the Context of the TTCs. Competitive Cost Strategy enables an organization to search for the costs which are highly similar to the one like the competitors of the company. It means organizations are likely to charge the same price which have been charging by their competitors or peers (Gould et al. 2006). This particular strategy is highly efficient for the TTCs, and sometimes suits them. It basically found very interactive for the TTCs which are operating in a complex and very competitive environment. Most of the companies throughout the world are now focusing over the same factor to apply this particular cost strategy for their betterment and development due to increasing competition and globalization. Management of a company used this particular strategy because they are well-aware about the internal control and external competition related to the company through which they can maximize their core potential in the market (Noe et al. 2006). Proper research is required prior than the implication and execution of this particular strategy on the context of a company, which is highly essential for the company to maintain their core attentiveness in the market. In short, this particular cost-pricing strategy is essential, which can work extremely well in the context of TTCs in all over the world, and its importance cannot be overlooked.
Premium Cost Strategy
The 4th cost management strategy which is likely to identify and discuss here is Premium Cost Strategy. It is one of the most integral and widely uses Costing Strategies in the Context of the TTCs. Premium Cost Strategy enables an organization to apply high amount of cost over their products or services, and then sell-out the same in the maximum price (Rimbaud et al. 2001). It means organizations are likely to charge higher price than the price charged by their competitors. This particular strategy is highly efficient for the TTCs, and sometimes suits them, but it is valuable for those TTCs who are operating in a Monopoly. It basically found very interactive for the TTCs which are operating in a complex and very competitive environment. Most of the companies throughout the world are now focusing over the same factor to apply this particular cost strategy for their betterment and development due to increasing competition and globalization. Management of a company used this particular strategy because they are well-aware about the internal control and market related to the company through which they can maximize their core potential in the market. Proper research is required prior than the implication and execution of this particular strategy on the context of a company, which is highly essential for the company to maintain their core attentiveness in the market. In short, this particular cost-pricing strategy is essential, which can work extremely well in the context of TTCs in all over the world, and its importance cannot be overlooked.
Findings
There are two different products which have been analyzed and discussed in this particular aspect which are Royal Golf Club and Sterling Yacht Club. However, Full and absorption costing will be based in the Royal Club (Freeman 2010).
The first costing measure is related to the Royal Club (Full Costing) Function. The Royal Club Costing is divided into three main elements which are Forming, Finishing and Assembly. The costing of all of these elements will include the three elements which have been discussed here. The total material cost in this particular aspect is $ 301, while the total labor and overhead cost are $ 630 and 1443.4$. The total cost of Royal Club according to the Full cost functioning is amounted to $ 2,374.40, which is quite high, and the company has to work hard to overcome on the same.
The 2ndcosting measure is related to the Sterling Yacht Club (Full Costing) Function. The Sterling Yacht Club Costing is divided into three main elements which are Forming, Finishing and Assembly. The costing of all of these elements will include the three elements which have been discussed here. The total material cost in this particular aspect is $ 65, while the total labor and overhead cost are $ 707 and 1663.4$ respectively. The total cost of Sterling Yacht Club according to the Full cost functioning is amounted to $ 3,035.06, which is quite high, and the company has to work hard to overcome on the same.
The 3rdcosting measure is related to the Royal Golf Club (Absorption Costing) Function. The Royal Golf Club Costing is divided into three main elements which are Forming, Finishing and Assembly. The costing of all of these elements will include the three elements which have been discussed here. The total material cost in this particular aspect is $ 301, while the total labor and overhead cost are $ 630 and 678.65$ respectively. The total cost of Royal Golf Club according to the Full cost functioning is amounted to $ 1,609, which is quite high, and the company has to work hard to overcome on the same. It is clearly found that the highest cost is associated with Sterling Yacht Club, comparing to Royal Club in both of the scenarios like Full Costing and Absorption Costing.
Conclusion
This particular assignment is very broad in nature, as it requires analyzing the cost management strategies of Treasury Trophy Company (TTC), through which different perspective. There are three different perspective of costing which has been discussed in this particular aspect. Each of the sections has certain factors in particular that may impact over TTC. The company has to make sure that they applied the Royal Club Absorption Costing factor for their productivity. However there are certain recommendations which the company has to undertake.
Recommendations
The first recommendation which has been proposed in the context of TTC is related to management of their cost and operations. The operational cost associated with Royal Club Absorption is the lowest as compared to other costing method. This particular factor will certainly help the company to minimize its operational cot and maximizing its financial outcome in a professional manner.
The second important recommendation that associated with TTC is related to communication factor. There are four different stakeholders associated with the company which have been divided among two main sections. The first one is the internal shareholders, while other is external shareholders. It is important for the company to increase the factor of communication through the perspective of Management Bi Objectives (MBO) to maximize the level of communication with their employees. Moreover, the company has to arrange certain meetings with the investors that include the management and arrangement of the Annual General Meetings (AGMs) and Extraordinary General Meetings (EOGMs) so that the management and the shareholders would be in a single binding and can manage their well-being in the market. Finally, the communication factor should have been increased with the management and the customers through different measures such as questionnaires and surveys. The implications of this recommendation not only strengthen the company from their internal perspective, but also strengthen their position in front of the eyes of their shareholders. It also helps them to strengthen its financial as well as strategic aspect in a perfect manner.
The third most important regulation that associated with this particular aspect is to strengthen the internal audit function and operations of the company accordingly. TTC can initiate the same factor by increasing the factor of proper monitoring and analysis through which they can actually strengthen their position in the market and maximize their core operations and effectiveness in a professional and ethical manner. The implications of this recommendation not only strengthen the company from their internal perspective, but also strengthen their position in front of the eyes of their shareholders. It also helps them to strengthen its financial as well as strategic aspect in a perfect manner. Hence, the company should consider and implement all the strategies and recommendations which have been mentioned here.
References
Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge University Press.
Hulland, J. (1999). Use of partial least squares (PLS) in strategic management research: A review of four recent studies. Strategic management journal, 195-204.
Pearce, J. A., Robinson, R. B., & Subramanian, R. (1997). Strategic management: Formulation, implementation, and control. Chicago, Illinois: Irwin.
Priem, R. L., & Butler, J. E. (2001). Is the resource-based “view” a useful perspective for strategic management research?. Academy of management review, 26(1), 22-40.
Thompson, A. A., & Strickland, A. J. (2001). Strategic management: Concepts and cases. McGraw-Hill/Irvin.
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