Strategic Management Essay Example | Topics and Well Written Essays - 1000 words

Strategic Management - Essay Example An anchor company can supply ships to marine wholesalers, they can supply anchors to marine wholesalers. In addition to this they can also supply steel plates, metal fabrications, plastic injection modeling so on and so forth. Structural steel frames and bases are also included in these services. As far as the case study is concerned, it is known that Albatross only supplies hooks and snags to its clients. Breaking Even: â€Å"Break-even analysis is a technique widely used by production management and management accountants. It is based on categorizing production costs between those which are "variable" (costs that change when the production output changes) and those that are "fixed" (costs not directly related to the volume of production).† (Break-Even) The sales volume required by a business to make profits is called a breakeven point; the following answer will present the breakeven point of Albatross. Breakeven point comes into the picture when a pricing strategy is being d eveloped. This pricing strategy can be a part of either the marketing plan or the business plan. The best option between A and B would be selected giving a just explanation. Fixed Cost per unit= Total fixed cost/ Volume of Production In this case it is x=$500,000/5000 X=$10 (Fixed cost per unit in process A) Case B= $12 Anchor and Process Process A Process B a Fixed Cost per Anchor $10 $12 b Total no of Anchors to Attain Break-Even 50000 Units 62500 Units I would recommend process A because the break-even would require only 50000 units whereas in process B it would require 62500 Units. The sooner the break-even is reached the better. So process A is recommended considering that it would take much lesser time to sell 50000 units than 62500 units. One very important long term change would to invest heavily in latest technology, the second long term change would be to buy more land to effectively manage the needs of the company. One short term change would be to access more shipping op tions; the second option would be to choose the most effective shipping option. The technology that is being used in the company is without a doubt obsolete, they have to invest in new machines. They can never expect growth should they keep using the same obsolete machinery. The company needs to invest in technology; the use of outdated technology can never facilitate growth. New machines will produce better products and at a good speed, this will make the company much better than ever. This will also bring down the cost of production, the old machines require much maintenance, and this would be much different in the case of new machines. Ergonomics: Ergonomics aims at two most important things, they are health and productivity. When an employee is unwell, he will never be able to produce what is expected of him and the organization will suffer because of his lack of productivity. Easy to use machines should be bought by an organization so that the employees never get affected and t heir productivity is never hampered. The organization must not buy anything that will affect the health of the employees. In this particular case Albatross