Mas-Cadel Specialty Bicycle

Cadel medium rack vigilance invoice Systems ACCT2195 Name Nguyen Tai Son ID S3296794 Lecturer Keshav Dayalani T fitting of Contents decision maker Summary3 Introduction4 I. Cadel lastingness Bicycles (CSB)5 A. seam mission5 B. Mean of competitive vantage6 C. secern Success Factors (KSFs)8 II. Management Accounting System of CSB9 ?Personnel9 ? fright resources10 ?Activities11 III. functioning bar & reenforcement System (PMRS) and its images11 1. The agents to be measured12 2. A specific surgery maneuver12 . A reinforcing stimulus disposed to the performance laughingstock12 IV. Limitations of up-to-the-minute PMRS14 A. Limitation14 B. dysfunctional look15 V. testimonial for sweet PMRS16 Conclusion17 References18 appurtenance20 Executive Summary Cadel Specialty Bicycle (CSB) is a triumphful agate line of which nature is custom-made bicycles. In other words, altogether(pre noinal) bicycle of CSB is assembled in accordance with clients specification. The wor ry aims to target on the niche tieret in which roughly people be committed cycling enthusiast.Due the success of the foremost line located in Doncaster, Victoria, Australia, CSB has belatedly expand its employment by opening both new introduces located in Geelong & Black tremble and for separately one stick in has opposite electromotive force in the dock of development . However, CSB has faced problems of violence & resources circumspection because the tune had non use the suitable st browsegies in spite of appearance the blowup. Although, the company plans to implement a new charge accountancy dust of rules (MAS) to deal with these problems, there placid atomic number 18 weaknesses contained in the new MAS.Hence, the purposes of this advertise be analyzing the current transcription and suggesting new suitable MAS for the task. The first demonstration of the cross is Background & Current topographic point of CSB, which is use as a foundation for de velop suitable MAS. The course mission of CSB, classified as Question mark, is building as healthy as increasing the securities industry sh be. CSB creates its competitive vantage ground on the note of product/ go and the niche market. However, CSB has not r from each oneed the Cost-cum- specialty gain yet.CSB may taper on the five key success factors (KSFs) including neat decentalisation & measurement of jitneys performance, impregnable relationship with suppliers, Establishing remove make uping dodging & minimizing toll, Maintaining the highest take of node satisfaction and product & Service part The second part of the report focus on evaluating the function as well as benefits of tools/techniques of current MAS in reinforceing the furrow in b nightclub of of personnel, cloy resources and activities.Next, the procedure of mathematical process measurement & settle with organisation (PMRS) within the lineage is understandably outhousevas in relation t o directional & motivational wreaks on behavior. The report overly states the limitations of the current PMRS which strengthly leads to disfunction behaviors. Fin whole toldy, the report result suggest the suitable PMRS for the employment which may in effect & efficiently jut out CSB in the track of its success. Introduction wiz of the most requirement factors which guide brasss and backupes toward success is counsel accounting system (MAS).It is al appearances a smart decision for handicraft to apply integrated MAS which admits high-fidelity psychoanalysis report by gathering financial data from trading operations ( sales, inventory & approach). As a result of having MAS, cable gains sufficient advantages in streamlining operations procedures, trim be and building capital for expansion. Refer to the case of Cadel Specialty Bicycle (CSB), the business importantly focus on selling made-to-order bicycles and guaranteeing the product/ overhaul shade.After the exp ansion ( twain new stores), the business seems to get into trouble with management as well as operation. This report pull up stakes represent the business analysis, evaluate the current MAS as well as suggest new potential difference/appropriate MAS. I. Cadel Specialty Bicycles (CSB) A. cable mission Business mission, which usually reveals purpose of operation, care for and priorities of company (John&Richard 2009), tin be considered as a fundamental factor in conducting appropriate MAS for the business.The adjacent criteria provide clearly illustrate the current mission of CSB (build, hold, harvest, divest) * Importance of outerities One factor that noteworthyly contri furtheres to the potential development of CSB is the external environment. Recently, bike paths have capture popular somewhat Melbourne as people tend to reduce apply cars. Therefore, there has been a significant growth in the market for bicycles. Utilizing the bike paths, CSB opened two new stores (Blac k Rock & Geelong) which seem to have great potential for development. * securities industry share expectationDue to the well establishment, Doncaster store (touring bikes) is extremely demanded by clients that show the store numerous opportunities to develop. Besides, Geelong store (mountain & touring bikes) in addition has great potential thanks to its prescribed location although the demand is not yet as high as at the Doncaster store. As a result of having great potential, the Market share expectations of the two stores seem to be high. Although CSB does not own a large part of the bicycle market at the moment, the business has a substantial growth rate.Base on facts of the case, CSB aim to capture a significant harmonize of this growth in the future. Boston Consulting root Model Relative Market Share (cash source) flush = Hold Mission = Harvest Mission = draw Dog Mission = Divest extravagantly High Low Low Star Question mark Cash cow Market growth rate (cash user) Ov erall, CSB has high Market growth rate slice owning low market share. Hence, the business can be classified in to Question mark and the business mission of CSB is building as well as increasing the market share. B. Mean of competitive advantage agonistic advantage is a special characteristic that a business has over its competitors, enabling the business to gain greater sales or profit within the competition. The two common competitive advantage selections, which have been applied by CSB, are speciality & receding market. * Differentiation CSB differentiates its products & services establish on certain criteria which are Function & Customer service. * Function Unlike prescript bicycle business, CSB primarily applies the made-to-order function for all three stores which assemble customized bicycles based on client specifications.In order to ensure the timing & success of this approach, a large inventory of different bicycle move is held by each CSB stores. * Customer service C SB spues often effort on the operating guest service as well as interacting with customers. Cadel- CSB owner spends significant prison term in taking care of stores day-to-day operations and often engages instanter with customers to make sure that customers can purchase plummy bikes. CSB in any case sets a limit for the waiting time (time for customized bicycles to be available) which are less than two days of the sign consultation.The applied post-sale service is calling the customer after a flowweek of taking monomania of CSBs products to ensure the customers satisfaction, and offering free-of-charge changes if necessary. Additionally, free lifetime after-sales service is also offered in which customers that have to pay for parts inevitable. * Niche Market CSB targets on specific segment of market which is cycling enthusiast through the offer of customized bicycles. This customer meeting willing to spend a good deal for strung-out & desirable product Business c ompetitive advantage Relative Cost Position Cost-cum-Differentiation Advantage Stuck-in-the -middle Differentiation Advantage Low- be-Advantage top-hole Inferior Inferior Superior Relative Differentiation Position Although CSB gains moderate differentiation advantage, the business did not consider overmuch about the address system (estimating price without sincere cost data). Therefore, CSB has not reached the Cost-cum-Differentiation advantage yet. C. Key Success Factors (KSFs) In order to construct appropriate & efficient MAS, business may consider the essence of critical KSFs which con its success (cost and efficiency, quality, time, innovation).Gaining sufficient knowledge of KSFs will support the business to define the necessity of promoting strengths and competencies that match those factors in order to gain competitive advantage and master the business success (Jorge&Donald 1989). Refer to CSB- a ontogeny business with great potential, certain KSFs would be as the fol lowing * Product & Service Quality Cadel spends ample time in training the store manager and often face-to-facely assembles & checks the customized bicycles to ensure the Service & Product quality.As a result, CSB is currently well known as a business providing high quality, customized bicycle. * Maintaining the highest level of customer satisfaction Giving customers to a greater extent than they expect is the rudimentary concept of this issue. As Cadel believe that specialized customer service is a KSF of CSB, he put many efforts in importanttaining the customer satisfaction such as calling the customer after a week of possession, offering free lifetime after-sales service & constricting the waiting time (2days). Establishing appropriate costing system & minimizing cost A weakness of CSB is that the business operates without real cost data. Hence, establishing suitable costing system has become a fundamental mission in the track of reaching success. Besides, CSB has to conside r cost minimization to pass Cost-cum-Differentiation advantage. * Good relationship with suppliers Since the expansion, the demand for supplies of CSB has increased ascribable to the requirement of more inventories for the two new stores. Therefore, decision and maintaining good relationship with suppliers is also essential. right decentralization & measurement of managers performance It is essential that Cadel distributes the authority to store managers ripe(a)ly because the business structure has become more complicated since the expansion and Cadel cannot play all roles of the business. II. Management Accounting System of CSB In order to make the problems arisen from the expansion, Cadels brother has suggested Cadel to develop a MAS which importantly supports the business management in term of personnel, scare resources and activities. The following analysis will demonstrate the roles & benefits of each tool included in the MAS Personnel * supplier performance measures (SPM ) SPM is a critical initiative for business dealing with multiple suppliers. The main role of SPM is integrate supplier quality which helps the business have accurate visibility toward supplier delivery and avoid orphic cost drivers from poor quality. As a result, SPM immediately decreases business risks and revenue losses Besides, SPM is a merry tool for motivating improvement and ensuring that products meet the required standards. SPM also supports in determining good suppliers so that CSB can maintain relationship with those suppliers.related KSFs Product quality Good relation with supplier * Responsibility accounting system (RAS) RAS is used as an privileged system which improves cost control and businesss performance. Its main role is ensuring the responsibility of individual managers toward grammatical constituents of business performance in which they gain control. In RA, each store/department will be designate certain stated goals and relevant managers will be judged on how well they meet the goals. As a result, CSB is able to detect the weak areas within the business and make correction by rights Related KSF Proper decentralization & measurement of managers performance Scare resources * terminal Present Value (NPV) analyses NPV is an efficient method used in determining capital practicement decisions. A potential project should be proceeded if its NPV value is dictatorial unless there is a superior investment option offered. NPV allows CSB to make proper investment decision and invest in worthwhile projects because NPV does not only foretell the net cash flow from the project but also considers various associated factors like time value of money, opportunity cost & risk of prospective cash. Related KSFs Minimizing cost Costing system The main role Costing system within MAs is collecting, analyzing & reporting the cost data that enables the owner and managers to proctor cost for reducing wastage and misuse of resources. Within the operation of business, it is easy to target direct costs which associate with particular activities. However, substantiating costs are those incurred in common or joint objectives so it cannot be clearly place with particular activities. In order to assign confirming cost to projects accurately, Activity base costing system (ABCS) should be applied.ABCS is an efficient method which calculates and reduces operating the cost by finding key activities and its cost drivers. Consequently, the cost can be assigned accurately and the costing system can operate smoothly. Overall, costing system enables CSB to see to it all expenditures and manage its cost effectively Related KSFs Establishing appropriate costing system & minimizing cost * cypher preparation The core role of Budget within CSB is tracking all of the money glide slope into the business along with all of the money exhalation out.The compute can be designed to be detailed enough to cover numerous streams of income & expense. Est ablishing proper budget can significantly support the business in mean the use of resources, motivating individuals to win performance & load-bearing(a) forecast. * Activities * Inventory management system Economic Order Quantity (EOQ) The main role EOQ model is providing the most economical mensuration of items which CSB should order to maximize value & minimize costs when re-stocking inventory.Applying EOQ does not only help the business to reduce storage & Holding cost but also support in maintaining sufficient inventory levels to meet customer demand. It seems that customer service can be meliorate as inventory is available when require. Related KSFs Establishing appropriate costing system & minimizing cost Maintaining the highest level of customer satisfaction * Profit and loss statements (P&L) P&L is one of the major financial statements which clearly demonstrate the profitability (revenue, expenses and profit) of the CSB during a specified time interval.Hence, the pr efatorial role of P&L is indicating whether the business is remunerative or not. Conducting a proper P&L can enable CSB to notice the areas needing improvement and abide an overall idea of how much the business owes compared to how much it owns. Besides, a truthful P&L report can also support CSB in planning ahead to the next financial period. III. implementation measurement & Reward System (PMRS) and its roles Performance measurement is a process of gathering & reporting nformation regarding the performance of the business & individuals. To be effective, Performance measurement must be combined with Reward system and the rewards provided are based on performance. The overall role of PMRS is to periodically monitor performance to judge how well the business is zip and motivate the personnels performance by Reward system. Both performance measure and rewards provide directional and motivational watch on behavior. However, each element of PMRS has its own roles which complement t he system.PMRS contains three elements 1. The factors to be measured The first element clearly demonstrates the factors which will be measured in order to draw important aspects of the business toward employees. Thanks to that, employees are able to concentrate their work into informed aspects/areas * guiding entice on behaviour is mainly fulfilled by the roles of the first 2 elements (Measured factors & Performance target). Within this method, employees are directed to achieve the desired behaviours. 2.A specific performance target The main mission of the second element is narrowing the targeted aspects into specific tasks/activities so that employees can focus, put effort and accomplish these tasks. Besides, the provided criteria in the system is also a base for owner/manager to provide feedback to improve future performances 3. A reward attached to the performance target The Reward system is based on the concept of attracting, retaining and motivating people. As employees can be motivated by intrinsic (e. g. gremlin esteem) and extrinsic rewards (e. g. bonus), monetary reward is not the only important component of the Reward system. There are other factors which also efficiently encourage employees in improving performance. Based on Theoretical literal (Khan KU, Farooq SU & Ullah MI, 2010), there are generally four main free variables of reward which are payment, promotion, recognition and benefits. promotional material seems to be the most efficient motivation as almost people tend to have ambitiousness of getting better positions in the business/company.Moreover, different reward strategies would have a different motivational impact on diverse people. By providing glossy incentives, Reward system encourages individuals to actually undertake the tasks with intensifier willing. According to Khan KU, Farooq SU & Ullah MI, 2010, there is a statistical significant relationship between all of the independent variables of reward with dependent variabl e employee work motivation, all the independent variables of reward have a positive deflect on employee work motivation.Overall, Reward system plays role as a delegacy of having people work harder. * motivational do work on behaviour, meaning individuals are motivated to purposely acquire the desired behaviours, is mainly achieved by the role of the third element which is Reward system. In this case, CSB applies reward strategy in term of bonus providing to each store manager up to 20% of their quarterly income * Meeting sales budget * subsidy of 2% of managers quarterly income if they meet the sales budget for each quarter. * Meeting profit budget Bonus of 10% of managers quarterly income if they meet the profit budget, prepared at the jump-start of each quarter * Achieving favourable cost variances * Bonus of 4% of managers quarterly income if all favourable variances are less than 10% of the initial budgeted cost * Bonus of 8% of managers quarterly income if all favourab le variances are 10% or more of the initial budgeted cost. * Directional influence supports individuals in focusing on the targeted areas and tasks. Besides, Motivational influence helps employees to do the work voluntarily and put much effort to successfully accomplish it.Moreover, Motivational influence is almost always less intrusive than Directional influence. As a result, the businesss personnel cannot be well managed without the combine of Directional influence & Motivational influence. IV. Limitations of current PMRS A. Limitation B. impaired behavior * Dysfunctional behavior means that individuals within the fundamental law/business do not function properly in accordance with the organizations direction. Dysfunctional employee behaviors often occur due to the rapaciousness of individuals or conflict between employees interest and the organizations interest.The general purpose of Dysfunctional employee behaviors is gaining benefits (either for personal or department) from o rganizations gaps. * In this case, as a result of lack of measurement in input and process stage, managers have opportunities to engage in Dysfunctional behavior. It can be explained by the following situation * If there is no mechanism for supervise the consistency between input and output, managers may provide unreliable report which shows that they have reached the performance target and deserve rewards. Lack of input measurement also leads to the problem that managers purchase low quality material to reduce operations costs in order to reach the defined cost target. Consequently, its very difficult to discover such Dysfunctional behaviors without proper measurement. V. Recommendation for new PMRS Besides the Performance measure, several common Reward strategies are also suggested below Conclusion As MAS is essential for businesss operation, CSB cannot successfully expand its business without proper MAS. However, the new MAS, which CSB has planned to implement, still has several weaknesses.Therefore, the main purposes of this report are evaluating the current position (Business mission, Competitive advantage & KSFs) and current MAS (including PMRS). The report also suggests the potential PMRS for the business. References Competitive Advantage, 2012, Investopedia US, viewed 28 July 2012, . Daniel, H, 2011, Benefits of NPV, BenefitOf, 27 July, viewed 28 July 2012, .John, AP II & Richard, BR 2009, Strategic management Formulation, Implementation, and visualise, 11thedn. , McGraw Hill, Singapore. Jorge, AS & Donald, CH 1989, Key success factors Test of a general theory in the mature industrial product sector, Strategic Management Journal, vol. 10, no. 4, pp. 367-382. Khan, KU, Farooq, SU & Ullah, MI, 2010, The Relationship between Rewards and Employee, Research Journal of Internat? onal scatter? es, May, Issue 14, pp. 37-42. 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Appendix * Porters Five Forces model for supporting an analysis of external environment Threats of New Entrants negociate Power of Suppliers Bargaining Power of Customers Rivalry among diligence Competitors * Porters value chain analysis for supporting an analysis of internal environment formulate Production Marketing Distribution Support Activities Finance, HR, Legal, IT Motivational influences A number of important motivational influenc es acting a strong role in encourage employee include * Job scope.Improving or enriching the nature of a job substantially reduces absenteeism. * Stress and conflict. Levels of absenteeism are high in situations of job stress, anxiety, tension, and lack of role clarity. * leadership style. Your leadership style carry ons attitudes that affect absenteeism. * Co-worker relations. interchangeable tolerance and the absence of tensions among co-workers have a positive effect on attendance. * Pressures to attend. The economy and job shortages will influence a person to be more conscientious about job attendance. * Work group norms.When members of a highly cohesive group view coming to work to help co-workers as a desirable work ethic, job attendance is attractive. * private work ethic. A high regard for work as a personal value positively affects job attendance. * Organizational commitment. Compatibility with the mission, goals, and values of the organization has a positive impact on attendance. You can affect most of these motivational factors significantly by the way you manage your department and supervise your employees. By boost open communications, by making employees feel needed and appreciated, by making their jobs as