Marketing management help of : E & A Service Company

Introduction

E & A Service Company is a 100 year old partnership with offices in 3 locations offering a broad variety of architectural and engineering services to the private sector and all three levels of government agencies. The issue faced by the managers of the Company is they are required to utilize cheaper labour to keep the allocated costs down (Drucy, 2004). Another issue faced by the Company is Manager was not able to deliver the work of the client within a limit of three days work, so he lost the future projects also with the client. In, fact the management of the Company had decided to take a closer look at the overhead issue. First, we discuss the SWOT analysis of the Company, Secondly we discuss the external environment of the Company with the help of Porter Analysis and last we offer recommendations for turning around the business of E & A Service Company.

SWOT AnalysisStrengths

• With the help of ABC, Norfolk and Lexington Offices of E & A are able to do equitable distribution of bonuses.
• ABC offered E & A with better source of information for resource allocation, pricing, marketing and other management decisions.
• The manager of the Company is not able to achieve the targets on the time, and because of that he lost the future projects with the client.
• Managers are required to utilize cheaper labour to keep the allocated costs down.
• ABC offers opportunity to get a better picture of what kind of activities are consuming resources so that procedures and policies could be used for reducing the cost of overhead.
• With the help of ABC, the Company is able to focus on the individual drivers and attack overhead by reducing or removing the actual impact of the overhead.

Weakness

Threats

Opportunities

The objective of the E& A Company is to look at the overhead issue closely. In regards to nature of distinct overhead cost, it became clear that several items were not related to the movement in direct labour dollar as previously presumed. The company’s generic competitive strategy is focus based because ABC offered E & A with better information for pricing.

After done the SWOT analysis, it has been examined that the results of ABC strategy were astounding to the E & A management. In, fact the building rent of the Lexington was taken out of the company overhead and charged directly to the Lexington.

The system used by the E & A Company was able to give the total dollar sum of vendor invoices generated for the year but not able to tell how many invoices there were. In case of E & A service Company, the outcomes of using ABC system proved that the conventional system being implemented was offering greatly erroneous profitability data (Andrews, 2004). In the beginning, managers were not being appropriately rewarded because bonuses were awarded to branch managers on the basis of financial condition of individual branches. But, now this problem is solved with the help of ABC costing because ABC offers equitable distribution of income. At last, it can be said that ABC system is appropriate for the Company because of its numerous benefits and offered enhanced managerial control and the better basis for the responsibility accounting. It can be said that the implementation of the ABC system matches with the business strategy of the Company because both view at the issue of the overhead completely.

External Environment

Bargaining Power of Suppliers – Due to ABC implementation in E& A Company, it is the simple task for allocating by implementing the cost per driver to cost out each of the branches total activities (Mack, 2003).

Bargaining Power of Buyers – Buyer is considered as the individual who produce the demand in the industry. After the implementation of ABC, the E & A Company is able to assign the cost to services and products as per their individual requirements on activities.

Competition from Rivalry – To maintain the Competition from the Rivalry, the implementation of ABC system would offer a better picture of what kind of activities consume input and resources so that procedures could be utilized for reducing the overhead.

Threat from Substitutes – the existence of substitute products may lower profitability and attractiveness of the industry (Jeffreys, 2011). But the implementation of ABC system would restrict the consumers to look at the services of another Company. For example: After the implementation of ABC, the company is able to offer suggestions on a drainage problem within three days.

Barriers to Entry – The implementation of ABC costing restricts the entry of different competitors and rivalries.

Recommendations

The Managers should complete the projects within a stipulated period of time.

• It is advisable to the management of the Company to follow the ABC costing in future as well for avoiding any inequitable distribution of bonuses.
• Managers should not use cheap labour, for reducing the level of cost because it led to lower quality of the work and dissatisfaction of the client.
  

  If you want HR management Assignment Help study samples to help you write professional custom essay’s and essay writing help.

Receive assured help from our talented and expert writers! Did you buy assignment and assignment writing services from our experts in a very affordable price.

To get more information, please contact us or visit www.myassignmenthelp.Com