What Strategies Do You See as an Investigator?-MAH_150216_63351_14_131320 and TMP_040216_63351_6_129683

Discussion: What Strategies Do You See as an Investigator?

Choose any one of the following companies and review the respective websites: Wal-Mart, Home Depot, IBM, or Cardinal Health. Examine their strategies to check if they are emergent, intended, or both emergent and intended. Discuss why you selected a particular company and how its strategies compare with their competition. In your responses to your classmates, relate how these strategies can translate to a business’s success and assess any differences in opinions you may have on a chosen company.

Discussion: The External Environment

Subaru America is a mainstream automaker offering middle-line priced automobiles. It offers great value for consumers. The company experienced phenomenal success in the 1980s but had to redesign itself slightly with the introduction of the Subaru Outback to compete in the trendy sport utility vehicle (SUV) market.



Subaru America: The External Environment. Based on the video, discuss the following questions:

  1. How does Subaru’s sustainable business practices help make it more competitive?
  2. Compare and contrast Subaru’s practices to two other auto manufacturers.
  3. Discuss how the internal and external environments of Subaru and the two other manufacturers compare. Are they alike or are they different?

Discussion: Cost Strategy

This week, you explored the aspect of cost in an overall business strategy and approach. The text talks about Ryanair and its cost strategy. In the U.S., there are other companies in many industries that use the same approach. Identify two companies that use the same cost strategy as Ryanair. Detail their actions and how the strategy equates to their success or failure. Find the market share they have in their industry and explain how the companies can neutralize threats in their industry.

Discussion: Vertical Integration

For this discussion, identify and research a company that has vertically integrated. Describe the value chain and determine if the company is forward or backward vertically integrated. Why is this integration beneficial to the company and why is it an important strategy?

Discussion: Exploring International Strategy

Select and describe a company that has an international strategy.

  • Do you think international strategies are always just a case of diversification strategies that a firm might pursue or are there any other reasons?
  • In which countries is it riskiest to begin international operations?

Discussion: Using Strategic Alliances

For years, companies have used strategic alliances to help mutually benefit partner organizations. Consider a joint venture between GM and Toyota. GM has been interested in learning how to profitably manufacture high-quality small cars from its alliance with Toyota. At the same time, Toyota has been interested in gaining access to GM’s U.S. distribution network.

  • Which of these firms do you think is more likely to accomplish its objectives and why?
  • What other companies have used a strategic alliance successfully?

Project Description

Managerial Accounting Project DescriptionThe final project will provide an opportunity to utilize the accounting skills you learned during the course by preparing a schedule of cost of goods manufactured, computing the contribution margin ratio and breakeven point, and completing a contribution format segmented income statement.

Project Introduction:

The project will be introduced in Week 1. The project is due for submission in Week 6. It is suggested that you follow the schedule below for timely completion of the project. Alternatively, you may complete the project at your pace. Following the schedule given below will help you balance the load across the weeks.


Course Objectives Tested:

  • Classify various types of costs.
  • Describe cost allocation and activity-based costing.
  • Analyze cost-volume-profit (CVP).
  • Analyze financial statements for decision-making.
  • Analyze long-term capital investment decisions using cash flow analysis and TVM concepts.

Project Submission Plan:

Project Part

Description/Requirements of Project Part

Project Part 1 Tasks:
Click here to download the information to calculate the following:

  1. A schedule of cost of goods manufactured
  2. An income statement

Deliverables and Format:
Submit your answer in Project Part 1 template.

Click here to download the template for Project Part 1.

Assigned and Due Date:
Assigned: Week 1
Due: Week 2

Grading Weight: 6%

Project Part 2 Tasks:
Computing Solutions sells a laptop battery, but they have been having some slow sales periods. The company’s contribution format income statement for January, 2012 is shown below:

Using the above information, calculate the following:

  1. Contribution margin ratio
  2. Breakeven point

Deliverables and Format:
Submit your answer in Project Part 2 template.

Click here to download the template for Project Part 2.

Assigned and Due Date:
Assigned: Week 1
Due: Week 4

Grading Weight: 7%

Project Part 3 Tasks:
Click here to download the information to calculate the following:

  1. A segmented income statement for the software division with the segments defined as product lines.
  2. Show computations to determine which product line should be chosen to increase sales according to the data given in the problem. Explain your answer in one or two sentences.

Deliverables and Format:
Submit your answer in Project Part 3 template.

Click here to download the template for Project Part 3.

Assigned and Due Date:
Assigned: Week 1
Due: Week 5

Grading Weight: 7%

Project Part 4 Tasks:
Click here to download the information to calculate the following:

  1. Determine the annual savings in cash operating costs that would be realized if the supercomputer were purchased.
  2. Compute the simple rate of return expected from the supercomputer. Would the supercomputer be purchased if the Computing Solutions required rate of return is 16%?
  3. Compute the payback period on the supercomputer. Computing Solutions will not purchase the supercomputer unless it has a payback period of five years or less. Would the supercomputer be purchased in this case?
  4. Compute (to the nearest whole percent) the internal rate of return promised by the supercomputer. Based on this computation, does it appear that the simple rate of return is an accurate guide in investment decisions?

Note: Ignore income taxes in all calculations.

Deliverables and Format:
Submit your answer in Project Part 4 template.

Click here to download the template for Project Part 4.

Assigned and Due Date:
Assigned: Week 1
Due: Week 6

Grading Weight: 5%


Schedule of Cost of Goods Manufactured:

            Computing Solutions Company
Schedule of Cost of Goods Manufactured
For the Month Ended August 31


Income Statement:


Computing Solutions Company
Income Statement
For the Month Ended August 31


  1. The CM ratio is _____%.


Total Per Unit Percent of Sales


The break-even point is:



Incremental contribution margin:






  1. Explain your answer.
  1. Segments defined as product lines:




Product Line


Software Division

Business Software

Gaming Software



  1. Computation for choosing product line:


Business Software Gaming Software










  1. Segments defined as product lines:




Product Line


Software Division

Business Software

Gaming Software

Sales 600,000 200,000 300,000
Variable expenses 300,000 130,000 120,000
Contribution Margin 300,000 70,000 180,000
Traceable Fixed Expenses:      
Advertising 120,000 30,000 42,000
Depreciation 48,000 10,000 24,000
Administration 10,2000 14,000 21,000
  270,000 54,000 87,000
Net Profit 30,000 16,000 93,000


  1. Computation for choosing product line:


  Business Software Gaming Software
Sales 200,000 300,000
|Contribution Margin 70,000 180,000
Contribution Margin Ratio 35% 60%



Thus, it can be seen from the above calculations that Gaming Software division has better contribution margin ratio. Therefore, the company should focus on this division to increase profit.



Current Cost   40,000
Cost of Supercomputer:    
Annual Depreciation 7,500  
Technician cost 14,000  
Electricity cost 1,800  
Insurance and Maintenance 3,200 26,500
Savings   13,500




Annual Savings 13,500
Net Investment 90,000
Expected Return 15%

The supercomputer will not be purchased as expected return from this super computer is 15% which is less than required rate of return of the company.


3. Computation of payback period

Initial Investment  94,500

Annual Savings     13,500

Payback period     7 Years


4. Computation of Internal Rate of Return


Cash Flow





























It can be seen from the above computations that internal rate of return is very less as compared to average return computed above. Thus, simple rate of return is not accurate for accurate decision making.

  1. The CM ratio is 30%.


  Total Per Unit Percent of Sales
Sales 585,000 30 100%
Variable Expenses 409,500 21 70%
Contribution Margin 175,500 9 30%


The break-even point is:


180,000 Fixed Expenses
30% Contribution Margin Ratio
600,000 Breakeven Point


Incremental contribution margin:


 Incremental Sales 15,000
Incremental contribution margin ratio 30%
Incremental contribution margin 4500


  1. Explain your answer.

It can be seen from the above working that the current sales level of the company is less than breakeven level. Therefore, the company is incurring loss. The company must increase sales to breakeven.

Schedule of Cost of Goods Manufactured:

            Computing Solutions Company
Schedule of Cost of Goods Manufactured
For the Month Ended August 31

Cost of Material Consumed:    
Opening Inventory 8,000  
Purchase 165,000  
Closing Inventory 13,000 160,000
Direct Labor Cost   70,000
Manufacturing Overhead   85,000
Total Cost   315,000
Changes in Inventory of Work in Process:    
Opening Inventory 16,000  
Closing Inventory 21,000 (5,000)
Cost of Goods Manufactured   310,000


Income Statement:


Computing Solutions Company
Income Statement
For the Month Ended August 31

Sales   450,000
Less: Cost of Goods Sold    
Opening Finished Inventory 40,000  
Cost of Goods Manufactured 310,000  
Closing Finished Inventory 60,000 290,000
Gross Profit   160,000
Selling and Administrative expenses   142,000
Net Profit   18,000


Business Policy of Wal-Mart

Name of the Student

Name of the Organization

Author’s Note




Table of Contents

I.      Strategy of Wal-Mart 2

II.         External Environment 2

III.       Cost Strategy of Wal-Mart 3

IV.       Vertical Integration in Wal-Mart 4

V.         International strategy of Wal-Mart 5

VI.       Strategic Alliance. 6




       I.            Strategy of Wal-Mart

After examining strategies of Wal-Mart, it is clear that the company uses both intended and emergent strategies. At their initial stages, Sam Walton, the founder of Wal-Mart decided to establish its other stores close to the first store of Wal-Mart, as it was easier for him to manage all the stores at the same time. The reason for adopting emergent strategy was the unknown future of the store as it was in its beginning days. On the other hand, Wal-Mart also uses intended strategy. They keep the prices of the products very low; sometimes lower than other stores to attract more customers. This intended strategy helps them to acquire a competitive advantage over rival stores.

Costco Wholesale is the primary competitor who is outperforming Wal-Mart using their intended strategy. Wal-Mart sells their products at a low cost. On the other hand, Costco makes most of its profits from membership fees, not margins on product sales. Therefore, they can sell their product at a very low cost, lower than Wal-Mart.

Emergent strategy is a big help for the companies who are entering into the new market. Playing safe allows them to gain profitability with a chance to evaluate the market at the same time. The intended strategy can help a business to gain more customers; however, there is a risk also.

    II.            External Environment

External analysis of Wal-Mart is discussed below with the help of PESTLE analysis,

Politics: Recently, Wal-Mart had to face political action lawsuit for gender discrimination. Otherwise, they are good at adapting and changing their priorities and strategies according to the political factors like economic conditions, political instability, currency regulation, legal and regulation constraints, intellectual property rights and tax systems.

            Economic: The Economic Condition of the host countries is creating a negative impact on Wal-Mart. For example in the US, higher interest rates, higher fuel and energy cost, a higher level of unemployment, higher tax rates, economic slowdown and other economic factors are changing the consumer demand for Wal-Mart products services.

            Social factors: While operating in International markets, Wal-Mart strictly follows the local culture of the host country. They follow the local population, distribution of age, attitude toward career and other social factors to implement their marketing strategy in that country.

            Technological Factors: Wal-Mart uses the modern tools and technologies for their marketing and advertising purposes. It heavily relies on the internet and social media to promote their band and to sell its products. CEO of Wal-Mart once stated that technology is the primary concern on the agenda of marketing in Wal-Mart.

 III.            Cost Strategy of Wal-Mart

Wal-Mart strongly follows “Everyday Low Price” cost strategy which allows the customers to buy different products at a low price throughout the year without waiting for a sale. Besides, low price strategy gives them a competitive advantage over their rivals. Because of this strategy, it is almost impossible for new companies to join the industry. Therefore, the risk of new entrants is also not there. However, there are some factors that helped Wal-Mart to carry out this strategy since their beginning days till today.

Huge customer base: The customer base and operational spread of Wal-Mart is huge. Therefore, keeping low price does not affect their sales volume.

            Supply chain management: Wal-Mart uses a smart supply chain management that is efficient and reduces the outlays.

Overhead and Operational cost: Wal-Mart keeps its overhead and operational costs as low as possible. The management instructed their employees to keep the cooling and heating cost of the building as low as possible. Besides, their low benefits health care plans, company policy to share rooms with the colleagues has also helped to keep the costs at a minimum level.

Transportation cost: Transportation cost of Wal-Mart for supplying goods is very low in compare with other companies. They have 160 distribution centers build on almost 120 million square feet and are located within 130 miles of the stores from where they supply.

 IV.            Vertical Integration in Wal-Mart

Wal-Mart never missed a chance to expand their business and profitability. Therefore, they are a strong practitioner of vertical integration. In its initial stages, Wal-Mart was only a retailer but from 1991, it started to sell well under its private label brand. For example, their private soft drinks brand Sam’s choice is now the third most popular brand in the United States. The company is also offering home entertainment by providing Vudu, which is an online stream service that allows consumers to purchase movies which can be viewed on almost any Internet-capable device. Wal-Mart introduced Vudu as their private brand in the year of 2010. Besides, the company is also interested in entering sued car market which is an example of the horizontal integration system. However, selling its own products in its stores has provided Wal-Mart a bunch of opportunities and advantages over their competitors.

    V.            International strategy of Wal-Mart

Going global is not an easy task for any company. However, Wal-Mart not only succeeded to spread their business globally but also acquired huge market shares from those markets in a very short amount of time. Their systematic and accurate international strategy helped them to achieve this enormous success. International strategies of Wal-Mart are,

Market selection: In 1991, Wal-Mart planned to spread their business in Asian countries. But soon they understood that cultures, languages and lifestyle of Asian people are totally different from the US. Besides, the geographical distance was another problem as it had to supply its good from the US to Asia. Therefore, they made the perfect plan to open their first international stores in Mexico, Brazil and Argentina. These countries had the largest population in Latin America which helped Wal-Mart to prepare themselves for the challenges in Asia. In the year 1996, they decided to open their store in China which had a population of 1.2 billion in 640 cities. However, they still felt that geographical distance is creating a barrier to their expansion plans. Therefore, they decided to shake hands with two Japanese retailers who are Ito-Yokado and Yaohan. Those retailers helped Wal-Mart to sell their products in Japan, Singapore, Hong Kong, Malaysia and Singapore. In 1996, Wal-Mart entered Hong Kong with the help of C.P. Pokphand Company to open three value club membership discount stores in Hong Kong.

Market entry strategy: The authority of Wal-Mart felt the cultural differences between the United States and Mexico. Therefore, they joined hands with Cifra which was Mexico’s largest retailer. While entering Brazil, they shared hands with Lojas Americana, a local retailer. In this way, they entered each market with the help of a local retailer to understand the local culture and daily needs with the help of those retailers.

Workforce and stores: After finalizing their purchases in Canada Wal-Mart send a professional team there to educate Woolco’s 15,000 employees with the objectives and goals of Wal-Mart. Besides, they bought every outlet from Woolco and renovated them within three or four months up to its own standards.

 VI.            Strategic Alliance

One of the most strategic alliances of Wal-Mart was joining hands with Stanley Works. In the year of 2001, Wal-Mart started selling Stanley hand tools, mechanic tools and Stanley toolboxes in their all U.S stores. Other companies with whom Wal-Mart formed strategic alliances are Humana and Li Feng. The Medicare patients of Humana can now buy the prescribed medicines from Wal-Mart because of their alliance with each other.