accg330 Essay - 7774 Words

ACCG330 SEMINAR ASSIGNMENTS (Assignments are due in the respective seminars in the week designated) Due Date TOPIC Week 2 No assignment is due this week. Please read the Baldwin Bicycles Case prior to class. Week 3 Strategic process and strategic analysis ........................................... page 2 Case: Baldwin Bicycles Week 4 Strategy and management control. Case: Lincoln Electric Week 5 Strategic change and strategic flexibility Class Test 1 (during normal seminar) ............................................. page 5 No assignment is due this week due to class test. Week 6 Activity based costing ........................................................................... page 6 Case:†¦show more content†¦Leister to increase Baldwins purchasing, inventorying, and production costs over and above the added costs that would be incurred for a comparable increase in volume for Baldwins regular products. On the positive side, Ms. Leister was acutely aware that the bicycle boom had flattened out, and this plus a poor economy had caused Baldwins sales volume to fall in the past two years.1 As a result, Baldwin currently was operating its plant at about 75% of a one-shift capacity. Thus, the added volume from Hi-Valus purchases could possibly be very attractive. If agreement could be reached on prices, Hi-Valu would sign a contract guaranteeing to Baldwin that Hi-Valu would buy its own-brand bicycles only from Baldwin for a three-year period. The contract would then be automatically extended on a year-to-year basis, unless one party gave the other at least three months notice that it did not wish to extend the contract. Suzanne Leister realized she needed to do some preliminary financial analysis of this proposal before having any further discussions with Karl Knott. She had written on a pad the information she had gathered to use in her initial analysis; this information is shown in Exhibit 2. 1 The American bicycle industry is very volatile. From 1967 to 1970 sales average about 7 million units a year; in 1973 sales were 15 million units; in 1975 sales were back down to 7.5 million units and in 1982 sales were 10 million units. 2 EXHIBIT 1:Show MoreRelatedCase Study—Baldwin Bicycles1153 Words   |  5 PagesACCG330 Case Study—Baldwin Bicycles Question: a On the basis of Michael Porter’s(1980) competitive strategies, how does Baldwin currently compete? Justify your answer. (25%) From the article it seemed that Baldwin Bicycle Company competed somewhere between a cost leader and a differentiator. Baldwin had been a bicycle manufacturer for almost 40 years. The article illustrated that Baldwin Bicycle had the image of being above average in quality in price, meaning to say that it was not low cost