Tutor profile: Sachini S.
Explain what is considered as a niche market and discuss the importance to a small business to cater to a niche market.
A niche market is identifying a "specific" market for which a business can provide goods or services in order to solve a problem. For an example if there's a clothing brand who caters to males, can cater to "teenage boys". So teenage boys are a "niche market". A small business will have less resources and a lower investment compared to larger organizations. Therefore if a small business is focussing on to a niche market they can reduce certain type of costs. For an example if we are addressing a large market/customer base, it will be costly to reach the customers as it will require mass communication and therefore a higher investment for marketing. The competition that is associated with a niche market will be less. Because large companies will focus on catering to mass needs. And therefore the small business will have a competitive advantage in that specific market. When the competition associated in the market is low they can gain higher profit margins because the products they offer are exclusive and the customer will be willing to pay a higher price. The customer loyalty in the niche markets are higher. Therefore the relationship between the customer and the small business will be strong. When the customer relationship is stronger the customers will not easily move to a substitute product.
You are the manager of ABC Ltd which is a company that produce computers and the senior management has decided to merge with a marketing company XYZ Ltd. Do you think the employees will work effectively? If not how can you resolve the problems that will arise?
No. It is highly unlikely the two merged company's employees will work together effectively as they come from 2 different organizational cultures. One in the production and the other being Marketing. Therefore the management will have the responsibility to minimise any conflicts that will arise with the merger as the employees will have different ideologies. In order to resolve the conflicts I will use different strategies according the type of the conflict and the risks associated. The conflict management strategies will be considered based on the assertiveness and the cooperativeness of the two parties involved. Below are the strategies, 1. Avoid- If none of the parties are contributing to resolve the issue and if the conflict can be resolved with time, I will withdraw from engaging in resolving the conflict. 2. Accommodating- I will use this strategy in the situations where it is possible to let the two parties involved accept the ways in which the other party operates. For an example, if the ABC Ltd is dressing in formal and XYZ Ltd is dressing in Casual, we can establish the dress code policy as smart casual or casual Fridays. 3. Compromising- This strategy will be used in situations which associates a high risk to the organization at the end of the conflict. This will require one party to sacrifice something that matters to them in order to resolve the conflict. 4. Collaborate- This is where I will see if it is possible to find a common ground for both of the parties involved. I can get representatives from both ABC ltd and XYZ Ltd to sit together with the management in order to formulate the policies.
What is the goal of accounting principles and discuss 4 important principles for an organization.
The main purpose of having financial principles is to make sure that all the companies prepare the financial statements in the same manner. This will help the decision making of the creditors and investors easier as they can compare the reports with other companies as well as our own reports of previous years. Below are 4 accounting principles that are considered important for an organization, 1. Accrual principle- This principle states that the transactions of the organization must be recorded in the accounting period that the transaction actually occur and not in the accounting period that the cashflows takes place. For an example if the water bill for the year 2020 is paid in the year 2021, we should record the expense in 2020 profit and loss statement and not in the year that we are actually paying for the water bill. 2. Consistency principle- This principle is established in order to make sure once an accounting principle is adopted by the organization it is continued to be used. If an organization adopts different accounting principles it will be difficult to evaluate the performance of the organization. 3. Going concern- A company should assume that the business will be continuing for the foreseeable future. This concept is the root for recognizing differed income, depreciation etc 4. Matching concept- This states that once a revenue is recorded, meantime all the related expenses also should be recorded. However this will be only applicable in the accrual basis accounting and not when cash basis is used. For an example if 100 cars are sold and the revenue is recorded, cost of sales (inventory) should be recorded at the same time.
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