Paper , Order, or Assignment Requirements

Part 1. An analysis of the industry within which Edencraft boat building company operates and an outline of the competitive strategy (product differentiation, cost leadership) of the organisation.

Part 2. A description of the main product/service of the organisation, the primary activities involved in providing the product/service and the management accounting information currently used by managers to aid decision-making.

In completing part 2, you should give your opinion on how well the management accounting information assists the management of Edencraft boat building company in decision-making and make specific recommendations on any additional management accounting information you consider may be of assistance.

To complete this section it is a requirement that all students undertake a site visit to the organisation. You must provide evidence in either your presentation or in your report that you have undertaken this site visit.

Part 1. Industry Analysis (1000 words)

Before undertaking this assignment you should ensure you have read Chapters 1 and 2 from Ward (see course references). Pay particular attention to discussion of Porter’s (1980, 1985) “Five-forces” model of industry competition and generic strategies for strategic competitive advantage.

1. a) Investigate Edencraft boat building company and briefly describe the industry within which it operates.

1. b) Analyse and report on the competitiveness of the industry using Porter’s five-forces model.

1. c) Identify the current competitive strategy (low cost or differentiation) and the target market (broad or niche) that you think Edencraft boat building company is following. Give your opinion on the suitability of the firm’s choice of competitive strategy in the light of your analysis in part1 b).

Part 2. Site Visit and Company Report (2500 words)

The broad aim of this part is for you to think about what type of management accounting information (that you have studied this semester) is used or could be used to assist management decision-making in Edencraft boat building company. In considering management accounting tools/techniques/methods, you should reflect on a number of factors including how the firm is competing, the size of the business, the main activities of the business, the resources and/or the ability of managers to effectively utilise management accounting information.

Required:

1. a) Identify, describe and document the key activities involved in producing the organisation’s main product(s) (either good(s) or a service(s)). The activities should not be limited to the physical production, but should also include those activities that straddle the extended value chain of the business.

1. b) Describe and discuss how effectively the following aspects of management accounting are utilised at your organisation:

 Performance measures (such as those in the four perspectives of the balanced-scorecard) – how does the organisation measure performance of its primary (value-chain) activities?

 Product/service costing – how is the product costed and overheads applied? How does the organisation identify direct and indirect costs?

 Cost-volume-profit analysis – how (if at all) does the organisation work out break-even point?

 Budgeting – how, why and when is budgeting used?

 Sustainability – how does the organisation take into account issues of social and environmental performance?

1. c) For each aspect of management accounting discussed in part 2b) above, evaluate how appropriate it is in supporting the information needs of managers and the strategic direction of the business, e.g., is the costing approach/technique the most suitable to assist managers in decision-making.

Please note that it is not necessary to ask the organisation for information regarding the amount of cost involved in the activities/processes. Emphasis should be on determining what are the major costs involved.

1. d) Recommend any aspect of management accounting which you consider may be appropriate in improving the current information. Base these recommendations on a cost benefit analysis basis, taking into account the size and resources of the organisation.