Blue Moon

Topics: Strategic management, Management accounting, Cost accounting Pages: 6 (2123 words) Published: September 16, 2013
Executive Summary

Blue Moons, Pty Ltd was a business specialising in the creation and production of sailing boats. Their traditional strategy was to offer clients with low cost products with reasonable short production time. However, due to incurring problems in relation to clients preferring products from competitors and the decline in profits and market share, Rob Inglis the owner of the business decided to implement a new strategy. The purpose of this report was to identify whether it is beneficial for Blue Moon’s to change its cost strategy to a differentiate strategy. The report details and list the strategically change the owner has considered undertaking to address the issue and the tools/techniques it should consider to include in its revised Management Accounting System. Analysis suggest that if Blue Moon’s transforms to a strategy which differentiates its product with other competitors, than the business will gain a handful of key success factors; more attraction by customers due to the quality and uniqueness of the product, may result in high profit and market share. It is suggested, that Blue moon should also consider the drawbacks in making this change. Rob Inglis should question how this alteration might impact on the financial position of the business, staff satisfaction, staff turnover. In conclusion, it is crucial to make this change sooner than later because it had been stated that the owner is ‘worried’ about its financial position and it had been noted that customer preference is changing due to the economic crisis and competitors. It seems that that the advantages of altering to a new strategy outweigh the disadvantages.

Table of Contents

Executive Summary2
2.Blue Moon, Pty Ltd. new business strategy4
2.1 The Business Mission of Blue Moon, Pty Ltd.4
2.2 The Competitive advantage of Blue Mood, Pty Ltd.5 3.Key Success Factors5
3.1Blue Moon’s Key Success Factors5
4.Blue Moons Pty Ltd. new Management Accounting System6
4.1 Strategic Planning6
4.2 Capital Budgeting7
4.3 Target Costing / Cost-plus pricing7
4.4 Variances and Budgeting7
4.5 Overhead Cost allocation7

“Blue Moon, Pty Ltd. was a boat business, “offering its customers recreational products at a low cost with short production time. However, the firm owner Rob inglis who is also a yacht broker and a nuclear submarine construction planner has decided to adopt a new strategy which is immensely different to the businesses traditional cost strategy. The new strategy is to enhance the quality of the product and sell it at a higher price to the smaller portion of the market share. The purpose of this report is to provide information to the client about; i) the new strategy that is going to be implemented ii) the key success factors of this strategy iii) and new techniques in MAS. 2.Blue Moon, Pty Ltd. new business strategy

This section outlines the new business strategy which Blue Moon is deciding or has decided to implement into their business. The strategy is the plans to achieve the organisations goals and objectives. Hence, the strategy of Blue Moon depends on the two new features; its missions and its competitive advantage. Each of these features is discussed below. 2.1 The Business Mission of Blue Moon, Pty Ltd.

Blue Moon’s, new mission is to build and upgrade the business. This mission implies an ‘objective of increased market share, even at the expense of short term earnings and cash flow’ (Irwin, 2003). The Business mission states what the overall ‘objective’ of the organisation; The main four business unit mission as stated in Boston Consulting Group model consist of; build, hold, harvest and divest(Irwin, 2003) . Blue Moon, Pty Ltd is aiming to get the attention of the higher end...

References: Accounting; Text and Cases. Anthony R. N., Reece, J.S., and J.H Hertenstein. 2003. Irwin. Pp 757-775
Management Control Systems. Anthony, R. N., and V. Govindarajan. 2004. Mcgraw Hill. Pp.
Harold Averkamp (CPA)
Rosemary Peavler
Cost Management; Strategies for Business Decisions. Hilton, R.W., Mayer, M.W., and F.H. Selto. 2006. Mc Graw Hill. Pp. 742- 767
RMIT Lecture slide; Accounting Behaviour Orgs, Week 1- 2, Laura Maran, 2013.
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