Write about the Relevance of your essay in addressing the above key areas..
Comment on Revenue
Bee Tan corp. is an organization that links the clients and merchants with an aid of allowing the consumers to meet their daily needs. However, because of the high competition from the Makan corp., Bee Tan Corp. has come up with strategies that makes them maintain their existence in the market. Bee Tan Corp currently offer complementary services rather than aiming at outright competitor position by coming up with practices like selling tickets and booking flights as well. To be realistic, complementary services helped Bee Tan Corp. to maintain their position in the market by generating $5 billion from the complementary services hence increasing their gross revenue to $340 billion. Additionally, according to our case study in Bee Tan Corp., the company has incurred huge losses in the recent years from the year 2015 to the year 2017 due to high operating cost. As viewed in the year 2015, the selling and marketing expenses, research and development expenses, and general expenses within the company totaled up to $2,280,000. Otherwise, the gross profit of the company was $559,900 hence recording an operating loss of $1,720,100. Similar situation was recorded in the year 2016 and 2017. The above illustrates the fact that Bee Tan Corp. is wallowing in a loss making state. Therefore, this report has been set primarily to evaluate the revenue, cost and driver activities of Bee Tan Corp. while pinpointing some of the measures to be adopted in enhancing the profitability of the company.
Revenue is the income that a company receives from its normal business or from the sale of goods and services to customers. Revenue is used by investors and managers to measure the financial health of the firm (Garcia, 2018). Sometimes it may be received from the interest, royalties, good will persons among others. In Bee Tan Corp., revenue is mainly received through diversity of ways. Firstly, the company obtains revenue by delivering services to the consumers. Secondly, the company obtains revenue through the sale of products which are often the basic needs purchased from the merchants. Thirdly, the company sells complementary products such as movie ticket and book flight plat forms. The process of revenue acquisition in the company has undergone periodic development for the past years. For instance, Bee Tan Corp. has introduced the mobile app, BTM (i.e., Bee Tan Mobile) that has make work easier and faster for their customers as all the payments are delivered online rather than physical delivery mechanisms.
Measures for Improvement in Bee Tan Corp.
It’s fundamental to address the scope of revenue trends within the company. According to the observation, Bee Tan Corp. has experience increase in their revenue from the year 2015 to the year 2016 until the year 2017. The figure bellow illustrates the revenue trends of the company for the past three years.
Cost in general is the measure of value of certain company or organization. In other terms, cost refers to the monitory value of capital that has been used to produce something or deliver a service. Therefore, the money spend as a cost is no longer available for use. In Bee Tan Corp. the costs incurred include the fix and operational cost within the company. The operational costs are responsible for the qualitative running of daily activities and ensuring customer taste and preferences are effectively met. Bee Tan Corp. has incurred costs in different operations within the company. Firstly, plenty of the capital in the company was used in construction of the structures such as restaurants and cafes. Also, the company utilized its capital in opening the movie ticket and flight booking platforms. Additionally, the company incurs costs in transportation of good to the consumers. Furthermore, money is invested on the development of the company through research and compensation of the employees in Bee Tan Corp.
It would be irrational to hesitate mentioning the cost trends of the company for the past three years as a strategic approach in determining the courses of action for profitability. According to case study on Bee Tan Corp., both operating and fixed cost has been increasing. As viewed in the year 2015, the operation cost for example in selling and marketing was $1,440,000 which was low as compared to the year 2017. However, the general expenses declined in 2016 before increasing again in 2017. Also, selling and marketing expenses recorded high value of $2,300,000 making an increment of $800000. In order to maximize their profitability, Bee Tan Corp. has to maintain lower operational costs. The figure bellow illustrates the cost trends of the company for the past three years.
Drivers of bee tan corp. on the other hand have played an important role in the success of the bee tan corp. by ensuring that supply of food to their customers has a high rate of delivery. As per the case study the more the company growth rates the more the food produced and the more the delivery of food staff, this definitely shows that drivers are doing amazing work in the bee tan corp. company because this will lead to more revenue hence making bee tan corp. stable.
Bee Tan Corp. losses have increased yearly and there is the need to minimize the crisis to ensure that Bee Tan Corp. makes profit that will enable smooth management of the company. Optimization of the revenues while minimizing the expenses within the company consequently results into profit maximization. Several strategies have to be employed for efficient maximization of revenues in the company. Firstly, the company has to improve the quality of their products by ensuring that the food staff delivered to customers has the lowest if not zero percentage of chemical residues. Chemical contamination in food may occur during the packaging process whereby materials with the potential to posses’ chemicals come into conduct with food staff. Also, contamination may originate from human activities such as chemical weed, pest and disease control during early preparation of farm products. These chemical residues can be toxic and can cause health effects such as allergic reactions to the customers. Thus customers may tent to avoid such products. Bee Tan Corp. can correct the chemical contamination in the food staff by using improved packaging containers that do not possess chemicals. Also, the company may curb chemical contamination by strictly purchasing chemical-free products. Additionally, the company may adopt the recommendations from the European Food Safety Authority. The EFSA provides scientific recommendations in form of technical assistance like risk assessment on chemicals in food and feed to the European Union risk managers (EFSA, 2018). Bee Tan Corp. can also buy an idea of conducting risk assessment, providing policy recommendation and developing methodologies from RIVM in Netherlands.
Poor hygienic conditions compromise the quality of the food hence critical to consider cleanliness among the employees and the bee tan corp. environment. Proper hygiene this will make Bee Tan Corp. lure more customers. Secondly Bee Tan Corp. has a responsibility of employing an effective pricing strategy. A cost-plus pricing strategy is significant for the profitability of the company. A cost effective pricing strategy is achieved by calculating the costs of the company and adding a mark-up that will not intimidate the customers (Marketingdonut.co.uk, 2018). Additionally, the company can employ competitor pricing strategy whereby an analysis of the current market price of the products in the market is done before setting g a price lower than that of the rivals to attract the clients. In simpler terms, competitive pricing strategy involves setting prices with reference to what the competition is charging (VARStreet, 2018). Thirdly, Bee Tan Corp management has a role of marketing their products by advertising on the social media platforms such as TVs, radios, newsletters, magazines and mails. The advertisement process can also be enhanced by making signs and billboards possessing Bee Tan Corp. products.
Employee motivation is also an important strategy in enhancing profitability within the firm. Employee motivation can be achieved in different ways. For instance, Bee Tan Corp. may opt to introduce an overtime payment to the employees. Adopting a value-based purchasing compensation strategy is significant in promoting hard work and motivation among the employees of the firm (Regis College, 2018). Training programmers will also improve the skills of the employees thus enhancing quality delivery of goods and services to the consumers. An employee becomes more productive and efficient when subjected to good training (MSG, 2018). Additionally, employees who are offered training and development programs within their companies feel motivated and appreciated to deliver their best output. Quality enhancement is a fundamental approach in promoting the company’s reputation for curbing advertisement costs. In addition, Bee Tan Corp. has to perform some relevant corporate social responsibility (CSR) in their society so as to attract more clients and penetrate underutilized market. Currently, consumers are aware of the social responsibility attributes and therefore, are constantly looking for products from organizations which operate ethically (Collier, 2018). CSR will make Bee Tan Corp. experience heavy harvest for their company and increase their revenue. Some of the CSR operations that need to be adopted by the company include charity giving, energy conservation, carbon (iv) oxide emission reduction and environmental conservation. Many of the customers will be buying the products with aim of funding the company to be able to help the less fortune. Corporate social responsibility also boosts employee engagement. Employees are usually happy working for a company with a constantly good public image for different reasons (Doublethedonation.com, 2018). Happy employees consequently deliver better out in the firm.
Bee Tan Corp. should also improve the infrastructure which includes roads and electricity to enable preservation and easy transportation of the perishable products to avoid losses. Infrastructure will also allow smooth communication between the Bee Tan Corp. and the market hence creating awareness regarding when to deliver which product and in which quantity. Infrastructure development will also lead to high customer acquisition of the product and ensures that the service promised is the one delivered or received.
Fifthly, Bee Tan Corp. has to make use of economies of scale whereby cost is curbed by purchasing products in bulk. Economies of scale refers to the cost advantage presented to the firm when it increases its level of output (CFITM, 2018). Economies of scale can also give rise to lower unit cost of labor. Additionally, product diversification is a significant ideology to be applied for competitive advantage within the company. This will help bee tan corp. to sale their existing products in more than one form thus avoiding decline and stagnant sales. Repackaging of the product will give it a new look and the customers may end up being attracted by the new appearance of the product. Giving a new name to the product may give it a new look and meaning thus being sold in different market. Reprising the product may also make more customers to be at the reach of the product.
Finally, market segmentation is fundamental within the company. Market segmentation involves the division process that group customers according to their potential, needs and their similar characteristics (Trackmaven.com, 2018). Market segmentation entails Demographic segmentation that divides customers according to variables such as occupation, gender, income and age. There also exists behavioral segmentation that divides consumers as per their morality values and decision making pattern. Thirdly, segmentation can be done following psychographs which entail lifestyle of the customers and their activities and lastly according to geographical location which considers the location of the customers. Segmentation is important for it promotes return clients thus minimizing on advertisement costs.
Despite many challenges that leads to operating losses being experienced in the previous years (2015, 2016 and 2017), Bee tan corp. has the potential of mitigating such losses from happening in the next financial year if two concepts are taken into consideration. Firstly, the company should focus on mitigating the cost of operations within the firm. Secondly, the company should focus on how to generate more revenue within the firm. Finally, the company should exercise proper planning aimed at optimally integrating the fundamental ideologies mentioned in this section.
CFITM (2018). Economies of scale: Cost benefits from higher output levels [online]. Retrieved from: https://corporatefinanceinstitute.com/resources/knowledge/economics/economies-of-scale/ [Accessed on 2, November 2018].
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Doublethedonation.com (2018). Why corporate Social Responsibility is important [online]. Retrieved from: https://doublethedonation.com/tips/why-corporate-social-responsibility-is-important/ [Accessed on 2, November 2018].
EFSA (2018). Chemicals in food [online]. Retrieved from: https://www.efsa.europa.eu/en/topics/topic/chemicals-food [Accessed on 2, November 2018].
Garcia, M. (2018). How to analyze Revenue Performance and Trends [online]? Retrieved from: https://smallbusiness.chron.com/analzye-revenue-performance-trends-74387.html [accessed on 2, November 2018].
Marketingdonut.co.uk (2018). Seven ways to price your product [online]. Retrieved from: https://www.marketingdonut.co.uk/marketing-strategy/pricing/seven-ways-to-price-your-product [Accessed on 2, November 2018].
MSG (2018). Training of Employees - Need and Importance of Training [online]. Retrieved from: https://www.managementstudyguide.com/training-of-employees.htm [Accessed on 2, November 2018].
Regis College (2018). 5 Benefits of Value-Based Purchasing in Health Care [online]. Retrieved from: https://online.regiscollege.edu/blog/5-benefits-value-based-purchasing-health-care/ [Accessed 2, November 2018].
Trackmaven.com (2018). Market Segmentation [online]. Retrieved from: https://trackmaven.com/marketing-dictionary/market-segmentation/ [Accessed on 2, November 2018].
VARStreet (2028). What is Competitive Pricing? Definition, Strategies & Example [online]. Retrieved from: https://www.varstreetinc.com/blog/what-is-competitive-pricing-definition-strategies-example/ [Accessed on 2, November 2018].
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