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I take this opportunity to thank Matthew Coaches ltd for their valuable information concerning introduction of their new product in the transport industry market. I also thank my colleagues for their support in preparing this case study, their insight, additional information, encouragement during the entire period of preparing this report and finally for their time in helping carry out the research (Friedlob, 1996). I will not forget my tutor for the encouraging words and support during all this period. I also thank all those who supported me financially to successful carry out this case study especially Matthew Coaches ltd management for their financial commitment to the completion of this project.
Collection and collation of any further research. Introduction of new services by the company calls for more accurate data to be collected on the future prospect of the product being introduced in terms of its marketability, profitability and cost of implementing the product.
The information used in this study has been collected from various department of Matthew Coaches ltd. The analysis on profitability has been done depending on the SWOT of the company as contained its strategic plan. Further studies have been carried out to analyze the marketing challenges that the company is likely to encounter as it launches the new product.
Matthew coaches ltd is positioned well in terms of it market success in the product that it intends to introduce. The company is market leader in provision of hiring and transport services to various individuals and corporation and this places the company in verge of success in the new product that its introducing. Due to its large share in the market the cost of running the new product will be low due to its advantageous economies of scale compared to its competitors. The company is likely to make high returns from the new product due to the high demand expected for the product especially due to the projected increase in the demand of holiday cars in the near future. Further study needs to be carried on the expected future competition as this may hinder the future success and profitability of the new product being introduced by the company. Analysis of the case study.
Mathew coaches’ ltd is a company that is involved in hiring of coaches. The company is based in Perth, Scotland. The current hiring capacity of the company stands at 14 fleet of 14 coaches. The company has a policy which states that it has to make additional coaches to its fleet after every two years. Although, demand for the company products is high, the company has felt the need of diversifying it existing products by introduction a new service to its current list of services. The company intends to offer coach holidays as a new service to its current services.
As a result, the company has negotiated to buy five new luxury vehicles, the vehicles have capacity of 51 passengers each and their market price is 500,000 pounds. The buses that the company intends to buy are those that will reduce pollution and this will translate to reduction in road taxes.
The company is planning to offer five holidays which will run on a weekly basis from Perth. The new holiday packages as proposed are as follows
1 .The Clyde Riviera - with a duration of 5 days & 4 nights at a cost of 154 pounds and coverage of 470 miles per holiday. 2 .Loch lomond and the trossachs-with duration of 5 days & 4 nights at a cost 0f 122 pounds and coverage of 330 miles per holiday. 3.Beamish and Durham- with a duration of 5 days and 4 nights at a cost of 229 pounds and coverage of 520 miles per holiday. 4. Highland gateway- with a duration of 5 days and 4 nights at a cost of 135 pounds and coverage of 550 miles per holiday. 5.Royal connection- with a duration of 5 days and 4 nights at a cost of 160 pounds and coverage of 220 miles per holiday. The prices to be charged are vary competitive compared to those being charred by other companies and this gives the company competitive advantage compared to other companies in the same business. The company currently rent its premises at a cost of 80000 pounds per annum.The company is proud of good management, high demand for its products, low cost of operations, highly qualified drivers. The company has also a very strong and highly qualified marketing team which has shaped the company product over the years. The company is faced with a problem of indiscipline among it some of it worker and this some time has affected negatively it public image. The company is faced with a very dynamic external environment this calls for dedication of highly qualified personnel in the development of its future products. The company faces a stiff competition from various major companies which offer diversified services thus making their cost of operations low compared to that of the company. The company is currently faced with high cost of fuels and inflation that has lowered the demand for its products thus having a negative impact in its over all returns. The company is one the best in the country especially due to its good bargaining power compared to other companies in the same business.
The company needs to take advantage of its bargaining power in order to win a larger share of the market. It also has to come up with ways of taking advantage of it existing high demand for it current products to market its new product. The company needs to come up with disciplinary measures that will be taken against those workers that commit offences that have negative impact in its corporate image as well as its earnings. Depending on the both external and in renal environmental factors the company can go ahead and introduce its new products as it has high probability of success against failure. The company mission which is build on the need to provide quality services to the customer. In the introduction of this new service in the market the company needs to come up with the best strategies of providing services which is in line with it over all mission, goals and objectives (Elliot, 2004).
The company should come up with cost regulation measures to ensure that it achieve its objective of maximizing profit. The company should also come up with measures of ensuring that the needs of the customer are satisfied while meeting the shareholders needs. Associated appendices.
The following are the various accounting information analyzing the prospect of introducing anew product by Matthew Coaches ltd. It will contain various financial statements the information given by the management of the company to analyze whether to implement the project or avoid the implementation.
6) The company should expand its operations by introducing new products targeting all sectors of the economy. The Matthew Coaches ltd can introduce the following transport services to its existing services;
(i) Introduce commercial Lorries to transport goods over long distances.
(ii) Introduce emergency response vehicles that will be hired during emergency situation
(iii) Introduce small vehicles to be leasing to various corporations and institutions.
The company can implement this new measures of ensuring that it increase its productivity by employing a research company to conduct survey on its behalf on the marketability of this product and then approach one of the financial institution to fund its new expansionary projects but its up to the management to ensure that the company is in a position to meet its debt obligations from the income that will be generated from these new services.
7) The management of Matthew Coaches ltd needs to have a budgetary control system within its premises as it’s very important for the long term survival of the organisation.
The budgetary control system is important due to the following reasons; budgetary control serves as a very strong tool in any business if it has to maximize its profits. It is the role of management to focus its efforts in proper control, effective coordination and planning for the business to realize maximum profit (Goodyear, 1913). Budget is one of the tools used by management in planning and controlling the business operations, in most cases it is used as standard devices in control and planning. The budget provides helpful information to the management in its functions of coordination, planning and control. It serves as a tool for measuring the management performance in any given organisation. It also serves as a source of promoting good motivation as well as generating harmony within the organisation. It facilitates and promotes efficiencies within the various levels of management. Budget can also be used to promote cost consciousness in various departments within an organisation.
A budget is usually based on estimates, which usually have some errors. Thus this can not serve as a substitute to be used by the management as, utility and efficiency of the budgetary system usually depends with the experience and skill that management has. This calls for the management to come up with budgetary control system to protect the organisation from adverse effects of these errors (Elliot, 2004). The budget control system help the management to access the actual performance from the planned/ budgeted performance of the various cost functions within an organisation.
Stage 3. Evaluation.
(i)The evaluation criteria used is through carry out a feasibility study of the project in terms of its marketability and profitability. The case study involved collection and collation of information concerning the history of the company in terms of its market share and the internal and external environment threats, opportunities, strengths and weakness (SWOT) of the company.
(ii)The information used in this study was used from the information provided by the management of Matthew Coaches ltd. Further market analyzes were done through various data collection techniques such as observation, previous case studies and interviews.
(iii)The action plan was very effective and helpful in gathering and compiling this case study. It acted as guideline and time frame for completion of this study.
(iv)The case study not only did it evaluate the profitability of the company but deeper analysis was done to test on other factors that determines the success of a given product in a given market. (v)Further studies should be conducted on the future growth and probable alternatives to the products that the company has in the market. This will help in identifying the threats that faces the success of the company in future.
(vi)There is need for the company to continuously carry out analysis on its loan and investment portfolio for the sake of its survival. (vii)I have gained skills on how to assess various projects using capital appraisal techniques and steps of analysis profitability of a product being introduced in new market.