(a) Refer to the Kinkead templates provided on the unit website. Template (A) calculates the market size, market share, sales mix, sales price and variable cost variances for each product and, Template (B) calculates the market size, market share, sales price, and variable cost variances for each product. Which analysis is most appropriate for Kinkead? A or B? Give reasons.
(b) What strategy is electric meters and electric instruments pursuing? ‘Dog’, ‘Cash cow’, ‘Star’, or ‘Question mark’. Analysing the relationship between the BCG matrix and the product of Kinkead, market share and market growth are the considerable reason to measure. Kinkead’s products are grouped into two main product lines which are electric meters(EM) and electric instruments(EI). First, for the EM product, according to template, the variance of the size of the market is unfavorable, the size of the market because their budget is 800000, but the actual market size of 650000, it does not implement the expectations. The EM market share difference to 0, with 10% constant of the actual and budgeted position, it will not change. Therefore, they are a cash cow.
Therefore, EM is the Cash Cow. Additionally, the Kinkead has been a leading Australia firm, and EM is the older but still dominant technology. Followed by EI table EI of the variance of the size of the market for 374,464 budgets, the size of the market for 250,000, lower than the actual market size of 363,500, more than expected. The market share variance is 241,321 Unfavorable which has decrease from 10% to 8%. Therefore, EI is question mark. In addition, EI’s future is uncertain, because from the case it says EI technology is new and still experimental.
(c) What aspects of performance are important for a product pursuing each of those strategies and which variances reflect those aspects of performance?
(d) Critically evaluate the performance of the two divisions.