5-1 Blue Ridge Manufacturing

In: Business and Management

Submitted By sorakim
Words 1154
Pages 5
Case I: 5-1 Blue Ridge Manufacturing

1. Blue Ridge’s competitive strategy appears to be cost leadership, focusing on a narrow product type and offering for sale only in the southeastern states. Blue Ridge’s limited offering of products, only a sports towel for limited use and distribution, give it an edge in determination as there are only so many materials, designs, and processes required for this one type of product. Though Blue Ridge does focus on just the sports towel, there are still some aspect of differentiation which causes the firm’s competitive strategy to also deviate a bit towards product differentiation. Blue Ridge offers variations of its sports towels aside from its three customary sizes (regular, hand, and midrange), offering the options of a custom “special” by request, and variations in color, printing, offering custom design or logo printing with a licensing fee, as well as embroidery. In addition to Blue Ridge’s sports towel customization options, it is also considering using a new type of EPA friendly ink along with a better quality towel. Both these changes would increase the cost of sports towels, but provide for a higher end product, allowing Blue Ridge to expand its operations nationally. Blue Ridge’s competitive strategy in the future may branch more into product differentiation, but for now, Blue Ridge’s competitive strategy emphasizes cost leadership, attempting to provide its clients with the most cost effective sports towels for their needs.
2. Blue Ridge recently began using an activity based costing system. The use of activity based costing is consistent with a cost leadership strategy as ABC allows a firm to associate specific costs with specific customers, and ultimate the profitability of those underlying activities and per respective customer.

3. Large Medium Small
Towels Regular 27,250 x $1.19 =…...

Similar Documents

Chestnut Ridge

...Chestnut Ridge Country Club Filename: chestnut1=2011.sav The Chestnut Ridge Country Club has long maintained a distinguished reputation as one of the outstanding country clubs in Elma, Tennessee, area. The club’s golf facilities are said by some to be the finest in the state, and its dining and banquet facilities are highly regarded as well . This reputation is due in part to the commitment by the Board of Directors of Chestnut Ridge to offer the finest facilities of any club in the area. For example , several negative comments by club members regarding the dining facilities prompted the board to survey members to get their feelings and perceptions of the dining facilities and food offerings at the club .Based on the survey findings, the board of directors established a quality control committee to oversee the dining room and a new club manager was hired. Most recently ,the board became concerned about the number of people seeking membership to Chestnut Ridge. Although no records are kept on the number of membership applications received each year, the board sensed that this figure was declining. They also believed that membership applications at the three competing country clubs in the area – Alden, Chalet and Lancaster … were not experiencing similar declines. Because Chestnut Ridge had other facilities , such as tennis club and a pool ,that were comparable to the facilities at these other clubs , the board was perplexed as to why membership applications......

Words: 2069 - Pages: 9

1. Manufacturing, Merchandising and Service Companies

...topic to study? Cost accounting isn't just for manufacturers anymore. Service organizations, while no tangible products, can control costs and gauge internal performance by using service-specific adaptations of traditional manufacturing cost techniques. These practices provide a consistent framework for analyzing business decisions and examining issues that are more important for service companies. Part I Manufacturing, Merchandising and Service Companies. There are three different types of companies and each type of company will have a slightly different in term of financial statement presentation and cost management also. The main difference is with the cost of goods sold. A manufacturing company uses labor and other inputs to transforms raw materials into finished product and then sells the product, like a merchandising company. But in service company does not produce/sell products, instead it provides service. So service companies usually don’t have a cost of goods sold as they aren’t selling a product, they are selling an idea. As the other two company types; Manufacturing, Merchandising Company are selling a tangible product, they will have a cost of goods sold. 1.1 How are they different in term Cost accounting? Title | Manufacturing company | Merchandising company | Service Company | Inventory | * Raw materials * Work in process * Finish goods | * Merchandise inventory | No inventory | Cost of goods/services | * Cost of goods......

Words: 704 - Pages: 3

Chapter 5: Analyzing Managerial Decisions: Rich Manufacturing

...Chapter 5: Analyzing Managerial Decisions: Rich Manufacturing John Davis October 26, 2013   Case: Analyzing Managerial Decisions: Rich Manufacturing Writing Task: 1. Why do many firms use cost-plus for supply contracts? 2. What potential problems do you envision with cost-plus pricing? 3. Should Gina contest the price increase? Explain. 4. Is the increase more likely to be justified in the short run or the long run? Explain. 5. How will a $3 increase in the price of machine parts affect Gina’s own production decisions? Why do many firms use cost-plus for supply contracts? “Firms that use the technique calculate the total cost and then mark up the price to yield a target rate of return” (Brickley et al, 2009, p 211). “Often information on marginal revenue and marginal cost is difficult to obtain with precision, making it impossible to exactly determine the point of profit maximization. By using cost-plus pricing, you can simply include a desired rate of return in the mark-up” (Graham, 2013). The primary purpose is so highly used by firms is the ease. You do not have to be as accurate with your estimates, and you need to have knowledge of the market. Knowledge of the market will lead to the appropriate requirement for the actual cost of the product. What potential problems do you envision with cost-plus pricing? The potential problem with “cost-plus pricing is it focuses on average rather than marginal cost. Because profit maximization requires marginal......

Words: 735 - Pages: 3

Blue Ridge Spain

... Blue Ridge Spain is a joint venture between an American fast food chain and a Spanish agricultural company, Terralumen. Terralumen contributed to most of Delta’s success in foreign markets. After many years of a successful JV, the European managing director of Blue Ridge, Yannis Costas, found out that Delta wanted to end the partnership. Cultural value orientation conflicts between parent companies of different nationalities led the way for the dissolution of the JV. In an American-Spanish JV board meeting, the Spanish representative pushed to dissolve the JV to show his dissapproval of the way the meeting was being conducted. He had more of a problem with relationships rather that contractual related issues. The Delta/Tellalumen relationship deteriorated because Delta wanted to grow through acquisitions, instead of JV’s, while Terralumen felt their goals were too agressive. Delta pushed the issue, Terralumen agreed to half and shattered the relationship. They fail to devote attention to critical international business cultural issues. Costas, is of Greek nationality. According to Hofstede, Greece is high on power distance and uncertainty avoidance. In Greece, people respect and prefer senior managers over younger inexperienced managers. Costas has put a lot of effort into the JV, identifies with his work and genuinily wants to help Blue Ridge. He has a good relationship with the Spaniards who value his ability to establish interpersonal relationships. Decisions are made......

Words: 574 - Pages: 3

Bus 698 Week 4 Dq 1 Manufacturing

...will find the next files: BUS 698 Week 1 Assignment Case Analysis.doc BUS 698 Week 1 DQ 1 Alignment.doc BUS 698 Week 1 DQ 2 Dell.doc BUS 698 Week 2 Assignment Global Strategy.doc BUS 698 Week 2 DQ 1 Value Chain.doc BUS 698 Week 2 DQ 2 Supply Chain Risk.doc BUS 698 Week 3 Assignment Lean Thinking.doc BUS 698 Week 3 DQ 1 Speed to Market.doc BUS 698 Week 3 DQ 2 Time and Logistics.doc BUS 698 Week 4 DQ 1 Manufacturing.doc BUS 698 Week 4 DQ 2 Quick Response Logistics.doc BUS 698 Week 4 manufacturers and customers relations.doc BUS 698 Week 5 DQ 1 Strategic Partnerships.doc BUS 698 Week 5 DQ 2 Supply Base Rationalism.doc BUS 698 Week 6 DQ 1 3PL.doc BUS 698 Week 6 DQ 2 Leading Edge Supply Strategy.doc BUS 698 Week 6 Final Paper.doc Business - General Business BUS 698 Week 1 Assignment Case Analysis BUS 698 Week 1 DQ 1 Alignment BUS 698 Week 1 DQ 2 Dell BUS 698 Week 2 Assignment Global Strategy BUS 698 Week 2 DQ 1 Value Chain BUS 698 Week 2 DQ 2 Supply Chain Risk BUS 698 Week 3 Assignment Lean Thinking BUS 698 Week 3 DQ 1 Speed to Market BUS 698 Week 3 DQ 2 Time and Logistics BUS 698 Week 4 Assignment Manufacturer End-Customer Relations BUS 698 Week 4 DQ 1 Manufacturing BUS 698 Week 4 DQ 2 Quick Response Logistics BUS 698 Week 5 DQ 1 Strategic Partnerships BUS 698 Week 5 DQ 2 Supply Base Rationalism BUS 698 Week 6 DQ 1 3PL BUS 698 Week 6 DQ 2......

Words: 417 - Pages: 2

Top 5 Benefits of Lean Manufacturing

...Top 5 Benefits of Lean Manufacturing Jingchen Cao Oct, 4th 2014 Lean manufacturing is a management philosophy whose goal is to remove wastes and achieve perfection through kaizen with a set of lean principles and tools. The birth of lean was in Japan in Toyota around 1940s. It has many tools or techniques including Kanban, 5S, Value Stream Mapping, JIT and so on. This article will introduce you to the top 5 benefits that you should know your company is considering implementing lean manufacturing. 1. Eliminate wastes Generally, lean thinking considers 7 major forms of waste including overproduction waste, waiting time waste, transportation waste, processing waste, inventory waste, motion waste and defects waste. Lean manufacturing is an effective way for companies to investigate wastes and remove them. Then companies will abolish time spend on non value-added activities. Source: Lean Operations Handouts 2. Save Time It is true that less inventory leads shorter lead-time. Lean manufacturing generates fewer inventories and less non value-added tasks, so the lead-time will be reduced correspondingly. Furthermore, employees will work more efficiently and save more time due to implementing lean manufacturing. Standard operation process in lean manufacturing guarantees employee fewer mistakes and higher efficiency. 3. Control Quality One lean manufacturing tool is single-piece flow, which suggests working on one product at a time instead of batching and lot......

Words: 463 - Pages: 2

Acc 340 Complete Course 1 – 5 a + Course Materialacc 340 Complete Course 1 – 5 a + Course Material

...ACC 340 Complete Course 1 – 5 A + Course Material To Buy this Class Copy & paste below link in your Brower http://homeworklance.com/downloads/acc-340-complete-course-material-wk-1-5-a/ Or Visit Our Website Visit : http://homeworklance.com Email Us : lancehomework@gmail.com ACC 340 Complete Course 1 – 5 A + Course Material Week 1 ACC 340 Week Complete DQs (a) How can an accounting information system add value to an organization’s processes and/or products? Explain in detail. (B) What is some of the key information that is collected by your organization’s accounting information system, and how is it used ? Explain in detail Week 2 DQ (A) What issues enter into a given company’s design, acquisition, and implementation of accounting information system? (B) Do you agree or disagree with the statement that “decision to acquire an accounting information system is a business decision not a systems decision”? What role does competitive advantage play in the decision to acquire an accounting information system? What types of databases do you use in your personal life? What data do you store in these databases? How have they increased your efficiency? How can you use the business cycles to create tables in a database? What types of reports would you create from these tables? What is the most important phase of the SDLC? Why? Why did Blue Cross and Blue Shield’s System 21 project fail? What can you learn from this example? ......

Words: 7264 - Pages: 30

Case Study Blue Ridge Spain

...Requirement | Your Mark | Out of | Instructor Comment | 1. What is the problem? What was Foster’s intention in sending the email?Answer: Foster’s problem was the unavailability of the new drive XD19 which was having good momentum. His intention in sending the email was to stock the inventory as soon as possible and to resolve the safety issues concerned with the new drive. | | 3 | | 2. Who cares about the problem? How did each recipient interpret the email?Answer: The primary person who cared about the problem was Charles Foster (Sales manager) and the secondary people who were related to the problem were Richard Howe (Vice-president of sales), Maurice LeBlanc (Head of SBU) and Ahmad Hassan (President of JV). Richard understood that there is limited stock so he wanted JV to expedite the manufacturing process as they were losing orders because of stock unavailability. Maurice thought that the US office is only concerned about the safety issues and they believe that JV doesn’t follow the same safety standards as US does. Ahmad thought that Foster is spoiling his business by saying so many negative things in an email to his boss. | | 1 | | 3. How did the problem come about? Provide some background. What cultural assumptions underlie Foster’s email and the phone call and email from Hassan? Answer: The problem arises from the forecast made by the marketing and manufacturing team. The manufacturing team doesn’t believe the forecast made by marketing team and......

Words: 844 - Pages: 4

Blue Ridge Spain

...* Refer to the spreadsheet on BB about the valuation of Carnaud Metalbox (CMB). The key variables that will determine how much Crown Cork & Seal (CCS) should offer are listed at the top.  As you change these variables, the implied value of the company per share will adjust at the bottom right. I have input values for the three highlighted (in blue) assumptions about sales growth and cost reductions to arrive at one realistic scenario for the current valuation of Carnaud Metalbox at approximately Ffr. 186.58 per share. Play around with these values to see how much changing the sales to something different each year, or making the cost savings higher or lower, affects the implied value. Here, we are seeking to understand how continued improvement within CMB after the recent merger might justify their current valuation.  <!--[if !supportLists]-->a.     <!--[endif]-->Next, vary the assumptions to match Avery’s estimates of the cost savings provided by an acquisition by CCS, to make the implied value equal approximately the proposed offer price of Ffr. 225. Here, you are evaluating the synergy Avery plans to create, resulting in his willingness to pay a premium for ownership of CMB. Copy and paste the three highlighted lines into your Word document so I can see your answer. Do not upload the spreadsheet.  <!--[if !supportLists]-->b.     <!--[endif]-->Write a short paragraph summarizing your interpretation of the offer price, considering the......

Words: 376 - Pages: 2

Week 5, Dq#1

...DQ#1: (Ch. 2, economics) How does the local, state, or national economy affect your business or place of work? I always loved the study of Economics, too bad that I was never good at it. The proof in that statement goes like this: I own a small manufacturing business that builds cat furniture, you know, scratching posts and such. We manufacture all year round but we only sell our products about 5-7 times per year in the Arizona market. Our products range in price from $35 to $345. So, when the economy started slowing, we cut way back on the larger, more expensive items, and started producing more of the items under $100. I figured that customers would not be so willing to part with a big wad of cash for a non-necessity item. Boy, was I wrong. Come selling day we were sold out of the larger items within a couple hours, and the smaller items didn’t move as well. Bottom line, we went back to making larger items and they are selling better than before. I still don’t get it, are these non-necessity cat posts recession proof? Since we only sell locally, the state and national economy really has little impact on our business. Are there businesses that are relatively recession- or depression-proof? They say that replaceable items such as toilet paper and cosmetics are relatively recession proof. But then, the petroleum industry may feel a pinch, but not as hard as manufacturing, such as automobile manufacturers or even the insurance industry. So how can we explain......

Words: 372 - Pages: 2

Blue Ridge Manufacturing - Cost Accounting

...Assignment II – Blue Ridge Manufacturing INTRODUCTION: Blue Ridge Manufacturing produces and sells sport towels in the USA market. The firm knits all the towels it sells and tracks costs for towel production separately from the cost to customize the towels. Seventy-five percent of its orders include logo design, while the balance are print only and require the payment of a licensee fee for the logo used. Towels are made in four different sizes: Regular, hand, mid-range and hand. The normal production cycle for an order of white towels is three days. If a customer wants a colored towel, the basic white towel made by Blue Ridge is sent to a dyeing firm for 3 days more. The company sells its products to 986 different customers, which are divided into 3 types of groups: Large (8), medium (154), and small (824). They use different approaches to serve different customers: Large Customers, primarily national chains, are supported by a small in-house salespeople; Medium Customers, which are small chains, large single store, licensing, sport teams, are supported by independent representatives (on commissions); and Small Customers, primarily single stores, attracted by Advertisements in magazines and newspapers, who call or mail in their orders. Blue Ridge does not give discounts and ships all orders FOB point of origin. GENERAL ASSUMPTION: 1. We do not take into consideration the value of 85 units for other process as stated in the table 2 since there is no......

Words: 1997 - Pages: 8

Module 1-5

...state administrative law, state case law as well as local ordinances. All treaties are federal and so states are not permitted to sign treaties with any other country and local governments derive their power from state governments as well.  | Correct Answer: | [None] | Response Feedback: | [None Given] | | | | | * Question 3 4 out of 5 points | | | Explain the differences between courts of law and courts of equity.  (75 word guideline). | | | | | Selected Answer: | Gradually through out the years, the courts of equity has merged with the courts of law. Courts of equity is involved with cases like family law and bankruptcy, lawsuits and petitions. Courts of law is more involved with foreclosures, tenant contracts and other written document cases. A judge in a court of law has to follow the law even if you were to be justified, where a judge in a court of equity, the court could use its own discretion to determine justification.  | Correct Answer: | [None] | Response Feedback: | Courts of equity may only award damages such as injunctions and specific performance. | | | | | * Question 4 5 out of 5 points | | | Explain the concept of stare decisis.  (75 word guideline). | | | | | Selected Answer: | Stare decisis is a policy of following rules or you may call them principles laid down in previous judicial decisions. The policy dictates that the court must abide or adhere to decided cases. Stare decisis helps distinguish the......

Words: 8648 - Pages: 35

Blue Ridge Spain

...Table of Contents Executive Summary 1 Dissolution of Blue Ridge Spain 1 Restructuring Management Based on Growth 2 LARGE GROWTH POTENTIAL 2 MEDIUM GROWTH POTENTIAL 2 SUSTAINABLE SIZE MARKETS 2 Growth Plans for Spain 3 Strategic Alternatives 3 EQUITY BASED STRATEGY 3 NONE-EQUITY BASED STRATEGY 4 Executive Summary International business meshes across multiple domains most notably market entry strategies and sociocultural variances. Factoring in those two critical aspects and giving them the right amount of attention is the separating line between success and failure. Terralumen, Blue Ridge, and Delta are all successful companies; However, by not observing the basic requirements of international business, the security of this otherwise prosperous enterprise is at stake. Both Terralumen and Delta have shortcomings in the area of international business and Blue Ridge is the only stakeholder in this mix who has the necessary experience and expertise to manage this crisis and find a resolution. Considering the overall profitability of the Blue Ridge brand in Spain and existing investments by each joint venture member, the position from this white paper is to recommend a restructure of the business model to leverage the strengths within the joint venture organization and tailor the Blue Ridge total product more closely to the Spanish market. Dissolution of Blue Ridge Spain Delta and Blue Ridge do not have adequate knowledge......

Words: 1913 - Pages: 8

Blue Ridge

Activities SG&A
Costs Administration Selling TOTAL Actitives
P.O Commissions Shipping
Activities Invoicing Cost
Calls Checking
Credit Samples,
Info Special
Charges Distribution
Management Marketing
Type Advertising/Promotion Marketing Administrative
Support Licenses,
Fees TOTAL Total
 Shipping Sales Marketing
 Other Assigned Note 





 130,900 From














‐ 55.00% 


92,210 Percentage
Function 10.00% 


‐ 10.00% 




‐ 65.00% 




31,400 15.00% 






13,700 20.00% 


‐ 30.00% 


Words: 1064 - Pages: 5

Blue Ridge

...Blue Ridge Manufacturing Blue Ridge Manufacturing is one of a dozen companies that produces and sells towels for the U.S. “sports towel” market. The firm designs, knits, prints, and embroiders towels. The towels are made in three different sizes; regular (18”x30”), hand (12”x20”), and mid-range (15”x24”). These towels are then sold to their 986 customers, who are predominantly from the southeastern states. The volume purchased by each customer does vary a bit. So, the management team has classified them into three groups; large (8 customers), medium (154 customers), and small (824 customers). The small group consists of customers who call in their orders after seeing ads placed in magazines or catalogues. We have been hired by the firm to conduct an analysis of profitability on their activity-based costing system. Blue Ridge Manufacturing is concerned about how profitable their company truly is. They have hired us to look at their financial activities and advise them of what to do in the future. Blue Ridge has been using activity-based costing for production of their towels for the last few years. They would like us to help them decide not only which products are the most profitable but also which customer group. Currently, Blue Ridge tracks all production costs and customization costs separately from each other. This allows them to follow these costs throughout the production process, making it easier to evaluate the profitability of each product. However...

Words: 370 - Pages: 2