Kwena Concrete Products-Bostwana-CS09 – Case Study Example
Task How Pricing is Addressed in Kwena Concrete Company Kwena Concrete company Botswana is a manufacturing firm that deals with production of concrete products such as brick and blocks, railway sleepers and paving bricks. The company has been remarkably successful ever since it was established in 1982. However, the company was slightly affected in 1992 when it was charged with corruption issues. These issues also raised against BHC led to its closure (Concrete Manufacturers Association 10). From the time the company reopened, it became exceedingly conscious with the pricing issues because it had modified its bricks and blocks to improve the quality. The company had to make some profits in order to stabilize. The outstanding orders were put into the stock brick store and their prices divided into three; base price, special price and production costs together with the activity-centered costs. All these costs are brought together and one fixed price published (Bendi.Mobi 11). The final prices of the products are reached by compiling the costs of all materials used, their costs and calculating the best price that can enable the company to make a profit for every brick, block and all the other products. When the prices of the materials and product are high, the final prices of products are high, and when the cost of materials and production is minimal, the prices of the products must also be sold at a slightly lower costs. Therefore, the pricing issue is handled in stages depending on the total cost of materials used to make them. The selling process is also divided into two whereby the small contracts and citizens normally pay cash while the large contractors or companies buy the products on credit. In this way, the pricing process of the outstanding orders remains efficient and effective (Concrete Manufacturers Association 15).
My reccomendation is that in order for Kwena Concrete Company, Botswana to be competitive enough, it has to make its product costs to be slightly lower than the other companies’. This will enable it to develop a strong, competitive advantage by acquiring more customers and selling more products than usual. Moreover, it will be able to make substantial profits and expand to other countries.
Bendi.Mobi. Kwena Concrete Products Ltd – Gaberone, Botswana. 2010. Print.
Concrete Manufacturers Association. Concrete Block Paving More Cost-Effective than Premix Asphalt in Many Applications, Kwena Concrete Products Ltd. Concrete Manufacturers Association. 2010. Print.
Suttle, Rick. Industry Pricing Strategy. Demand Media, Small Business. Chron.com. 2010. Print.