Drop – Term Paper Example
DROP EVALUATION - CONTROL By Marketing EVALUATION - CONTROL & UP By the end of the 1st year after its launch, DROP should have a market share of approximately 5% in the bottled water industry with only a deviation of 0.05% being allowed. In the 3 subsequent years, its market share shall be increasing with 0.1% annually with no admissible deviations. Additionally, its sales will be $41,596,123 by the end of the financial year with only a deviation of 5% being allowed from this targeted figure.
Audits and performance reviews
Audits and performance reviews will be done semi-annually by external audits who will review all analysis conducted by our internal accountants. Afterwards, our accountants will report the financial information to members of the public and the internal staff for effective decision-making1. Reporting dates shall be 31st March and 30th September. Important performance indicator metrics include;
Operating margin = operating income/sales x 100%
Profit margin = net income/sales x 100%
ROI = (Gain from investment-cost of investment)/cost of investment
Gross margin = gross profit/sales x 100%
We shall embrace the lean production strategy where production is customer driven. Any performance below the allowable deviations from the anticipated rates, for instance a 2% deficit, will lead to stoppage of production activities to pave way for identification of the root cause of the problem. All inventories shall be quick disposed and a quick risk identification and assessment process initiated. Inventory level shall be held at very low levels during times of low demand to reduce storage costs. Moreover, contingency life cycle costs will be minimized be regularly appraising the contingency plan to incorporate changes that might emerge in the bottled water industry.
To mitigate potential losses resulting from market failures, DROP will be insured against adverse market conditions and new production technologies shall be employed in case it is discovered that current competitors have learned the technique used in producing a product that has zero calorie, healthy infusions of electrolytes, zero sugar, and vitamins, and no artificial sweeteners just like DROP2.
Wilson, R. M., & Gilligan, C. (2005). Strategic marketing management: Planning, implementation and control. Amsterdam: Elsevier/Butterworth-Heinemann.