Question 1 – Current System
1-1. [10 points] a. What is the competitive environment at Gibson? b. What actions has the company undertaken in response ?c. What strategic issues do contemplated actions raise?
Here you may use brief bullet-point answers as per mid-term instructions – you don’t need to write paragraphs.
Here you may use brief bullet-point answers as per mid-term instructions – you don’t need to write paragraphs.
Answer:
(a)
- Gibson has acquired two new businesses, Midwest and Compton in order to grow quickly and increase its customer base. However the sales have increased and at the same time profitability has declined
- The company’s cost allocation has nearly 50 line items and different basis for cost allocation to different items. This is very complex while managing the various product lines and business units
The company uses number of policies as criteria for allocation, which is not right as per cost …..
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