Hello, everybody.You're listening to Accounting Makes Sense, an MJ the Tutor podcast.And I am your host, MJ.
In this podcast, we are focused on helping accounting students all over the world by offering a quick warm-up on various accounting and business topics, hoping to generate bigger discussions and conversations around them.
If you are a SEMA student right now, then this episode is for you. For this episode, I'm going to offer a few tidbits on the Management Case Study, MCS, for November 2024.
So, if you are a SEMA student right now studying for the MCS exam, then this episode is for you.So, these tidbits that I'm going to offer are like clues into the world of the pre-seen company.
All it is are really quick and fast intakes of the pre-scene.Since I've only had a few days to read through it, these are just fresh thoughts about them.I always believe that as you read the pre-scene more, you'll get more and more insights into it.
Anyway, let's start off with a bit of background information on our Precine company.Our Precine company for the MCS is a company called Shiny Glass.
They manufacture double-glazed windows and doors for installation in domestic and business properties.They are the largest fabricator of windows and doors in the fictitious country that they lived in, which is Templand.
Now, our first tidbit for today that I'd like to share is the role that salespeople play in this company.You may ask, why have I actually singled out the salespeople?
It's no surprise, because the sales department and how the salespeople are compensated, monitored, interacted with, are mentioned quite a bit on the pre-seen material.
Shiny Glass salespeople play a critical role in delivering value to customers, but their unique employment structure and work conditions present both challenges and opportunities when it comes to their motivation and performance.
Shiny Glass salespeople are compensated on a commission basis, which incentivizes them to secure more sales.
While this pay model can drive high performance, it can also create stress and demotivation if sales are inconsistent, especially in areas where business volumes might fluctuate.
Currently, the salespeople enjoy flexible working arrangements, allowing them to manage their time accordingly to the demands of their regions.
This flexibility appeals to many workers, fostering a sense of autonomy, especially nowadays where remote working is really very popular among the workforce.However, there's a risk that some may underperform due to the absence of a formal structure.
The salespeople are located across different regions, with some benefiting from booming construction areas, while others face limited demand in more mature markets.
This geographical imbalance means that certain salespeople are in an advantageous position, while others may struggle to generate the same level of business, despite their skills.
This could lead to dissatisfaction among those in slower regions if they perceive the system is unfair. This area or topic is just so much information that there's so many questions that could be directed at it.
It could be about motivation, it could be about structure, leadership, performance measurements, and all that. So, we're going to stay with stakeholders on our next tidbit, but this time we will focus our attention on another part of the business.
Our second tidbit is on collaboration and strategic partnerships.Collaboration across the supply chain is critical for Shiny Glass, especially given its reliance on external partners for both materials and installation services.
Shiny glass depends on a reliable supply of sealed units and raw materials to produce high-quality windows and doors.
Building strong, long-term relationships with suppliers is crucial for maintaining product consistency, managing costs, and ensuring timely delivery of materials.
Also remember that there's only three sealed units manufacturing specialists in Templin, which could indicate that there's an imbalance with the supplier power in the market.
Any disruptions in the supply of these materials, whether due to environmental concerns, global trade issues, or local constraints, could impact production and the schedules and lead to delays in delivering the product.
Collaborating closely with suppliers to create contingency plans and secure a diversified source could mitigate this risk.
Now, there's also the other part of this where there's an increasing public scrutiny over the environmental impact on manufacturing.
Shiny Glass might need to collaborate with suppliers to ensure that their processes are energy efficient and environmentally responsible.This could also provide an opportunity to co-market sustainable products, enhancing our company's reputation.
Now, I want to talk about the other end of the process, which is the installers.
Installers are integral partners in ensuring that the final customer experience meets the company standards, completing the value chain by providing reliable and timely service. These installers need to consistently meet quality standards.
Shiny Glass can focus on collaborative growth.This could include sharing insights on market trends or customer preferences that enable the installers to optimize their services.
This creates a mutually beneficial environment where both parties are actually benefiting with a stake in growing both businesses. Shiny Glass and its installers can focus on increasing operational efficiency.
This could involve optimizing scheduling, route planning, or reducing the time taken for each installation.
By collaborating on these improvements, installers can complete more jobs per day, boosting their earnings, but at the same time, they are not sacrificing the quality that Shiny Glass needs its brand to actually represent.
The third tidbit that I'd like to share is perhaps on product differentiation, or the lack thereof, and how we are going to gain an edge from competitors.
While Shiny Glass is at the top of its game, there is not much product differentiation between the top four.There may be some that focus a bit more on cost and others that focus on quality, but most fabricators provide much of the same thing.
I think we edge a little bit because of the reputation and history of the brand.We are known throughout the country and we've been in business for a very long time.
But in order to differentiate, we may have to think outside of our current focus or maybe innovate a little bit. Under innovation, we need to determine what the customer needs.We could look at the following innovation.
Think like smart windows, where the windows could be adjusting the light levels automatically.That could be an opportunity.
We can have self-cleaning windows, another innovative feature that could appeal to both residential and commercial customers, reducing that need for regular maintenance.
We could also look at environmental concerns related to our production of these products, our energy consumption.There's ways where we can innovate, maybe perhaps to put more insulation properties into the double-glazed windows.
There's also other things where we can even touch on subscription-based aftercare service, which is a big thing now.Subscription-based model of revenue is a big thing nowadays, right?
So anyway, there's lots of stuff, noise reduction, security windows, and many other things.And I really think that innovation will be big part of how shiny glass can differentiate its products.
So the last tidbit I'd like to share is on cost management.If you research this industry, you'd have found some articles about a couple of big companies specializing in double-glazed windows entering into administration.
One of the biggest reasons cited is that these companies struggled financially. It's not uncommon that there are high costs in this industry.
The products are expensive, so it's difficult to entice normal, regular people to spend monies on what they may perceive as luxury home improvement.
Obviously, there are way more benefits in getting double-glazed windows versus just plain glass windows.But at our end, we also need to make sure that we watch how we control and maintain our costs in producing, manufacturing these products.
Cost management regarding commissions and discounts is a delicate balance for Shiny Glass as these factors directly affect both sales volume and profitability.
Shiny Glass relies on a commission-based model to drive sales, which incentivizes salespeople to close deals.However, if the commission structure is too generous, it can erode profit margins.
Finding that right balance between motivating sales staff and protecting profitability is going to be crucial.Offering significant discounts to closed sales, especially in a highly competitive market, can hurt profitability.
While discounts can drive volume, they may come at a cost of reducing the overall profitability as well.
Shiny Glass needs to ensure that discounts are applied strategically, focusing on volume increases or customer loyalty without significantly cutting into profits.
If discounts become too frequent or too steep, customers may come to expect them as the norm, and this can reduce the perceived value of Shiny Glass's products and make it harder to sell at full price in the future.
A clear discounting strategy is probably essential here to prevent discounting from becoming a permanent expectation.Shiny Glass already limits commissions payout on highly discounted sales to avoid this double hit on the profitability side.
But we could also probably explore offering discounts on bundled packages.We could partner with our installers where we offer the product, the window or the door together with a subscription model of the aftercare service.
And then we know that we are protecting the longevity of our product.At the same time, we are ensuring whoever handles the maintenance and repairs of the windows or doors are properly trained, they will take care of them appropriately.
Anyways, that is it for me today.I hope you found this episode helpful, and maybe perhaps you had the same thoughts as me when it came to the MCS pre-scene.
That's good, you know, since it confirms your hunches, but if you've had other points as well that you've raised in your mind, then that is also good, because it gives you additional food for thought.
As always, thank you for listening to Accounting Makes Sense, an MJ the Tutor podcast, and I am your host, MJ.
If you're keen to connect to be updated with the arrival of the next episode of this podcast or find SEMA resources online, please head on over to my website, www.mjthetutor.com.
You can also hit subscribe on whichever platform you are using to listen to this podcast. If you want to connect with me on social media, I'm on Facebook, X, and Instagram under the name MJTheTutor And I hope to see you again next time Ciao for now!
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