[Management]
Tangible Resources of Delta
Tangible resources refer to the balance that remains after subtracting goodwill from the shareholder’s equity total. When it is positive it indicates that the business is approaching the right direction. The book value of the tangible resources of Delta is – $15.9 million. This company lacks the balance sheet strength to safeguard itself from recession or well financed players in the same industry. These tangible resources may include (inputs), activity system (transformation activities) and product offering (output) (Sterman, 2000, p. 813).For a company to be competitive in the market it has to invest in a specific initiative and strategy rather than concentrating in a generalized market.
Moreover, the Delta& Signal Corporation had over 2000 distinct products in the market before the year 2012. As a result, the firm experienced a low market share, high manufacturing and administration costs, and lack of clear operational goals and objectives (Power, 2010, p. 13). Further analysis into its financial reports showed that the company’s stock price had lost value; there was falling revenue although the company had expanded its operations in Asia.
Intangible Resources ratio of Delta
Examples of intangible resources include goodwill, relational resources and capabilities among others. Delta Corporation has a ratio of intangible resources of 33%. This is relatively above the Heiserman’s 20% threshold. This indicates that the company is moving fairly to the positive direction.
Recommendations in relation to the Outside –in perspective of the Firm
After changing its management, the company has changed its strategies to more specific ones. They had to focus on one initiative strategy: Low lifetime Cost strategy (Saloner, 2001, p. 273). Market research was done and relevant information about the product was collected. The firm advertised its product and this saw the sales for the eight products rise. In addition, the asset turnover increased, market share rose to 48% from 15 %, product defect rate reduced by 0.24%, quality of products increased and there was also an increase of share prices. Likewise the rate of customers recommending the products to others also increased (Power, 2010, p. 3). The company’s market segmentation is unique and superior because, the company seeks to understand the needs of its customers better and produces solutions to those needs, which in turn increase customers’ satisfaction. A satisfied consumer would like to be recognized with the products and recommend it to their family and friends (Saloner, 2001, p. 199). An increased customer base will mean that the market share increases. If the firm manages to outdo the competitors it becomes the market leaders.
Recommendations in relation to the Inside-out perspective of the firm
After the firm developed its market segment, it decided to use its creativity in tandem with the anticipated client’s tastes and preferences to rebrand its products an then present them to the market. This included the use of activity system which comprises of all the processes that are employed by a firm in adding value to its products. The system comprises of both primary activities and support activities. Primary activities are those involved in the creation of the products and the transfer of ownership through sales. They include inbound logistic, operations, outbound logistics, sales and marketing and services. Support activities are auxiliary services that assist primary activities (Saloner, 2001, p. 313). They include firm infrastructure, technology development, procurement services and man power. Companies in one industry tend to have similar activity system. To be a market leader, a firm needs to employ a unique system from the others. To achieve this, there is need to review the strategies and relate them with the external environment. The global trends should be considered and compared with the firms’ progress.
In conclusion factors such as primary and secondary materials, branding, advertising, apt marketing segmentation strategies, competitiveness in internal controls and managements form a blended pattern of features of a successful company. With these factors the company is able to compete effectively with other players in the industry.
References List
Power, J. (2010). Initial Quality Study Results. Retrieved from http://www.jdpower.com/autos/articles/2010-Initial-Quality-Study-Results/, accessed May 2011.
Saloner, G. (2001). Strategic Management. London-uk: Wiley; 1st edition ISBN-13: 978-0470009475.
Sterman, J. (2000). Business Dynamics: Systems Thinking and Modeling for a Complex World with CD-ROM. New York: McGraw-Hill/Irwin ISBN-13: 978-0072389159.
