Unit 2 module Assignment Example | Topics and Well Written Essays - 1000 words

Unit 2 module - Assignment Example The opposite is true in the case of unfavorable variance, where the amount set aside in the budget is less than the actual expenses to get met. For this case, the organization will experience budget deficit, and some items in the budget will get forgone or postponed unless borrowing or further funding get undertaken by the firm. c) Some variances are usually nil or zero. This arises from the accurate budget estimation done by the organization. Favorable and unfavorable variances often result from an organization’s lack of the exact projection or rather forecasting on the accrual expense in its various variables, both patient and non-patient revenues. Other also arises from an organization’s failure to give the estimate on the exact value of the expenses, both personal and non-personal, and the income over or under expenses. d) The possible primary cause of favorable variance is the organizations overestimation on the actual price of the particular variable. It can also arise as fall in the future price or cost of the particular variable, such that relatively the budgeted value is higher than the real value. As a result of this, the estimated value exceeds the actual value leading to a positive difference, which, in this case, is the favorable variance. The possible primary cause of unfavorable variance is underestimation of the real future price of the particular variable, for example, net salaries and wages. The other possible cause is the increase in the future price or cost of the particular variable, such that the budgeted value is relatively lesser than the actual value. For these two cases, the amount set aside for the budget ends up getting lower than the real value of the variable, hence a negative difference, which results in unfavorable variances. e) Positive variances are always favorable. This

Coca-Cola India Case Study Example | Topics and Well Written Essays - 1000 words

Coca-Cola India - Case Study Example The company's re-entry into the Indian market was through a strategic alliance with Parle Exports which was owned by Ramesh Chauhan (ICFAI Center for Management Research (ICMR)). Parle Exports entered the soft drinks market in late 1970s and this was the time when the government pressures forced Coca-Cola to exit the Indian market. Through the strategic alliance, Coca-Cola India gained the ownership of 5 popular brands of Parle Exports namely Thums Up, Limca, Maaza, Citra and Gold Spot with a market share of around 60%, and a well established network of 56 bottlers. All these five brands were the leading and most popular soft drink brands which were initially owned by Parle and later take over by CCI. Coca-Cola India wanted to tap the vast rural market of India. The company did so by creating a tag line which almost every common man of India is well versed with - "Thanda Matlab Coca-Cola." As part of this initiative to tap rural India, in the year 2002, Coca-Cola India launched a new advertising campaign featuring leading Bollywood star Aamir Khan with the above mentioned tag line. The advertisement was targeted at rural and semi-urban consumers. According the sources from inside the company, the idea was to position Coca-Cola as a generic brand for cool drinks and at the same time also to support CCI's rural marketing initiatives. The company seriously started focusing on the rural market in the early 2000s with an aim to increase sales volumes. This decision was nothing to get surprised about if the huge untapped rural Indian market was looked at. Nevertheless, it is a fact that the real market in India is in the rural areas and if any company can tap it in the right way, there is a tremendous potential (Carratu). "The company's strategy to tap the rural market was based on three A's - Availability, Affordability and Acceptability. The first 'A' - Availability emphasized on the availability of the product to the customer; the second 'A' - Affordability focused on the pricing of the product, and third 'A' - Acceptability focused on convincing the customer to buy the product (Research) (ICFAI Center for Management Research)." After entering the rural market in India, CCI focused on strengthening its distribution network there. The company realized that the centralized distribution system used by the company in the urban areas would not be suitable for rural areas. In the centralized distribution system, the product was transported directly from the bottling plants to retailers, but the company realized that this kind of distribution system would not be effective in rural markets as the transportation of stocks directly from bottling plants to retail stores would be very costly due to the long distances that need to be covered. The other alternative that the company looked at was a hub and spoke distribution system. "Under this kind of system, stock used to get transported from the bottling plants to hubs and then from hubs, the stock was transported to spokes which were situated in small towns. These spokes in turn fed the retailers catering to the demand in rural areas. Apart from changing the distribut ion model, the company also