In: Accounting
Question 1 Classify the following statements as goals, objectives, or strategies/tactics. If the statement is part goal or objective and part strategy/tactic, separate the statement into its relevant parts. For statements classified as either a goal or an objective, further classify them as either short-term or long-term (assume it is January 1, 2018) and financial or nonfinancial. In addition, if you feel that a statement is an outcome (i.e., either a goal or an objective), further assume that it is appropriate and realistic as these terms are defined in Chapter 2. After you have classified the statement, explain your reasoning in no more than two sentences. (Instructor’s Note: The fact that a case may refer to a statement as a goal or strategy, for example, is not controlling. Business terminology is often used incorrectly even in business reports.)
A. Maximize stockholder wealth over the long term.
B. Increase the percentage of business-to-consumer package deliveries from 46% of domestic deliveries in 2017 to 51% of domestic deliveries in 2019.
C. Increase revenues from higher-margin aero/defense and transportation aluminum products from 31% to 41% of revenues.
D. Expand into 10 emerging global markets by the end of 2020. E. Increase revenues 20% in market share of all products sold by 20% by the end of 2020.
F. Lower the average price of all products sold by 10% over the next year.
G. Increase market share by 10% over the next five years by adding five new products to the company’s present product line.
A. Maximize stockholder wealth over the long term.
The following statement is the goal. The goal is a long term goal.
The above mentioned line is a long term goal as the ultimate reason of operation of the company over long term is Maximising the wealth of its's stockholder.
B. Increase the percentage of business-to-consumer package deliveries from 46% of domestic deliveries in 2017 to 51% of domestic deliveries in 2019.
The above mentioned line is the long term objective of the enterprise. This is a non financial objective.
The line mentioned above is a long term objective as the enterprise aims to achieve it in 2 years. The objective doesn't relate to money directly, thus being of non financial nature.
C. Increase revenues from higher-margin aero/defense and transportation aluminum products from 31% to 41% of revenues.
The above line is an short term objective of the enterprise as it aims to achive the same in the coming financial year. The objective is of financial nature.
The line specifies a target to be achived by the company in the coming financial year, thus being a short term objective. The target directly relates to increasing revenue margin, thus it is of financial nature.
D. Expand into 10 emerging global markets by the end of 2020.
The above statement is a strategy/tactic.
By the above way, the company aims to achieve it's goal and objectives, thus it is a strategy. It is of non financial nature.
E. Increase revenues 20% in market share of all products sold by 20% by the end of 2020.
The following statement is long term objective. It is of financial nature.
The line mentioned above is a long term objective as the enterprise aims to achieve it in 2-3 years. It directly relates to increasing revenue by increasing market share, thus being of financial nature.
F. Lower the average price of all products sold by 10% over the next year.
This is a short term objective of the company. It is of financial nature
As its a target the company aims to achieve in the coming year, thus it is a short term objective. As, it willdireclty affect revenue, thus is of financial nature.
G. Increase market share by 10% over the next five years by adding five new products to the company’s present product line.
1st Part: Increase market share by 10% over the next five years
This is a long term objective of the company, as it aims to achieve it in the coming 5 years.
This is of non financial nature.
2nd Part: adding five new products to the company’s present product line.
This is a strategy of the company as it is the way by which it aims to achieve the long term objective.