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Question: Discuss and Provide Suggestions on Competitive Strategies that the Entity Can Consider to Improving its Financial Results. Answer: Introduction CFC Technologies (CF) is involved in the business of producing the tablet computers that are of high end technologies and delivers the consulting related services. The headquarters of the company is operated from Singapore and the company is largely funded through the venture capital. Owing to the growth in markets all over the South East Asia, it is experiencing high growth in revenue in the current years. The main business of the company is carried out in consulting services (CS) and another is in the manufacturing of Tablet computers (TCM). The most part of the companys earnings and revenue are generated from these services. It is found from the expenses and revenue compilation statement that the total revenue of the company for the accounting year ended 2014 amounted to $ 77,727 whereas for the accounting year ended 2015 the revenue amounted to $ 82,391. Therefore, there was an increase of revenue by 6.00% for 2015 as compared to the year 2014. Further, the total revenue of the company for the accounting year ended 2015 amounted to $ 82,391 whereas for the accounting year ended 2016 the revenue amounted to $ 81,567. Therefore, there was a decrease of revenue by 1.00% for 2015 as compared to the year 2014. The company believes that world is better place while the technology is utilised for assisting the businesses and people in effortless communication (Azhar Lin, 2017). Further, it makes the communication more reliable, faster and easier for the customers and at the same time deliver values to the shareholders. Performance of the company If the profit of the company is considered for the last 3 years that is 2014, 2015 and 2016, it is identified that the profit is in increasing trend over 2014 to 2015 and it was increased by 6.01%. However, the profit over 2015 to 2016 has been reduced by 14.15%. Therefore, the profit generating ability of the company is reducing over the years. On the other hand, if the total cost is considered, it can be identified that the total cost of the company is increased over the tears from 2014 to 2015. However, the total cost of the company has been reduced over the year 2015 to 2016. Therefore, it can be said that the companys ability to generate sales as well total cost has been reduced over 2016 to 2016. Revenue Particulars 2014 2015 Change +/- 2015 2016 Change +/- Sale of goods $ 77,000.00 $ 81,620.00 6.00% $ 81,620.00 $ 80,804.00 -1.00% Sales of services $ 727.00 $ 771.00 6.05% $ 771.00 $ 763.00 -1.04% Total revenue $ 77,727.00 $ 82,391.00 6.00% $ 82,391.00 $ 81,567.00 -1.00% % of sales of goods to total revenue 99.06% 99.06% 99.06% 99.06% % of other sales of services to total revenue 0.94% 0.94% 0.94% 0.94% Total 100.00% 100.00% 100.00% 100.00% The total revenue of the company includes two items like sale of goods, for instance, the sale of tablet computers and sales of services, for instance, the consulting services. It can be identified from the above figures that the revenue from selling of goods of the company constitutes a big part and accounts for 99.06% for all the years over 2014, 2015 and 2016. However, the revenues from sales of services constitute only a negligible part that is only 0.94% for all the three years (Krishnan et al., 2014). Cost Particulars 2014 2015 Change +/- 2015 2016 Change +/- Raw materials $ 8,470.00 $ 8,978.00 6.00% $ 8,978.00 $ 10,504.00 17.00% Direct labour $ 3,850.00 $ 4,081.00 6.00% $ 4,081.00 $ 11,313.00 177.21% Consultants salaries $ 25.00 $ 27.00 8.00% $ 27.00 $ 42.00 55.56% General Overheads $ 500.00 $ 525.00 5.00% $ 525.00 $ 662.00 26.10% Total cost $ 12,845.00 $ 13,611.00 5.96% $ 13,611.00 $ 22,521.00 65.46% The cost of CF involves the expenses like cost of raw materials, cost of direct labours, cost of consultants salaries and costs of general overheads (Patrick Sim, 2015). It can be identified from the above table that the raw material expenses of the company for 2014 were $ 8,470 thousands, for 2015 it was $ 8,978 thousand and $ 10,504 thousands. Cost of direct labour for all the 3 years were $ 3850, $ 4081 and $11,313 respectively for the year 2014, 2015 and 2016. There is a 6.00% for raw material cost as well as cost of direct labour over the year 2014 and 2015. However, the direct labour cost significantly increased by 177.21% over the year 2015 and 2016 (Bodie, 2013). It was further identified that the consultants salaries as well as general overheads of the company significantly increased by 55.56% and 26.10% respectively over the year from2015 to 2016. Profit Particulars 2014 2015 Change +/- 2015 2016 Change +/- Profit $ 64,882.00 $ 68,780.00 6.01% $ 68,780.00 $ 59,046.00 -14.15% Profit of the company represents the amount left with it after meeting all the costs including the raw material expenses, direct labour expenses and salaries expenses of the consultants and the expenses related to general overheads. It can be recognized from the above table that the profit of the company is in increasing trend over the years 2014 and 2015 and it increased by 6.01% during that period. However, the profit of the company is in decreasing trend over the years 2015 and 2016 and it decreased by 14.15% during that period. For the accounting year 2014 the profit was amounted to $ 64,882, for 2015 the profit was $ 68,780 whereas, the same for the accounting year 2016 it was amounted to $ 59,064 (Nuswandari, 2017). Thus, though the profitability position of the company is stable and can be expected that the company will be sustainable over the long run, the profit earning ability of the company has been reduced over the year from 2015 to 2016. Activity drivers Particulars 2014 2015 Change +/- 2015 2016 Change +/- Number of production operators 500 545 9.00% 545 615 12.84% Number of full time consultants 50 60 20.00% 60 74 23.33% Number of tablet produced per year ('000) 1000 1220 22.00% 1220 1377 12.87% Number oif defects per year 30 61 103.33% 61 90 47.54% From the above table it is recognized that the number of production operators of the company for the last 3 years that is 2014, 2015 and 2016 is in increasing trend and it increased by 9.00% from 2014 to 2015 and further increased by 12.84% from 2015 to 2016. Further, the number of consultants has been increased by 20% in 2014 to 2015 and by 23.33% in 2015 to 2016. It has also been identified that the number of production for tablet increased by 22% and 12.87% respectively over the year 2014 to 2015 and 2015 to 2016 whereas, the number of defects significantly increased by 103.33% and 47.54% respectively over the years from 2014 to 2015 and 2015 to 2016 (Jakob, 2017). Therefore, the increases in defects were far more as compared to the increase in the production of tablets. Therefore, the profit generating ability of the company is reducing over the years as the revenue of the company has not been increased proportionately (Hevert, 2013). Competitive strategies and conclusion CF is the company that deals in selling of computers and providing consulting services that has its headquarter in Singapore. The most part of the companys earnings and revenue are generated from these services. However, due to the growth in markets all over the South East Asia, it is experiencing high growth in revenue in the current years. Under the competitive market, the competitive advantage states that the company is using the capabilities, core competencies and resources in such a way that it will generate more value for the customers as compared to its competitors. For achieving the competitive strategy over the competitors CF may apply the following strategies Product strategy the basic product shall be offered at the introductory stage and the product warranties as well as extensions shall be offered under the growth stage and the individual item shall be diversified under the maturity stage. Pricing strategy the cost plus price shall be charged at the introductory stage and the price shall be set for penetrating the market under the growth stage and the price shall be set for meeting the competitive price in the market (Rafay Khan, 2016). Advertising strategy creating the awareness regarding the product among the early dealers and the adaptor in the introductory stage and creating interest in mass market under the growth stage, stressing on the differences and the benefits of the brand in the maturity stage shall be properly implemented. Distribution strategy distribution shall be built in selective way during the introductory stage and the distribution further be developed under the maturity phase and during the decline stage it shall be in more selective way. Sales promotion strategy using the extensive promotions in the introductory stage, reducing the promotions for taking the advantages of heavy customers demand under the growth stage, increase promotion for encouraging the switching of brand under the maturity stage and decreasing the promotion to the minimum under the declining stage (Grossberg, 2014). Further, it can be concluded from the above discussion that the revenue of the company for the accounting year ended 2015 amounted to $ 82,391 whereas for the accounting year ended 2016 the revenue amounted to $ 81,567. Therefore, there was a decrease of revenue by 1.00% for 2016 as compared to the year 2015. Further, the revenue of the company has not been increased in proportion with the activity drivers of the company like number of production operators, number of defects and number of full time consultants. Thus, the company shall take proper measures like improve the quality of the product, reduce the price of the product and improve the distribution strategy and carry out the market research to know the preference of the customers to increase the sales and take proper measures to balance the activity drivers with the revenue. References Azhar, A., Lin, C. W. (2017, April). The fundamental business strategy for state owned mobile provider company enter the regional market community. InInformation Management (ICIM), 2017 3rd International Conference on(pp. 16-20). IEEE. Bodie, Z. (2013).Investments. McGraw-Hill. Grossberg, K. A. (2014). Marketing Champions: Exemplars of Product Innovation as Key to Marketing Strategy.Waseda Business Economic Studies,49, 23-31. Hevert, S. R. B. (2013). Return on Equity. Jakob, B. (2017). Performance in Strategic Sectors: A Comparison of Profitability and Efficiency of State-Owned Enterprises and Private Corporations.The Park Place Economist,25(1), 8. Krishnan, S. P. T., Veeravalli, B., Krishna, V. H., Sheng, W. C. (2014, August). Performance Characterisation and Evaluation of WRF Model on Cloud and HPC Architectures. InHigh Performance Computing and Communications, 2014 IEEE 6th Intl Symp on Cyberspace Safety and Security, 2014 IEEE 11th Intl Conf on Embedded Software and Syst (HPCC, CSS, ICESS), 2014 IEEE Intl Conf on(pp. 1280-1287). IEEE. Nuswandari, C. (2017). Pengaruh return on asset, debt to equity ratio, earning per share, ukuran perusahaan dan likuiditas terhadap nilai perusahaan (Studi Empiris pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia Tahun 2013-2015).Students' Journal of Accounting and Banking,6(2). Patrick Sim, M. M. (2015). A Review of Corporate Social Responsibility: SingTel Touches Lives.J Account Mark,4(137), 2. Rafay, A., Khan, A. (2016). Shift Towards Next Generation Networks (NGNs) for Sustainability: Evidence from an Emerging Economy.Journal of Cases on Information Technology (JCIT),18(3), 1-12