Colorscope Inc Essay Example

short term strategy.

Questions

1. How could Colorscope improve its operation?

2. How could it change its pricing strategy?

3. What accounting and control should this company install?

1. Colorscope’s strategy to improve its operation are: If we talk about performance it’s correlated with revenue, marketing area is lead by Mrs. Agatha Cha and Mr. Joe Cha. Since Mr. Joe will move to Shanghai to pursue a career in consulting, Company have to prepare new personnel to replace Mr. Joe’s position. Highly recommended the new marketing personnel have good skill and knowledge in technology ,so when colorscope want to get more revenue they must have marketing campaign to get big fish.

* They must changed the based printing method from conventional to modern based which is more eficien and effective. It can be looked in the picture Beside leadtime changing from conventional based to be computer based can reduce cost

* According to organizational structure

* Cost competitive pressure can be reduced by shrank the hours spent on rework. Colorscope was spent hours for rework which means it has impact to quality control wages cost ($ 11,000, June 1996) that caused the increase on product cost. Reworks are divided into rework initiated by customer due to change in specification and rework caused by error in-house. This kind of rework caused by error in house should

be avoided, the original defects were introduced in the scanning stage of the operation.

However, when a job is rescanned, assembly, output, and quality control all have to be redone. Colorscope can gain additional revenue by leased the 6,500 sq. ft. idle floor space.

2. Colorscope Pricing strategy If we talk about pricing strategy we must analyze about cost of production / cost per unit from the product, now price per page from colorscope around $ 600, The result from the price analysis is colorscope sales price is below from cost per unit it cause there are inefficiency from cost of rent , there are idle room ( about $ 13,000) and it’s affected total cost about $ 24 per pages

So the conclusion about pricing strategy :

* Colorscope must increase their sales prices over than cost per unit ( sales price > Total Cost)

* Colorscope must make a policy about their rent. They must rent smaller office then rent expense will be reduced and effective.

* Considering the size of the operations and cost of rework, it needed to control costs while maintaining quality and to manage customer profitability

* Colorscope initiated quality improvement techniques, an incremental change to limit error . accounting and control should this company install

* Employees considered as important assets that will keep the business running well.

Nevertheless, from the description of workflow organization at Colorscope we find that workflow and production procedures were standardized but not documented. Colorscope relied instead on the institutional knowledge of its imployees and frequent supervision by Andy Cha to maintain and improve operational efficiency.

It is important for Colorscope to create and documented its standard operating procedures, in order to anticipate

increase in work hours that may be caused by new employee hired. In other side it can reduce work hours spent for coaching and supervising new employee.

* In practically colorscope can adopt activity based costing, in this method fully related with contol system, because with this method they can now where is unefficient activity and used to measure customer profitability, beside that colorscope must revised or make new their SOP ( ideal Condition).