Strategic Positions of Vee and Feather

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Management Control System
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Course
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Question one.
1. What are the strategic positions of the two companies (Venture and Feather) and how
do they differ?
Strategic position is the choice a company makes after reviewing the industry in relation
to its competitors and how the competitors operate.1 Such choices are based on value creation
and how those values will differ from the competitors. The strategic position helps a company to
create its own market space and attract more consumers to its products. Strategic positioning
may involve factors such as lower operating costs for the company or premium pricing.2
Venture’s strategic positioning is based on the low cost of maintenance of their shredders.
Ventures operating cost within the two-year period is estimated to be 500 US dollars while that
of Feather is about 700 US dollars. Venture has, therefore, position itself based on low
maintenance cost as compared to Feather. This Positioning style will attract more consumers to
Venture as they will be willing to save money on the operating and maintenance cost.3
Consequently, Venture has emphasized themselves in regards to this strategic position by
stressing their low maintenance and operating costs to consumers. On the other hand, Feather’s
strategic position is based on the firm’s reputation and their ability to deliver goods under a
shorter timeline. The difference in delivery time between the two companies differ by a whole
1 Strauß, Erik, and Christina Zecher, Management control systems, 240
2 Bedford, Management control systems across different modes, 19.
3 Shaikh, et al., A review on optimized control systems,410.

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one week. Such a smooth and efficient delivery time is key in attracting consumers who want
their goods delivered faster. Feather’s strategic positioning is also based on the reputation of
good service. Many consumers are attracted by the guarantee of good quality service. Feather
Company has therefore maintained this reputation over time. The difference between the two
modes of strategic position differ in that Venture’s model is inclined more towards product
operation and maintenance while Feather’s is based upon external factors such as delivery time
and brand image.
2. Explain how these actions translate into strengthening the competitive position of the
Venture’s shredder relative to Feather’s shredder. Also discuss the implications for the
management accounting information system (hint: what sort of information should be collected
and reported?
Competitive positioning is creating the value of marketing by differentiating one’s value
as opposed to that of the competitors.4 Consequently, this gives the business a niche in the
market, allowing the business to attract more customers, retain the available ones and develop a
marketing share. Through their cost leadership, Venture Company is able to set a lower price
than Feather due to their lower cost in production while consequently offering the consumer with
the same benefits.5 This cost leadership gives Venture the opportunity to be flexible with the
consumers. The company can, therefore, absorbs consumer requests such as lowering the prices
and increasing the quality of their machine. The company has also lots of choices in strategies,
4 Cugueró-Escofet, et al., The just design and use of management control systems, 30.
5 Acquaah, Management control systems, business strategy and performance, 133.

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for example, they can set the price at the same level with Feather and still maintain profitability
or reduce the price and attract increase the market share. On the other hand, fast delivery will
help Venture company to tap into a larger market share.6 The contemporary consumers focus
more on fast delivery. By reducing their delivery times, Venture increases their success rate in
the market. Since Venture and Feather are at a price competitive environment, fast delivery can
result in a competitive advantage. In their management accounting information, Venture should
focus on emerging market trends and how consumers respond to their new product and cost
leadership. This will enable the company to understand any existing gap in the market and also
evaluate the ever-changing consumer’s wants. By collecting feedback from the customers, the
company will be able to plan for future changes in order to remain relevant in the industry.
Question two.
1. To meet this goal in the three regions, should Modern Travel Company System’s
management structure be decentralized or centralized? Provide at least four reasons to
support your answer.
Centralized management structure is whereby the top management has the sole decision
in making decisions concerning matters affecting the business.7 This type of management is
hierarchical. On the other hand, a decentralized management system is one which the decision-
making process has been delegated to staff at the lower level of management.8 The lower level
6 Jordao, et al.,Organizational culture and post-acquisition changes, 545
7 Janke, et al., An exploratory study of the reciprocal relationship, 260
8 Lee, et al.,Enablers of top management team, 20.