Blue Ocean Strategy Essay Example | Topics and Well Written Essays - 4000 words

Blue Ocean Strategy - Essay Example The overall concept of Blue Ocean Strategy is innovation. It is understood from the book that companies should identify, plan a strategy and create a business of which no competition exists. Kim and Renee (2005)2 divide the competitive business world into two segments of Red Ocean and Blue Ocean. It is further explained that 'Red Ocean' is the business world full of competition where the existing organizations compete with each other to acquire its share in the market whereas 'Blue Ocean' is the unidentified market area. The Blue Ocean is the space wherein the business is new in the market and has no threat of competition instead it has to create competition. The giants of particular commodity or product or services, who are termed as leader, find it difficult to survive in the competitive world of business without marketing. American Marketing Association has defined marketing as the performance of the business activities that direct the flow of goods and services from producer to consumer or user. Marketing assists in identifying specific markets for products and services, guiding the development of products, packages, and services, etc. (Kumar)3 In blue ocean strategy this concept has a new meaning and a new method to implement in the firms. Blue ocean marketing concept proposes a method based on the segmented target group and the product development and marketing is based on the conduct of this group. The concept is good but cannot be fitted with all firms and their marketing procedures as it lack competition, which is vital in the marketing concept. (Kim and Renee, 2005)4 Marketing Strategy David (2007)5 states that creating a marketing strategy is only the first step towards the attainment of goal and after the strategy has been built; its solidarity has to be maintained to attract external stakeholders. He criticizes the marketing directors who are using B2B model while the others in the market have adopted real and valuable marketing strategies. The first principle of blue ocean strategy is to reconstruct market boundaries to create blue oceans so that it doesn't face any level of competitions and existence of competitors is zero. In order to create Blue Ocean, it becomes necessary to identify the threats and difficulties that make Red Ocean such a difficult world to live in. The red ocean companies are trapped in this area due to following reasons, 1) they define their industry similar to which exists in the market and try to provide the best other than others, 2) they try to and follow the strategic accepted methods, models, principles of developed and successful companies and strive to stand out in their strategic group, 3) as they produce similar products and provide service similar to that of the other industry, they focus the same consumer, which further makes the competition stiff and harder, 4) they define the scope of products and services similarly, 5) they accept the rules and regulations of the specific industry as they are governed by the governing body and functions accordingly and 6) some seasonal products produced by the companies will face stiff competition from its rivals as all the companies will

Auditing Process and Procedures for Smackey's Dog Food Inc Term Paper

Auditing Process and Procedures for Smackey's Dog Food Inc - Term Paper Example SEC influence over the Smackey Dogs food Inc. relate to issues of independence roles for the audit team. The audit standards is one of the influences to be observed, that have to be followed in establishing the independence of auditing team involved in the audit of Smackey. The relationship between the owner’s (Kim) husband and the audit manager Pete is going to influence the disclosure and materiality of the audit contents. The fact that there is a relationship between the bank the loan is being sort and Alan, Kim’s Husband depicts a loan relationship. SEC requires ethical principles to be observed by auditors. Independence is one of the six ethical principles of the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct. The other principles are responsibilities, the public interest, integrity, objectivity and independence, due care, and scope and nature of services. Section 303 of the SEC prohibits officers or directors of a company f rom manipulating, misleading, coercing or acting fraudulently towards the audit team in a manner to influence the auditor to issues financial information, knowingly or not, that the act could lead to rendering the audit immaterial. In this case, Alan obtains information from the audit manager during beers that will be shared with Kim, the owner and further Sarah who is seeking the loan. This is an issue that ought to be addressed as the result will be an adverse opinion. The underlying issues of Ben’s relationship with the bookkeeper Anita could be controversial in the resulting audit opinion. SEC elaborates on quality of disclosure and evidence. There is no proof of how far the relationship went but the reliance on the word of mouth. Mutuality of interests is identified in this case between the two parties. This is likely to jeopardize the independence of the audit staff. Over auditing of a company’s financial reports only materializes to full disclosure. However, the audit process should be within the required set guidelines given by SEC. Question two In the initial planning of the audit, the activities to be included are: an understanding of the company in terms of description and history of the company, tax issues disclosure, types of the customers, the internal audits, timing of the audit process amongst others. An assessment of the client’s business risk will be done to see whether it is achieving its objectives. The audit team should assess the risk of material misstatements arising from Smackey’s business risk. This is seen in the high wastage in Smackey’s Best Dog division that presents a lot of business risk, and therefore material misstatement risk. Performance of preliminary analytical procedures. – A comparison will be made to that of the industry. This helps in identifying the areas of high risk of materiality. Set materiality and assess acceptable audit risk and inherent risk- precise and reliable judgme nt is going to be applied by the auditor in assessing the materiality levels. Question three Stages of an audit Planning – the auditor outlines all the activities that he will follow during the entire process. The auditor should lay down his plan for the vital internal controls to be assessed. In the case of Smackey, the team should focus on: sales forecast, receivables approval and authority followed, stock taking, fraudulent dealings in the company, debts approval etc. Test of Internal control – this process follows a critical analysis internal controls of the records, procedures and processes followed in the company. The auditor should analyze the sales forecast process, be present during the stock take, and consider evaluating the control checks for stores. The weakness in the stock control is seen where the employee is stealing from the company, assessing the debts and the pending legal suits. The effects of the customers’