222222222 Wilkerson Case Study Final
Q#1.What is the competitive situation curently being faced by the company?
The company facing the different competitive situations between the products, gross margin of values are maintained at 35% and produce in standered.
Flow controlers are custmized products, and less competitive market power.
Pumps are comodity products produced in high voulume at high price for a market.
Wilkerson is a quality leader although his competitor also have a best match with him. Butt there is no competition in price facing by wilkerson, and there is no chances in future. So wilkerson should compete in price by analyze its overhead cost.
Pumps are commodity products, produced in high volumes for a market with high price competition - price cutting by competitors led to a drop of Wilkerson’s pre-tax margin to under 3%, gross margin on sales for pump sales has fallen below 20%. Flow controllers are customized products, sold in a less competitive market with inelastic demand at the current price range.
Valves are standard, produced and shipped in large lots - gross margins have been maintained at 35%.
Wilkerson is a quality leader, but this leadership may soon be contested by several competitors. Although they are able to match Wilkerson 's quality, there are no signs of price competition yet. Nevertheless, in the long-run Wilkerson should be prepared to compete on price. The price competition pushes Wilkerson to analyze its overhead costs, since no reserves of cost cutting are left in its supply chain (both customer and suppliers agreed to just-in-time delivery).
Q#2.what is the problum the company is having allovation of overheads? Should it considered abadoning overheads allocations and shift to direct cost or conribution margin approch.
In the current pricing method the wilkerson facing the prbolum that the real manufacturing cost is not actual manufacturing cost, because the proportion of over head cost is large which is at aproximately 52%. In the current method the overheads
The company facing the different competitive situations between the products, gross margin of values are maintained at 35% and produce in standered.
Flow controlers are custmized products, and less competitive market power.
Pumps are comodity products produced in high voulume at high price for a market.
Wilkerson is a quality leader although his competitor also have a best match with him. Butt there is no competition in price facing by wilkerson, and there is no chances in future. So wilkerson should compete in price by analyze its overhead cost.
Pumps are commodity products, produced in high volumes for a market with high price competition - price cutting by competitors led to a drop of Wilkerson’s pre-tax margin to under 3%, gross margin on sales for pump sales has fallen below 20%. Flow controllers are customized products, sold in a less competitive market with inelastic demand at the current price range.
Valves are standard, produced and shipped in large lots - gross margins have been maintained at 35%.
Wilkerson is a quality leader, but this leadership may soon be contested by several competitors. Although they are able to match Wilkerson 's quality, there are no signs of price competition yet. Nevertheless, in the long-run Wilkerson should be prepared to compete on price. The price competition pushes Wilkerson to analyze its overhead costs, since no reserves of cost cutting are left in its supply chain (both customer and suppliers agreed to just-in-time delivery).
Q#2.what is the problum the company is having allovation of overheads? Should it considered abadoning overheads allocations and shift to direct cost or conribution margin approch.
In the current pricing method the wilkerson facing the prbolum that the real manufacturing cost is not actual manufacturing cost, because the proportion of over head cost is large which is at aproximately 52%. In the current method the overheads