Market based approaches, Strategic Management

Assignment Help:

Q. Market based approaches?

Cost based approaches to transfer pricing can ignore what external competition would charge, therefore 'open (external) market price' could be used internally as a transfer price to encourage greater market efficiency and goal congruence.  When the external market price is used as a transfer price, a seller will always be encouraged to sell because they would be indifferent between their charging policies for internal or external customers. An internal buyer generally would not want to pay any higher than what the external market price is, it should therefore not discourage them from buying internally if a fair market price is charged.

The main problem with market based approaches is that establishing a market price can be difficult, different suppliers will quote different prices, the price may be affected by such factors as quality, quantity, discounts and credit terms available.  In some cases no intermediate market exists, therefore a comparable market product and price may not be available.


Related Discussions:- Market based approaches

Decision-making information systems, An organisation is reviewing its decis...

An organisation is reviewing its decision-making information systems and has asked you to recognize suitable assessment criteria for this review. Value for money. Value for m

Who are burns and stalker, Q. Who are burns and stalker? Burns and Stal...

Q. Who are burns and stalker? Burns and Stalker in their 1961 book 'The Management of Innovation'explained two organisational types signifying a spectrum which organisations co

Advantages of time study, 1. Output standards are easily convertible into...

1. Output standards are easily convertible into labor costs per unit of output. 2. Output standards facilities scheduling and controlling the flow of production thr

Explain the phases of the bath-tub curve, Question: (a) Briefly discus...

Question: (a) Briefly discuss the following Maintenance practices and list some of the techniques used to implement these practices in the work environment (i) Predictive

Quality product, An electronics firm is presently manufacturing an item tha...

An electronics firm is presently manufacturing an item that has a variable cost of $0.50 per unit and a selling price of $1.00 per unit.  Fixed costs are$14,000 per month.  present

Product innovation rates, Product innovation rates are a: a. A goal-ba...

Product innovation rates are a: a. A goal-based measure. b. A corporate goal. c. A productivity measure. d. An external factor.

Strategy, explain strategy as an organisational process

explain strategy as an organisational process

Divisional structures – product organisation, Q. Divisional structures – pr...

Q. Divisional structures – product organisation? The functional structure is normally adopted by an entrepreneurial structure e.g. small business, because the organisation grow

Pbpk models strategies, Model-Building Strategies Various strategies ha...

Model-Building Strategies Various strategies have been used when implementing whole body PBPK models. As discussed below, it is important to distinguish between model building

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd