Strategy Paper Research Example | Topics and Well Written Essays - 1000 words

Strategy - Research Paper Example The increase in returns has been accompanied by a significantly higher increase in the proportion of the cost of goods sold for period 3. This has led to a decrease in contribution and; hence, profit after tax. To increase contribution, the cost of goods sold has to decrease or the goods have to be sold at a higher mark up. An analysis of the individual brands shows that SOLO has a higher contribution as compared to SOFT. Furthermore, it can be observed that SOLO has higher sales to contribution ratio as compared to SOFT. This is an indication that SOFT incurs significantly high costs to sell. This in turn affects the overall company performance. Based on this, SOLO being more profitable, the company should focus more resources to marketing and in its research and development. From an analysis of the market share, it can be observed that SOFT has a higher volume market share as compared to SOLO. However, SOLO has a higher value market share. This means that more funds should be allocated to SOLO’s marketing and to increasing its value market share. To add to this, more money should be allocated to marketing SOFT as an increase in the sales volume will lead to an increase in contribution. SOFT should be given priority in budget allocation in marketing as it has a higher sales contribution ratio. From the analysis of distribution and sales volume of the two brands, Mass Merchandisers sells more of SOFT followed by specialty stores and then online stores. More resources should be allocated to supplying SOFT to mass Merchandisers as they sell more. For SOLO, more resources should be allocated to supplying specialty stores as they sell more units as compared to the other distribution channels. SOLO should be supplied to more specialty stores and SOFT to mass Merchandisers, as they are the biggest sellers of the respective brands. The cost of developing and distributing both SOLO and SOFT should be decreased or the