The way in which the finance of a company is managed predetermines the success of this company and its competitiveness in the market. That is why the sphere of managerial accounting is one of the fundamental spheres for the work of every company. In this paper, we are going to analyze the situation that was formed in the company Claire’s Antiques and offer possible ways out of the situation that will allow the company to suffer no losses and obtain new clients.
The point of the situation is that Claire’s Antiques placed its bid with the new client for the sale of 150 clocks at the price of $650 each. At the same time, it became known to the company’s managers that their competitors placed their bids with the same client but offered the price of $600 per item. If the client chooses the competitor’s bid, Claire’s Antiques will suffer losses and will have to cut the staff. Not to let the situation develop in this direction, the accounting managers of the company will have to choose between sparing money and losing a client and losing some money but expanding their client base. In other words, the most effective step for Claire’s Antiques will be to reduce the bid price to $550 – 570 so that the client would choose their bid. Of course, this will involve money losses at the initial stages of the cooperation with this client but will bring additional profit in the future as this client can advise others to work with Claire’s Antiques because they propose the same quality but their prices are lower.
This way, the possible decline in sales will not be experienced and, moreover, the number of the company’s clients can be extended so that the resulting profit will be larger than the losses involved by reducing the actual price of the clocks. Another step that will be helpful in this situation is the advertising of the firm’s production which will develop its positive image and attract clients.