Organizational Competencies and Dynamic Capability †Free Samples

Question: Discuss about the Organizational Competencies and Dynamic Capability. Answer: Introduction: The report will be addressing the current situation of Outdoor Adventures with detail assessment of the profit situation for the company. The study also includes the segmental performance for Outdoor Adventures and understanding the profitability for each of the section. A circular flow diagram will also accompany to improve the efficiency of the firm in the areas of accounts receivable. The business is report is aimed to providing the outdoor Adventures a detailed assessment of the profits generated by the business during the year ended 31 March 2018. As evident the sales revenue from the accessories stood 54,582 whereas the revenue from clothing during the month of march stood 18,183. The total amount of revenue for the company stood 72,726. The total cost of sales incurred stood 23680 and net profit for the Outdoor Adventures stood 49,085. Gauging into the balance sheet of Outdoor Adventures total asset for the firm stood 173,612 whereas the total liabilities for the firm stood 49,527. The net asset for the firm stood 124,085. Considering the performance of the business an assertion can be bought forward by stating the segmental revenue from sale of clothing stood 18,183 and also incurred a higher cost of sales in the clothing segment to 49,085. The business also has considerable amount of cost of goods sold reported in the statement of profit and loss account impacting the profitability of clothing segment. Specific recommendations can be provided to improve the profitability of Outdoor Adventures. The key areas include Managing the costs increasing the turnover increasing the productivity increasing the efficiency and, concentrating on sales efforts Managing cost: It is recommended that Andrew and Stephanie should keep a close management of the business cost as this will help in driving profitability. Key actions such as negotiating with suppliers can help in sealing better deals (Van Der Aalst, 2016). Additionally, it is recommended that Andrew and Stephanie should make use of Just in Time basis to make an effective use of the capital. Andrew and Stephanie should use the activity based costing in an effective manner to uncover the real costs of specific business activities. Increasing turnover: Pricing helps in effecting the profitability and the form of customers that it can sell to make a big difference in revenue. Additionally, it is recommended that to increase the profitability Outdoor Adventures should consider cross selling by analysing what the customer purchase and should offer complementary products (Mathuva, 2015). By identifying the needs and developing the new products and services the business will be able to diversify the products and services to meet the developing needs of the customers. Increasing productivity: Andrew and Stephanie can reduce the cost of goods sold and may remain competitive. This will them in measuring the operational efficiency on the ongoing basis. Both Andrew and Stephanie can communicate their productivity targets and measurement which will enable the staff to aim at certain level of productivity. Increasing the efficiency: One of the clearest way of increasing the profitability of Outdoor Adventures is to buy more effectively. It would make sense how Andrew and Stephanie regularly view their supplier base (Prasad Green, 2015). If Andrew and Stephanie are able to purchase raw materials more cheaply, they can try to maintain the quality at the same time. Concentration on Sales Effort: Recommendations can be provided to increase profitability in two ways; selling more products to the existing customers and finding identical customers to sale. It would make sense for Andrew and Stephanie to encourage the customers that generate higher sales and higher profitability (Du et al., 2015). Andrew and Stephanie can also considerably increase their profitability by nurturing those customers that provide higher profit from lower sales. Therefore, the above recommendations would help increasing the profitability and efficiency of Outdoor Adventures. Conclusion: On arriving at the conclusion it is understood that clothing department of outdoor adventures incurred higher cost of sales. Additionally, a considerable amount of cost of goods sold reported by the firm that has impacted the profitability of the organization. On a conclusive note the report has provided recommendations in the area of increasing turnover by considering the tools of cross selling and providing discount to the customers. The business should incorporate operational efficiency on the ongoing basis for improving the efficiency of business. Reference List: Du, K., Huddart, S., Xue, L. (2015). Accounting Information Systems and Asset Prices. Mathuva, D. (2015). The Influence of working capital management components on corporate profitability. Prasad, A., Green, P. (2015). Organizational competencies and dynamic accounting information system capability: impact on AIS processes and firm performance.Journal of Information Systems,29(3), 123-149. Van Der Aalst, W. M., La Rosa, M., Santoro, F. M. (2016). Business process management.