Inorder for the organization in this case to maximize profits earned, severalprocedures should be followed keenly. Product differentiation. A company maydistinguish itself from the rest by provision of high quality products andservices to the clients.
This may work in a situation where the buyers are notprice sensitive but mainly consider the quality of goods or services that arereadily available in the market. Controlling costs is a method that is veryreliable in minimizing losses likely to be incurred. When a company functionsunder a low level of cost, it is flexible and can easily adapt to any declinein prices thus remaining profitable. If the cost is low, the profitmargin remains high. Low price strategymay also be useful considering that whenever the demand for goods or servicesis elastic the prices turn out to be low and the demand becomes stronger.
Theoutput produced should be in such a way that the marginal costs are equivalentto marginal revenues in order to maximize the profits earned by Sony as anorganization dealing with the smartphones. However, the costs should beminimized depending on the current profit margin. Low costs lead to increasedprofits. However, the employees should be offered training sessions to improveon their skills so that they may produce quality goods to attract newcustomers. Inaddition, the level of technology enhanced should be cost effective. In casethere are intermediaries, there is need to hold negotiations with the vendorsto abolish any extra costs that may be incurred during the distributionprocess. The employees with a deteriorating performance should be warned andsacked if no changes are recorded from such individuals.
Allocation of dutiesis therefore important so that the employees’ performance can be evaluated.Discountsshould be eliminated. Furthermore, the workers should not perform their dutiesduring overtime to ensure that no extra costs are incurred. In some cases theprices are increased and the waste products that are left behind after themanufacturing process should totally be eliminated from the equation.
