what is the in market share due to reduction in selling price
Sunway Corporation is a small information systems consulting firm that specializes in helping companies implement sales management software. The market for Sunway's products is very competitive. To compete, Sunway must deliver quality service at a low cost Sunway bills clients in terms of units of work performed which depends on the size and complexity of the sales management system. Sunway presents the following data for the years 2018 and 2019 (Click the icon to view the data ). (Click the icon to view the components: (Click the icon to view more info. Required Calculate how much of the change in operating income between 2018 and 2019 is due to industry market size factors, cost leadership, and product differentiation. How successful has Sunway been in implementing its strategy? X 51.000 105 107, 100 U Now, calculate the change in operating income due to product differentiation Label each component as to whether the amount has a favourable effect or an unfavourable effect on Operating income. (Label each component as favourable For Unfavourable" 107 500 Growth in market share due to product differentiation Cost effect of price-recovery 100 100 207266 Change in operating income due to product differentiation Before calculating the change in operating income due to cost leadership, you must calculate the growth in market share due to productivity imorovement and the strategic decision to reduce the selling price Begin by selecting the formula you will use. Then enter the amounts and calculate the growth in market share due to the reduction in the selling price Determine whether the amount has a favourable effect or an unfavourable effect on operating income (Hold all decimals in tem Laluations Round your final answer to the one who umbrate the component as lavourable For unfavourable Unicres Growth in market share due to reduction Growth component Total unit incrons 115 1 Data Table luce di 2019 effect 1. Units of work performed 2. Selling price 3. Software implementation labour-hours 4. Cost per software implementation labour-hour 5. Software implementation support capacity (units of work) 6. Total cost of software implementation support 7. Software implementation support capacity cost per unit of work 8. Number of employees doing software development 9. Total software development costs 10. Software development cost per employee 2018 90 51,000 $ 30,500 66 $ 130 507,000 $ 3,900 $ 105 49,200 31,500 68 130 520,000 4,000 $ $ roveme! Jarket sh cimals in Eas $ 560,000 $ 140,000 $ 576,000 144,000 $ Print Done Data Table The company has chosen a cost leadership strategy. The growth, price- recovery, and productivity components of the change in operating income from 2018 to 2019 are as follows: Revenue effect of growth F 765,000 335,478 Cost effect of growth U 429,522 Change in operating income due to growth CT Revenue effect of price-recovery 189,000 100,166 Cost effect of price-recovery $ 289,166 Change in operating income due to price-recovery 11 $ 277,644 Change in operating income due to productivity Print Done i More Info ng i omel uct Suppose that during 2019 the market for implementing sales management software increased by 4%, and that Sunway experiences a 2% decline in prices. Assume that any further decreases in selling prices and increases in market share are strategic choices by Sunway's management to implement Sunway's cost leadership strategy. prod eratir ing p mine wer to Print Done
