Chinhoyi University of Technology

ACCOUNTING CUEB 406

Question The rise of Asian manufacturing giants that compete on cost and technology has posed serious threats to the existence of Zimbabwe’s Clothing and Textile manufacturing firms, resulting in 95% of operating firms being reduced to 34% and of the 35000 employees, 20000 losing their jobs” Zimbabwe business daily.com. Management in most of these companies is convinced that they have implemented the necessary strategic initiatives. You have been recently appointed as a strategist by the Confederation of Zimbabwe Industries. Draft a comprehensive document outlining accounting techniques that can be adopted to solve the crises 2 Definition of terms Strategy initiative It refers to an investment of resources dedicated to accomplish an organizational objective. Unlike strategic objectives, which tend to be phrased as broad goals, strategic initiatives are projects that include a scope, budget, and start/end date. As we’ve mentioned before, these three characteristics are critical to differentiating between strategic and operational initiatives. Introduction The business environment has changed drastically and increase in competition in manufacturing and service sector posed negative results. Extensive competition from Asian companies in domestic markets which resulted in a situation where most Zimbabwe clothing and textile firms are now competing in a highly competitive global market which resulted in 95% of operating firms being reduced to 34% and of the 35000 employees,20000 losing their jobs” (Zimbabwe business daily.com). And also, there has been a significant reduction in product life cycle arising from technological innovations and the need to meet increasingly discriminative customer demands. To compete successfully in today’s highly competitive global environment, management approaches should be taken into account. In the competitive market, which has the presence of global players, obtaining sustainable competitive advantage is of great importance. There are various accounting techniques that can be adopted by Textile and Clothing industry to solve challenges such as inability of the companies to beat competition of cheap imports as well as other factors such as lack of working capital, lack of raw materials and power outages which have affected the companies seriously. In Zimbabwe Firms in the textile and clothing industry can differentiate their products from those produced in other Asians countries by offering products or services that are unique and superior in quality as compared to other products. Thus the competitive advantage is obtained by differentiating the products or services. Price may not be considered as an important factor in this strategy because a firm may charge higher prices as compared to its competitors by differentiating in its products. Firms in the textile and clothing industry should focus on leadership and the cost leadership is obtained when a firm has the ability to produce products at the lowest cost as compared to its competitors. This will assist the firms to offer its products at lower price as compared to its competitors and the costs can be lowered by reducing the input costs by obtaining advantage of scale, procurement of raw materials at favorable prices and use of advanced technology. Below are the accounting techniques that the management can be adopted to gain the competitive advantages.