Definition: A Sunk Cost is the cost already incurred by the firm and cannot be recovered or refunded. The cost which was incurred in the past and is now permanently lost is called as a Sunk Cost. Suppose, a firm has spent Rs 50,000 in the construction of a building, but due to some government law the construction has to be stopped, then the amount spent till date is a sunk … [Read more...] about Sunk Cost
Capitalized Cost
Definition: A Capitalized Cost is the cost incurred in the purchase and financing of fixed assets. It includes not only the price paid for an asset but also the expenses incurred on its installation and transportation. A capitalized cost is added to the fixed assets and is shown on the assets side of the balance sheet. These costs are not deducted from revenues during the … [Read more...] about Capitalized Cost
Lockbox Banking
Definition: The Lockbox Banking is the service offered by the commercial banks to the companies wherein, the payment made by the customers is directed to the special post office box rather than to the company. Under the lockbox banking system, the company opens up a lockbox account with a bank, which is generally at the central location, easily accessible to the bank. The … [Read more...] about Lockbox Banking
Vote on Account
Definition: The Vote on Account is the special provision given to the government to obtain the vote of Parliament to withdraw money when the budget for the new financial year is not released or the elections are underway, and the caretaker government is in place. Simply, the approval given by the parliament to withdraw a certain sum of money from the consolidated funds of … [Read more...] about Vote on Account
Guerrilla Warfare
Definition: A Guerrilla warfare is the marketing strategy adopted by the challenger firm intended to launch the intermittent attacks with an intention to harass or demoralize the competitor. This strategy is more a preparation for the war than an actual war. A guerrilla warfare can be expensive, but however, is less than the frontal, flank and encirclement attack. … [Read more...] about Guerrilla Warfare
Bypass Attack
Definition: The Bypass Attack is the most indirect marketing strategy adopted by the challenging firm with a view to surpassing the competitor by attacking its easier markets. The purpose of this strategy is to broaden the firm’s resources by capturing the market share of the competing firm. The firm can adopt any of the three approaches before launching the bypass attack; … [Read more...] about Bypass Attack
Encirclement Attack
Definition: The Encirclement Attack is a war strategy adopted by the challenger firm intended to attack the competitor on all the major fronts. Under this strategy, the challenging firm considers both the strengths and weaknesses of the opponent and then launch the attack simultaneously. It is assumed that only those firms that are 10 times stronger or powerful than the … [Read more...] about Encirclement Attack
Flank Attack
Definition: The Flank attack is the marketing strategy adopted by the challenger firm and is intended to attack the weak points or blind spots of the competitor, especially a leader. A flank attack strategy is based on the assumption, that a large firm, may have several product lines and a wide range of services, but may not be necessarily a leader in all the categories. … [Read more...] about Flank Attack
Frontal Attack
Definition: The Frontal Attack is the marketing strategy adopted by the challenger firm and is intended to have a head on attack on the competitor by matching him in all the aspects Viz, product, price, place, promotion. It is assumed that in order to have an effective frontal attack the challenger must have three times more Fire Power than the opponent. Now the question … [Read more...] about Frontal Attack
Promotional Training
Definition: The Promotional Training means preparing the potential candidate to handle more duties and responsibilities, thereby making him/her eligible for promotion to higher jobs in the organization. Simply, training given to the efficient workers of an organization who are likely get promoted in the near future. With the promotion, the work and responsibilities get … [Read more...] about Promotional Training