Accounting For Customer Acquisition At ADT Corporation Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Accounting For Customer Acquisition At ADT Corporation Case Study Analysis

Introduction

Southern Cross Capital (LLC) appoint Anna Amphlett as a financial analyst and her job is to collect and analyze information about the ADT Corporation to acquire the shares of the organization by Southern Cross Capital. Amphlett was an MBA graduate in the field of finance and accounting. She starts her career in Southern Cross Capital as an internee. The manager of Southern Cross Capital wantsAmphlett to put high attention to the (ADT) accounting methods, and its policies towards capitalizing and repaying subscriber gaining costs before spending and acquiring the share of the organization. However, Amphlettpays near interest to the organization’s accounting methods, and mainly to its coverage of capitalizing and amortizing subscriber acquisition fees, as opposed to expensing them immediately (Stroburg, 2018).

Southern Cross had emerged as a cautious corporation consisting of Pre-Paid Legal Services, Polymedia, and Excel Communications, which skilled extensive inventory rate declines after famous press articles mentioned their accounting policies. Such corporations additionally skilled extensive inventory rate declines while it turned into ultimately disclosed that they have been below research with the aid of using the U.S. Securities & Exchange Commission (SEC).

Amphlett’s studies found that the organization’s inventory rate overall performance because turning into a publicly indexed organization had extensively outpaced the NASDAQ inventory marketplace index. ADT had grown rapidly, with sales growing from $2.2 billion in 2008 to $3.2 billion in 2012, whilst internet profits accelerated from $222 million to $394 million over the equal period.

Amphlett’s studies additionally found that ADT accounted for a number of its patron acquisition fees with the aid of using capitalizing them on the organization’s stability sheet and remunerating them over time. Furthermore, ADT has an attractive business model that allows the company to sustain a growth rate in both markets but the potential of the company could not be identified by focusing on GAAP profitability and the income statement of the company (Handoko, 2021).

History

ADT is considered the leading company that has a strong market presence because of its business model that allows the company to retain its customers and achieve a profitable business in the market. The major influential factor that has a significant role in business development is the retention of customers hence most research analysts considered that a high customer retention rate has a direct relation to the profitability of the company.

The company is one of the leading companies that have a strong customer market across Canada and the United States of America. The competitive market of the industry somehow resists the company to execute its business in the local as well as the global market but the company started focusing on the leadership that allow the company to reduce the competitive nature of the market. The main business terrain is compelling the Account for client Acquisition at ADT Corporation to increase the customer-based market that allows the company to achieve a profitable market that plays a significant role in the development and sustainability of the business growth rate. The company has set its competitive positioning strategies on some critical factors that give it a strong advantage over competitors including the competitor in the maturity of customerneeds (de Toledo, 2019).

The company mainly adopted various strategies that allow the company to achieve a responsive and profitable marketplace company however the strategies include has adopted a blend of cost leadership, segregation, and attentiveness strategies to regulatethe intensity of competition. The client base expansion and deals growth objects are attained by fastening on utmost applicable rapid growth strategies deal with three common strategy channelsincluding focus, cost, and isolation. The main strategies that are mainly followed by the company to gain rapid growth of the business to achieve its objectives include Increasing the demand for products as well as penetration of business in the market, developing the product, Increasing services demand, and diversifying of business.

Mix Marketing

Mix marketing is the fundamental strategic step that aids the company to expand or execute its acquisition in a respective market. So ADT primarily focused on the cost leadership strategies that allow the company to execute the expansion of its business in the most profitable market. However, the company used Mix marketing strategies through which initially the company achieved a wide range of customer-based markets. The basic 4Ps of marketing include the following

Place

The significant factor that has a vital role in marketing is the Place so ADT mainly focuses on the global market for the marketing and execution of its acquisition. The company had the most profitable market across Canada and the United States of America. Hence in 2012, the company expected that the market can generate around $13 billion in small business electronic security systems and residential sales, installation, and other services in the Canadian market as well as in the USA market. Furthermore, the company had experienced around a 2% of growth rate annually for the past five years while the company needs to retain high-quality products to retain the customer market that enable the company to achieve a strengthening marketplace.....................

Accounting For Customer Acquisition At ADT Corporation Case Study Analysis

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