Costs and strategy management

Acepublisher a.

Order the writing of a tailor-made Management Case study

Free quote online

Case study Format .doc

Costs and strategy management

Download

Read an extract

Reader
Abstract
Contents
Extract

Abstract

I. Current Strategic Context

- In a context that is characterized by increasing turbulence and constant strengthening of competition, the ability of a company to create value for the customer appears to have become a sustained competitive advantage.

- The value of the product is what the customer is willing to pay a higher amount for and this is produced by cutting prices to one that is lower than the competition's for equivalent benefits or providing unique benefits that more than offset a higher price.

- The strategy tries to determine what value is created for the customers.

II. The concept of the value chain

- The objective of the value chain is to account for the relevant activities of the firm in a strategy to understand the need for the costs and seize existing and potential sources of differentiation. This is broken down into large corporate functions that serve to achieve two broad categories of activities: primary activities and support activities (that support the core activities).

- Through this analysis, it will be possible to identify activities that are a source of sustained competitive advantage for the company.

- The value chain is part of a system that is composed of other components that contribute to a company like suppliers, distributors, customers etc. By studying the vertical links between its own value chain and that of its customers, the company can focus on creating value in its products for its customers.

- However, the strategy is not only meant to determine the value for the customers but is also meant to ensure that he is aware of the value that the company is offering.

Tags: value chain, concept of value chain, costs and strategic management

External Analysis
1. Environmental Analysis
2. Market Segmentation
3. Overview of competitors
4. The sectoral analysis
5. Decathlon Customer
6. Catchment area
7. Synthesis of external analysis
Internal Analysis
1. The questionnaire
2. Analysis of strengths
3. Analysis of weaknesses
Strategic recommendations
1. Issues and Risks
2. Problematics
3. Marketing objectives
4. Target communication
5. Communication message
6. Means of communication
Measure of the Outcome

Get this table of contents for free after login.

Extract

[...] - Traditional methods of cost cannot estimate the value of a property and manage its market. III Failure of the classic model of costs - The objective of the full cost method is to judge the cost price of a product on the assumption that the performance of production is essentially identified with cost minimization. To increase profits, it is the costs that must be managed better. This method is based on: - Distinguishing direct costs / overheads and indirect cost allocation in the full cost of the product. [...]

[...] It also results in a loss of profits and a loss of production when there are cases of staff absenteeism. - The traditional cost accounting system and confuses value and cost. It requires that any expenditure generate a value that is, at least, equal to its cost. When supply is bloated, value is never a foregone conclusion and the market has no reason to validate it automatically. The value and cost of a product must be separated. The purchase of the customer is dependent on the value he assigns to the product that is offered by the company. [...]

[...] Costs and strategy management I. Current Strategic Context - In a context that is characterized by increasing turbulence and constant strengthening of competition, the ability of a company to create value for the customer appears to have become a sustained competitive advantage. - The value of the product is what the customer is willing to pay a higher amount for and this is produced by cutting prices to one that is lower than the competition's for equivalent benefits or providing unique benefits that more than offset a higher price. [...]

[...] Arbitrarily allocating indirect costs in the cost of a product when they represent 10% to 20% of the total expenses is acceptable. However, the approach is more questionable when indirect costs represent 70% to 80% of the total expenses. This seems to be the case in many companies that function today (as they include development of automation, robotics, design work, preparation, control etc.). The traditional model that manages accounting was well suited to a Taylorist-Fordist context that saw the beginning of development. [...]

[...] The cost driver decides the level of activity, the complexity it imposes and the amount of time the tasks require. It creates, and, by its existence, the conditions of the variation of the measurement of activity. If a range of products reveals some complexity in its manufacture, this means, inevitably that the level of activity is higher or more difficult. There is an inevitable consequence in terms of costs. - Cost management activities are based on the pilotage service of organizations. [...]

doc