Lesson 1: Overview of Cost Management and Strategy

is an approach focusing on making a business more competitive by reducing the costs of operations.

What are the three important components of strategic cost management?

How many stages are involved in implementing Cost Management practices? Specify them.

What is the company's competitive position in the market?

Identifying the activities generating costs in the organization.

In Cost Driver Analysis, costs are divided into one of two categories:

______ is the process of identifying how all organizational activities related to the final product or value proposition are delivered to the customer or client.

Identify methods for strengthening the organization's competitive position by reducing costs.

Communicated these strategies throughout the organization.

This includes identifying and executing tactics in furtherance of the identified strategies.

include developing methods of monitoring and measuring activities to gauge the effectiveness of strategies and execution.

In addition to cost management, _____ plays an important role in SCM.

______ is the means by which a company makes decisions for what it will or will not do.

There are three general strategies to be considered:

For average products or services, customers prefer to buy them at lower prices.

For fashionable or unique products or services, companies wish to strive to enhance customer value by improving on the overall product experience that customers receive

Companies choose or focus on a specific market or customer segment in which to compete.

Companies adopting this strategy aim to provide the same or better value to customers at a lower cost than that offered by competitors.

This strategy is a means of achieving customer recognition. For example, computer retailers may provide repair services on-site, a service not offered by other competitors in the business.

Google Inc., the biggest IT services company, has targeted types of customers through pattern analysis of Web search results and tailors its Web advertisements to target sets of customers.

it integrates cost information into the decision-making structure as a means of reinforcing the organization’s business strategy.

Companies might redesign product specifications so that fewer parts are needed, lowering production costs and maintenance costs after sales.

To face increasing global competition, new markets, and tightening regulation, flourishing companies must develop a _________.

______ utilizes cost and management accounting data about a company and its competitors for use in developing and monitoring the business strategy.

There are _____ main activities and applications of strategic cost management in the value chain. Specify them in sequence:

Add value to customers reducing cost, and understanding relation between business organization and booth customers.

To provide accuracy in allocating indirect costs.

Defining Strategy that an organization could adopt to excel over rivals.

Cost that an organization is willing to incur according to competitive price that could be used to achieve desired profit.

Adopt necessary polices and procedures to met customers expectations

A comprehensive system to buy materials or produce commodities when needed in appropriate time.

Systematic procedure to identify critical success factors of an organization.

Process performed to determine critical success factor and study ideal procedures of other organization in order to improve operations and dominate market.

Accounting report of critical success factors about the organization. It is divided into four major dimensions: financial performance, customers' satisfaction, internal operation, and innovation and Growth.

A tool to improve rate of transferring material into finished goods

Conducting continuous improvements in quality and other critical success improvement factors.

Continuous improvements is also known as _____?