Strategy and cost management l.jpg
This presentation is the property of its rightful owner.
Sponsored Links
1 / 17

Strategy and Cost Management PowerPoint PPT Presentation


  • 90 Views
  • Uploaded on
  • Presentation posted in: General

Strategy and Cost Management. Controlling costs by focusing on core competencies. The Role of Resource Information. Resource information is needed to support the four functions of management Strategic management Planning and decision making Management and operational control

Download Presentation

Strategy and Cost Management

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Strategy and cost management l.jpg

Strategy and Cost Management

Controlling costs by focusing on core competencies


The role of resource information l.jpg

The Role of Resource Information

  • Resource information is needed to support the four functions of management

    • Strategic management

    • Planning and decision making

    • Management and operational control

    • Preparation of financial statements


The role of resource information3 l.jpg

The Role of Resource Information

  • Strategic management

    • Supports choice of products, manufacturing methods, marketing methods, etc.

  • Planning and decision making

    • Supports recurring decisions such as equipment replacement, production scheduling, pricing, purchasing, etc.


The role of resource information4 l.jpg

The Role of Resource Information

  • Management and operational control

    • Provides feedback on operational efficiency, performance evaluations, etc.

  • Preparation of financial statements

    • Provides information on the value of inventory, cost of goods sold, etc.


Strategy development l.jpg

Strategy Development

  • Strategy determines the emphasis of cost management

    • Strategy determines what you must do

    • What you do determines the costs you must incur


Strategy development6 l.jpg

Strategy Development

  • Strategy should be built around the company’s core competencies

    • What are we good at doing?

      • Competitive advantages

    • What are we not good at doing?

      • Competitive disadvantages


Strategy development7 l.jpg

Strategy Development

  • SWOT analysis

    • Internal analysis

      • Strengths

      • Weaknesses

      • Includes product lines, management, research and development, manufacturing, marketing, strategy, employees, brand recognition, etc.


Strategy development8 l.jpg

Strategy Development

  • External analysis

    • Opportunities

    • Threats

    • Includes barriers to entry, intensity of competition, substitute products, bargaining power of customers and suppliers, changing demographics, government regulation, technological change, world events, etc.


Strategy development9 l.jpg

Strategy Development

  • Basic strategies

    • Cost leadership

      • Based on having lowest delivery costs in the industry

      • Low production cost

      • Essential product features

      • Limited product or service selection

      • Quality

      • Low price for customers

      • Large market share


Strategy development10 l.jpg

Strategy Development

  • Differentiation

    • Based on having unique product or service

    • Emphasis on innovation

    • Wide product variety with different features

    • Differentiating features allow for premium price

    • Narrow market share


Strategy development11 l.jpg

Strategy Development

  • Confronting competition

    • Developing a sustainable advantage is virtually impossible

      • Rapid transfer of technology

      • Changing consumer desires

      • Actions of competitors

    • Company and its strategy must be flexible to stay in the lead, if just temporarily


Strategy development12 l.jpg

Strategy Development

  • Areas of competition

    • Cost leadership

      • Cost/price

    • Differentiation

      • Functionality

        • Features

        • Time

        • Status

      • Quality


Strategy development13 l.jpg

Strategy Development

  • “Survival triplet” is constantly changing

    • Must understand the customers’ desires for price, functionality and quality

      • Position the company’s products or services within the survival zone

Cost/price

Quality

Functionality


Strategy development14 l.jpg

Strategy Development

  • Shape of the survival zone is determined by many factors

    • What determines the minimum and maximum values for

      • Cost

      • Price

      • Quality

      • Functionality


Strategy development15 l.jpg

Strategy Development

  • Value chain

    • Sequence of activities necessary to satisfy the customer

Assemble materials into components

Wholesaling

warehousing

distribution

Design and

engineering

Material

acquisition

Final

assembly

Retail

sales

Customer

service


Strategy development16 l.jpg

Strategy Development

  • Value chain analysis

    • Which activities present opportunities to add value or reduce costs?

      • Activities where the company has strengths represent opportunities to add value

        • Perform the activities internally

      • Activities where the company is weak represent opportunities to reduce cost

        • Outsource to more efficient providers


Strategy development17 l.jpg

Strategy Development

  • Analyze linkages in the value chain for opportunities

    • How does one activity relate to preceding or succeeding activities?

      • For example, does providing repair service to customers help improve product development activities?


  • Login