Development of strategic cost management
Strategic cost management book pdf free download
A contingency fund can and should be built into any plan. Importance of Strategic Cost Management 3. In Strategic Cost Management SCM , primary importance is given to constant improvement in the product to provide better quality to its target customers. While formulating the strategy for the accomplishment of organisational overall objectives, different cost drivers should be clearly identified. Hence the strategic cost Management goes a step ahead and uses several approaches for efficient management of cost. Strategic cost management is understood in different ways in literature. Repeat Logo , a business logo design company, started up in August It was propounded by Michael Porter , to show the way a customer value assembles along the activity chain that results in the final product or service.
Advantages of Strategic Cost Management: Strategic Cost Management provides number of benefits to different organisations. In a nutshell, strategic cost management is not just about controlling the costs but also uses the information for managerial decision making.
There is a need to continuously strive to optimize the same in the context of the entire business model of the firm. Meaning of Strategic Cost Management 2.
Conceptual framework of strategic cost management
Hindle admits that in the past, a lack of experience and internal control led to its pay-per-click costs spiralling out of control. It is an effective way of reducing cost, increasing revenue and facilitating survival in the competitive world. Repeat Logo , a business logo design company, started up in August Strategic cost management is understood in different ways in literature. It has provided the business with an improved understanding of its sources of profits. Traditionally firms have been under pressure to cut costs in the short term without really thinking about sustainable growth and integration with the overall business strategy. In view of this, the importance of strategic cost management should not be underestimated. It provides a better understanding of the overall cost structure in the quest of gaining a sustainable competitive advantage. Need for SCM It is an updated form of cost analysis, in which the strategic elements are more clear and formal and improves the overall position of the company. Meaning of Strategic Cost Management: In global competitive environment, the most efficient firms view all of their spending as an investment. Strategic Cost Management focuses on the cost reduction and continuous improvement and change than cost containment only.
It is used to analyse cost information, and use it to develop various measures to achieve a sustainable competitive advantage.
And if you do find a better deal, free-to-use services like The Current Account Switch Service in the case of banking can help make the process of switching seamless. Effective cost management helps companies to achieve business performance improvement.
Ross believes that asset ownership brings with it a greater control of costs. It has also been observed that firms that are taking the investment approach to managing cost are thriving in this new environment, striking a balance between a competitive cost structure, cost effective strategy execution and investment in the future.
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