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Strategic Cost Management Insights

Strategic cost management can be defined as using cost information at the four stages of strategic management: formulation, communication, implementation, and control of strategies. It emerges from blending three themes: value chain analysis, strategic positioning analysis, and cost driver analysis. Value chain analysis focuses cost management efforts on the linked set of value-creating activities from raw materials to the consumer. It takes an external perspective beyond traditional management accounting.

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Nisha Malik
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111 views8 pages

Strategic Cost Management Insights

Strategic cost management can be defined as using cost information at the four stages of strategic management: formulation, communication, implementation, and control of strategies. It emerges from blending three themes: value chain analysis, strategic positioning analysis, and cost driver analysis. Value chain analysis focuses cost management efforts on the linked set of value-creating activities from raw materials to the consumer. It takes an external perspective beyond traditional management accounting.

Uploaded by

Nisha Malik
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

STRATEGIC COST MANAGEMNT :

NEW WINE OR JUST NEW BOTTLES?


Presented By: Sidhhart
Nisha
Priyanka
Raman
• Strategic cost management can be defined as a
managerial use of information explicitly at one or more
of the four stages of the strategic management cycle.
• Four stages are: a) formulating strategies
b) Communicating those strategies into the organization
c)Developing and carrying out tactics to implement out
those strategies
d)Developing and implementing the control to monitor
the success of the implementation steps…..
• Strategic cost management emegence results
in blending three themes:
1) value chain analysis
2)strategic positioning analysis
3)cost driver analysis
It will be argued that these three themes
represent coherent framework for thinking
about managerial accounting. Such a
framework can be called as paradigm
VALUE CHAIN ANALYSIS
• It focus of cost management effort
• The value chain of any firm in nay business is linked
set of value creating activities all the way from basic
raw material source for component suppliers through
to the ultimate end use product delivered in to the
final consumer hands.
• This focus is external to the firm
Management accounting takes a value added perspective
just to maximize the difference between purchase and
sales.
The value adde concept has 2 shortcomings it starts very
late and stops very soon

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