Chapter 4 - Developing A Competitive Strategy; Comtemporary Cost Management Techniques Flashcards
Is a set of policies, procedures and approaches to business that procedure long-term success
Strategy
Financial performance measures include among others
- Growth in sales and earnings
- Cash Flows
- Stock Price
Non-financial measures of operation include among others
- Market Share
- Product Quality
- Customer Satisfaction
- Growth Opportunities
Strategic Financial and Nonfinancial measures of success are also commonly called:
Critical Success Factors (CSFs)
This is a competitive strategy in which a firm succeeds in producing products or services at the lowest cost in the industry.
Cost Leadership
Is implemented by creating a perception among consumers that the product or service is unique in some important way, usually by higher quality, features or innovation.
Product Differentation
Is a technique in which managements develop policies snd practices to ensure that the firm’s products and services exceed customer’s expectations
Total Quality Management (TQM)
The two major characteristics of TQM are
- Focus on serving customers, and;
- Systematic problem-solving using teams made up of front-line workers
Is the philosophy that activities are undertaken only as needed or demanded.
Just in Time (JIT)
JIT is a production system also known as
Pull-it-through approach
Is a system in which each component on a production line is produced immediately as needed by the next step in the production line
Just-In-Time (JIT) production
Is a process for creating competitive advantage in which the firm reorganizes its operating and management functions, often that result that jobs are modified, combined, or eliminated.
Reengineering
A more radical approach to improvement than TQM, is an approach where a business process is diagrammed in detail, questioned and then completely redesigned in order to eliminate unnecessary steps
Process Reengineering
Is a process by which a firm:
1. Determines its critical success factor
2. Studies the best practices of other firms for achieving these critical success factors, and;
3. Then implements improvements in the firm’s processes to match or beat the performance of those competitors
Benchmarking
Is a management technique in which marketing and production processes are designed to handle the increased variety that results from delivering customized products and services to customers
Mass Customization
Is an accounting report that includes the firm’s critical success factors in four areas
Balanced Scorecard
Four Areas of CSF under balanced scorecard
- Financial Performance
- Customer Satisfaction
- Internal Business Process
- Innovation and Learning
Is used to develop a detailed description of the specific activities performed in the operation of the firm
Activity Analysis
Is used to develop a detailed description of the specific activities performed in the operation of the firm
Activity Analysis
Is used to improve the accuracy of cost analysis by improving the tracing of costs to improve the accuracy of cost analysis by improving the tracing of costs to products or to individual customers.
Activity-based costing (ABC)
Uses activity analysis to improve operational control and management control
Activity-based Management (ABM)
Emphasizes the importance of managing the organizations constraints or barriers that hinder, impede progress towards an objective
Theory of Constraints (TOC)
Is a management technique to identify and monitor the costs of a product throughout its lifecycle
Life-Cycle Costing
Involves the determination of the desired cost for a product or the basis of a given competitive price so that the product will earn a desired profit
Target Costing
Is the use of computers in product development, analysis and design modification to improve the quality and performance of the product
Computer-aided design (CAD)
Is the use of computers to plan, implement, and control production
Computer-aided manufacturing (CAM)
Is a computerized network of automated equipment that produces one or more groups or parts or variations of product in a flexible manner
Flexible manufacturing system (FMS)
Is a manufacturing system that totally integrates all office and factory functions within a company via computer-based information network to allow hour-by-hour manufacturing management
Computer-integrated manufacturing (CIM)
Refers to the sequence of business functions in which the usefulness is added to the products or services of the company. Is an analysis tool that firms use to identify the specific steps required to provide a product or service to a customer.
Value Chain
