CONTEMPORARY BUSINESS ENVIRONMENT AND STRATEGIC FOCUS OF COST MANAGEMENT Flashcards
the key development that drive the extensive changes in the contemporary business environment.
growth of the international markets and trade
affected significantly by the rapid growth of economic independence and increased competition for other countries
Profit-oriented business and not-for-profit organization, consumers and regulators
A key competitive edge that firms have
ability to deliver the product or service faster than the competition
a product development term used to define how long it takes a company to conceive of an idea, develop it and get it to its customers
Speed to market
life cycle of a product
•Idea generation
•Product design
•Prototype creation
•Product development
•Product launch
is perhaps the most fundamental of all business changes in recent years
The increasing use of information technology, the internet and e-commerce
the key focus that businesses of all types must be concerned with
customer value
has changed the orientation of managers from low-cost production of large quantities to quality, service, faster delivery and the ability to respond to the customer’s desire for specific feature
Producing value for the customer
Today, many of the critical success factors are
customer oriented
are also changing
Cost management practices
now include specific measures of customer preference and customer satisfaction.
cost management reports
Cost information plays an important in the process call
STRATEGIC COST MANAGEMENT
Generally, firms chose a strategic position corresponding to one of two general strategies:
a. cost leadership, and
b. superior product through differentiation
means that the management accounting system should produce information about both realization and sacrifice
focus on customer value
This firm is
- customer-driven,
- uses advanced manufacturing technologies when appropriate,
- anticipates the effect of changes in regulatory policies and customer tastes, and
- recognizes its complex social, political and cultural environment
Cost management should focus not on the measurement per- but on the ______ that are critical to the firm’s success.
identification of those measures
is use to describe the approaches and activities of managers in short-run and long-run planning and control decisions that increase value for customers and lower costs of products and services.
Cost management
helps managers make such decisions
Information from accounting systems
themselves are not cost management.
information and the accounting systems
has a broad focus
Cost management
is not practiced in isolation
Cost management
it includes- but is not confined to the continuous reduction of costs
Cost management
is usually inextricably linked with revenue and profit planning.
planning and control of costs
It’s an integral part of general management strategies and their implementation
Cost management
