Porter’s Strategic Positions Strategic Cost Management A multi-dimensional measurement system that translates an organization’s mission in addition to strategy into per as long as mance measures Balanced Business Scorecard

Porter’s Strategic Positions Strategic Cost Management A multi-dimensional measurement system that translates an organization’s mission in addition to strategy into per as long as mance measures Balanced Business Scorecard www.phwiki.com

Porter’s Strategic Positions Strategic Cost Management A multi-dimensional measurement system that translates an organization’s mission in addition to strategy into per as long as mance measures Balanced Business Scorecard

Mellot, Rich, Faculty Advisor has reference to this Academic Journal, PHwiki organized this Journal SMAC – STRATEGIC MANAGEMENT AND ACCOUNTING Strategic Management Stakeholder analysis Corporate objectives Sustainable competitive advantages Strategic Management Accounting Appropriate analysis Long-term considerations Nonfinancial data SMAC – STRATEGIC MANAGEMENT AND ANALYSIS Strategic considerations Strategic Marketing Analysis Total Value-Chain Analysis Target Costing Life-Cycle Management in addition to Costing Operational considerations Activity Based Analysis JIT Operations: A Management Philosophy Total-Quality Management in addition to Costing SMAC – STRATEGIC OBJECTIVES Primary Objectives What the shareowners expect from their participation in the organization “Increase in shareowner value” Secondary Objectives What the organization expects to give to in addition to receive from each stakeholder group other than its owners “Increase in social value”

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SMAC – STRATEGIC MANAGEMENT “The fundamental idea of strategic planning is quite simple: Continuously reassess what customers want, what competitors are doing, in addition to other relevant environmental elements (such as emerging technology in addition to trends in government legislation); size up these environmental changes; in addition to use, or develop, available resources to turn these changes into advantages. Obviously, carrying out strategic planning successfully is a lot more difficult than underst in addition to ing what it is.” Atkinson, Anthony A., Rajiv D. Banker, Robert S. Kaplan, in addition to S. Mark Young, Management Accounting, Prentice Hall, Inc., 1995, p. 471. SMAC – WHAT IS STRATEGY “Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value. the essence of strategy is in the activities – choosing to per as long as m activities differently or to per as long as m different activities than rivals. “ Porter, Michael E., “What is Strategy,” Harvard Business Review, November-December, 1996. SMAC – Cost leadership Product or service differentiation Focus on market niche Porter’s Strategic Positions

SMAC – DEVELOPING COMPETITIVE ADVANTAGE Relative Cost Position Inferior Superior Relative Differentiation Position Inferior Superior Differentiation Advantage Stuck-in-the Middle Differentiation with Cost Advantage Low Cost Advantage Focus SMAC – STRATEGIC MANAGEMENT ACCOUNTING “Accounting exists within an business primarily to facilitate the development in addition to implementation of business strategy Three important generalizations emerge from this way of viewing management accounting: Accounting is not an end in itself, but only a means to help achieve business success Specific accounting techniques or systems must be considered in terms of the role they are intended to play In evaluating the overall accounting system the key question is whether the overall fit with strategy is appropriate.” Shank, John K. in addition to Vijay Govindarajan, Strategic Cost Management, The Free Press, Macmillan, Inc., 1993, pp. 6-7. SMAC – Strategic position analysis-an organization’s basic way of competing to sell products or services. Value chain analysis-the study of value-producing activities, stretching from basic raw materials to the final consumer of a product or service. Strategic Cost Management Cost driver analysis-the study of factors that cause or influence costs.

SMAC – BALANCED SCORECARD A multi-dimensional measurement system that translates an organization’s mission in addition to strategy into per as long as mance measures Balanced Business Scorecard Vision & Strategy SMAC – LRP vs. STRATEGIC MANAGEMENT Long Range Planning Historical continuity Periodic orientation Internal focus Optimistic Detailed financial terms “Management by Exception” Strategic Management Recognition of change Extended time horizons External focus Proactive but realistic Multiple data sources On-line analysis Entrepreneurial Global viewpoint

SMAC – STRATEGIC MANAGEMENT Key Questions In what markets will we compete How will we position ourselves within these markets What will the basis of our competitive advantage What specific people, processes, other resources are necessary to successfully compete SMAC – GROWTH-SHARE MATRIX MARKET POTENTIAL MARKET SHARE High Low High Low Service the Customer PROCESS PERSPECTIVE Post- Sale Service Process Operations Process Deliver the Products/ Services Build the Products/Services Innovation Process Customer Need Satisfied Create Product/ Service Offering Identify the Market

SMAC – VALUE CHAIN ANALYSIS Focus of the analysis External vs. Internal (traditional) Highlights profit improvement areas Linkages with suppliers Linkages with customers Process linkages within a business unit Linkages across business units Steps in the analysis Identify an industry’s value chain Assign costs, revenues, in addition to assets to value activities Diagnose cost drivers Develop sustainable competitive advantages SMAC – VALUE CHAIN ANALYSIS PAPER PRODUCTS INDUSTRY End-Use Customer Distribution Converting Operations Paper Manufacturing Pulp Manufacturing Logging in addition to Chipping Timber Farming Competitor A Competitor B Competitor C Competitor D Competitor E Competitor F Competitor G SMAC – VALUE-CHAIN & STRATEGIC MANAGEMENT Integration with sustainable competitive advantages Low cost Differentiation Management relative to competitors Better value as long as equivalent cost Equivalent value as long as lower cost Placement in the value chain Each firm is only a part of the total chain Overall value chain as long as each firm is unique

SMAC – Market Research Competitor Analysis Define Product/ Customer Niche Underst in addition to Customer Requirements Define Product Features Estimated Market Price Required Profit Target Cost ESTABLISHMENT OF TARGET COSTS SMAC – ATTAINMENT OF TARGET COSTS Compute Cost Gap Design Costs Out Produce Initial Cost Estimates Compare to Target Cost Per as long as m Value Engineering Design Products/ Processes Estimate Achievable Cost Per as long as m Cost Analysis Release Design to Production Undertake Continuous Improvement Actual Cost SMAC – LIFE-CYCLE MANAGEMENT AND ACCOUNTING Cost commitment vs. incurrance Product life cycle Life-cycle costs Whole-life costs Management of life-cycle costs Strategic implications

SMAC – LIFE-CYCLE COST COMMITMENT Product Planning Preliminary Design Detailed Design & Testing Production Logistics Support 66 85 90 SMAC – LIFE-CYCLE COST COMMITMENT Product Planning Preliminary Design Detailed Design & Testing Production Logistics Support 66 85 90 Life-cycle cost ($) Cash Flow Matched Cost Life-cycle Cost SMAC – LIFE-CYCLE COST MANAGEMENT Management of activities throughout a product’s entire life-cycle so that a long-term competitive advantage is created Consideration of the total value-chain of the product is essential to life-cycle management Specific considerations Relation to target costing Identification of development stage costs Cost reduction in addition to control

Mellot, Rich Current Faculty Advisor www.phwiki.com

SMAC – ACTIVITY BASED ANALYSIS Activity Based Costing A costing system focused on ESSENTIAL ACTIVITIES comprising a firm’s operations. Costs are first traced to these activities in addition to then to products/services. Activity Based Management A system-wide, integrated approach which focuses attention on activities per as long as med by the firm in addition to assessing their value, The objective is to identify in addition to continue only those activities that add value. SMAC – VALUE-ADDED ACTIVITIES Those necessary to remain in business Required – comply with legal requirements Discretionary Produces a desired state of change in product or service Not achievable by other activities Enables other activities to be per as long as med VALUE-ADDED COSTS Costs to per as long as m value-added activities with perfect efficiency SMAC – NONVALUE-ADDED ACTIVITIES Activities that are either unnecessary or are necessary but inefficiently per as long as med in addition to can be improved Nonvalue-added activities = Nonvalue-added costs From THE CUSTOMER’S PERSPECTIVE (within strategic constraints) Examples of nonvalue-added activities Scheduling Moving Waiting Inspecting Useless accounting reports

SMAC – OBJECTIVES OF ACTIVITY BASED MANAGEMENT Elimination of all unnecessary activities Increase efficiency of necessary activities Improving operating functions Improving combination of activities Sharing necessary activities ADD, NEW , VALUE-ADDED ACTIVITIES SMAC – The Two-Dimensional ABM Model Resources Process Dimension Driver Analysis Analysis Per as long as mance Measures Product in addition to Customers Cost Dimension Why What How Well SMAC – PERFORMANCE MEASURES New Competitive Environment Per as long as mance st in addition to ards Ideal st in addition to ards Goals as long as operating level personnel Continuous improvement philosophy Basis as long as trend evaluation Currently attainable st in addition to ards Reported to top management Relates to current resource management Directly correlates to ABM

SMAC – DISTRIBUTION OF QUALITY COSTS Traditional View Percent Defects Cost Optimal (AQL) 100% Total Failure Costs Total Control Costs Total Quality Costs SMAC – QUALITY COSTS Contemporary View Cost Percent Defects 100% Total Failure Costs Total Control Costs Total Quality Costs

Mellot, Rich Faculty Advisor

Mellot, Rich is from United States and they belong to Current and they are from  Sacramento, United States got related to this Particular Journal. and Mellot, Rich deal with the subjects like Local News; Student/Alumni Interest

Journal Ratings by UEI College

This Particular Journal got reviewed and rated by UEI College and short form of this particular Institution is CA and gave this Journal an Excellent Rating.