Competitive Position—Strategic Cost and Value

Wingsun Li ()
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Wingsun Li: Beijing Normal University & Hong Kong Baptist University—United International College

Chapter Chapter 5 in Strategic Management Accounting in a Network Economy, 2023, pp 101-130 from Springer

Abstract: Abstract This chapter discusses how a firm seeks the competitive position that best aligns with its capabilities. I will explore the strategic review process and delve into how a firm, considering its resource constraints, selects and incorporates value attributes into its product/service offerings to attract target customers. In fact, the firm can gauge the appropriateness of its selection only through the market power test—evaluating performance in terms of price, sales volume, and profit margin. Using this straightforward test, the firm must reassess the effectiveness of its value selection and the cost drivers relevant to its competitive position. SMA has made available numerous techniques and concepts that can aid in the strategic review process. In this chapter, I have selected a few powerful techniques and concepts for further discussion. These include the value curve, value chain analysis, scale driver analysis, and industry value chain analysis. These tools are centered around value creation and cost management, enabling thorough research from a broad perspective to meticulous details. To ease a better understanding of these these concepts and techniques, I have utilized examples and real-world cases to demonstrate how they can assist in conducting in-depth investigation to align strategies and develop comprehensive plan for the firm’s desired competitive position.

Keywords: Cost structure; Strategic cost management; Value chain analysis; Value curve; Industry value chain (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/978-981-99-5253-3_5

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