Strategic Cost Management

The video tutorial explains a competitive strategy focused on achieving a low-cost structure to gain an advantage. It outlines the process in phases: strategic analysis to assess feasibility, cost driver analysis to identify cost sources, value chain analysis to find cost reduction opportunities, and finally, implementation and control to monitor and adjust the strategy. This approach is known as strategic cost management.

What is the primary goal of a competitive strategy focused on a low-cost structure?

• To offer similar goods at a lower cost than competitors

• To expand into new markets rapidly

• To focus on high-quality customer service

• To provide unique products at a premium price

What is the first step in implementing a low-cost strategy in a marketplace?

• Conducting a strategic analysis

• Hiring more employees

• Increasing marketing efforts

• Raising product prices

In cost driver analysis, what are executional costs related to?

• Research and development

• Marketing and sales

• Fixed costs and equipment

• Carrying out production activities

What is the purpose of value chain analysis in strategic cost management?

• To improve customer satisfaction

• To identify cost reduction opportunities

• To increase product prices

• To expand the product line

What is the controlling function in the implementation of a strategic cost management plan?

• A strategy to enter new markets

• A method to hire more staff

• A feedback loop for continuous efficiency

• A process to increase production speed