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Accounting Notes Managerial Accounting Notes

Strategic Analysis Of Costs Notes

Updated Strategic Analysis Of Costs Notes

Managerial Accounting Notes

Managerial Accounting

Approximately 157 pages

In depth, typed notes covering the Managerial Accounting (AC211) at LSE (London School of Economics). Covers the full content of the 4 modules in the course.

Module 1 - Management Accounting and Strategy
Module 2 - Planning and Control
Module 3 - Management Accounting for Decision Making
Module 4 - Performance Measurement

Over 70 pages of notes in an easy to follow, intuitive format, closely following the structure of the course (2010-2011). Notes are in bullet points of varying length a...

The following is a more accessible plain text extract of the PDF sample above, taken from our Managerial Accounting Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

Lecture 4: The Strategic Analysis of Costs 25 October 2010 Topics * Strategic Typologies and Control Issues * Strategic Management Accounting Reading * Required Reading: * Bhimani (2008) Chapters 5, 6, 7 (pp. 219-231) and 8 * Further Reading: * BHDF Chapter 22 * HNS Chapter 7 Key Points * Strategy * Normative view of strategy * Descriptive view of strategy * BCG view on strategy * Porter view on strategy Strategic Typologies and Control Issues * Strategy = Patterns of decisions about the organisation's future * "Concerned with the way resources are focused to convert distinct competencies into competitive advantage" - (Andrew) * Strategic changes are rare * They have a long life cycle: * Conception * Elaboration * Decay * Death * Miles and Snow view on strategy * Strategic management accounting * Strategic appraisal of investments * Relative performance measures * Short-term vs. long-term costs * Strategic cost analysis * Customer profitability analysis * Target costing * Target cost vs. traditional costing methods * Kaizen costing The Normative View of Strategy * Proactive * Sequential and structured * Orderly and linear * Focus on formulation Definitions The Descriptive View of Strategy * Complex * Dynamic * Multi-level * Shaped by diverse interest groups * Emergent * Focus on formation Linkages * Strategy-Structure * Political * Perceptual BCG View on Strategy * Harvest * Hold * Build Porter View on Strategy * Cost leadership * Differentiator * See Porter's value chain * Shank and Govindarajan (1996) place considerable weight on Porter's notion of strategic positioning * A value chain perspective on strategic cost management requires that firms recognise their product in the total value-creating chain of activities Miles and Snow View on Strategy * Defender * Analyser * Prospector Porter's (1985) Strategy Typology * Strategic Management Accounting * SMA = "The Provision and analysis of management accounting data about a business and its competitors for the use in developing and monitoring the business strategy" - (Simmonds, 1981) * Two features of SMA: * Outward focus * Long term/future orientation The Product Life Cycle and Its Strategic Implications Course Notes Page 13 * SMA = "The Provision and analysis of management accounting data about a business and its competitors for the use in developing and monitoring the business strategy" - (Simmonds, 1981) * Strategy = Patterns of decisions about the organisation's future * Target Cost = The allowable amount of cost that can be incurred on a product and still earn the required profit from that product * Target Costing = Reducing the price of a product over its entire life towards the target cost

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