Blueprint Problem I: Basic Concepts,Exploiting Internal Linkages Activity$-$Based Customer Costing, Activity$-$Based Supplier Costing

Basic Concepts, Value$-$Chain Analysis, and Exploiting Internal Linkages

Strategic decision making ischoosing among alternative strategies with the goal of selecting a strategy or strategies that provides a company with a reasonable assurance of long$-$term growth and survival. Strategic cost management is the use of $$ to develop and identify superior strategies that will produce a sustainable competitive advantage. A competitive advantage is creating better customer value for the same or lower cost darr or creating equivalent value $$ for lower cost $$ than offered by competitors.

Customer value is the difference between what a customer receives $$ and what a customer $$ I $.$ Increasing customer value to achieve a competitive advantage is tied closely to judicious strategy selection. Strategic positioning is the process of selecting the optimal mix of three general strategies: cost leadership, differentiation, and focusing. The objective of strategic cost managersent is to reduce costs $$ while simultaneously strengthening $$ the chosen strategic position.

Successful pursuit of a sound strategic position mandates an understanding of the industrial value chain. The industrial value chain is the linked set of value$-$creating activities from their basic raw materials to the disposal of the finished product by the end$-$use

customers.In a value chain framework there exist complex linkages and interrelationships among activities both within and beyond the firm. External $$ linkages describe the relationship of a firm's value$-$chain

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