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Method of strategic cost analysis. value chain. The concept of the value chain as a tool to achieve the competitive advantage of the organization in the framework of strategic management accounting Theoretical aspects of analysis

In a general sense, cost chain analysis is a systematic approach to accounting for the costs of business processes from the very beginning to the very end. As part of the decision-making process, the determining factor is the cost of products and services; producing low-cost products can generate high profits. The nature of the enterprise in terms of their size is different. For example, an unprofitable group of goods in a large enterprise will not cause an immediate crisis, while in a small enterprise the situation will be completely different. In a small business, if the business is not profitable, it simply cannot survive.

Given the many factors that contribute to cost differences, a company must always be aware of how its costs compare to those of its major competitors. This requires a strategic cost analysis that captures the cost position of the company relative to its closest competitors.

Cost chain concept. The primary analytical tool for strategic cost analysis is the concept of the cost chain, which defines the activities, functions, and processes that must be carried out in the development, manufacture, marketing, delivery, and support of a product or service. The chain of cost-creating activities begins with the purchase of raw materials, continues with the manufacture of parts and assemblies, their assembly, wholesale distribution, and ends with the retail sale to the final consumer of the finished product or service.

A company's cost chain shows a consistent set of activities and functions performed within it (Figure 4-1). This chain includes profit because the markup on the cost of running the value-creating divisions of the company is usually part of the price (or total cost) paid by the buyer. Creating value that exceeds the cost of obtaining it is a fundamental goal of business.



Dividing a company's activities into strategic steps and processes allows you to better understand the company's cost structure and determine what the main cost elements are. Each activity in the cost chain creates costs and links assets. The accrual of the operating costs of the company and its assets for each individual activity allows you to estimate the costs associated with this work. The company's costs in the implementation of each type of work can be increased or decreased under the influence of two types of factors: structural (scale effects and the development curve, technological requirements, capital intensity and complexity of the product range) and managerial (stimulating employees to constantly improve labor, creating organizational capabilities and such employee relations that would contribute to the high quality of both the work itself and the products, reducing the time between the start of the development of new products and offering them to the market, maximizing the use of production capacities, qualified development and rational use of internal technological processes, effective work with suppliers and consumers in order to reducing the cost of these activities). The value chain is a tool for analyzing potential sources of delivering more value to consumers and identifying synergies. The value chain includes all activities of the organization (chain links) aimed at creating value for the consumer. In the classical model of an organization, these activities include the development, production, marketing, distribution, and support of its products. These activities are grouped into main activities (input logistics - providing production operations with everything necessary; production operations - release of finished products; output logistics - handling of finished products; marketing, including sales, and services) and supporting activities (infrastructure of the organization - providing good governance, finance, human resource management, technology development, procurement involving the acquisition of everything necessary for the conduct of core business). Supporting activities relate to the conduct of all major activities. In a more detailed model of the organization, each of its nine activities can in turn be specified - for example, marketing - according to its individual functions: conducting marketing research, promoting a product, marketing development of a new product, etc. The challenge is to test the costs and outputs of each of the nine activities and find ways to improve them. By comparing this data with those of competitors, ways to gain competitive advantage are identified.

Primary activity

1. Incoming logistics - acceptance, storage and sorting of suppliers' products; control; inventory management.

2. Production activities - activities, costs and assets aimed at turning the flow of raw materials into the final product (production, assembly, packaging, ensuring the operation of equipment, installation, product quality certification, environmental protection)

3. Outbound logistics (delivery of goods to the consumer) - activities, costs and assets associated with the physical delivery of goods to the buyer (warehousing of the final product, order processing, scheduling, shipping, transportation).

4. Sales and marketing - activities, costs and assets related to sales, advertising and promotion efforts, marketing research and planning, dealer and distributor support.

5. Service (service) - activities, costs and assets intended to provide assistance to buyers in installation, delivery of spare parts, maintenance and repair, for technical assistance, informing buyers and handling complaints.

Ancillary activities

Technology development (know-how, technological innovations used in each link of the value chain) - activities, costs and assets related to the process of research and development of the product, the process itself, improvement of the design process, development of the necessary equipment, development of software, telecommunications systems , computer developments, new possibilities of databases, development of computer support system.

2. Personnel management - activities, costs and assets related to the recruitment of employees, training, development and social security of personnel, relations between employees, professional development (skill).

Firm infrastructure - activities, costs, and assets related to general management, accounting and finance, legal, security and privacy, management information system, and other top management functions.

Each enterprise, firm, before starting production, determines what profit, what income it can receive. The profit of an enterprise, a firm depends on two indicators:

product prices and production costs. The price of products in the market is a consequence of the interaction of supply and demand. Under the influence of the laws of market pricing in conditions of free competition, the price of products cannot be higher or lower at the request of the manufacturer or buyer, it is leveled automatically. Another thing is the costs of production factors used for production and sales activities, called "production costs". They can increase or decrease depending on the amount of labor or material resources consumed, the level of technology, the organization of production and other factors. Consequently, the manufacturer has many cost-cutting levers that he can bring into play with good guidance. What is meant by production costs, profit and gross income?

In general terms, the costs of production and sale (the cost of products, works, services) are the valuation of natural resources, raw materials, materials, fuel, energy, fixed assets, labor resources, as well as other costs used in the production process of products (works, services). for its production and distribution.

The costs of production and sale of products include:

costs associated with the direct production of products, due to the technology and organization of production;

using natural raw materials;

preparation and development of production;

improving the technology and organization of production, as well as improving the quality of products, increasing their reliability, durability and other operational properties (non-capital costs);

invention and rationalization, carrying out experimental work, making and testing models and samples, paying royalties, etc.;

servicing the production process: providing production with raw materials, materials, fuel, energy, tools and other means and objects of labor, maintaining fixed production assets in working order, fulfilling sanitary and hygienic requirements;

ensuring normal working conditions and safety measures;

production management: maintenance of employees of the management apparatus of an enterprise, a company and their structural divisions, business trips, maintenance and maintenance of technical controls, payment for consulting, information and audit services, hospitality expenses related to the commercial activities of enterprises, firms, etc.;

training and retraining of personnel;

deductions for state and non-state social insurance and pension provision, to the State Employment Fund;

deductions for compulsory health insurance, etc.

The specific composition of costs that can be attributed to production costs are regulated by law in almost all countries. This is due to the peculiarities of the tax system and the need to distinguish between the company's costs according to the sources of their reimbursement (included in the cost of production and, therefore, reimbursed at the expense of prices for it and reimbursed from the profit remaining at the disposal of the company after paying taxes and other obligatory payments).

In Russia, there is a decree on the composition of costs for the production and sale of products (works, services) included in their cost, and on the procedure for the formation of financial results taken into account when taxing profits.

There are two approaches to cost estimation: accounting and economic. Both accountants and economists agree that a firm's cost in any period is equal to the cost of the resources used to produce goods and services sold during that period. In the financial statements of the company, actual ("explicit") costs are recorded, which are cash costs for paying for the used production resources (raw materials, materials, depreciation, labor, etc.). However, economists, in addition to explicit, take into account "implicit" costs. Let's explain this with the following example.

Let us assume that the firm invests in the production of products borrowed capital, which it took out from the bank; then the costs would include funds for the repayment of bank interest. Therefore, provided that the attracted capital is invested, implicit costs in the amount of bank interest must be excluded from the income of the firm.

However, even the concept of "implicit costs" does not give a complete picture of the true costs of production. This is explained by the fact that out of the many possible options for using resources, we make one specific choice, the uniqueness of which is forced by limited resources.

So, for example, being carried away by TV, you miss the opportunity to read a book, having entered the institute, we lose the opportunity to receive wages if we were engaged in this or that job.

Therefore, when making this or that production decision and evaluating the actual costs, economists consider them as costs of missed (lost) opportunities.

Opportunity costs are understood as the costs and loss of income that arise when choosing one of the options for production or sales activity, which means the rejection of other possible options.

Considering the many factors that influencedifferences in costs, a company should alwaysknow how its costs compare with the costsmain competitors. This requires a countrytegical cost analysis fixing position companies in terms of costs relative toits closest competitors.

Cost chain concept.The initial analysistic tool for strategic analysiscosts is the concept of the cost chain, defineddefining the work, functions and processes thatshould be carried out in the development, manufacturemanufacturing, marketing, supply and supportducts or services. The chain of cost-creating activities begins with the purchase of raw materials.materials, continues in the manufacture of parts and assemblies, their assembly, wholesaledistribution and ends with retail sale to the final consumercommodity product or service.

The company's cost chain demonstrates a sequential set of activities.and the functions performed within it (Figure 4-1). This chain includes profit,because the markup on the cost of operating the value-creating divisions of a company is usually part of the price (or totalcost) paid by the buyer. Creating value beyondthe cost of obtaining it, is the fundamental purpose of the business.

The division of the company's activities into strategic stages and processesallows you to better understand the company's cost structure and determine what are the maincost elements. Each activity in the cost chain creates costs and linksassets. Accrual of operating costscompany and its assets for each separate typeactivities allows you to evaluate the costs associated withnye with this work. The company's costs in the implementation of each type of work can be increased or decreased under the influence of two factorstypes: structural (scale effects and curvedevelopment, technological requirements, capitalcapacity and complexity of the product range) and managerial (incentives for employees tocontinuous improvement of labor, creationorganizational capabilities and suchniya workers who would contribute to you-the high quality of both the work itself and the products,reducing the time between the start of developmentnew products and their offer on the market,maximum use of production capacities, qualified development and rational use of internal technologiesprocesses, effective work with suppliers and customers in order to reduce the costs of these activities). If it's good to knowthe cost structure of the company, then you can come to an understanding of the following:

It is necessary to strive for obtaining a competitive advantage based onve: 1) low costs (at the same time, management efforts to reduce costs along the cost chain should be clearly visible); 2) individualization (withmanagement should pay more attention to those departmentswhich are responsible for creating individualizing properties).

How are the costs in each activity forcost chains and costs in one type of activitysti will affect costs in other types of activities ness.

Do cost chain linkages create companiesopportunity for cost reduction(for example, Japanese cassette recordersneocassette recorders were able to reduce the prices of theirproducts from $1,300 in 1977 to less than $300.

Introduction

1. Theoretical aspects of the analysis

1.3 SWOT analysis

2. Production costs

2.1 The concept of costs

2.2 Determination of production costs

Conclusion

List of used literature

Introduction

This topic is considered relevant, because. one of the clearest indicators of a company's situation is its price position relative to competitors. This is especially true for industries with weakly differentiated products, but even so, companies are forced to keep up with rivals, otherwise they risk losing their competitive position. Differences in the costs of rivals can be caused by:

the difference in prices for raw materials, materials, components, energy, etc.

differences in underlying technologies, age of equipment, - differences in internal costs due to different sizes of production units, cumulative effect of output, productivity levels, different tax conditions, levels of organization of production, etc.

difference in sensitivity to inflation and changes in exchange rates, - difference in transport costs,

difference in costs across distribution channels.

Strategic value analysis focuses on a firm's relative value position relative to its competitors. The primary analytical approach to such an analysis is to build a value chain for individual activities, showing the picture of the cost from raw materials to the price of final consumers. If a firm loses competitiveness at the back or front of the chain, it can change its internal operations to regain competitiveness.

In order to determine the strategy of the organization's behavior and put this strategy into practice, management must have an in-depth understanding not only of the internal environment of the organization, its potential and development trends, but also of the external environment, its development trends and the place occupied by the organization in it. At the same time, the external environment is studied by strategic management in the first place in order to reveal those threats and opportunities that the organization must take into account when defining its goals and achieving them.

The objectives of this course work is to study value chains using, SWOT analysis, functional cost analysis, production costs of their essence and ways to reduce them, the impact of costs on profits. Production costs are now a rather serious and urgent problem today, because in the conditions of market relations the center of economic activity is moving to the main link of the entire economy - the enterprise. It is at this level that the products needed by society are created, the necessary services are provided. The most qualified personnel are concentrated at the enterprise. Here the issues of economical expenditure of resources, the use of high-performance equipment and technology are solved. The enterprise seeks to reduce to a minimum the costs (costs) of production and sales of products.

. Theoretical aspects of analysis

1.1 Value chain analysis

The selective business expansion mindset involves a serious analysis of what the organization brings to the production and commercial operations in current market segments and how effective its existing value chains are. If both are indeed the most effective option, then the organization should concentrate its efforts on developing in the direction from E to B, i.e. towards the development of its internal capacity to carry out its arbitrary commercial operations.

If the analysis shows that the organization can do better in other market segments or value chains, the organization should focus on development. This can be achieved through cooperation with other industry players. The use of networks of cooperation instead of competition allows not only to significantly increase the presence of the organization in the market and in the industry, but also to free up resources for building internal capacity.

Several methods are used to assess the strategic position of an enterprise.

SWOT analysis - abbreviation of the English words strengths, weaknesses, opportunities, threats strong, weak means the sides of the enterprise, opportunities, dangers. Based on the analysis of the internal and external environment, the identification of key success factors, and social aspects, a four-cell matrix is ​​built. Its cells are filled with the corresponding data. The data obtained allow us to form an enterprise strategy, which is laid down in plans, executed, the results are subjected to the next stage of analysis.

BCG matrix ( Boston Advisory Group). Similar approach. The results of the analytical work are presented in the same way. The positions of the enterprise in the market are determined in comparison with the leading firm in this market segment, all activities are divided into four groups. Appropriate strategies are being developed for them. Typical recommendations have been developed, the essence of which is to support promising, eliminate hopeless areas of activity.

The McKinsey matrix is ​​a development of the BCG matrix. This technique involves the use of formalized indicators of market attractiveness and competitive status. In the initial data, expert estimates and forecast indicators are used.

Porter value chain analysis and competitive analysis . They were asked to present the set of functions performed by the enterprise in the form of chains of value creation processes. At the beginning and end of the chains, the activities of the enterprise are integrated (consistent) with the activities of business partners.

Competitive analysis is carried out on the "field of forces" acting on the enterprise. The author identified five main ones, including: the influence of buyers, the influence of suppliers; the possibility of the emergence of new competitors, the existence of substitute products, the actions of competitors within the industry. The factors causing these forces are investigated, their ratio is estimated. Based on the analysis, an optimal strategy is developed. The technique does not give specific recommendations and is limited to qualitative analysis.

Value chain analysis encourages a firm to adopt a strategic cost analysis that compares all value-creating activities that deliver value to the customer. In addition, this analysis includes many more economic cost drivers that affect buyer equity, such as structural drivers (scale, experience, technology, complexity) and executive drivers (total quality management style, plant planning, capacity utilization, technological approaches in the production of high-quality products, vertical relations with suppliers and buyers).

It has become necessary to use the accumulated experience in planning, analyzing and controlling costs in a relatively stable business environment to achieve the goals and implement strategies of the organization in a rapidly and unpredictably changing environment. It was necessary to move from the outdated methods of allocation and cost analysis "after the fact" to the modern concept of strategic cost management.

Strategic cost management refers to an analytical system for correlating significant accounting information with a firm's strategy. Cost data is used to develop a strategy to create and realize sustainable competitive advantage. And modern accounting acts as an information system that serves the process of making managerial decisions (Fig. 1).


Fig.1 Accounting as an information system for making managerial decisions

Accounting, thus, provides quantitative information for the process of making and implementing management decisions. The information link between financial and managerial accounting is not regulated by any legislative norms and standards. However, management accounting information must be consistent with and comparable to financial accounting information. To ensure such comparability, one should carefully consider the process of developing an enterprise's accounting policy, which should be formed jointly by the chief accountant and financial director. Otherwise, the collection and processing of accounting information used to make management decisions will have to be handled by a special accounting service, which, in the face of intensified price competition, will not help reduce or optimize costs.

The process of conducting a value chain analysis begins with an internal analysis of the firm and then leads to an external competitive analysis of the industry's cost system. It ends with the integration of these two analyzes to define, create and potentially maintain competitive advantage.

1.2 Functional cost analysis

Functional cost analysis is understood as a method of complex system study of the functions of an object (product, process, structure), aimed at optimizing the relationship between the quality, usefulness of the object's functions and the costs of their implementation at all stages of the life cycle.

Strategic cost analysis - comparing the costs of the company and its competitors along the entire value chain. Such an analysis is an essential part of the analysis of the company's strategic position.

The term "strategic cost analysis" allows us to focus on the features of this cost analysis, its differences from the traditional one: Firstly, this is an analysis with which we intend to identify or create competitive advantages, and therefore, this is a comparative analysis, including a comparison of the costs of competing products , stamps, etc. Secondly, this analysis is based on a calculation that is done not by cost items or cost elements, but by elements of the value chain, that is, by type of activity. An objection may arise here - is it not possible to identify losses and outline ways to reduce costs with the help of costing or cost estimates? But as tools for cost analysis, these calculations can only be used within the framework of current activities, in solving operational rather than strategic tasks. A strategic cost analysis is a cost analysis that involves comparing with the costs of competitors. Differences in the costs of competitors can be explained by the actions of factors such as:

Supplier prices;

Technology and equipment;

Economies of scale, learning curve effect;

Inflation and changes in exchange rates;

Marketing expenses;

transport costs;

Marketing expenses.

Costs can be analyzed in different ways. This can be done in the context of costing items, cost elements, etc. Strategic cost analysis in comparing the costs of a firm and its competitors uses the concept of a value chain. value chain- a strategic cost analysis tool that demonstrates the addition of value to the product when performing the main and auxiliary activities. Sometimes the term "value chain" is used as a synonym. This so-called chain gives an idea of ​​the strategically related activities of the company and allows you to track the movement of costs, as well as highlight potential sources of increasing the company's competitiveness. The nine strategically related activities include core and support activities (Figure 2).

Rice. 2. Value chain

By decomposing the total costs of production and sales of products by strategically related actions, you can better understand the cost structure, identify the main elements. The value chain simultaneously allows you to analyze the relationship between activities, and therefore, the analysis of the relationship between the costs of these activities. The first is important for strategy development. The second has to do with setting and achieving financial goals. Example. Linking the processes of sales, production of the product and purchases allows you to reduce the stocks of raw materials and finished products. Example. The purchase of more expensive, but more modern equipment leads to lower costs and improved product quality.

The value chain can be used to:

1) ensuring competitive advantages by:

a) cost reduction (the entire value chain is involved in the analysis).

In the first case, the analysis can be carried out autonomously for each type of activity.

b) differentiation (more efforts can be consciously spent to develop the areas of activity necessary for differentiation).

When carrying out differentiation, managers can deliberately increase the costs of certain activities, which, ultimately, should ensure an increase in profits;

2) analysis of the formation of costs in each link of the chain and the impact of the costs of performing one type of activity on the costs in other links.

3) assessment of the possibility of price reduction based on the analysis of the relationship between types of production activities. In most cases, the company's activities are not autonomous, but are included in the system of large-scale activities, which means at the same time the inclusion of the company's value chain in value chain system. Such a system may include value chains of suppliers, manufacturers, distributors, and end users. Understanding the structure of such a system makes it easier for company managers to assess its competitiveness. Strategic cost analysis involves comparing the composition and structure of costs both along the value chain of the firm and its competitors, and along the value chain systems that include the activities of the firm and its competitors.

Value chain management- analysis of the value chain, comparison with competitors, identification and elimination of shortcomings associated with high costs, identification of activities in which competitive advantages are potentially hidden.