Abstract
Target cost management has been considered as the most effective cost management strategy for new product development stages, particularly in its contribution to businesses with competitive advantages. Target cost management is market-driven that requires the cooperation of all departments within an organisation and various players across the value chain. For many industries, target cost management offers excellent benefits across product life cycle generally and new product development stages particularly. Although a substantial number of studies pertaining to target cost management in most industries have highlighted the essential characteristics that contribute to the high adoption rate and success, little is known about the condition of its low adoption in a food manufacturing company.As such, this study looked into the organisational readiness for target cost management in new product development stages. This research assessed six essential elements of target cost management. The research analysed qualitative case study data retrieved from experienced managers in a food manufacturing company. The question raised is ‘is this company ready for target cost management?’
The interviews revealed the fundamental concept of target cost management within the new product development process although not entirely exercised. The organisation exhibited cross-functional involvement by incorporating customer input and top management support in the new product development process. The author has discovered that further improvement in the current practice of cost data is crucial to ensure that the organisation has detailed cost information. This study lists several integral factors of successful implementing target cost management, such as corporate strategy, profits goals and objectives, leadership and strong support from the leadership, as well as characteristics of target cost management. The study findings enhance understanding and aid researchers and managers in light of target cost management. It is hoped that this research inspires researchers to further explore organisational readiness for target cost management.
Date of Award | 20 Feb 2019 |
---|---|
Original language | English |
Awarding Institution |
|
Supervisor | Lisa Jack (Supervisor) |