Target costing for companies executing a blue ocean

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: arget buyers. Here, price-minus costing, and not cost-plus pricing, is essential if one is to arrive at a cost structure that is both profitable and hard for potential followers to match. Target costing for companies executing a Blue Ocean Strategy is therefore generally more aggressive, because it forces companies to find innovative ways to reduce their costs. Part of the challenge of meeting the target cost is addressed in building a strategic profile that has focus, i.e. by reducing or eliminating key competitive factors the industry has taken for granted. 18 ¬© 2008 Kim & Mauborgne. All Rights Reserved. Blue Ocean Strategy Dictionary Time, Look Across refers to path six of the Six Paths framework, whereby managers gain noncustomer insights by shaping external trends to unlock breakthrough value. All industries are subject to external trends that affect their business over time. Instead of adapting incrementally and somewhat passively, one can gain insights into how the trend(s) will change value to customers and impact their company‚...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online