In the television industry, each company gives their best effort product in different tiered categories qualified according to specs and price. With this in mind, Panasonic would be wise to employ a strategy of target costing to decide how to appropriately decide on the quality, expense, and profit per television unit. Target costing, more valuable than cost minimization or cost reduction, complies with market conditions and involves the needs of the customer, as well as adding value. Panasonic would employ this strategy in the design phase (before the production phase). Production capabilities and costs are set during production planning and design.
Target costing will be a valuable tool for Panasonic and its implementation towards their television segment of the industry. Target costing will enable them to market many different televisions, with different capabilities, in different tiers, to different markets, with predetermined profit and revenue margins. This type of stability and planning will help Panasonic compete in the television industry, with solid profit margins, and an understanding of what is to come.
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