The effect of target cost in enhancing competitive advantages

DOI:

https://doi.org/10.36371/port.2021.4.5

Authors

  • M. H. Ali uruk
  • A.M. Obaid

The research aims to apply the target cost technology in one of the factories of the Rubber
and Tire Industries Company, Babylon Tire Factory, where this technology is considered one of the most
important strategic cost management techniques, and its application leads to achieving the goal of the
economic unit in reducing costs and increasing productivity, and to achieve this goal the researcher relied
on data Economic unit research sample through personal interviews and field visits for the purpose of
applying TC technology. A set of conclusions was reached, the most important of which are: The target
cost technique is one of the important techniques whose work focuses on reducing costs during the life
cycle of the product, especially in the planning, research, development and design phase without affecting
the quality of product, this research helps in determining the competitive costs of products through
Determining the target costs in the market and comparing them with the actual (current) costs and
analyzing the costs gap to reach the competitive costs. Important notes pay attention to the main success
factors, which represent cost, quality and time, Developing the economic unit in question or replacing it
with the machinery and equipment of the Babel Tire Factory in order to compete with the products of
other competing units by reducing costs.

Keywords:

Target cost competitive advantage

[1] Kádárová, J., Teplická, K., Durkáčová, M., & Vida, M. (2015). Target Costing Calculation and

[2] Economic Gain for Companies. Procedia Economics and Finance, 23, 1195–1200.

[3] https://doi.org/10.1016/s2212-5671(15)00331-7

[4] Al-Mohammadi, Alaa Abdel-Hassan Hassan. 2019.Integration of the two technologies of target

[5] cost and value chain and its role in achieving competitive advantage, an applied study. Master's

[6] thesis, College of Administration and Economics, Al-Mustansiriya University, Baghdad, Iraq .

[7] https://iqdr.iq/search?view=f7bce51417b7b6738a6ce6f41ae89819

[8] Stadtherr, F., & Wouters, M. (2021). Extending target costing to include targets for R&D costs

[9] and production investments for a modular product portfolio—A case study. International Journal

[10] of Production Economics, 231. https://doi.org/10.1016/j.ijpe.2020.107871

[11] Baharudin, N., & Jusoh, R. (2015). Target Cost Management (TCM): A Case Study of an

[12] Automotive Company. Procedia - Social and Behavioral Sciences, 172, 525–532.

[13] https://doi.org/10.1016/j.sbspro.2015.01.398

[14] Al-Qady, Mostafa A.; El-Helbawy, S. M. (2016). Integrating target costing and resource

[15] consumption accounting. The Journal of Applied Management Accounting Research, 14(1), 39–

[16] https://www.researchgate.net/publication/303896464_Integrating_Target_Costing_and_Resource_Consumption_Accounting

[17] Horngren, C. T., Foster, G., Datar, S. M., Rajan, M., Ittner, C., & Baldwin, A. A. (2010). Cost

[18] Accounting: A Managerial Emphasis,. Issues in Accounting Education, 25(4), 789–790.

[19] https://doi.org/10.2308/iace.2010.25.4.789

[20] Simon, D. S. (1989). Management and Cost Accounting. The British Accounting Review, 21(1),

[21] –95. https://doi.org/10.1016/0890-8389(89)90074-7

[22] Blocher, E. J., Stout, D. E., Juras, P. E., & Smith, S. (2019). Cost Management: A Strategic

[23] Emphasis. Journal of Chemical Information and Modeling (pp. 4, 413,422).

[24] Stein Smith, S. (2014). Accounting: An Emerging Business Partner. Journal of Finance and

[25] Accounting, 2(6), 6. https://doi.org/10.11648/j.jfa.s.2014020602.12

[26] Sharafoddin, S. (2016). The Utilization of Target Costing and its Implementation Method in Iran.

[27] Procedia Economics and Finance, 36, 123–127. https://doi.org/10.1016/s2212-5671(16)30023-5

[28] Alexandra, M. L. (2017). Considerations Concerning the Application of Target Costing Method

[29] in the Industry of Dairy Products. Ovidius University Annals: Economic Sciences Series, 17(1),

[30] -550 .https://ideas.repec.org/a/ovi/oviste/vxviiy2017i1p545-550.html

[31] Ofileanu, D., & Bumbescu, S. S. (2014). The Analysis of the Factors Which Influence the Change

[32] of the Breakeven Point. Procedia Economics and Finance, 16, 356–367.

[33] https://doi.org/10.1016/s2212-5671(14)00814-4

[34] Henri , Jean- Francois. Wouters ;Marc,(2017) " Coexistence of Mangement Control Practices and

[35] Successful Product Innovation ", Canadian Academic Accounting Association (CAAA) Annual

[36] Conference 16jun https : // ssrn . com / abstract =2896110.

[37] A., S., & Gerard, W. (2019). Target Cost Contracts and The Development of Collaborative

[38] Behaviours and Value for Money in The UK Construction Industry. JOURNAL OF

[39] INTERNATIONAL BUSINESS RESEARCH AND MARKETING, 4(4), 7–15.

[40] https://doi.org/10.18775/jibrm.1849-8558.2015.44.3001

[41] Ferreira, M. M., & Martins Oliveira, S. R. (2020). Integrated framework for strategic cost

[42] management based on target costing, ABC, and product life-cycle in PDP: Empirical

[43] experience. Global Journal of Business, Economics and Management: Current Issues, 10(1), 31–

[44] https://doi.org/10.18844/gjbem.v10i1.4700

[45] De Melo, R. S. S., Kaushik, A., Koskela, L., Granja, A. D., Keraminiyage, K., & Tzortzopoulos,

[46] P. (2014). Target costing in construction: A comparative study. In 22nd Annual Conference of the

[47] International Group for Lean Construction: Understanding and Improving Project Based

[48] Production, IGLC 2014 (pp. 183–194). The International Group for Lean Construction.

[49] Kazem Hatem Karim, 2019, Integration of the two techniques of target costing and accounting

[50] for resource consumption to increase the productivity of the economic unit in Iraq, PhD thesis,

[51] College of Administration and Economics, University of Baghdad, Baghdad, Iraq

[52] https://coadec.uobaghdad.edu.iq/?p=22075

[53] Lahdenperä, P. (2016). Preparing a framework for two-stage target-cost arrangement

[54] formulation. International Journal of Managing Projects in Business, 9(1), 123–146.

[55] https://doi.org/10.1108/IJMPB-07-2015-0049

[56] Tu, Y., & Wu, W. (2021). How does green innovation improve enterprises’ competitive

[57] advantage? The role of organizational learning. Sustainable Production and Consumption, 26,

[58] –516. https://doi.org/10.1016/j.spc.2020.12.031

[59] Weil, K. E. (1985). PORTER, Competitive advantage, creating and sustaining superior

[60] performance. Revista de Administração de Empresas, 25(2), 82–84.

[61] https://doi.org/10.1590/s0034-75901985000200009

[62] Ferdousi, F., Baird, K., Munir, R., & Su, S. (2018). Associations between organisational factors,

[63] TQM and competitive advantage: Evidence from an emerging economy. Benchmarking, 25(3),

[64] –873. https://doi.org/10.1108/BIJ-05-2017-0110

[65] Afraz, M. F., Bhatti, S. H., Ferraris, A., & Couturier, J. (2021). The impact of supply chain

[66] innovation on competitive advantage in the construction industry: Evidence from a moderated

[67] multi-mediation model. Technological Forecasting and Social Change, 162.

[68] https://doi.org/10.1016/j.techfore.2020.120370

[69] Zhang, Q., Oo, B. L., & Lim, B. T. H. (2019, February 10). Drivers, motivations, and barriers to

[70] the implementation of corporate social responsibility practices by construction enterprises: A

[71] review. Journal of Cleaner Production. Elsevier Ltd. https://doi.org/10.1016/j.jclepro.2018.11.050

[72] Awwad, A. S., Khattab, A. A. A., & Anchor, J. R. (2013). Competitive Priorities and Competitive

[73] Advantage in Jordanian Manufacturing. Journal of Service Science and Management, 06(01), 69–

[74] https://doi.org/10.4236/jssm.2013.61008

[75] Awwad, A. S., Khattab, A. A. A., & Anchor, J. R. (2013). Competitive Priorities and Competitive

[76] Advantage in Jordanian Manufacturing. Journal of Service Science and Management, 06(01), 69–

[77] https://doi.org/10.4236/jssm.2013.61008

[78] Dirisu, J. I., Iyiola, O., & Ibidunni, O. S. (2013). PRODUCT DIFFERENTIATION: A TOOL OF

[79] COMPETITIVE ADVANTAGE AND OPTIMAL ORGANIZATIONAL PERFORMANCE (A

[80] STUDY OF UNILEVER NIGERIA PLC). European Scientific Journal, 9(34), 258–281.

[81] Retrieved from http://eujournal.org/index.php/esj/article/viewFile/2174/2059

[82] Wen-Cheng, W., Chien-Hung, L., & Ying-Chien, C. (2011). Types of Competitive Advantage

[83] and Analysis. International Journal of Business and Management, 6(5).

[84] https://doi.org/10.5539/ijbm.v6n5p100

[85] Al-Khammas, Abdel-Reza Faraj Badrawi and Mohammed Rashid Hamid. 2018. Market

[86] orientation as a mediating variable in the relationship between mass marketing and its accessories:

[87] An analytical study of the opinions of a sample of masterminds of some commercial responses in

[88] Iraq. Economic Sciences, vol. 12, p. 48, p. 1-30 ..30-1 .https://search.emarefa.net/detail/BIM-

[89] Al-Qassab: Basem Abdul-Hassan Abboud, 2019, Integration between the two technologies of

[90] target costing and accounting for resource consumption and the effect of reducing costs, an

[91] applied study in the General Company for Textile Industries in Hilla, Al-Qudifa Factory, an

[92] unpublished master’s thesis, College of Administration and Economics, University of Karbala .

[93] https://uokerbala.edu.iq/archives/research-paper

[94] Mehamed, S. A., Abbas, Z. K., & Yaseen, A. T. (2021). The Effect of using Administrative

[95] Accounting Tools on Improving Internal Audit Quality in Iraqi Private Banks: Balanced

[96] Scorecard as a Model. Academy of Entrepreneurship Journal, 27(SpecialIssue2), 1–11.

[97] https://doi.org/10.1142/s0219877020400076

[98] Al-Moussawi: Abbas Nawar Kahit. 2007, The Integration of Target Costing and Kaizen Costing

[99] Techniques and Their Effect on Competitive Strategies of Economic Entities doctoral thesis.

[100] unpublished, College of Administration and Economics, Al-Mustansiriya University .

[101] https://search.mandumah.com/Record/822586

Ali, M. H. ., & Obaid, A. . (2022). The effect of target cost in enhancing competitive advantages. Journal Port Science Research, 4(4), 279–303. https://doi.org/10.36371/port.2021.4.5

Downloads

Download data is not yet available.