What is the accounting of strategic management?

Accounting of strategic management is the theory and practice of accounting, which focuses on the cost position of the organization, cost benefits and differentiation of products for market decision -making. Traditional management accounting does not take into account these factors and relies much more on accounting systems that are already introduced in the organization. Method of accounting strategic management analyzes information about the creation of higher profit range and distinguishing the organization from competitors on the global market.

The key part of the strategic management accounting is to investigate factors that take place externally from the organization. These factors include new market competition, which includes the cost of entering the market and the number of total competitors in a particular industry. Another problem is whether alternative products or services are available, such as new technologies or products that can eliminate the needing product. Competition in the field is examined to determine the biggest competitors of the organization and also pricesand the position of competitors on the market.

costs are a key point in the analysis, from the supply chain to the amount of money that the organization can charge for its products and services. Strategic management accounting focuses on ways to reduce costs as much as possible to increase profits. This includes basic commercial practices, such as reducing human resources, company operation, technology development, marketing products and services and productivity improvement. The organization will analyze its costs before carrying out the same process on its competitors. The aim of the organization is to have a higher profitable position than the competition.

After the analysis of the organization and its competitors, depending on the organization. In areas where costs can be reduced, long -term consequences, such as loss of productivity. Investment areas of their long -term advantages or disadvantages are also examined,Including whether it will increase the profitable range in the future. Long -term plans are developed, but must remain flexible due to the ever -changing market nature. Progress is measured by traditional financial methods such as profit and loss, and modern methods such as customer satisfaction assessment and market share.