The Impact of using Strategic Cost Management Tools on Competitive Advantage and Performance of Companies in Business in Industrial Estates in THAILAND

Abstract

Research using mixed methods – both qualitative and quantitative research methods - is conducted on the impact of strategic cost management tools on competitive advantage and operating results in industrial estates in Thailand. These methods aid in exploratory and confirmatory questions, which will lend reliability and credibility to the research results. The study shows consistent results for both the qualitative and quantitative research. Trade competition necessitates that most businesses adjust their structure and production models, as well as their management, to be flexible according to market conditions, thus resulting in the introduction of new cost management concepts to develop applicable principles and strategic cost management. Strategic management tools used as cost tools include Attribute Costing, Quality Costing, Target Costing, Activity Based Costing /Management, Product Life Cycle Costing, and Value Chain Management. These tools provide executives with both primary and secondary information on their operations, which assist them in deciding whether or not their organization can gain a competitive advantage over the competition. 1) The organization may gain an advantage as a leader in differentiation (Differentiation) through different products or services that are superior to competitors. 2) The organization may become a cost leader (Cost Leadership) by keeping their costs lower than their competitors through lower sales prices leading to increased profits. 3) The organization may focus on specific segment of the market in order to do business successfully. Creating a competitive advantage can result in enhanced performance of the business (Firm Performance), which includes 1) Financial Performance - the profit and loss figures of the business, and 2) Non-financial performance - profit opportunities and various obstacles that may affect the organization in the future. Administrators will focus on both the external and internal environments, adapting management concepts to align with new production costs and current market conditions. Administrators will use accurate data and appropriate cost analysis for planning. Decision tools facilitate development from older, traditional management systems towards modern strategic cost management systems able to adapt quickly and efficiently.