What is the usefulness of conducting a customer profitability analysis?

To develop a strategic plan, as a nonaccounting manager, you need to analyze and link management accounting data and performance information with business strategies. You also need to extend the scope of management accounting beyond the organization. For this perspective, you will need to focus on variables that are external to the firm, such as variables relating to markets, customers, and competitors. This external focus will help you develop a sustainable competitive advantage, which is the primary element of your long-term growth strategy.

In this assignment, you will analyze the factors that affect the long-term growth strategy of a company.

Tasks:

Respond to the following:

  • What can you learn from the financial statements of competitors that determine the relative cost position of your company?
  • What are some of the ways in which you can secure a sustainable cost advantage over the competition?
  • How does maintaining a strong understanding of relative costs help you maintain the competitive advantage?
  • How do you use cost structure to differentiate products? Do you think product differentiation is a successful growth strategy? Why or why not?
  • What is the usefulness of conducting a customer profitability analysis?

Submission Details:

By Saturday, December 5, 2015, post your response to the appropriate Discussion Area. Through Wednesday, December 9, 2015, review and comment on at least two peers’ responses.

Write your initial response in 300–500 words. Your response should be thorough and address all components of the discussion question in detail, include citations of all sources, where needed, according to the APA Style, and demonstrate accurate spelling, grammar, and punctuation

Do the following when responding to your peers:

  • Read your peers’ answers.
  • Provide substantive comments by
    • contributing new, relevant information from course readings, Web sites, or other sources;
    • building on the remarks or questions of others; or
    • sharing practical examples of key concepts from your professional or personal experiences
  • Respond to feedback on your posting and provide feedback to other students on their ideas.
  • Make sure your writing
    • is clear, concise, and organized;
    • demonstrates ethical scholarship in accurate representation and attribution of sources; and
    • displays accurate spelling, grammar, and punctuation.

Grading Criteria

Assignment Components
Max Points

Initial response was:

  • Insightful, original, accurate, and timely.
  • Substantive and demonstrated advanced understanding of concepts.
  • Compiled/synthesized theories and concepts drawn from a variety of sources to support statements and conclusions.
16

Discussion Response and Participation:

  • Responded to a minimum of two peers in a timely manner.
  • Offered points of view supported by research.
  • Asked challenging questions that promoted discussion.
  • Drew relationships between one or more points in the discussion.
16

Writing:

  • Wrote in a clear, concise, formal, and organized manner.
  • Responses were error free.
  • Information from sources, where applicable, was paraphrased appropriately and accurately cited.
8

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