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Activity-based costing for competition against generic products: the case of an herbicide product company

Activity-based costing (ABC) enables management to use activity cost information to formulate more effective strategy against competitors. Based on the case of herbicide product company, this paper examines how DCPM, a subsidiary of a multinational company, uses activity cost information to revise...

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Main Authors: Foong, Soon Yau, Ho, Beng Seng
Format: Article
Language:English
Published: Asia-Pacific Management Accounting Association, Accounting Research Institute & Faculty of Accountancy and UPENA, Universiti Teknologi MARA 2009
Online Access:http://psasir.upm.edu.my/id/eprint/12925/1/Activity.pdf
http://psasir.upm.edu.my/id/eprint/12925/
http://ari.uitm.edu.my/vol-4-issue-1-july-2009/171-apmaj-vol-4-issue-1-4.html
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spelling my.upm.eprints.129252015-10-05T06:37:40Z http://psasir.upm.edu.my/id/eprint/12925/ Activity-based costing for competition against generic products: the case of an herbicide product company Foong, Soon Yau Ho, Beng Seng Activity-based costing (ABC) enables management to use activity cost information to formulate more effective strategy against competitors. Based on the case of herbicide product company, this paper examines how DCPM, a subsidiary of a multinational company, uses activity cost information to revise its pricing strategy to compete with the generic herbicide products, as the patent protection of its main herbicide product is coming to an end. The management of DCPM faces serious challenges of not only having to sustain its market share but also to achieve the profit target expected by its parent company. Using the activity cost information, DCPM is able to set competitive prices for different combinations of product and services to cater for customers with differing product/service price-sensitiveness. In the long term, however, the company would have to improve the overall cost efficiency in its product manufacturing and logistics services, as well as to educate users more extensively on the importance of quality and safety standards for herbicide products to sustain its market share. Asia-Pacific Management Accounting Association, Accounting Research Institute & Faculty of Accountancy and UPENA, Universiti Teknologi MARA 2009 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/12925/1/Activity.pdf Foong, Soon Yau and Ho, Beng Seng (2009) Activity-based costing for competition against generic products: the case of an herbicide product company. Asia-Pacific Management Accounting Journal, 4 (1). pp. 65-80. ISSN 1675-3194 http://ari.uitm.edu.my/vol-4-issue-1-july-2009/171-apmaj-vol-4-issue-1-4.html
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description Activity-based costing (ABC) enables management to use activity cost information to formulate more effective strategy against competitors. Based on the case of herbicide product company, this paper examines how DCPM, a subsidiary of a multinational company, uses activity cost information to revise its pricing strategy to compete with the generic herbicide products, as the patent protection of its main herbicide product is coming to an end. The management of DCPM faces serious challenges of not only having to sustain its market share but also to achieve the profit target expected by its parent company. Using the activity cost information, DCPM is able to set competitive prices for different combinations of product and services to cater for customers with differing product/service price-sensitiveness. In the long term, however, the company would have to improve the overall cost efficiency in its product manufacturing and logistics services, as well as to educate users more extensively on the importance of quality and safety standards for herbicide products to sustain its market share.
format Article
author Foong, Soon Yau
Ho, Beng Seng
spellingShingle Foong, Soon Yau
Ho, Beng Seng
Activity-based costing for competition against generic products: the case of an herbicide product company
author_facet Foong, Soon Yau
Ho, Beng Seng
author_sort Foong, Soon Yau
title Activity-based costing for competition against generic products: the case of an herbicide product company
title_short Activity-based costing for competition against generic products: the case of an herbicide product company
title_full Activity-based costing for competition against generic products: the case of an herbicide product company
title_fullStr Activity-based costing for competition against generic products: the case of an herbicide product company
title_full_unstemmed Activity-based costing for competition against generic products: the case of an herbicide product company
title_sort activity-based costing for competition against generic products: the case of an herbicide product company
publisher Asia-Pacific Management Accounting Association, Accounting Research Institute & Faculty of Accountancy and UPENA, Universiti Teknologi MARA
publishDate 2009
url http://psasir.upm.edu.my/id/eprint/12925/1/Activity.pdf
http://psasir.upm.edu.my/id/eprint/12925/
http://ari.uitm.edu.my/vol-4-issue-1-july-2009/171-apmaj-vol-4-issue-1-4.html
_version_ 1643825175851958272
score 13.211869

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