Target Costing – The market-oriented Cost Management
Target Costing is essential in Strategic Cost Management. It is used when the budgeting and planning of projects, as well as the requirements of the market and those of the company, have to be fulfilled. This is the only way for you to be able to focus on the right product functions and components right from the start of the project planning phase and thus economically manage the value added of your company.
Cost management in projects
In traditional Cost Planning, either project managers define the target costs based on the internally calculated bottom-up cost, or management sets the value of the target cost for new developments as a derivation of historical cost information, or as a percentage of financial figures such as revenue and profit for Research and Development (R & D).
Due to the fast-paced technological progress, changing market requirements receive little attention. The industry's pressure to act in order to remain competitive is high: that is why we at POLARIXPARTNER pursue the approach of market-oriented Target Costing. This is where market and customer requirements are placed at the forefront. In Target Costing, we define the budget of projects so that the customer is satisfied with the selling price and the company is satisfied with the profit earned.
Cost management in projects
In traditional Cost Planning, either project managers define the target costs based on the internally calculated bottom-up cost, or management sets the value of the target cost for new developments as a derivation of historical cost information, or as a percentage of financial figures such as revenue and profit for Research and Development (R & D).
Due to the fast-paced technological progress, changing market requirements receive little attention. The industry's pressure to act in order to remain competitive is high: that is why we at POLARIXPARTNER pursue the approach of market-oriented Target Costing. This is where market and customer requirements are placed at the forefront. In Target Costing, we define the budget of projects so that the customer is satisfied with the selling price and the company is satisfied with the profit earned.
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