Strategic Management Accounting: Techniques for BHP Billiton Ltd

Strategic management accounting

PART D
Strategic management accounting is termed as the analysis of managerial accounting data
regarding a business and its related competition which is further used in strategy development for
the business to achieve its long-term goals and gain a better competitive edge (Morden, 2016).
For the current scenario, and helping BHP Billiton Ltd in achieving its current and future
strategic goals, three effective strategic accounting techniques are selected in order to support the
entire competitive strategy of the company, and help the company to establish more advanced
product and service costs.
The key three strategic management techniques which are selected for the present case are the;
balance scorecard, target costing and activity based management. The usefulness and
effectiveness of the same techniques for the company are discussed as below:
 Balance scorecard: The balanced scorecard is stated as a managerial system that allows
firms to clear their mission and vision and execute the same into action. This is a useful
tool for the BHP Billiton Ltd, as it offers feedback on the internal as well as external
business process to make continuous improvement in the strategic performance and
outcomes. If the balanced scorecard is effectively deployed by the company, then it
changes the strategic planning into the core competencies of the business enterprise
(Humphreys, Gary & Trotman, 2015). This technique involves strategic planning to
ensure that the commitment of the company is aligned with the ultimate vision and
strategy.
 Target costing: One of the best benefits of implementing target costing is that its
deployment is done at the time of product designing and stage of planning so that it can
create a maximum influence (Cooper, 2017). This technique will aid the company in
reducing the accumulated losses at the highest level, and also by using its majority of the
external factors can intervene. In addition, it helps in ensuring procedure and product
innovation to attain a better competitive advantage. On and on, it facilitates in forming a
market-driven approach to design products that satisfy the prices needed for the desired
success.