Strategic Management Accounting Techniques for Business Strategy

This report focuses on strategic management accounting, particularly for BHP Billiton Ltd. It identifies and analyzes three key strategic accounting techniques: the balanced scorecard, target costing, and activity-based management. The balanced scorecard is presented as a tool to align the company's mission and vision with its actions, providing feedback for continuous improvement. Target costing is discussed for its role in product design and planning, aiding in cost reduction and innovation. Activity-based management is highlighted for its usefulness in providing accurate cost information, facilitating better decision-making, and improving customer satisfaction. The report concludes that the optimal utilization of these strategic management tools enables strategic product positioning and improved corporate performance.

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.

 Activity based management: Activity based management is a decision-making method of
management that makes optimum utilization of the activity based costing in order to
make improvement in the business profitability and overall customer satisfaction
(Rothaermel, 2015). This technique will be beneficial for the cited company, because it
will help in offering correct and useful information regarding costs, and by the same
entity will be capable of making a better decision based on the information. This
technique by deploying process-oriented thinking, aids decision making based on long-
term, and also it enables effective cost control and conduct by fostering internal business
communication.
PART E
Thus, it can be concluded that by the optimal utilization of strategic management tools, the
business would allow managers to do product positioning in a strategic manner in the market by
making use of tools like customer and competitor based techniques, performance appraisal,
competitor costs and performance measurement system (Otley, 2016). By considering these
strategic tools, the business will be able to identify the variables which are able to influence the
corporate performance.

REFERENCES
Morden, T. (2016). Principles of strategic management. Routledge.
Otley, D. (2016). The contingency theory of management accounting and control: 1980–
2014. Management accounting research, 31, pp.45-62.
Rothaermel, F.T. (2015). Strategic management. McGraw-Hill Education.
Cooper, R. (2017). Target costing and value engineering. Routledge.
Humphreys, K. A., Gary, M. S., & Trotman, K. T. (2015). Dynamic decision making using the
balanced scorecard framework. The Accounting Review, 91(5), 1441-1465.