David Alejandro Romero
Cost Management
Chapter 2.
Question 2-1
The book states two types of competitive strategy; cost leadership and differentiation.
Cost leadership means that a company/firm succeeds by producing at the lowest cost in the
industry. Differentiation means that a company/firm succeeds by enhancing and maintaining an
incomparable value for the product.
Question 2-6
A SWOT analysis is an organized list of a business’s greatest strengths, weaknesses,
opportunities, and threats. It is important when a company is identifying a competitive
strategy.
Question 2.8
Critical success factors are meant to determine financial and non-financial measures of success.
These are used to specify and redefine the factors by which a company achieves a competitive
advantage.
Strategic cost management involves the developing, understanding, and application of critical
success factors in order to manage business firms.
