Evaluating the Effect of Strategic Cost Management Practice in Supply Chain Management on Competitive Advantage of Pharmaceutical Manufacturers in Addis Ababa, Ethiopia
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Date
2024-06
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Addis Ababa University
Abstract
This study aimed to evaluate the effect of strategic cost management practices used by pharmaceutical manufacturers throughout their supply chain management on competitive advantage of the firm. An explanatory and descriptive study design was employed. Target populations of the study were employees of the nine pharmaceutical manufacturing companies that have their head offices or factories found in Addis Ababa, Ethiopia. 105 respondents were selected through purposive sampling technique. Questionnaires were used to collect primary data from respondents and the data collected were analyzed using both descriptive and inferential statistics. The findings shows that target costing is the most commonly employed strategic cost management technique in pharmaceutical supply chain management by pharmaceutical industries, followed by life cycle costing and, finally, activity based costing. The study findings also shows that target costing and life cycle costing have a considerable impact on competitive advantage, but activity based costing had little impact. Hence, the study concluded that strategic cost management has a significant impact on competitive advantage. As a result, pharmaceutical manufacturers seeking a competitive advantage are recommended to employ target costing and life cycle costing.
Key Words: Strategic Cost Management, Activity based costing, Target Costing, Life Cycle Costing and Competitive Advantage