Target Costing i Large Cap : -

Abstract: Master Thesis G3 in Business Administration, Business School at Linnaeus University, Management Control, 4FE90E, Spring 2012 Authors: Mohammad Akhbari och Eric Wennberg Tutor: Jan Alpenberg Title: Target Costing in Large Cap Background and problem formulation: Since the 1980s, the product of the company has become increasingly important, because of increased competition and rapid technological development. To succeed in the Product development, “Target Costing” can be used as an important financial tool to calculate costs based on an established price and profit margin. Research shows that the method widely has been applied in Japan, but studies of the method’s prevalence in Sweden, however, are quite limited. Objectives: The purpose of this paper is to describe and analyze the Swedish companies applying “Target Costing” in their product development process. Furthermore, the study aims to analyze respondents’ dysfunctional, performance related, successfulness and dynamic experiences of the method. Finally, the intention is to interpret the correlation between the use and experiences of the method in relation to the corporate influential factors. The essay is limited to the companies listed on the “Large Cap” on the Stockholm Stock Exchange and engaged in activities related to product development. Theory: We have studied a variety of literature and articles that treat the Target Costing in its entirety within the product development processes. In our theoretical references one can find Ansari et al, Cooper, Robinson and several other researcher describing the implementation and performance factors of Target Costing. Method: The study is based on a quantitative survey carried out to 40 companies. The empirical data have been analyzed by theoretical studies and research in this area. Study findings and conclusions are finally discussed based on the thesis of reference. Conclusion: Target Costing is used by 22 of 32 companies on Large Cap, which amounts to 69 percent. The use is influenced by the factors; industrial type, sales orientation, profit margin, revenue and staff numbers. Correlations have also been established between their experiences and the factors mentioned above, where the sales approach excels.