Customer Profitability Analysis - Today

Inhaltsangabe:Abstract:

Traditional management accounting systems are limited in their ability to provide profitability information relevant to management decisions. The problems of inadequate profitability measurement are intensified by the increasing competition in todays international market and the customer sophistication in locating low-cost providers. In response a number of manufacturers and service companies are experimenting with new methods to analyse their profits. The collection and analysis of information on the customer profitability analysis enables management to identify their most attractive customer groups and support them with their scarce resources, turning loss-making making accounts into profitable ones.

The project investigate both the theoretical approach of customer profitability analysis and its usage in practice, today. Relevant data was collected by means of a survey and three ease studies. The survey provided information about the extent of knowledge of member of organisations about customer profitability analysis and the use of it in the decision making process. The interviews added deeper knowledge about the application of customer profitability analysis in practice and helped to find new insights to this analysis method.

Inhaltsverzeichnis:Table of Contents:

TABLE OF ABBREVIATIONS4

TABLE OF FIGURES5

1. CHAPTERPREFACE6

1.1INTRODUCTION6

1.2BACKGROUND8

1.3AIM10

1.4OBJECTIVES10

2. CHAPTERRESEARCH METHODOLOGY11

2.1INTRODUCTION11

2.2AGGREGATION OF SECONDARY DATA11

2.3COLLECTION OF PRIMARY DATA12

2.3.1INTRODUCTION12

2.3.2SELECT THE APPROPRIATE METHOD12

2.3.3THE SURVEY14

2.3.4THE CASE STUDIES15

3. CHAPTERTHE THEORETICAL APPROACH18

3.1INTRODUCTION18

3.2APPLICATION OF THE CUSTOMER PROFITABILITY ANALYSIS18

3.2.1MAKE OPERATING DECISIONS19

3.2.2DEVELOP STRATEGIES20

3.2.3TACTICAL BENEFITS25

3.3HOW IS THE CUSTOMER PROFITABILITY ANALYSIS OBTAINED?28

3.3.1THE FIRST STEP: THE APPROPRIATE CUSTOMER SEGMENTATION28

3.3.2THE SECOND STEP: THE PRINCIPLE OF AVOIDABLE COSTS AND UNAVOIDABLE COSTS 30

3.3.3THE THIRD STEP: COST ALLOCATION34

3.4TRE CUSTOMER PROFITABILITY ANALYSIS TACTICALLY AND PRACTICALLY44

3.4.1THE DECISION GRID44

3.4.2CUSTOMER PROFITABILITY ANALYSIS, A DAY-TO-DAY OPERATION?47

3.4.3WHO IS RESPONSIBLE FOR THE CUSTOMER'S PROFIT?48

3.4.4REVIEW OF EXISTING SURVEYS48

3.5CONCLUSION49

4. CHAPTERSURVEY52

4.1INTRODUCTION52

4.2KEY-ISSUES52

4.3SAMPLE SELECTION PROCEDURE AND DATA [¿]