Chrysler's Competitive Strategy

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Target Costing Strategy In today’s changing business environment, businesses have adopted strategies that would enable them to stay competitive and are forced to incorporate plans that would make the company successful. Chrysler is one of those companies that have done that. Chrysler is an American automobile manufacturer that was founded in 1925 out of Detroit. It is the third largest automobile manufacturer in America and has gone through series of financial problems including bankruptcy. Chrysler like other automobile manufacturers experienced a slump in car sales until the Obama Administration revived the American automobile industry. Today, Chrysler is bobbling in sales like never before. A firm’s success is dependent on the type of strategy it adopts and this is done through policies, procedures, and approaches to the business strategy. Target strategy is one of those strategies that businesses could implement in order to enhance their competitive edge. According to Blocher, Stout, Juras, and Cokins, target costing is the desired cost for a product to stay competitive while earning a desired profit (Blocher, Stout, Juras, Cokins, 2013). Target costing is a fundamental and different way to look at the relationship of prices and costs. Managers use target costing to proactively plan cost, do cost management, and cost reduction (Institute of Management Accountant, 1994). Target costing is a mindset that affects the whole organization and is a key to long-term survival and success. Target costing would be a better strategy that Chrysler can use to achieve its critical success factors. Chrysler faces very strong competition from other automobile manufacturers globally and these competitive forces may cause Chrysler to decrease the cost of production while streamlining operations in order to maintain an acceptable level of return (Hibbets, Albright,

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