Mapping Cost Drivers to Value Activities for Impact Assessment PPT

This PPT slide, part of the 18-slide Cost Drivers Analysis PowerPoint presentation, presents a structured approach to mapping cost drivers against value activities within an organization. This mapping process is crucial for identifying which cost drivers exert a broader influence on the company's overall cost structure and value chain. The slide outlines a four-phase methodology: Select, Identify, Quantify, and Refine.

In the first phase, a matrix is created to visually represent the relationship between cost drivers and various value activities, including Firm Infrastructure, HR Management, Technology Development, and others. The matrix allows for a systematic evaluation of how each cost driver impacts different areas of the business.

Key instructions are highlighted within the matrix. The first note emphasizes the importance of cross-referencing the list of cost drivers to ascertain if any driver affects multiple business activities. This step is vital for understanding the interconnectedness of cost drivers and ensuring that no significant influences are overlooked.

The second note indicates that cost drivers appearing in several categories should be marked as having a notable impact on the company's cost structure. This identification process helps prioritize which cost drivers warrant deeper analysis and potential strategic focus.

The overall goal of this exercise is to enable organizations to pinpoint significant cost drivers that can be leveraged for operational improvements and cost efficiencies. By following this structured approach, executives can make informed decisions that align with their strategic objectives and enhance overall performance.

This slide is part of the Cost Drivers Analysis PowerPoint presentation.

This presentation is created by former McKinsey, BCG, Deloitte, EY, and Capgemini consultants. It explains the approach to Cost Drivers Analysis utilized by global strategy consulting firms.

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