The Application Of Target Costing In The Project Of New Food Serve Equipment Development

With the trend of economic globalization, competition between theenterprises becomes fiercer than ever. There are three strategies named CostLeadership strategy, Unconventional strategies and Objectives Focused to helpenterprises gain a lasting competitive edge in the modern market. Among them,Cost Leadership strategy is the most competitive one.With the rapid development of Chinese economy, the consumer demandand turnover in food industry income has grow. However, according to the salesand market share, the western fast-food restaurant is still No.1. The growingChina caterers can’t afford expensive foodservice equipment is a huge problem.It should be a milestone if the China restaurants can use the similar equipment asthe western restaurants.Target costing originated from Toyota Company in Japan in early1960. Itwas developed from objective management in US. The target cost was achievedfrom an acceptable price based on competitive market and the profits of theenterprises. Then the effective tools and skills are used to make this happen.Nowadays, a lot of companies have applied target costing and achieved greatresults. However, few foodservice equipment companies applied the targetcosting.H Company is foodservice equipment company, headquartered in USA.Developing China market is the company strategic position. The most costlypart of the product development identified during the design phase of product. Itshould be of great use and significance to research the cost control system in thedesign. In this thesis, the author has studied the situation of China food industryand its current R&D system; the author has also applied the target costing tonew foodservice equipment development for reducing the price and made itacceptable by Chinese customers. Finally, the desired objectives have beentotally achieved.