Strategic Cost Management – Improving performance in SMEs through the right Costing (and Pricing)
Cost management decisions can make or break SMEs in competitive global markets. Can a Thai SME in the Toy Trading industry improve its bid performance through better costing methods?
At a glance
Country
Thailand
Industry
Toy Trading
Business Category
SME
(Small and medium-sized enterprises)
Focus
Cost Accounting Methodologies
Abstract
Transmax Co., Ltd. (TMX), a Thai SME in the toy trading industry, faced declining competitiveness due to a traditional costing system that misrepresented project costs and reduced its ability to compete effectively in price-sensitive bidding environments. With a bid success rate of only 1 in 10 for large projects, TMX needed a more accurate approach to cost allocation, pricing, and strategic decision-making.
This decision-making case study examines how TMX evaluated three costing approaches: its existing costing system, a volume-based allocation model, and Time-Driven Activity-Based Costing (TDABC). Using real company data, the analysis highlights the trade-offs between pricing accuracy, profitability, capacity utilization, and implementation complexity. The case demonstrates how TDABC provides greater visibility into resource consumption, unused capacity, and project profitability, while requiring additional data collection and managerial commitment. Learners are invited to evaluate which costing methodology can best support competitive pricing, strategic cost management, and long-term business performance in a highly competitive SME environment.
Key Topics: Strategic Cost Management, Time-Driven Activity-Based Costing (TDABC), Cost Accounting, Pricing Strategy, Competitive Bidding Strategy, SME Performance Management, Capacity Utilization Analysis, Cost Allocation Methods, Managerial Decision Making, Profitability Analysis
Important Remarks
The research was conducted with the support and collaboration of Transmax Co., Ltd. (TMX) Managing Director Arnecht Kanchanatavee, who provided comprehensive access to the company's operational data, financial records, and strategic insights that form the foundation of this decision-making scenario, directly with real-world cost management challenges faced by SMEs in emerging markets.
Cover Photo: By Jakub Żerdzicki on Unsplash
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Disclaimers:
(1) Regarding Case Study Content: This case study is based mainly on secondary data and analysis of publicly available information unless otherwise stated, and is intended solely for educational purposes. Any opinions expressed by the author(s) are designed to facilitate learning discussion and do not serve to illustrate the effectiveness of the company. Additionally, banner images and logos used in the case study are intended for visualization in an educational setting and it is not used to represent or brand the company. For any dispute regarding the content and usage of images and logos, please contact the team.
(2) Regarding University Affiliation and Titles of Authors: The university affiliation and titles of author(s) seen in the case study is based on their affiliation and title during the time of publication. It may or may not represent the current status of said author(s).
