THE ROLE OF TARGET COST MANAGEMENT APPROACH IN REDUCING COSTS FOR THE ACHIEVEMENT OF COMPETITIVE ADVANTAGE AS A MEDIATOR: AN APPLIED STUDY OF THE IRAQI ELECTRICAL INDUSTRY

Abstract

Target cost management (TCM) contributes to cost reduction amidst the intensive competition faced by industrial companies, which is the central premise of the research.

It seeks competitive advantage (CA) to obtain the largest market share, attract customers, and maximize profits. This study aims to determine the role of CA as a mediator between TCM and Reduced costs (RC) in Iraqi industrial firms, given the intense competition faced by state-owned government companies. The research sample consisted of a set of employees from the General Company for Electrical Industries in Iraq, and the questionnaire was distributed to these workers. Using structural equation modeling, the mediating role of CA was evaluated. The study drew several conclusions, the most significant being that TCM affects RC. We also discovered that CA's function as a mediator strengthens this relationship. The results of this study indicate the significance of continuous improvement, which requires that industrial companies in Iraq pay attention to the need to adopt the CA as a means that helps these companies to obtain the largest return in order to sustain their activity and compete with local private companies and imported goods, which is reflected in the achievement of returns and financial savings for it and its employees in order to conduct future expansion.