Statements on Management Accounting
PRACTICE OF MANAGEMENT ACCOUNTING

TITLE

Value Chain Analysis for Assessing
Competitive Advantage

CREDITS
This statement was approved for issuance as a
Statement on Management Accounting by the
Management Accounting Committee (MAC) of the
Institute of Management Accountants (IMA). IMA appreciates the support of The Society of Management
Accountants of Canada (SMAC) in helping create this
SMA and extends appreciation to Joseph G. San
Miguel, of the Naval Postgraduate School, who drafted the manuscript.

Published by
Institute of Management Accountants
10 Paragon Drive
Montvale, NJ 07645-1760 www.imanet.org Special thanks are due to Randoif Holst, SMAC
Manager, Management Accounting Guidelines, for his continuing project supervision and to the members of the focus group (including MAC members Dennis Daly and Thomas Huff) for contributing to the improvement of the final document.

Copyright © 1996
Institute of Management Accountants
All rights reserved

Statements on Management Accounting
PRACTICE OF MANAGEMENT ACCOUNTING

Value Chain Analysis for
Assessing Competitive Advantage
TABLE OF CONTENTS
I.
II.
III.
IV.

Rationale . . . . . . . . . . . . . . . . . . . . . . . 1
Scope . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Value Chain Defined . . . . . . . . . . . . .1
Competitive Advantage and
Customer Value . . . . . . . . . . . . . . . . . . .2
V. The Role of the Management
Accountant . . . . . . . . . . . . . . . . . . . . . . .4
VI. The Value Chain Approach for
Assessing Competitive Advantage . . . . . .5
Internal Cost Analysis . . . . . . . . . . . . . . .5
Internal Differentiation Analysis . . . . . . .10
Vertical Linkage Analysis . . . . . . . . . . . .13
VII. Strategic Frameworks for
Value Chain Analysis . . . . . . . . . . . . . . .17

Exhibits