Chapter 4. Identifying Critical Costs in the Supply Chain
On October 21, 1993, the Wall Street Journal published an article by the don of business management, the late Dr. Peter F. Drucker, titled “The Five Deadly Business Sins.” One of the deadly sins Dr. Drucker mentions is cost-driven pricing. According to him, the “only thing that works is price-driven costing. Most American and practically all European companies arrive at their prices by adding up costs and then putting a profit margin on top.” He then adds: “If Toyota and Nissan succeed in pushing the German luxury auto makers out of the US market, it will be the result ...
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