Does Pricing Strategy Increase the Competitive Advantage of Companies Implementing an ABC System?

This study aims to investigate the extent to which pricing strategy creates an effective competitive advantage for
companies implementing an activity-based costing (ABC) system in their production activities. The research data were obtained
through a questionnaire-based survey of several manufacturing companies in Indonesia that implement ABC systems. This
research used the Structural Equation Model with Partial Least Square statistical method. The results of this research indicate
that those companies who apply an ABC system are capable of making their pricing strategy more effective and increasing their
competitive advantage. The empirical results show that price competition is unavoidable among manufacturing industries.
However, implementing an ABC system can increase manufacturing companies competitive advantage. Thus, the implementation
of an ABC System employs pricing strategy as a determinant factor of competitive advantage. This research supports the results of
previous studies that also concluded that there is a strong relationship between ABC systems and competitive advantage. In
addition, this research found that pricing strategy can improve competitive advantage with implementation of an ABC System.