INITIATIVE Definition

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INITIATIVE is a key action program developed to achieve objectives or close gap between measures performance and targets. Initiatives are often known as projects, actions, or activities. They differ from objectives in that they are more specific, have stated boundaries (beginning and end), have a person/team assigned to accomplish them, and have a budget. Several initiatives taken together may support a specific objective or theme. It is important for an organization to define the boundaries for Initiatives, such as “all strategic projects over $500k in size”. It is also important that Initiatives be strategic in nature, and not “operations as usual” projects, such as “Recruit a new Sales Rep." Example: “Develop Quality Management Program”, “Install ERP System”, “Revamp Supply Chain Process”, “Develop Competencies Model."

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CUSTOMER ACQUISITION COST is calculated by dividing total acquisition expenses by total new customers. However, there are different opinions on what constitutes an acquisition expense, e.g. rebates and special discounts do not represent an actual cash outlay, yet they have an impact on cash (and, presumably, on the customer). There is no set standard, i.e. acquisition costs vary across industries. When acquisition data is available, it is best to try to determine if you are comparing apples to apples. This is not easy, as customer acquisition data is usually scarce and the methodology is often questionable.

IAS see INTERNATIONAL ACCOUNTING STANDARDS.

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