What are the problem companies face with cost?How to cut costs strategically?
Majority of managers are following the theory of cost reduction, which is not the key in every stage. To be more strategic you have to apply expense reduction, which makes you identify what to apply and what is strategic to apply? In fact, managers must go for the activities that make them win the market competition.
How can we implement these strategies in companies?
We can do that by, eliminating activities that are not important to the company and concentrate on what is essential. Executive management must make this kind of decision to make sure that the cost reduction theory is applied.
Is it possible to implement this strategy in the short run?
Most of the managers do not believe that we can apply this idea quickly. In fact, if the manager knows his\her job very well and understand the market competition, he\she will be able to apply the strategy very fast.
Can this strategy be implemented in one department or group rather than the whole organization?
This is the most important question. In fact, it is better to start step by step because you cannot apply the strategy for the whole organization in one night. You have to start step by step and get the feedbacks. To be safe, start with none-complex department first.
© ABDULRAHMAN NASEEB |Dr. SAMMER HAMMAD| KNG FAHAD UNIVERSITY OF PETROLUOM AND MINERALS
