We won't sugar coat it...cutting costs sucks.
But sometimes it is the only option. Whether your business is looking to stay in business, gain efficiencies or shift to a cost leadership strategy.
In our experience, companies will seek to improve their cost structure:
- Adjusting to new / emerging market conditions and competition
- Changes in political climate resulting higher costs from changes in regulation and / or taxation
- Planned business events: freeing capital for eventual acquisition or merger, launching a new service / product or expanding geographies
- Following years of capital intensive development that now needs to shift to a lower-cost operation
- Higher-than-industry costs for labor, supply chain, information technology or other "enabling" or non-revenue generating units
What is Cost Leadership?
For a detailed explanation - dig into Porter's "generic strategies".
Cost leadership as a strategy has been employed by many large multi-national companies including notable brands such as Walmart, McDonalds, IKEA, and Southwest Airlines. For these organizations, competing on cost is their primary strategy and is deeply engrained into their culture and decision making. However, every company can benefit from better understanding their costs and optimizing them.
Let's tackle cost structure improvement together...
in two steps.
Set the objectives...
The decision framework below helps set objectives and targets for the Cost Structure Improvement Program (CSIP). The overall approach and timing is dictated by the financial state of the organization - this ensures the right priority is set.
Then move forward.
Now that the objectives have been set, its time for action. With our proven roadmap we can help make the journey easier. Move forward with clarity, vision and confidence that the efforts and sacrifices of you and your team will pay dividends. Beniva can help with any or all of the stages of this journey bringing the toolkit and necessary structure for success. Contact us to learn more.
Want more info on cost leadership and cost structure improvement? Check out our blog post.