A Report on
Prn: 12020241117| Gandharv Gaurav|
Prn: 12020241118| Jaideep Sowani|
To be profitable, companies must not only earn revenues, but also control costs. If costs are too high, profit margins will be too low, making it difficult for a company to succeed against its competitors. In the case of a public company, if costs are too high, the company's may find that its share price is depressed and that it is difficult to attract investors. This report focuses on the corporate cost control strategies and tries to fulfill a few objectives such as * Why it is needed?
* What it deals with?
* What are the various strategies?
* Why Human Capital cost is the most important cost and how it should be controlled? * How it should be implemented?
Cost Management and Profit Maximization:
The key to control cost is to maximize profits. The first need is to understand the management style. Financial analysis is critical in making such decisions. But, there is a need to act with integrity and don’t be short-sighted or cut corner, it will come back to haunt you. Communication between various units and key constituents internally and externally is vital. Company must identify its pain points and inefficiencies to curb on various useless costs. A want v/s need analysis based on current expense and past data of expenses can help corporates in better cost management. Understanding types of Costs:
Identify what type of cost a company need to control. The various kinds of costs could be: Fixed v/s. Variable Costs, Debt-service costs, Infrastructure and Systems Costs, Human Capital Costs like Salaries, Benefits, Healthcare costs etc., Advertising and Promotional Costs, Overhead and Administrative Costs, Research and Development Costs. The type of cost you are trying to manage will dictate the strategy. Cost Control Techniques: