Strategic choice and operating decision in controlling cost

Question

What are strategic choices and operating decisions in controlling the cost drivers?

Answer 1

Strategic choices and operating decisions, A company’s cost can be driven down or up by a fairly broad variety of managerial decisions:

a. Adding or cutting the services give to buyers.

b. Incorporating more or fewer quality and performance features into the product.

c. Decreasing or increasing the number of various channels utilized in distributing the firm’s product.

d. Lengthening or shortening delivery times to consumers.

e. Putting more or less stress than rivals on the use of wage increases, incentive compensation, and tassel profits to motivate employees and increase worker productivity.

f. Raising or lowering the specifications for purchased materials.

KEY CONCEPT: Outperforming rivals in controlling the factors that drive costs is a more demanding managerial exercise.