firstname.lastname@example.org The DNA of a company is its vision and mission, whether the company is able to churnout the ‘Value for Money’ for its people, stakeholders and society at large is the companythat is able to sustain itself in the long run. The success of likes of Wal Mart, Reliance,Microsoft are a standing testimony to the story, today they are brands with which peoplecan associate themselves well. What drives these companies to become the eye candies of its customers is the simple –
Value for Money.
What defines the success of Wal Mart, for instance, is its strong cost cutting physics.Wal-Mart's everyday-low-price position and its low cost structure with streamlinedlogistics and distribution network is what distinguishes Wal Mart from its peers. Thesuccess and sustenance of every company is dependant on its strategies on costmanagement.Many schools of thoughts may contest that, sales volumes, dynamic marketing tactics,product’s unique selling point are equally if not more of the driving forces behind thesuccess of a company. True, that it a culmination of more than one factor that drives thesuccess story of a company, but there is one factor behind each of these factors that helpsin placing these strategies right, that is a disciplined and continuous monitoring of costs.When times are hunky dory organizations spend millions on developing that customercontact but when times are harsh, the first thing every firm irrespective of the size ‘cutscosts.’ We have witnessed one such recessionary period in the recent times and it wouldbe logical to take cues from the recent recessionary phase to reiterate our point.
What marks the recessionary phase:
It is the Darwin’s theory that holds much relevance especially in such testing times, whenthe economies are bearish consumer spending is at the abyss but the cut throatcompetition remains. Recession is trying time for businesses. Revenues drop, costs seemto be unmanageable and the bottom-line becomes a bottomless pit. This is when theFinance guys are brought in to take charge and manage costs. Headcount is pink-slipped,travel budget is reduced, long distance calls are banned, stationery supply is curtailed andthe free cups of tea are stopped.Is cost management critical only during troubled times like “Global Meltdown”? Is costmanagement less important during periods of high growth and prosperity? Businessleaders tend to focus on revenue growth during normal and boom times and allow coststo inflate beyond necessity. Then, during slowdown period and recession they switch