Page 11 - Cost_Competitiveness
P. 11
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The Institute of Cost Accountants of India
organisation against the attributes. Ide- static and overwhelmingly concerned
ally, one should target to be the best in of stability, become resistant to changes
each of the attributes. and fade out in the long run.
Similarly, while checking the cost com- In today’s fast paced world, there is a
petitiveness, one should identify each continuous change in technology, hu-
element of cost. For example, the broad man needs and aspirations. Products like
heads would be the material costs, la- the alarm clocks and cameras have been
bour costs, overhead costs, cost of inven- replaced by the smart phones, brick and
tory holding, cost of distribution, cost of mortar shops are giving way to e-stores
services, cost of debtors aging and so on. and new sets of demands like public
One should typically compare the data health and geriatric needs are surfacing
published in the annual reports of com- giving rise to new products and services
petition and bench mark one’s own or- to meet such needs. Every organisation
ganisation for each of the elements of has to be sensitive to these changes as
cost. Of course, this is easier said than stagnation is a precursor to death.
done because balance sheet data are
not always comparable across organisa- Q.
tions. What policy an organiza-
tion should take to differentiate its
There are several other indirect methods
of checking cost competitiveness, one products and/or services from that
of them being, conducting a lost order of its close competitors?
analysis. Any order lost is bad news, but it
is also a source of information and learn-
ing of an organisation’s inadequacies A. Every product and / or services must
and weaknesses. The cause of loss of or- have its own Unique Selling Proposition, or
der must be captured and the weakness- what is called its USP. Price can of course
es must be worked upon. be an USP and certainly not the only
one. For example, a company like Eure-
Q. What special attributes or ka Forbes chose direct marketing as their
USP and was very successful at that. Some
abilities give an organization a companies provide after sales support
and warranty, an example being Delsey
competitive edge? for soft luggage. Horlicks targets the el-
derly while Complan the growing child.
The moot point is the every organisation
A. An organisation which is sensitive must choose the USP for the product or
to the market, listens to the customer’s service and build on that for differentiat-
voice, is receptive to ideas and is ever ing its offering from that of competition.
changing by shifting its own goal posts
can survive and remain in competition Author can be reached at :
in the long run. An organisation which is s_chaki@mbecl.co.in
www.icmai.in
The Institute of Cost Accountants of India
organisation against the attributes. Ide- static and overwhelmingly concerned
ally, one should target to be the best in of stability, become resistant to changes
each of the attributes. and fade out in the long run.
Similarly, while checking the cost com- In today’s fast paced world, there is a
petitiveness, one should identify each continuous change in technology, hu-
element of cost. For example, the broad man needs and aspirations. Products like
heads would be the material costs, la- the alarm clocks and cameras have been
bour costs, overhead costs, cost of inven- replaced by the smart phones, brick and
tory holding, cost of distribution, cost of mortar shops are giving way to e-stores
services, cost of debtors aging and so on. and new sets of demands like public
One should typically compare the data health and geriatric needs are surfacing
published in the annual reports of com- giving rise to new products and services
petition and bench mark one’s own or- to meet such needs. Every organisation
ganisation for each of the elements of has to be sensitive to these changes as
cost. Of course, this is easier said than stagnation is a precursor to death.
done because balance sheet data are
not always comparable across organisa- Q.
tions. What policy an organiza-
tion should take to differentiate its
There are several other indirect methods
of checking cost competitiveness, one products and/or services from that
of them being, conducting a lost order of its close competitors?
analysis. Any order lost is bad news, but it
is also a source of information and learn-
ing of an organisation’s inadequacies A. Every product and / or services must
and weaknesses. The cause of loss of or- have its own Unique Selling Proposition, or
der must be captured and the weakness- what is called its USP. Price can of course
es must be worked upon. be an USP and certainly not the only
one. For example, a company like Eure-
Q. What special attributes or ka Forbes chose direct marketing as their
USP and was very successful at that. Some
abilities give an organization a companies provide after sales support
and warranty, an example being Delsey
competitive edge? for soft luggage. Horlicks targets the el-
derly while Complan the growing child.
The moot point is the every organisation
A. An organisation which is sensitive must choose the USP for the product or
to the market, listens to the customer’s service and build on that for differentiat-
voice, is receptive to ideas and is ever ing its offering from that of competition.
changing by shifting its own goal posts
can survive and remain in competition Author can be reached at :
in the long run. An organisation which is s_chaki@mbecl.co.in
www.icmai.in
