Compulsions for Cost Reduction and Responsiveness

Regional Excellence: Governing Together to Compete Globally and Flourish LocallyCompanies that compete globally generally face two types of competitive pressures: pressures for cost ir?t=vishaalslair 20&l=bil&camp=213689&creative=392969&o=1&a=1886152241reductions and pressures to be locally responsive. International companies must cope with pressures for cost reductions. This is more so for industries producing commodity-type products such as bulk chemicals, petroleum, steel, sugar, etc. for which price is the main competitive weapon. Pressures for cost reductions are also severe in industries in which the competitors are based in low-cost locations.

Liberalisation of the world trade environment is also expected to generally increase cost pressures because of greater international competition. Countering pressures for cost reductions requires that a company minimise its unit costs. To attain this goal, a company may have to base its value creating activities at the most favourable low-cost location anywhere in the world and offer a standardised product globally in order to ride down the experience curve as quickly as possible.

Managing in the New World of Manufacturing: How Companies Can Improve Operations to Compete GloballyIn contrast, responding to pressures to be locally responsive requires that a company differentiate its product ir?t=vishaalslair 20&l=bil&camp=213689&creative=392969&o=1&a=0136171435offering and marketing strategy from country to country in an effort to cater to the different consumers’ tastes and preferences, business practices, distribution channels, competitive conditions, and governmental policies. Since differentiation across countries can involve significant duplication and a lack of product standardisation, it may raise costs. Dealing with these conflicting and contradictory pressures is a difficult challenge for a company, mainly because being locally responsive tends to raise costs.

5 Comments on "Compulsions for Cost Reduction and Responsiveness"

  1. In MBA course one gets the deep knowledge of each and every subject of his/her stream.Case studies, Industrial Visits, Workshops, Internships are part of their course.
    On the other hand, PGDM is like a diploma and generally its a short duration course.
    Mostly working people prefer to go for PGDM.

  2. We can not decide which one is better? But Having an MBA degree means that you can go ahead to pursue a Phd or any other course that can be done Post Graduation and PGDM does not give you the option to do further studies from a recognized university.

  3. Actually,
    the difference is only in name. All that matters are the institute from where
    the course is pursued rest all difference is insignificant.

  4. People who’ve done pgdm shall always try to justify… That’s just inferiority complex.A masters degree is always superior to diploma…. Period!

  5. People who’ve done pgdm shall always try to justify… That’s just inferiority complex.A masters degree is always superior to diploma…. Period!

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