Updated: Jun 14
Cost is one thing that is purely negative in nature. It is always debited and is a huge burden. All the organizations work copiously towards fragmenting the costs for their products, processes, resources and functioning. The cost trimming ideology is prevalent from long ago and still masters the business economy at a great proportion. The sole motive behind such fragmentation is to increase the volume of profits.
Returns can be maximized only when the costs are low or the price set for the sale in high. In both the cases, the emphasis is laid on increasing the spread or the margin.
Cost trimming has many pros and cons. The best thing is that this strategy makes room for bigger returns but on the other scale it creates gaps in quality. Thus, we can make out that this strategy will work only for short term and in longer arena it tends to customer loss and decline in sales.
The best take here is to cut the unnecessary costs rather than going for force cuts. The results will be aggrandized only when the quality will be maintained along with possible cost cuts.