Cost Leadership Term Paper

Cost Leadership Term Paper-89
Until recently, we enjoyed many years – almost a full generation of strong global and domestic business growth.Much of the growth in the US was fueled by a prolonged period of low interest rates and readily available credit that helped drive an unprecedented commercial and residential real estate surge.Only then can they play a value-adding role that transforms challenging times into a period of growth, enhanced self-confidence, and innovation-driven success.

Until recently, we enjoyed many years – almost a full generation of strong global and domestic business growth.Much of the growth in the US was fueled by a prolonged period of low interest rates and readily available credit that helped drive an unprecedented commercial and residential real estate surge.Only then can they play a value-adding role that transforms challenging times into a period of growth, enhanced self-confidence, and innovation-driven success.

Although it’s hard to fault a business for aggressive marketing, we’re still concerned today about the negative impact of too much outsourcing on effective leadership development, decision-making objectivity, stifling innovative thought, and the appearance of conflicts of interest.

Some individuals actually blame the “tool” for the failure.

Their blend of cost consciousness and customer focus across their value chain, including key suppliers, is part of what’s sustaining them as a leader in this challenging economy, especially for retailers.

Note that Wal-Mart’s cost leadership achievement was built, established, and embedded in their culture during the “good times” that proceeded the current recession and not as a reaction to it.

In every business challenge context, there have always been winners and losers.

We would like to share how we need to alter our focus to help improve opportunities for business success in this challenging time.The model can be disaggregated into components that represent process steps, activities, and decision points.Also, based on surveys at a variety of companies in various industries, we believe that the overall reputation of the finance and accounting function and leadership has improved materially over the last 20 years.Beyond our shores, Brazil, Russia, India and China have grown in dramatically different ways but have increased the global demand for basic commodities including oil, gas, and steel. recession, however, has impacted the rest of the world.More recently, the basic solvency of several European countries has come into question. It certainly isn’t the same as it was in the 1980s when economists would joke, “America sneezes and Japan catches pneumonia.” Nevertheless, in spite of the significant and impressive growth of other economies, the world is increasingly interdependent economically.Managers and leaders in product development, marketing, manufacturing, logistics, distribution, and other functions may be more open to what an accounting or finance professional can offer with a view toward supporting profitable business growth.But there’s one caveat: finance and accounting professionals must know the business, know the business jargon, and know the personality type of their target customer.Cost leadership is characterized by four primary criteria: (1) recognition as the lowest cost producer in one’s industry, without compromise in quality or customer focus; (2) realization of a long-term cost-centric culture where cost consciousness is a across functional lines and independent of the vagaries of financial markets; (3) dissemination of cost information with regard to customer, product, distribution channel, and the like that is timely, understandable, credible, and actionable and is made available to decision makers to fuel continuous improvement; and (4) aggressive and balanced performance targets are established across the value chain.Achievement of these targets is recognized, rewarded, shared, and celebrated.Given most managers’ lack of orientation, preparation, or temperament for a recessionary period, their first response and reaction is usually: These negative and dysfunctional reactions will proliferate, will influence and will dominate an organization that isn’t proactive in promoting innovation and creating a cost leadership culture, strategy, and practice that’s backed up with coherent planning, initiatives, and actions.The purpose of this article isn’t to bemoan or critique the past but to focus on how business leaders can (and must) flex and change to meet the needs of the new economy we face.

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