COST REDUCTION STRATEGY – PROCESS AND EFFECTS
COST REDUCTION STRATEGY – PROCESS AND EFFECTS

Summary/Abstract: The strategy of cost leadership, although always current, acquires special importance in the time of crisis. Cost reduction, savings program, savings measures, etc. are used as synonyms for this strategy; finally, all of these express the need to reduce costs for an enterprise. Enterprises make the cost reduction program which includes mandatory stages of reduction, reduction tools and the most appropriate strategies. The choice of tools depends on the chosen strategy, but the stages cannot be skipped or omitted within the strategies. Firstly, the present paper presents five stages through which the cost reduction program must pass, then a set of tools that can be used for reduction, and the differencies between cost reduction strategy and program of layoffs.

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