Enhancing Business Sustainability and Competitive Advantage by Using a Strategic Mathematical Computing Model
Table 9
The summary of key research questions answered in the study.
Question
Answer
Is there significant difference on doing cost management across industry for reasons including profit contribution, revenue generation, company reputation, quality assurance, people management, or other specified?
No, no significant deviation exists across industries. However, manufacturers give significantly more importance to profit contribution and service companies give significantly greater importance to quality assurance.
Is there significant difference on the importance of cost management for the reasons (including profit contribution, revenue generation, company reputation, quality assurance, people management) if the respondent’s involvement in the cost management is taken into consideration?
No, the sample group of “individuals personally involved” did not differ significantly from the sample group of “individuals not personally involved” on the ranks for reasons of conducting cost management although the views on people management (the most insignificant category) do get close to significance at the 5% level.
Is reducing nonstrategic costs a path to failure? Can managing nonstrategic costs be a strategic advantage to business profit and sustainability?
Yes, reducing nonstrategic cost item is a wise move to enhance a firm’s strategic position and is not a roadmap created for business collapse. Managing nonstrategic costs by taking a strategic view can enhance a firm’s competitive advantage and sustainability. Managing nonstrategic costs is an alternative cost leadership paradigm to enhance business profit in difficult times
Is the assumption that nonstrategic costs accounting for 10 to 30 percent of a company’s revenue in line with reality? Is it meaningful to cut nonstrategic costs, the minor portion?
Yes, a review of 51 companies confirmed the assumption. Less attention is often given due to the nature of relatively small portion compared to strategic costs, resulting in higher saving rate and easier achievement from nonstrategic costs for standing out from competitors than from strategic costs.
