Cost control vs reduction
You'll learn the critical difference between cost control and cost reduction — two distinct strategies for managing organisational performance.
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In this lesson
- 0:00 Introduction to cost performance measurement
- 0:22 Cost control versus cost reduction approaches
- 1:03 Cost reduction as proactive strategy
- 2:06 Understanding product value components
- 4:14 Applying value analysis in practice
- 5:48 Cost control and reduction summary
About this lesson
Cost control techniques like budgeting and variance analysis aim to keep costs within set limits, whilst cost reduction techniques such as value analysis proactively lower costs without sacrificing customer value. This video explores how to identify which costs can be reduced by examining use value and esteem value, ensuring you maintain product functionality and market appeal whilst improving profitability. Essential for Performance Management and strategic decision-making across CIMA and ACCA qualifications.
Duration: 6m
Transcript
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