Case Study Of Group X For Cost Control

Company A and B are assumed to have the same competitive advantages and the same quality of product. By applying Cost Control measures, Company B can produce the product at a lower price and achieve larger market share than Company A. Because of mass production with economies of scale and achieving the target market share, Company B can lower their average fixed cost. The above example is to exhibit the importance of cost control.In recent year, most companies face with difficulties of economic downtrend, deflation and decrease in market demand. Nevertheless, government owned enterprises in China have the competitive advantages of cheaper labors, lower rental, abundant resources and mass production with economies of scale. As a result, they can operate at lower cost and eventually they can seize more market share by selling at lower price. On the other hand, Companies in Hong Kong operate at relatively higher cost with dramatic competition. Therefore, if Companies have to struggle for survival, it is high time for them to achieve cost optimization in all sides.The purpose of my research about the important issues of Cost Control is to provide companies more practical and creative methods in order to improve their competitiveness. By applying Case study of Group X, I hope to provide effective cost control method in all aspects with comprehensive and selective recommendations. In the real world aspect, after Group X has adopted all kinds of Cost Control methods since 1997, they can demonstrate to turn successfully from loss to profit by cost reduction.