haku: @author Eilon, S. / yhteensä: 49
viite: 4 / 49
| Tekijä: | Eilon, S. |
| Otsikko: | A managerial response to falling demand |
| Lehti: | Omega
1993 : JAN, VOL. 21, p. 17-23 |
| Asiasana: | PROFIT MODELS RECESSION |
| Kieli: | eng |
| Tiivistelmä: | A sharp fall in demand for goods can have a devastating effect on corporate performance. For the short term possible managerial responses may include: (1) reduce price to stimulate demand; (2) increase advertising and promotion expenditure, again to stimulate demand; (3) reduce unit cost to improve the competitiveness of the product and thereby ward off a fall in profitability. This paper is concerned with the third option, assuming that price and promotion expenditures remain unchanged. The paper explores how actions taken to reduce fixed and variable costs can affect profit, profit margins and unit cost, and proceeds to explore the degree of cost reductions that are necessary to maintain the original profit level that pertained prior to the fall in demand. |
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