How they control cost: 09-August-08
Sourav Mitra -
Sunday, August 10, 2008 4:59 PM
Gap, apparel chain:
1. It has reduced inventory by a third
2. It has reduced the time it takes to move clothes from concept to rack from 12 to 9 months.
3. It has reduced TV ads
[Click here for full story at Businessweek.com]
Lower inventory + less time to market products = lower costs
Less advertising = lower costs (but with lower customer mindshare)
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OAO Mechel, a Russian coal and steel producer:
It delayed the sale of 55 million shares to fund a $5.2 billion upgrade and expansion of its production because of slumping financial markets.
[Click here for full story at Bloomberg.com]
Postponing share issues until financial markets recover = more collections = lower cost of finance
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Toyota Motor Corp., the world's second-largest carmaker, with a 28 percent profit drop in the three months ended June, after increasing accounting provisions for possible loan defaults and drops in residual values of leased vehicles:
It will halt U.S. production of Tundra pickups and Sequoia SUVs for three months from August.
[Click here for full story at Bloomberg.com]
Discontinuing unprofitable products = cost savings