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a market situation in which the operating company faces economic difficulties

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Describe a market situation in which the operating company faces economic difficulties and the need to cut costs. What cost cutting strategies might the operating company use to remain profitable? What would be the benefits and drawbacks of each?

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Solution Summary

This solution provides a discussion of cost cutting strategies. Additionally, one reference is included for further research on the topic.

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Answer:
This happens when the company is operating in a perfectly competitive market. In this market the company can't increase the price of goods as they are the price takers not the price maker. Also due to huge competition and a large number of players in the market, it's very important to get the competitive advantage. This competitive advantage can only be achieved through cost reduction. Thorough research is required for this cost ...

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  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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