Should cost analysis ("should costing") was developed by the Defense Department to assist procurement officers in determining... READ MORE
Do Apple and Cisco Need Should Cost Analysis?
Why do companies like Cisco and Apple use should cost analysis? On the surface, it might seem with all that money and all those loyal customers they can afford to make a few blunders and send out a few exorbitantly high-priced runs. The fact is, they know better.
The world's most competitive companies have stockholders watching to see if profits go down, and customers watching the price of their products. All the while, the competition is lurking around the corner, ready with lean production lines and a well-trained workforce, primed to steal a portion of their market share.
As soon as a customer even thinks of turning to Samsung or HP (for example) for their tech needs, Apple and Cisco know it means trouble. They ultimately stand to lose far more than the sale of a single iPod or network router. They also lose the profits from follow on sales of their proprietary, integrated systems and services. Smart companies know they are not simply selling a device, but their company name.
The trick to satisfying both investors and end-users is producing at the lowest possible cost. That is where should cost analysis comes in. Especially for companies like Cisco and Apple where branding and customer loyalty is everything, should cost analysis is a key aspect of their business because it is the proven method of consistently achieving the lowest possible production costs.
Further Reading: Why You Need To Do Should Cost Analysis
This post originally appeared on the DigiSource Blog