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Диплом  The reduction of product cost as a method of increasing the ability to compete on the international market

Содержание:

1. Introduction……………………………………………………………………………... 3

2. Theoretical part…………………………………………………………………….......... 5

2.1. The concept of product cost......………………………………………………......... 5

2.2. The expenses contributing to the product costs......………………………………… 6

2.3. The expenses related to the operating of the harvester machinery.......................... 8

2.4. Techniques and ways of reducing costs………......………………………………... 15

2.5. Why is it necessary to reduce the expenses of a business……………………….. 18

2.6. The businesses’ ability to compete on the international markets………………… 19

2.7. The reduction of expenses in the period of crisis…………………………………... 20

2.8. Profitability of production: concept, types, definition, methods of calculation......... 21

2.9. Prime risk factors related to the business activity of the company.....…………….. 25

3. Practical part……………………………………………………………………. 28

3.1. The description of the company and its achievements...…………………………… 28

3.2. The analysis of the current situation of the company……………………………… 33

3.3. The competitive position of the company.…....……………………………………. 34

3.4. The analysis of cost reduction and recommendations.....…………………………... 35

4. Conclusion………………………………………………………………………………. 48

5. Bibliography ……………………………………………………………………………. 49





Introduction

A large number of the companies of the forest industry, including those, who are specializing in timber processing, its secondary products, and delivery, are fighting for survival in the current conditions of worldwide economic downturn.
Effective July 1, 2007 Russia has raised the dues on export of round timber 2.5 times — from 4 to 10 euros per cubic meter (20% of the customs value), from April 1, 2008 — to 15 euros per cubic meter, and by 2009 the dues are forecasted to increase to 80% of the customs value, but no less than 50 euros per cubic meter.
Without a doubt, to maintain the ability to compete in the conditions of the declining demand, the companies of the wood export industry need to go through significant changes. How would the companies of the industry be able to realize this reorganization - based on the long overdue consolidation of assets (especially in Europe), the changes in the business model, or the combination of the both approaches - this question remains open.
The aim of the research: The reduction of the production costs as a method of increasing the ability to compete on the international market.
The actuality of the research consists of the fact that export of timber to Finland is no longer profitable for the wood processing companies, and to maintain their competitive ability they must not only reduce their costs, including shipping, logistics and customs, but also expand the distribution area and the product mix directed towards domestic as well as the international market.
Therefore, the topic of research is not only relevant, but also has the practical application.
The goals and objectives: The goal of the diploma research is to provide recommendations regarding the reduction of production costs of the analyzed company and give suggestions on how to maintain the ability to compete on the international and domestic markets.
The goal of the research will be reached through performing the following tasks:
1. To review the theoretical aspects of the reduction of the product costs and gaining the competitive advantage;
2. To analyze the current state of business of the analyzed firm;
3. To analyze the current expenses, product costs and area of distribution;
4. To analyze the operating costs of the harvesting machinery; ;
5. To analyze the risks related to the business activity of the company
6. To provide recommendations regarding the expansion of the distribution area;
According to the tasks, the diploma research consists of introduction, theoretical part, practical part, conclusions, and the list of the used publications.
The theoretical and methodological foundation of this diploma research is based on the research done by the Russian and international scientists on product valuation and improvement of marketability.

Диплом  The reduction of product cost as a method of increasing the ability to compete on the international market