Economic-based enterprise operation using cost management strategy

Аuthors

Khomutova Y. V.

Moscow Aviation Institute (National Research University), 4, Volokolamskoe shosse, Moscow, А-80, GSP-3, 125993, Russia

e-mail: k502@mai.ru

Abstract

An ordinary method to evaluate enterprise activity based only on analysis of financial indices do not allow to react rapidly on changing market situations in hard competition conditions. A profit is considered traditionally as the main index describing an effectiveness of a business. Therefore some danger exists to pay this index too much attention. In this case other aspects of the enterprise activity including innovations, client policy, personnel qualification etc. cannot obtain proper attention. Such approach can results in great negative profit, in decreasing of the enterprise market segment and in a crash as the final result. According to a modern approach to business activity evaluation an enterprise cost must be the baseline index of enterprise effectiveness instead of the profit. A value of the approach is confirmed by extensive experience of the world economy. This experience demonstrates an importance of the enterprise cost as the evaluation index to enhance enterprise competitive ability.