Proceedings of 9th Annual London Business Research Conference
4 - 5 August 2014, Imperial College, London, UK, ISBN: 978-1-922069-56-6
SMEs’ Cost Reduction Strategies of Eastern Thailand-based
Manufacturing Firms: Value Chain Analysis Approach
Somboon Saraphat*
The main purposes of this research are to explore a set of cost
reduction strategies, investigate the effectiveness of cost reduction
strategies, and also gather the facts needed to provide the supporting
measures to the entrepreneurs.
Collected 320 sets of data, accounted as 80 percent of the SMEs'
entrepreneurs, the analyzed cost
reduction strategies through the 5
key activities indicate that; the most crucial cost reduction strategy for the
research, development, and design is to continuously acquire knowledge
from the various medias; the most important aspect of the cost reduction for
the production activity is placed on the quality control over the all stages of
the production processes; marketing activities place the greatest importance
on giving the discount based on the purchased quantities; the immediate
response is
considered the most important dimension to the cost
reduction strategy implemented by the customer services.
With regard to the cost reduction effectiveness, it is found that the
various cost reduction strategies through the research, development, and
design cause an improved internal process and created innovation, including
trigger the positive customer response, enhanced cost effectiveness, and
higher asset utilization, and the potential revenue and profit growth. The
cost reduction strategies via the production processes lead to the greater
organizational learning and growth, an innovative internal process, a positive
customer response, and higher cost effectiveness. Like distribution-based
cost
reduction methods, the higher learning and growth and the cost
effectiveness are also due by a wide
range of cost reduction strategies in
the area of the marketing. Besides, the customer service-based cost
reduction strategies can also result in an improved internal process and
innovative operation,
customer satisfaction, highly achieved cost
effectiveness, an increased worthwhile asset utilization opportunity for
revenues and profit be generated.
*Asst.Prof Dr. Somboon Saraphat, Section of Managerial Accounting, Faculty of Management Sciences,
Kasetsart University Si Racha Campus, Thailand Australia, Email: fmssbs@src.ku.ac.th