Company strategy

A business company is an institution established for the purpose of making profit. It's a big organisation which is operated by individuals. Their share of ownership is represented by shares. In order to operate successfully a company has to have its strategy. The company strategy must be flexible enough and take into consideration the changing market conditions. The main objective here is to gain a market share, and in order to achieve it, it's necessary to reduce prices. But if you reduce prices, your margins will be lower, and that will cut profits.

If you can slowly increase production, you will be able to cut unit costs though it seems to be a long-term prospect. Unit costs can come down if you invest in new plants and machines. Let's try to define the company strategy from the point of view of the market and manufacturing.

If you think that increased market share is the main objective in the company strategy, you are highly mistaken. First of all you should go in for a higher profitability. If you can upgrade the product, you are sure to get better prices and therefore higher profits.

You should bear in mind that the market is very competitive now. If you increase prices, whatever the quality, sales may drop rapidly. Let's look at the problems from the manufacturing view-point. If you can reduce costs in manufacturing, it'll put you in a strong position and enable you to adapt to the market. The only way you can become flexible enough is to subcontract more of the production.

It means job losses if you do that, but the jobs which remain will be more secure.

Vocabulary

for the purpose of – с целью

share of ownership – доля собственника

to operate successfully – действовать успешно

to take into consideration – принимать во внимание, учесть

main objective – основная цель

to gain – получать, приобретать, извлекать пользу

to reduce (to cut) prices – понизить цены

margin – прибыль

to increase production – увеличить производство

unit costs – стоимость изделия

to come down – уменьшаться, снижаться

to be highly mistaken – глубоко ошибаться

to go in for higher profitability – стремиться к увеличению прибыльности

to upgrade – повысить качество, совершенствовать

to bear in mind – помнить, иметь в виду

to enable smb. to do smth. – дать возможность кому-то что-то делать

to subcontract more of the production – заключать больше субдоговоров по линии производства

job losses – потеря рабочих мест

to be secure – быть стабильным, гарантированным