Factor analysis of production costs and competitiveness

Effective and meaningful factor analysis the cost of production allows you to explore all the factors that affect generation costs. It includes the study of permanent factors and variables, and the ratio between them. Modern tendencies of development of market relations clearly demonstrate the growing influence of such a measure as the competitiveness of goods, which the company represents in the relevant market.

Studies show that if the competitiveness of goods tends to decrease, then among the main reasons of this process at the micro level can be called such:

• Insufficient degree of market adaptation;
• Reduced internal competition;
• Passive strategy of an enterprise, limiting its innovative-investment activity (constraining the implementation of measures to improve the quality of goods);
• Moral and physical wear of equipment;
• A lack of professionalism in the management of the company;
• Low level of staff motivation for effective work;
• High level of resource intensity of products in manufacturing costs;
• Cost-based pricing strategy.

Modern factor analysis the cost of production and the level of competitiveness allows to identify the following areas of improvement:

• Rational use of resources and providing a market advantage;
• The formation of a competitive environment;
• Development and implementation of the enterprises ' competitive strategies;
• Marketing activities to create demand for the product;
• Providing the company with resources and information;
• Development of intellectual potential in the intangible assets of the enterprise, the implementation of which ensures the production of high-tech goods;
• Implementation of scientific discoveries and inventions, the use of technological breakthroughs, stimulating increased demand for new products;
• Creating conditions for the formation of economic freedom and market-based pricing, which allow the enterprise with limited resources to effectively address three important problems of Economics: what, how and for whom to produce;
• Planning for the cost of production;
• Improvement of the systems and strategies of state regulation.

Factor analysis of production costs shows that the management of the products competitiveness in enterprises based on planning, promotion and evaluation of its level, including the assessment of the overall efficiency (economic and financial standing, technical and technological status, levels of production and management). All this with government support allows you to establish a system of competitiveness of goods, which includes:

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1. A complex of measures on increase of social and technological enterprise (strengthening the innovation base and improve the organization of innovation, accelerated implementation of investment policy in accordance with the development priorities of the enterprise; fundamental restructuring of the training system, improving production conditions; the transition to modern methods of analysis of production costs, the clarification of roles and improvement of quality management of goods and labor; certification and standardization of products);
2. The development of economic, technical, organizational and social activities (which factor analysis the cost of production includes as the base) to reduce the resource intensity and costs;
3. Improving service, organization, advertising and studying the market of goods;
4. Introduction of a new system of competitiveness management, involving the organization of effective activities of all employees in solving problems of product quality; creation of creative groups and “responsibility centers”; the planning of production costs; measures to provide dynamic development of the company.

In the market, a cost analysis based on the parameters of competitiveness allows you to accurately set the trends in this indicator, to give an objective and comprehensive evaluation of the enterprise.