{"id":26154,"date":"2015-03-04T03:37:31","date_gmt":"2015-03-04T03:37:31","guid":{"rendered":"http:\/\/vskills.in\/certification\/blog\/?p=26154"},"modified":"2024-04-03T13:15:49","modified_gmt":"2024-04-03T07:45:49","slug":"industrial-strategy","status":"publish","type":"post","link":"https:\/\/www.vskills.in\/certification\/blog\/industrial-strategy\/","title":{"rendered":"Industrial Strategy"},"content":{"rendered":"

\"Industrial<\/a><\/p>\n

A large number of companies operating in cyclical sectors made a mistake by
\nraising their breakeven point through heavy investment. In fact, they should
\nhave been seeking to achieve the lowest possible breakeven point and, above all,
\nthe most flexible possible cost structure to curb the effects of major swings in
\nbusiness levels on their profitability.
\nFor instance, integration has often turned out to be a costly mistake in the
\nconstruction sector. Only companies that have maintained a lean cost structure
\nthrough a strategy of outsourcing have been able to survive the successive cycles of
\nboom and bust in the sector.
\nIn highly capital-intensive sectors and those with high fixed costs (pulp, metal
\ntubing, cement, etc.), it is in companies\u2019 interests to use equity financing. Such
\nfinancing does not accentuate the impact of ups and downs in their sales on their
\nbottom line through the leverage effect of debt, but in fact attenuates their impact
\non earnings.
\nA breakeven analysis provides a link between financial and industrial strategy.
\nWhen a company finds itself in a tight spot, its best financial strategy is to reduce its
\nfinancial breakeven point by raising fresh equity rather than debt capital, since the
\nlatter actually increases its breakeven point, as we have seen.
\nIf the outlook for its market points to strong sales growth in the long term, a
\ncompany may decide to pick up the gauntlet and invest. In doing so, it raises its
\nbreakeven point, while retaining substantial room for manoeuvre. It may thus
\ndecide to take on additional debt.<\/p>\n

Click here for government certification in Management<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A large number of companies operating in cyclical sectors made a mistake by raising their breakeven point through heavy investment. In fact, they should have been seeking to achieve the lowest possible breakeven point and, above all, the most flexible possible cost structure to curb the effects of major swings in business levels on their…<\/p>\n","protected":false},"author":600,"featured_media":26367,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[1533],"tags":[2474,2475,1770,2476,2172],"class_list":["post-26154","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management-2","tag-break-even","tag-cost-structure","tag-investment","tag-leverage","tag-strategy"],"acf":[],"yoast_head":"\nIndustrial Strategy - Vskills Blog<\/title>\n<meta name=\"description\" content=\"What are the various aspects of Industrial Strategy?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/blog\/industrial-strategy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Industrial Strategy - 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