Cost Structure Strategies: An Empirical Study in the Software Industries in India

Abstract

Cost structure issues in recent years gained momentum in the context of attaining competitive advantage of the firms competing globally. The present study attempts to investigate the nature of cost components and its impact on Reported Net Profit of the firms during the financial meltdown regime to formulate appropriate strategy for avoiding their financial distress. The software companies, victim of current recession, are considered for study covering 8 years from 2004-05 to 2011-12. Research outcome shows that overseas demand slowdown coupled with immunity in reducing the cost components led to aggravating financial woes of the software companies over the years and urged upon crafting of blue ocean strategy.