The primary goal of every business venture is to make profit.

Without profitability, a business

will not survive on the long run. Due to the current’s economic status, introducing a number of

challenges that makes it tough for businesses to maintain profitability. A company’s revenue

must outweigh it’s cost for it to to be said as profitable. The performance of companies given the

environment in which they operate is profitability. In fact, profitability should reflect the quality

of a company’s management, the company’s competitive strategies, efficiency, effective and risk

management capabilities (García-Herrero, 2009). When a business is profitable, growth can be

attained on the long run. Since profitability is the success of a business, cost reduction and cost

control is an important tool of a business. So cost reduction, cost control and profitability are

interrelated.

Costs are one of the basic economic categories determining profitability therefore, they should

be subject to analysis, as well as detailed planning and control. Cost should be controlled or

reduced and profit will take care of itself (Brumbaug, 2008). Cost of operations increases as

production increases in an organization. Cost control and reduction are essential in a business in

order to regulate and minimize expenses. In relations to competitive market, cost control and

reduction helps to attain increase in market demand. The major significance of cost reduction and

cost control is profit maximization.

The better a business reduces and control cost, the better the profitability of the company.

RESEARCH QUESTIONS
The analysis of the impact of cost control and cost reduction on the profitability of selected

manufacturing companies raises the questions as to the challenges of encountered by

manufacturing companies when implementing cost control and reduction strategies? The role of

ycost control techniques such as variance analysis, waste reduction, vendor management etc on

the profitability of these companies? The realtiomship between cost control, cost reduction and

profitability. In order toconduct an efficient research, it asked the follow questions:

1. How does cost control and cost reduction influence the profitability of manufacturing

companies?

2. What is the impact of the profitability of a manufacturing company on the long run?

3. Does cost control have influence on the competitive positioning of manufacturing

companies in the market and how do cost effective strategies improve their market

efficiency.

OBJECTIVES OF THE STUDY

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