Cost Structure
Definition
The cost structure is the accumulation of the fixed and variable costs, that make up a given product or service expense. Defining TCO (Total Cost of Ownership) cost structure and most impacting “cost drivers” will help companies:
- To anticipate and identify profitability risks (e.g Energy price increase)
- To set pricing policies (e.g passthrough in inflation context, contracts’ review clause…)
- To prioritise and support cost reduction plan