Cost
Cost structure
Last reviewedWhat is Cost structure?
Split total cost into fixed and variable, or into MECE buckets by value-chain stage, and size each.
When should you use Cost structure?
Cost-cutting and profitability cases where cost is the driver.
What are its limits?
Buckets vary by business; a generic cost tree misses the real drivers of this specific one.
How do you tailor it to a case?
Build the buckets for this business, then attack the biggest cuttable one while protecting what drives revenue.
Use a framework as a source of ideas, then put a structure built for this specific problem on the table. Reciting a framework by name is a common way to lose marks.