Published by:
Harvard Business Publishing
Length: 13 pages
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Abstract
Senior managers at large companies may think that occupancy costs are too insignificant to worry about, too technical to analyze, and too fixed to control. But occupancy costs can hurt a company''s earnings, share value, and overall performance. To manage occupancy costs, managers must be able to identify their components, measure their impact, understand what drives them, and develop options to change them. Four basic tools help diagnose problems: a cost history, a loss analysis, a component analysis, and a lease aging profile. Executives also must understand cost drivers like leasing, location, and layout.
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Abstract
Senior managers at large companies may think that occupancy costs are too insignificant to worry about, too technical to analyze, and too fixed to control. But occupancy costs can hurt a company''s earnings, share value, and overall performance. To manage occupancy costs, managers must be able to identify their components, measure their impact, understand what drives them, and develop options to change them. Four basic tools help diagnose problems: a cost history, a loss analysis, a component analysis, and a lease aging profile. Executives also must understand cost drivers like leasing, location, and layout.