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Sir I was just reading the study text and it said that cost-reduction schemes are a form of long term plan and that’s why it is seen as a capital expenditure
Sir but there was this other note somewhere in the first chapter that gave an example and said that cost-reduction schemes are a form of tactical planning
Sir I’m really confused with what the textbook is trying to tell, please explain me what it is trying to convince
It depends on the context as to whether it is strategic or tactical planning. Reducing costs can be a short-term measure or part of a long-term plan. There is only capital expenditure involved if the plan for reducing costs involves the purchase of new machinery or the like (and then it would be part of a long-term plan and therefore strategic).
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