Don't Shoot Yourself In The Foot
Strategic approach to cost cutting
“You seldom improve quality by cutting costs, but you can often cut costs by improving quality.”
Karl Albrecht
You can cut costs in two ways:
1. By reducing expenses.
2. By keeping them at the same level while the business expands.
For instance, if there are three employees in the logistics department, you may fire one of them or not increase your staff even if the workload increases.
As we have already discussed recently, efficiency can’t be a strategic goal.
Moreover, throwing the baby out with the bathwater is easy when you cut costs.
But there is a better solution.
Circuit City: Powered down for good
Circuit City was an American electronics retailer that was founded in 1949 and filed for bankruptcy in 2008.
In the mid-2000s, the company was attacked from all sides.
· Customers fell in love with online shopping.
· Walmart and Best Buy offered the same products at lower prices.
· The financial crisis in 2008 made a bad situation even worse.
I…