Cost decrease
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To effectively decrease costs in a business setting, it is essential to focus on strategic actions and prioritize cost control measures. Here are several strategies highlighted by experts:
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Minimizing Opportunity Cost: Shreyas Doshi emphasizes the importance of working on high-leverage tasks rather than just quick wins. By focusing on the optimal use of time and resources, businesses can minimize opportunity costs and potentially uncover significant growth opportunities Shreyas Doshi 1.
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Cost-Effective Model and Hardware Selection: In the context of AI and machine learning, Luis Ceze suggests selecting the right models and optimizing them to fit specific performance needs, along with choosing the most cost-effective hardware. Daniel Campos adds that structured pruning and knowledge distillation are valuable techniques for improving performance without increasing costs 2.
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Increasing Margin and Reducing Unnecessary Costs: Mike Michalowicz explains that while costs can only be reduced to a certain extent, margins can always be increased. This can involve cutting unnecessary expenses such as subscriptions, but it's crucial to not cut essential areas that impact service or product quality. Additionally, businesses should not fear raising prices if they correctly communicate the value to the customers 3.
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Aligning Strategy with Business Goals: Jeffrey Sherman advises aligning efforts with the company's current focus, whether it’s cutting costs or scaling up quickly to meet funding requirements. In growth periods, focus on actions that drive customer signups without being overly concerned about cost efficiency. Conversely, during stability phases, prioritize automation and quality improvement to reduce defects and cut costs 4.
By addressing these areas, businesses can strategically manage costs while continuing to support growth and operational efficiency.
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