Case type 12
Cost reduction and cost cutting
Reducing cost to a target without breaking the business, by sizing the big buckets, choosing the right levers, and counting the one-time cost of each cut.
17 min1 lesson Last reviewed
Start the lesson Cost reduction and cost cutting
How do you approach a cost reduction case?
- Split costs into buckets, size them, target the largest ones that can be cut, and check that the cuts do not hurt revenue or quality.
- The most common mistake: cutting every bucket by the same percentage, or cutting costs that drive revenue.
- Size the cost buckets, estimate a realistic saving for each from benchmarks, add them up against the target, and rank by size, ease, and risk rather than cutting the most visible expense.
By the end you will be able to
- Split costs into large, sized buckets
- Build a path to a savings target from several levers
- Count one-time costs and protect costs that drive revenue or quality