28 December, 2013

1-5-20 finance: Incremental degradation

The accumulation of small changes of "decreasing the product quality" over time for the purpose of "decreasing the costs"

-          You have every right to look at the costs from the financial point of view > try to cut down the unnecessary costs > so that you can increase the profit margin > and keep more money
-          But in the process > you forget the primary purpose; that is maintaining the quality of the value you are creating (that is the only reason people choose to buy from you) >
So you come to a point that you cross the line between 'cutting down the costs' and 'making a crappy product' > the value is decreased to a point that customers stop buying from you  

So, look for cost saving but make your primary concern: maintaining the premium quality of your product.

Always think twice before any cost-saving decision you are making