Benson P. Shapiro, Adrian J. Slywotzky and Richard

Typically, cost reductions are delayed, are across-the-board (eliminate 10 percent, say, from every department) and are not oriented toward what the business design should be at the end of the reduction effort. Consequently, the effort usually fails. In fact, cost reduction and internal re-engineering approaches more often than not misconstrue the fundamental nature of the problem. The point is not to become more efficient at activities that are losing customer and economic relevance, but to alter the business design in a way that matches customer demands and is consistent with the new economic order in your industry.

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