Reduce the Rate of Cost for the Input Used to Produce the Output
Use the same type of input and the same activities, but pay less for the unit of input employed in producing the output. A reduction in rate is equivalent to a reduction in the number of inputs for the same ICD. For example, if a person who makes $10 per hour could produce the same amount of output as a person making $20 an hour, the substitution of the $10 person for the $20 person in the process would be equivalent to cutting the number of people required to do the work by 50%.
B. Reduce the quality of the input used by using a cheaper form of the input:
The reduction in quality should bring with it a reduction in the rate paid for the input.
|1||0||2007||Online tools from Google, Yahoo, Microsoft and eBay allow small businesses to network employees, sell goods and manage their business without having a brick-and-mortar operation or expensive equipment. Microsoft Office Live suite of services allow allow businesses to share calendars, documents and email, build websites and integrate accounting function. The basic edition is free while packages with more services cost $19.95 to $39.95 monthly.|
|2||0||2007||Online tools from Google, Yahoo, Microsoft and eBay allow small businesses to network employees, sell goods and manage their business without having a brick-and-mortar operation or expensive equipment. Google Apps functions like a company's internal computer network. Users can share documents and calendars, host websites, email and massage. The basic version is free and the premier model, which includes virtual conference room, storage space and advanced tools costs $50 per employee annually.|
|3||2830||2004||Over-the-counter health care product maker Chattem Inc. takes advantage of its opportunities. It gets its ads on network TV, but never pays the full asking prices. Chattem also trolls around the bargain basement of media, buying a lot of media on sale.|
|4||3571||1991||NCR just merged with AT&T. NCR's new mainframe is built from standard industry parts unlike the traditional mainframes.|
|5||3571||2001||Unlike internet servers made by Compaq and Dell, RLX's computers will use the Transmeta Corp. chip because of its lower power consumption and an open source version of Linux software.|
|6||3571||2005||In response to upstarts overseas, IBM is taking a new approach by betting that giveaways of precious technology will expand the market and boost its products sales to meet that new demand. One part of its strategy is investing in Linux, an open-source operating system. By contributing 600 IBM programmers solely to the cause of Linux, IBM is getting a world-class operating system for its customers' needs at a small fraction of what it would cost to do by itself. To fund the development of an operating system would cost a minimum of $500 million a year, but with all the companies and organizations contributing to Linux, it gets way more than $500 million a year. Recently IBM created miniaturized Linux-friendly Intel based servers called blades. While IBM's market share in ordinary Intel servers is only about 20%, it dominates the fast-growing $2 billion a year blade business, where it has about 45% market share.|
|7||3572||1999||At one time, storage servers used expensive disks and proprietary electronics. EMC switched to off the shelf style components; that drove costs down and margins up.|
|8||3575||1987||Sun builds workstations from off-the-shelf components: much cheaper to produce than Apollo's proprietary designs.|
|9||7372||2004||Business and governments are starting to show a real interest in expanding their use of Linux operating system software from servers to employees' desktops. Corporations, which are looking to Linux PCs to reduce costs and simplify administration, usually restrict it to setting where the software is limited. The most popular uses are in call centers and other transaction-processing operations, where employees will often run just one application.|
|10||7375||2004||Paid searches have become a cash cow for search engines and their partners by creating a flexible market for business "leads." Leads range from as much as $100 for mesothelioma information to $20 for conference-call services and 31 cents for paper clips.|
|11||7375||2005||Craigslist is a threat to newspaper classifieds as it becomes more and more popular. Ten million Craigslist users click on an estimated 6.5 million classified postings each month at 190 local sites in 35 countries, generating three billion page views. The company itself only has 18 employees and no sales or marketing departments. The site is bare bones, with the listings all in text and divided into a handful of basic categories. The postings aren't even searchable by zip code. There are no ads or even bold facing.|
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