RECESSION GURU-Frankie Le 5V
How to reduce cost or increase productivity as a consumer:
For example, buying a pair of shoes at Adidas shop at HMV shopping center. Normally one pair may costs about 100 dollars or more. However, due to the Singapore sell, they will decrease the cost of Adidas by 50% or more. Therefore, we can buy more and more pairs instead of purchasing 1 pair at 100, we can have 2 pairs, same models, same quality at the half price for each. Besides that, we could find the shop which sells the medium quality, these shoes are from same company but then there’s cheaper because these shoes’s quality are lower than the one at the proper Adidas shop. Nonetheless, we can satisfy our wants and our needs and we also have the same shoes.
How to reduce cost as a producer:
The Adidas has the huge number of consumers because they have nice shoes, bags, clothes and sport’s wear. As a producer of Adidas, they can upgrade the machines to produce more shoes at a time. For example, old machine can make 10 pairs in 10 minutes, but after upgrading, it makes 20 pairs in 5 minutes. Therefore they can increase the productivity. On the other hand, they can select employees, those who can make more shoes or those who needs more money but they can make produce more than others in a given time period. After that, producers have to pay less but then they will have more shoes at a better quality. To make it, they need substitutes for materials, because there are lots of people who are selling materials at other price, it may cheaper or more expensive. Therefore the producer needs time to find the suitable supplier to have cheaper cost for them, but they still make more shoes.