Other cost-saving measures might include improving purchasing policies and procedures, redesigning the
product or service to reduce production costs, contracting out services that are not considered essential
to the core business, organisational changes to reduce duplication, improving financial control systems,
and so on. The difficulty is that certain types of cost-saving measures, such as improving factory layout,
might require some initial expenditure, which is not possible if the organisation is already experiencing
declining revenues. This exemplifies the problems caused by reactive management.
In some situations, this type of retrenchment, i.e. doing the same as before and cutting some costs, may
not be adequate to ensure survival. Managers may then have to consider more fundamental strategic
alternatives such as: