0 votes
asked in Strategy by (14 points) | 140 views

1 Answer

+1 vote
Goal is to reduce the OpEx by 50%.

OpEx--> (1) Fixed Costs (2) Variable costs

1) Fixed Cost--> IT infrastructure--> Where is it hosted? on premise? Cloud? If on premise, any cost decrese if hosted on cloud?

2) Variable Cost--> (2a) Salaries (2b) 3rd party transaction costs (2c) Advertisements

(2a) Salaries--> Automate some of the tasks and cut some of the redudencies?--> How much to invest to automate some of the tasks? what is the $$ benfit? Check if this option is feasible.

(2b) 3rd party transaction costs: Leverage the market leader position and negotiate with the 3rd party (such as Visa, Amex, banks etc.,) to reduce the transaction costs.

(2c) Advertisements-->How much is the spend? What is the elasticity? (% decrease in Revenue for % decrease in spend in advertisements). How much of the Revenue are we willing to forgo if we decrease spend in this area.

I would compile each of the benefits ($$) for each of the above areas and see the trade offs/opportunities.
answered by

Post answer and get feedback

Your name to display (optional):
Privacy: Your email address will only be used for sending these notifications.
To avoid this verification in future, please log in or register.