A familiar example:
- “A company cannot profit enough to survive, to grow; its costs increase and it loses away its market to its rivals.
The companyÂ’s advisor firm has analyzed the cost factors and has suggested measures to reduce them. As a consequence, the company has disemployed some of its staff, has diminished unnecessary expenses. However, no significant economy could be realized; moreover, production was cut down.
The existing personnel started overworking; they worked harder but earned less and the company faced more loss every passing day. This is a vicious circle and if nothing is changed, the unavoidable destiny will be bankruptcy. The company looks for a long term interest source (credit, loan, etc.) as the only way out.Â”
This scenario represents a case which many companies face and very few can solve. The company in the scenario is virtual but real in every aspect