Cost-driven

Cost-driven refers to a business strategy, process, or decision-making approach where the primary focus is on minimizing expenses and controlling costs. This approach prioritizes efficiency and often involves measures like streamlining operations, negotiating favorable prices with suppliers, automating tasks, and reducing waste. The goal is to increase profitability by lowering expenses, even if it necessitates compromising on certain non-essential features or services. It is the opposite of value-driven.

Cost-driven meaning with examples

• The company adopted a cost-driven strategy to weather the economic downturn. They eliminated unnecessary travel expenses, reduced marketing budgets, and implemented stricter inventory management, which ultimately preserved profit margins despite declining sales.
• Our organization's procurement process is heavily cost-driven. We constantly solicit bids from multiple vendors to secure the lowest possible prices for raw materials and supplies, optimizing our production budget.
• The shift to automation in manufacturing was largely cost-driven. By replacing human workers with robots, the factory significantly reduced labor costs and boosted productivity.
• The product design team faced a cost-driven constraint, forcing them to choose less expensive components. Despite the limitations, they prioritized features and maintained functionality.
• During the budget meeting, the financial director emphasized a cost-driven mindset, focusing on identifying and eliminating any areas of spending that didn't contribute to core business goals.