Cost reduction refers to the strategies and actions taken by a business to lower its expenses while maintaining the same level of output or quality. This can involve various methods, such as improving operational efficiency, negotiating better terms with suppliers, or eliminating unnecessary costs. The goal is to increase profitability without sacrificing product or service quality. Companies often implement cost reduction techniques during challenging economic times or when facing increased competition. By streamlining processes and optimizing resource allocation, businesses can enhance their financial health. Effective cost reduction can lead to a more sustainable operation and better positioning in the market against competitors like Walmart or Amazon.