Does Saratoga Supply really need a survival strategy? Or should the company just begin to downsize to fit the demand for its products and services?

For this item the answer along with the explanation is stated below:

Saratoga may consider exploring a survival strategy rather than adopting reflexive responses to downsize. These problems may still happen in the future because the presumed financial advantages of downsizing may not be sustained in the long run since downsizing does not solve the problems underlying the efficiency and effectiveness gap. And one thing is for sure, downsizing has another major drawback.