Hello

I have a paragraph and do not understand what some phrases mean

(( Sales are falling due to new competition in the market with exiting new products. So " the company " must cut production costs to survive.))

Whar does mean that it has to cut its production costs to survive ?

Production costs are those expenses the company pays to produce its product. These include cost of materials, labor costs (wages and benefits), cost of machinery, overhead (electricity, heat, etc.), and shipping costs.

This company must sell its product at a lower price in order to remain competitive. To sell at a lower price, it must reduce its expenses (production costs).