Even with some encouraging signs around cooling inflation rates in late 2022, the coming year is still shaping up to be challenging for businesses, which will likely continue to struggle with pricing their products amid surging demand, supply chain challenges, labor shortages and geopolitical unrest.
Cost volatility is likely to stay for a while, with some indications that costs could move up and down faster rather than slower. How can companies respond to an increasingly fast-moving market while retaining and growing margins?
Executives can begin by taking a cue from the space program. At the beginning of a mission, the crew rockets up through the atmosphere, just as prices rise sharply during inflationary times. Upon re-entry, however, astronauts enjoy a softer parachute-enabled landing rather than a steep drop. Of course, this “rocket up, parachute down” strategy sounds great, but some significant factors currently hold businesses back from taking advantage of this approach.
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