BB.lv: Corporations might have to chop prices

It ought to be anticipated that enterprises might need to make disagreeable selections to scale back prices, since though inflation is now not rising considerably, the extent of prices has not fallen and it’s changing into more and more tough to compete, a accomplice on the consulting firm EY, head of the Strategic and Transactional Division, identified in an interview with LETA. consulting within the Baltic international locations Guntar Krols.

He identified that though inflation has stabilized and nobody expects power costs to rise many occasions over, many elements usually are not seeing a drop in costs and prices.

“That is additionally the largest problem for entrepreneurs, as a result of firms have remained at a excessive degree of prices and it’s far more tough to compete with different European and world firms whose value ranges have additionally elevated, however maybe now they haven’t remained so excessive. As well as, if we point out the productiveness issue, which Latvia has not been excellent prior to now, there’s a threat that we are going to be much less aggressive with particular services or products if we stay at this excessive value degree,” Krols stated.

He warned that this might result in conditions the place falling gross sales drive firms to make tough cost-cutting selections as a result of they’ll now not be capable to move on increased costs to their clients. As a substitute, extra consideration will probably be paid to decreasing the price of consumables.

Moreover, except entrepreneurs are ready to do that by rethinking their enterprise technique, reengineering working rules and processes, and efficiencies, lots of the present enterprise fashions might turn out to be unprofitable or not worthwhile sufficient to recoup their investments over time, the professional predicts.

When requested which sectors this may apply to, Crols famous that difficulties are already seen in manufacturing sectors, such because the wooden business. On the identical time, firms whose services or products have the next added worth, such because the IT business, discover it simpler to extend remaining costs and thus cowl prices.