Rising Costs And Pricing

How to deal with rising costs is an important topic at this juncture, especially given various characteristics inherent in today’s business environment.  Some of these characteristics include increasing material costs; overhead costs that have already been reduced to low levels; and a confluence of issues that cumulatively make it difficult, in many cases, to “automatically” increase prices.

Recently, the Wall Street Journal published a feature titled “Tips for Companies Battling Rising Costs.” Twelve respondents answered the question of “What advice would you give companies whose costs are rising, but are afraid of raising prices?”

While I don’t necessarily agree with any or all of what is said in these responses, I think that the article’s topic is valuable, as is awareness and discussion of these issues.

As with any discussion of pricing and pricing strategy, I strongly believe that such pricing issues need to analyzed and handled on a company-specific level, as each company almost certainly will have company- and industry-specific characteristics and dynamics that need to be considered.  As such, following generalized advice concerning pricing will likely be suboptimal, if not harmful.  There are many factors that should be taken into account, encompassing many different functional areas (such as finance, marketing, sales and corporate strategy) and issues.


StratX, LLC (stratxllc.com) is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and offers corporations and businesses advice, strategies, and actionable methods on how to optimally increase revenues and profitability.