Introduction
For businesses to combat the effects of inflation, they need to focus on efficient practices and cost-cutting measures.This may include automating processes, reducing waste, and improving relationships with customers and distributors. Additionally, companies need to be aware of the rising freight and logistics expenses and take steps to mitigate these costs. By accepting these proactive measures, businesses can weather the current economic conditions and emerge more robust after COVID-19.This essay discusses the priorities companies should consider and ways of achieving them.
Strategies to Overcome Inflation Effects
Raising Capital Expenditure (CAPEX)
The top three priorities for companies in the industrial sector are to increase their CAPEX, focus on growth and automation, and improve their customer-distributor relationships. The priority for businesses is to increase CAPEX. This is because the rising interest rates have slowed down investments in CAPEX, growth, and automation. According to Yeganeh (2021), the goal is to increase CAPEX so businesses can grow and automate their processes. The overall expected return is that the organizations will be able to grow and automate their operations, improving their efficiency and bottom line.
Growing and Automating
The second priority is to focus on growth and automation. This is because the rising borrowing costs have led to a slowdown in investments in CAPEX, growth, and automation. The goal is to focus on growth and automation so businesses can improve their efficiency and bottom line. The expected return is that the companies can improve their efficiency and bottom line.
Developing Customer-Distributor Relationships
The third priority is to strengthen customer-distributor relationships. Inflation has steadily risen from 1-2% pre-COVID to 8-10% (Yeganeh, 2021). Increasing interest rates have dampened investment in CAPEX, business growth, and automation, making it difficult to borrow money. The goal is to improve customer-distributor relationships so companies can grow their business. The expected return is that the companies can grow their businesses.
Steps to Implement the Measures
CAPEX
Businesses can do a few things to increase CAPEX:
- They can focus on traditional excellent and efficient business practices. This will help them to cut costs and improve efficiency.
- They can develop relationships with suppliers and customers to ensure they get the best prices for materials and products.
- They can invest in new technologies to help them automate processes and improve productivity. By taking these steps, businesses can increase CAPEX and improve their chances of success in the post-COVID economy.
Growing and Automating
Automating processes and functions can help improve efficiency and save money. In addition, automating can help companies scale quickly and efficiently. Growth is also essential for a company’s success. A company must constantly innovate and expand to stay ahead of the competition.
Customer-Distributor Relationships
On the other hand, there are many ways to improve customer-distributor relationships. One way is to improve communication because it helps to build trust and understanding. Another way is to provide better customer service (Yeganeh, 2021). Good customer service helps to build trust and rapport. The expected return from improving customer-distributor relationships is increased sales and customer satisfaction.
Conclusion
In conclusion, companies must focus on traditional goods and efficient business practices to navigate the current market landscape. Traditional business practices are a clear indication of lowering the inflation rates caused by the COVID-19 pandemic. Additionally, companies should be aware of rising freight and logistics expenses and frequent increases in material costs. Lastly, it is vital to maintain strong customer-distributor relationships to weather the storm.
Reference
Yeganeh, H. (2021). Emerging social and business trends associated with the Covid-19 pandemic. Critical perspectives on international business. Web.