A business enterprise will survive only when it can generate margins that will not just cover its costs, maintain a buffer to cover risks, and produce a surplus for growth.
Competitiveness is not be achieved by cutting costs alone. It is an outcome of vision, strategy, innovation, and operational excellence.
The question gives me the impression that you are in a business whose products have many competitors. You probably want to outcompete them on price. It is a bad strategy. It will affect margins, productivity, operational performance.
Looking at undertaking the following steps-
- Undertake a detailed analysis of all your product lines
- Undertake competitor analysis and compare their productivity with yours
- Look at the market for your products. Is there adequate demand for these, or is it a buyer’s market?
- Gradually phase out low-margin products without affecting cash flows
- Focus on innovation and development of high margin products
- Aggressively promote and expand higher-margin products
These steps will help you improve productivity. The enterprise will start showing signs of revival.
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