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Sunday, October 31, 2021

McKinsey Talks Inflation

Be ready for it.

Winning the race with inflation: The pricing opportunity for industrial companies

As inflation rises, industrial companies must take a new look at the pricing opportunity.

Many industrial companies face a complex new array of challenges today, including a global pandemic that has driven radical shifts in demand, buying patterns, cost to serve, and perceived value across sectors and value chains, which in turn have led to sharp spikes in commodity prices. Inflation in the cost of raw materials is forcing industrial companies to take swift action on pricing. The price increases required to offset inflation and maintain constant gross margin could greatly exceed the 2- to 3-percent hikes many industrial companies make at year-end. In our discussions with leaders across industries, many have voiced concern about this issue (see sidebar, “The response to inflation”). .... ' 

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