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Strategies for Staying Cost Competitive
Raising prices to cover rising costs and defend profit margins is a strategy that ceases to work in a recession, for that is when other companies start lowering their prices to increase their competitiveness. To avoid this competitive pricing trap, a company needs a method for seeing the unique way in which inflation is affecting it. Such a method is the value chain, a diagram that shows the value added at each step in the market process, from the raw materials stage to the final prices paid by consumers, exposing shifting cost components.