The panic caused by a crisis often leads to a focus on price – but rarely to cheaper products …
By: CEO Henrik Holvad, RIVAL
In these times of crisis, we experience more and more often that the price becomes a decisive competition parameter in connection with new orders. But what actually happens when the price becomes the key factor? Is a cheaper price always cheaper in the long run? Danish suppliers are rarely able to compete on price alone, but we are competitive if you look at the entire value chain, including the reliability of supply, quality, openness to change and service.
When the crisis bites, as it does now, price quickly becomes the parameter under discussion. In many companies, the management tells all its departments: “We must optimise our resources,” and this is often interpreted as a need to buy products and services from the suppliers at cheaper prices. In the process of studying how the product moves through the value chain, people often forget to look at the overall price. The price per item may well be cheaper, but if the products are not delivered on time or have more defects, the decision could in the end turn out to be an expensive one.