Big Take Asia
Japan’s Small Businesses Have a Problem. They Don’t Know How to Raise Prices
Jul 29, 2024
Reed Stevenson, a senior editor at Bloomberg with a focus on economic issues, discusses Japan's small businesses grappling with rising costs. He highlights a negotiation workshop where business owners relearn pricing strategies after decades of deflation. The conversation dives into how these small enterprises, making up 90% of Japan's economy, struggle against larger corporations' wage demands. The potential economic implications of failing to adapt are alarming, yet Stevenson emphasizes the importance of strategic partnerships to navigate these challenging times.
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Quick takeaways
- Small Japanese businesses are struggling to adapt to rising costs due to a long history of deflation and price stability.
- Relearning negotiation skills has become essential for these firms to effectively communicate necessary price increases without jeopardizing client relationships.
Deep dives
The Need for Price Negotiation Skills
Many small and medium-sized businesses in Japan are currently facing the challenge of learning how to raise prices for their products and services. For decades, a deflationary environment meant that businesses had little or no experience in negotiating price increases. As costs rise for raw materials and employee wages, companies are now realizing that in order to survive, they must adapt and seek out new skills. This necessity has driven business professionals to attend classes on negotiation techniques, helping them cultivate the expertise needed to successfully communicate price increases to clients.
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