Regardless of the size of a company's operations, one of the most pressing issues for management is reduction of costs. With very low economic growth likely to continue for some time and deflation placing pressure on prices in many different industry sectors, management is being called upon to make more efficient use of resources.
So what can Japanese management do to maintain or improve gross margins in such a business environment?
The answer is to lower fixed costs through restructuring value chains by retaining those functions and processes that will contribute to profit in the long term and outsource those that will not.