Sharing value at the right price: No margin for error

Abstract

Purpose

This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting‐edge research and case studies.

Design/methodology/approach

This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.

Findings

The recipe for business success appears pretty straightforward. Companies set the price of products and services to maximize the value they can secure from each transaction. Unsuspecting customers then pay up willingly, profits soar and the organization lives happily ever after. Times are changing though. Many individuals are no longer content to play the submissive role. Empowered by the internet and social media platforms, they can easily access information about a firm's pricing policies. Such customers typically then vote with their feet against those businesses they feel are trying to exploit them. So what should organizations do? For a start, change how they perceived the value offered. A current assumption is that each transaction enables a fixed amount. Customers can't be afforded too much as this leaves an insufficient portion for the company. The answer? Charge them more. Strategies based on aggressive pricing might bring immediate rewards. Long‐term sustainability is much less likely.

Practical implications

The paper provides strategic insights and practical thinking that have influenced some of the world's leading organizations.

Originality/value

The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy‐to digest format.

Citation

(2013), "Sharing value at the right price: No margin for error", Strategic Direction, Vol. 29 No. 1, pp. 23-26. https://doi.org/10.1108/02580541311285393