This framework is developed by a team of former McKinsey and Big 4 consultants. The presentation follows the headline-body-bumper slide format used by global consulting firms.
This product (Strategic Pricing Capability) is a 23-slide PPT PowerPoint presentation slide deck (PPTX), which you can download immediately upon purchase.
Pricing isn't just a matter of a good Pricing Strategy and tactics. By investing in specific areas of organizational capital—specifically, Pricing Capital—we can foster a Strategic Pricing Capability.
This framework breaks down the 3 forms of Pricing Capital:
1. Human Capital – Human Capital refers to the Pricing professionals who have deep understanding of all elements and implications of the organization's Pricing Strategy.
2. Systems Capital – Systems Capital refers to the software and hardware infrastructure needed to perform Pricing analyses and implement our resultant Pricing Strategy.
3. Social Capital – Social Capital is the internal, organizational “glue” that coordinates and holds together the many participants and stakeholders in the Pricing process.
To develop Pricing as a strategic capability, we must make appropriate investments across all 3 forms of Pricing Capital.
This presentation also discusses the 3-phase process to build Pricing as a strategic capability. This process starts at the high level of overall capital budgeting decisions; and ends with us making Pricing decisions and taking Pricing actions. Having Pricing has a strategic capability is a source of sustainable Competitive Advantage.
This deck also includes slide templates for you to use in your own business presentations.
The Strategic Pricing Capability framework is not just theoretical; it provides actionable insights and practical steps for implementation. The PPT outlines the critical role of Human Capital, emphasizing the need for pricing professionals to possess a deep understanding of corporate strategy, product range, and market dynamics. Systems Capital is equally crucial, involving the integration of sophisticated software and hardware to perform comprehensive pricing analyses and implement strategies effectively. Social Capital, the organizational "glue," ensures seamless coordination among stakeholders, fostering a collaborative environment essential for strategic pricing.
The presentation also details a 3-phase process for building a Strategic Pricing Capability, starting with capital investment decisions and ending with actionable pricing decisions. This structured approach ensures that investments in pricing capital are balanced and aligned with organizational goals. The deck includes templates to facilitate the application of these concepts in your own business context, making it a valuable resource for any organization looking to gain a competitive edge through strategic pricing.
This PPT slide outlines the critical phase of making pricing decisions and executing corresponding pricing actions within a strategic pricing framework. It emphasizes that effective pricing actions are grounded in 3 essential forms of Pricing Capital: Human, Systems, and Social Capital. The text suggests that the extent of investment in these capitals directly influences the ability to implement pricing strategies successfully.
The slide highlights a significant risk: without adequate Pricing Capital, organizations may struggle to make informed pricing decisions. For instance, if a sales team lacks the necessary skills or knowledge in pricing, they may misjudge customer profitability and lifetime value (LTV), leading to unprofitable deals. This underscores the importance of investing in the right capabilities to ensure that pricing actions are both effective and sustainable.
Furthermore, the slide posits that sufficient investment in Pricing Capital can yield a strategic edge. Organizations that are well-prepared can respond more swiftly to market fluctuations and adjust their pricing strategies accordingly. This agility can be a distinguishing factor in a competitive environment, allowing companies to stay ahead of their rivals.
The final point suggests that a robust pricing capability not only supports current pricing actions, but also enables innovation in product offerings. For example, it mentions the potential for developing usage-based pricing models, which can enhance customer engagement and revenue streams. Overall, the slide serves as a call to action for organizations to assess and strengthen their pricing capabilities to drive better outcomes.
This PPT slide focuses on the concept of Human Capital within the context of pricing strategy. It emphasizes the essential role that pricing professionals play in understanding various elements critical to effective pricing decisions. The content is structured into 4 main sections: Details, Key Considerations, Building Capital, and a concluding remark.
In the Details section, it outlines the multifaceted knowledge required by pricing professionals. This includes not just theoretical insights, but also practical realities related to pricing tasks and programs. Key areas of expertise highlighted are the analysis of break-even points, financial implications of price changes, customer sensitivity to pricing, and understanding customer lifetime value. These professionals are depicted as integral to making informed pricing decisions.
The Key Considerations section stresses the importance of training for field sales personnel in fundamental pricing knowledge. It suggests that effective pricing decisions should be informed by benchmark data against competitors. The slide notes the challenges in accurately assessing these benchmarks, particularly when comparing product designs and functionalities.
Building Capital outlines 3 core methods for enhancing Human Capital in pricing: hiring new talent, training existing employees, and expanding the pricing experience of current staff. This section underscores the need for ongoing investment in human resources to ensure a robust pricing strategy.
The slide concludes with a reminder of the importance of being familiar with various pricing theories, even if they are not directly applied. This highlights the necessity of a comprehensive understanding of pricing dynamics to inform strategic decisions.
This PPT slide outlines the essential components necessary for developing a Strategic Pricing Capability, emphasizing 3 key capitals: Human, Systems, and Social. Each capital plays a distinct role in ensuring effective pricing strategies within an organization.
Human Capital is described as the expertise and knowledge held by pricing professionals. These individuals must possess a comprehensive understanding of the pricing strategy's implications and how it aligns with the broader corporate strategy, including products, services, and market dynamics. Their insights are crucial for making informed pricing decisions.
Systems Capital focuses on the technological infrastructure required to implement pricing strategies effectively. This includes both software and hardware systems that facilitate the collection, sharing, and analysis of relevant data. The presence of robust systems is vital for supporting the pricing strategy and ensuring that decisions are based on accurate and timely information.
Social Capital is characterized as the organizational cohesion that binds various stakeholders in the pricing process. It serves as the internal mechanism that fosters collaboration among different departments, ensuring that all parties are aligned and committed to the pricing strategy. The slide highlights that successful implementation of pricing strategies often hinges on gaining buy-in from multiple stakeholders, each with potentially conflicting agendas. Furthermore, Social Capital extends beyond internal dynamics, encompassing relationships with customers, which can influence pricing decisions.
Overall, the slide emphasizes that building a Strategic Pricing Capability is a multifaceted endeavor requiring investment in these 3 capitals. Each element is interconnected, and neglecting any one of them could undermine the effectiveness of the pricing strategy.
This framework is developed by a team of former McKinsey and Big 4 consultants. The presentation follows the headline-body-bumper slide format used by global consulting firms.
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