Evaluating Centralized vs. Decentralized Pricing Models PPT

This PPT slide, part of the 25-slide Strategic Pricing Management PowerPoint presentation, outlines the implications of selecting a Pricing Operating Model based on an organization’s structure and size. It presents 2 primary models: Centralized and Decentralized. Each model carries distinct operational characteristics and consequences that can significantly affect the organization.

In the Centralized model, the slide indicates that there are fewer resources allocated, which can lead to enhanced executive and leadership support. This model centralizes resources across all business units, promoting a unified approach to methods, language, and revenue management. However, this comes at the cost of reduced autonomy for individual sales and business functions. The implications also suggest that while access to core pricing resources is streamlined, there may be a need for additional resources to support this centralized structure.

Conversely, the Decentralized model offers total autonomy to sales and business functions. Each unit manages pricing independently, which can lead to increased resource requirements and less alignment between sales and business functions. The slide implies that this model may result in varied methods and language across the organization, potentially complicating revenue management.

The choice between these models is critical and should be made with careful consideration of the implications outlined. Organizations must weigh the benefits of centralized control against the flexibility of decentralization, ensuring that the selected model aligns with their strategic objectives and operational capabilities.

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