C-Suite Insights 21st July 2021

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Tips for price-setting in a time of inflation

 

Harvard Business Review

 

Many businesses are struggling with high costs for raw materials, labour, energy, and other inputs. At the same time, demand is surging as economies reopen for business in the wake of falling COVID-19 cases.

 

Some businesses have started to raise prices in response, with producer prices in the OECD countries up 9% in the 12 months through April 2021. While chronic inflation might not occur, companies need to hedge now against a medium or long term inflation scenario.

 

Five tactics that can help are:

  • Treat customers differently. Instead of blanket pricing, use surgical increases informed by the cost to serve, historical performance, and value to the supplier of an individual customer or segment.
  • Exchange price for other valuable features. Prepare for customers resisting a straight increase, by offering other benefits. These range from volume guarantees to bundled products or adjusted service levels.
  • Enforce what’s already in the contract. Many companies put price increase contingencies in their contracts but don’t regularly enforce them and may not even be aware of them.
  • Consider indirect increases. Companies may be able to pass on surcharges for fuel, expedited shipping, inventory holding, and longer payment terms.
  • Adjust the product mix. During a period of inflation and supply shocks, what a company makes can be even more important than who it sells to. It’s critical to have a current SKU-level view of profitability, not just a customer-level view.

 

Learn more>>

 

 

​​​​FURTHER INSIGHTS

 

Case study: awakening a business from the zero-point

 

Kearney

 

Products, services, and experiences designed to suit the pre-pandemic customer will need to be reimagined for a post-pandemic reality.

 

This article presents the case study of a hotel that used a ‘zero point’ strategy to reawaken their business for relaunch with the post-COVID customer in mind.
 

It provides an example of how to focus on innovation in order to meet new customer needs; and how a radical vision can secure success.

 

Learn more>>

 

 

Why CHROs want to focus on people again

 

McKinsey & Company

 

This study, based on interviews with 70 CHROs from some of Europe’s largest organisations, reveals that the vast majority of CHROs are eager to shift to models that meet physical and mental health needs, as well as focusing on moral concerns about a company’s overall impact on society.

 

The research indicates that HR teams of the future are likely to continue to automate and outsource the purely transactional elements of their work, and there will be a pivot toward strategic leadership.

 

Learn more>>






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