THE TONY CASEBY:Dhimant Patel MM1113152Geet Sawhney MM1113153Geet Verma MM1113154Rahul Tapa MM11131DUAL A
The Case ( Problems):• Changed procurement policies of the client, occidental• Occidental likes to do business with Stand...
AKITA, KAKUCHI TONYOCCIDENTAL SCOT Company policy
Rationale behind Fixed Price: • Organization should know the customer in and out, better than the customer itself • H...
What tony & Scott are doing?• Worrying about the upcoming winters and rays of sun.• Resting on laurels• Trying to convinc...
What they aren’t?• Looking to train the sales team in the true philosophy of Fixed Price• Opening a channel beyond Joanne...
Why Reducing Price( price strategy)may fail?• Standard ‘s policy is of quality leadership not of price leadership.• The c...
Why the solutions proposed by Scottmay fail?• Reduction in on site training , trouble shooting and service might lead the...
What Tony should do!• Put together a cost-justified solution that truly conveys value-added marketing.• Send a break up o...
Cont…• Get Davis involved in such a big ticket order. He may give some creative ideas.• Include a point about Switching C...
Focus on VALUE instead of price.Price can be justified.
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Pricing predicament solution tony case

solution for HBR - Pricing predicament case
Published on: Mar 4, 2016
Published in: Business      Education      
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Transcripts - Pricing predicament solution tony case

  • 1. THE TONY CASEBY:Dhimant Patel MM1113152Geet Sawhney MM1113153Geet Verma MM1113154Rahul Tapa MM11131DUAL A
  • 2. The Case ( Problems):• Changed procurement policies of the client, occidental• Occidental likes to do business with Standard• Tony ( the Hero) wont take the proposals of Scott to Top management• The villains: Company’s policy of ‘Fixed Price’, The Asian Rivals• Scott is too anxious and eager to get the deal done
  • 3. AKITA, KAKUCHI TONYOCCIDENTAL SCOT Company policy
  • 4. Rationale behind Fixed Price: • Organization should know the customer in and out, better than the customer itself • Help customers define their needs, design their plant layouts, train their employees, support their manufacturing systems • Avail such a great level of service that no other supplier will win on price only as Akito et al are trying • Support the kind of R&D that will constantly help keep itself and its customers competitive
  • 5. What tony & Scott are doing?• Worrying about the upcoming winters and rays of sun.• Resting on laurels• Trying to convince each other• Scott is trying to mindlessly imitate the competitors.• Worrying about the PLANNED upcoming projects of Occidental, which may not even come
  • 6. What they aren’t?• Looking to train the sales team in the true philosophy of Fixed Price• Opening a channel beyond Joanne• Opening a two way channel with own top management• sharing info with each other aka competitive bidding and field centers
  • 7. Why Reducing Price( price strategy)may fail?• Standard ‘s policy is of quality leadership not of price leadership.• The competitor follows price leadership. If standard reduces the price, AKITA might as well further lower it. ( they need a foot in Standard’s door).• Occidental may think that there always has been a scope of price cut for last 15 years and they didn’t avail it.• Every other customer may demand a price cut
  • 8. Why the solutions proposed by Scottmay fail?• Reduction in on site training , trouble shooting and service might lead the reduction in the PERCIEVED VALUE• Cosmetic changes: Occidental is in business for quite long and are big players. They will immediately come to know about the ‘ clever act’ of standard bringing bad name for them
  • 9. What Tony should do!• Put together a cost-justified solution that truly conveys value-added marketing.• Send a break up of his cost sheet over to Occidental to justify the price.• Try and understand through meetings and deliberations with the purchase team of OCCIDENTAL what is that is not of value to them and cut corners there instead of assuming them
  • 10. Cont…• Get Davis involved in such a big ticket order. He may give some creative ideas.• Include a point about Switching Cost in the cost sheet. That may increase the perceived value.• Take a serious note of the competition in the next meeting to sustain profitability
  • 11. Focus on VALUE instead of price.Price can be justified.