PLAY OFFENSE
Source: Bain & Company
Margin protectors
Inflation escalators
Include commodity inflation clauses for quotes/contracts
Direct increases
Correct prices based on market dynamics and cost to serve
Indirect increases
Pass on surcharges for costly customer behavior
Surgical strategists
Value-based price adjustments Execute data-backed surgical price increases
Pricing capabilities
Invest in pricing capabilities (e.g., center of excellence) to realize longer-term potential
Opportunists
Dynamic pricing Opportunistically capture share by adjusting prices based on market dynamics and competitive positioning
Exchange price
for other benefits
Sign up for things like longer contracts and volume guarantees in return for better prices
PLAY DEFENSE
Careful followers
Competitive benchmarking
Closely benchmark and follow market leaders in price increases
Price leakage
Identify and patch existing price leakage via tighter controls on discounting and enforcing contract terms
Frontline discounting
Establish clear discounting criteria/thresholds with defined approval process or adjust existing policies, if relevant
Governance structure
Define governance norms with clear accountabilities, data, and tools
Fighters
Intentional discounting Proactively protect share from market leaders by matching discounts and service levels
Adjust product
and channel mix
Focus on profitable SKUs/channels to protect strategic customers/segments
MACROECONOMIC DYNAMICS
STRATEGIC POSITION
Strong
Weak
Inflation
Stagflation
Recession
(High margin risk, low demand risk)
(Mix of margin and demand risk)
(High demand risk, low margin risk)
Strategies applied