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Finding Profit Opportunities

Posted On - 26/09/2013 16:54:15

How do you set price that positions you consistently with your peers? How much should you charge?Some competitors are more expensive than you, some cheaper. So create price advantage against one and you'll create disadvantage against another. But thinking like this is simplistic. Because there's more to pricing than the reputation it creates with customers. You have to think about profit too. But far from suggesting you profiteer, what you need – no have – to do is find the right price. Have to? Look at it this way: have you ever worked out the true cost of pricing just 3% less than you could?

Setting the scene

This blog is part of series on how to write strategy. Its objective is to do everything possible to help you write your own, without actually doing it for you. Using an imaginary business – URPCSFIXED Limited - with 8 fictitious competitors, it illustrates the process end-to-end. Each blog represents a major stage of strategy development with detailed guidance, tools, templates and the appropriate part of the Strategy Document fully written up, given. For more detail on the different blogs in this series and how they all fit together, see ‘A Strategy for Price Competition'.

Understanding competitive landscape

In 'Mapping Competitive Position' I set out the Value Matrix. The different quadrants of the Matrix were described along with the suggested responses ‘Attack, Defend, Observe, Preserve'. And whilst the Value Matrix provides tremendous insight into competitive positioning competitor by competitor, there's another way you need to think about things to complete the picture. It's the cross-competitor view. Or, to put it another way the view that looks product by product, service by service and utility by utility.

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