Maximizing Profits: Price, Development, and Portfolio Strategies, Slides of Business Management and Analysis

Download Maximizing Profits: Price, Development, and Portfolio Strategies and more Slides Business Management and Analysis in PDF only on Docsity! Some thoughts on how to increase profits P=SP-C 1. Increase Selling Price Increase Customer Value • Put extra features in product which require little marginal cost • Provide extra service • Target less competitive segment of the market • Get to market before competition • Price at the maximum the customer is willing to pay Price models should reflect customer value- not cost (except in government contracts if you wish to avoid jail Note in English gardening magazine: Even though seed sales are at an all time high, the price is not expected to come down Docsity.com • Why? Some thoughts on how to increase profits P=SP-C 2. Decrease Selling Price Docsity.com Assume the decision is made to invest in developing new products • How do you make the decision on which new product to invest in? • What are the criteria for this decision- making process? • How do we maximize profit? – in the long range – in the short range Docsity.com Portfolio Analysis Reward (NPV) Risk Game Changers KillBread and Butter Pearls Docsity.com D C B A Reward (NPV) Risk Kill Game Changers Bread and Butter Pearls A Portfolio of 6 programs G F Note: area = program cost Docsity.com