Boost Pricing Performance With a Global Strategic Plan for Pricing
Author: Danielle Ray
A global strategic plan (GSP) is a document built from an organization's mission, vision, and objectives to achieve its long-term success. Beyond that, it is a powerful tool that will assist in aligning your pricing department with corporate strategy to improve communication and collaboration while gaining a competitive edge and increasing profitability.
These are most often used in the context of international expansion or growth because it considers diversity in markets, cultures, competition, and legal or regulatory conditions. Even regional organizations can utilize a GSP because it provides strong inputs for decision-making.
Some of the elements used to build a GSP are vision and mission statements, SWOT analysis, External Factor Evaluation (EFE) Matrix, Competitive Profile Matrix, and Internal Factor Evaluation (IFE) Matrix. A pricing organization benefits by capitalizing on the work already done in the creation of the corporate GSP.
A GSP for Pricing ensures that everyone has a common vision that can lead to improving performance and efficiency. The consistency in objectives provides a clarity that can prevent unintended discrepancies in pricing strategies or goals. The communication between departments and to leadership improves, and the collaboration will increase as contradicting strategies are eliminated.
By utilizing and building upon the competitive information from the GSP, pricing can implement better strategies and improve execution to further the company's competitive advantage and market position. The alignment results in better decision-making, competitiveness, and profitability.
The tools used to build a GSP are ones that pricing may already create for themselves. By sharing the information across departments or teams, there is a better allocation of resources to the priorities important for supporting market penetration or expansion, value propositions, forecasting, and product lifecycle strategies. The resulting measures and analysis provide pricing the opportunity to give feedback on what is working and what is not. Adjustments can then be made to the GSP to maximize success.
In today's fast-paced and ever-changing landscape, pricing is critical to driving profitability and long-term success. The challenge and complexity of setting optimal prices in diverse markets requires pricing to maximize their effectiveness by using the corporate GSP to create their Global Strategic Plan for Pricing. Ultimately, the GSP provides pricing with a roadmap to success.
If you want to learn more about how to create a global pricing strategic plan that aligns with your GSP, join me at the upcoming 2023 European & Global Professional Pricing Society Conference.