Is unabated inflation the new normal? Inflation is back and here to stay. For companies, this means that the world in which they do business has fundamentally changed. This book examines inflation from multiple perspectives and offers actions and strategies for companies to cope with and manage it to ensure their survival. For businesses and consumers, it is not a question of eliminating inflation, but how to cope with it in order to suffer as little damage as possible. This includes not just price management, but also sales, finance, purchasing, cost management along with digitalization and innovation activities in equal measure. It also requires corporate cultural change, which if managed fast and successfully, the prospects of defeating inflation and thus ensuring the survival of the company are good.
Author(s): Hermann Simon, Adam Echter
Publisher: Springer
Year: 2022
Language: English
Pages: 136
City: Cham
Preface
Contents
1: Comeback of the Inflation Specter
Monetary vs. Commodity Value
Current Inflation
Sustained Inflation
Inflation in Food Prices
Summary
2: Victims and Profiteers of Inflation
Companies, Managers, and Inflation
Lack of Inflation Experience
Consumers and Inflation
Evasive Strategies
Consumer Reactions
Savings Behavior
Consumer Financing
Employment
Changed Purchasing and Price Behavior
The State and Inflation
Summary
3: Getting Ahead of Inflation
Inflation’s Fast Start
Money Supply Driving Inflation
Agility and Timing
Preemptive Pricing
Frequency of Price Adjustments
Summary
4: Understand Profit Mechanics
Profit Terms
Nominal vs. Real Profit
Phantom Profit
Economic Profit
Profit as a Cost
Profit Situation
Profit Defense
Summary
5: Optimize Prices in Line with Inflation
Negotiated and Fixed Prices
Varying Inflation Rate and Net Market Position
Profit Impact
Summary
6: Control Value-to-Customer
Value Enhancement
Innovations
Value Communication
Additional Services
Guarantees
Unsuitable Instruments
Summary
7: Lead in Competition
Influence of Competitive Prices
Competitor Reaction
Price Leadership
Signaling
Summary
8: Strengthen Pricing Power
Pricing Power by Industry
Cementing Pricing Power
Buying Power
Cost Disclosure
Creating Pricing Power
CEO and Pricing Power
Summary
9: Exploit Digital Opportunities
Price Transparency
Value Transparency
Marginal Cost of Zero
Summary
10: Apply Smart Pricing Tactics
Price Escalator Clauses
Contracts Without Price Escalator Clauses
Price Differentiation
Less Expensive Alternative (LEA)
Price Differentiation by Product Category
Reduction in Package Size
Price Thresholds
Discounts
Information Requirements
Summary
11: Introduce Innovative Pricing Systems
Dynamic Pricing
Multidimensional Pricing Systems
Performance-Based Prices
Bundling vs. Unbundling
Freemium
Price of Zero
Pay-per-Use
Summary
12: Toughen the Sales Force
Responsibilities
Culture Change
Plugging Leaks
Incentives
Segmentation
Customer-Specific Pricing Power
Sales Controlling
Summary
13: Prioritize Finance
The Value of Money
Cash Management
Long-Term Investments
The Challenge of Economic Profit
Phantom Profits
Summary
14: Reduce Costs
Who Is Affected by Cost Reductions?
Volumes and Prices
Changed Role of Purchasing
Time Requirements
Cost Structure and Risk
Break-Even Volumes
Future Hedging
Summary
15: What to Do – Conclusion
Create Awareness
Establish Profit Transparency
Call Functions to Responsibility
Increase Agility
Strengthen Pricing Power
Restructure Pricing Models
Upgrade the Sales Force
Make Use of Digitalization
Prioritize Finance
Reduce Costs
Conclusion
