Who in the organization is most aligned with the pricing group? If the pricing group is doing it’s job, it’s the shareholders. When companies report strong pricing power, share prices go up. When company struggle with a tough pricing environment, share prices go down. One high profile case in the past month was Dell, which saw its share price drop 10% after reporting a profit drop due to aggressive pricing and restructuring charges.
As Shannon Cross of Cross Research noted: “What people on the Street wanted to see was revenue growth and a solid gross margin number. Because if you sell things for no profit, to some extent, what’s the point?“
Shareholders get it, but how many CFO’s get a weekly pricing report?