Pricing Decisions by Manufacturers

Abstract

The structure of industry has changed dramatically in the last decade. The major forces of change are the global impact, changing competitive conditions calling for a sharper focus on customers, greater operational effectiveness and flexibility, and critical changes in customers and market structures.

Organizations are changing by necessity. Globalization is simply a fact of life. We have slower growth in the developed worlds. This puts more pressure on all of us since we are all after a piece of the pie. Therefore, value is all there is to provide. For example, in the computer business, if you miss a cycle you lose your company. So if you’re going to provide the most value, if you’re going to have the lowest cost and the highest quality product available, you’ve got to engage every mind that you have.

Now we are much more globally competitive, and Value buying’ is everywhere. The competitive pressures have dramatically changed, and so has the number of people chasing a particular consumer, be it an industrial or retail consumer.

(Jack Welch, Chairman and CEO of General Electric, in 21st Century Leadership: Dialogues with 100 Top Leaders (New York: Leadership Press, 1993))