Assignment:
It's time to crunch some numbers! Your boss has just given you an important, high priority assignment. The company's core business product has shown steadily shrinking profitability and you've been asked to address the problem by coming up with at least one new pricing technique. Your boss and the regional VP of Accounting and Finance will meet with you at the end of the month to hear your proposal. Prior to the meeting, your boss would like to see a brief memo that outlines your proposal and the impact you expect it to have on units sold and profits. The VP of Accounting and Finance is new to the company, so you'll also need to include a section that contains a brief description of the product and its background information.
Choose the Primary or Urgent Care Health Care provider service.
Sample analysis from Mckinsey:
https://www.mckinsey.com/insights/health_systems_and_services
/when_and_how_provider_competition_can_improve_health_care_delivery
The market place is getting crowded and its your responsibility to come up with a winning strategy to boost win new customers, retain existing customers and win-back who have left. There are 4 main areas: Active Competition, Oligopoly, contested monopoly and uncontested monopoly.
Review and incorporate the following topics:
Supply and Demand or Utility
Soman, "The Last Mile - Using Behavioral Insights to Create Value"
Demand Analysis and Price Elasticity
HBS Pricing Discrimination Dhebar
Price Segmentation across 4 areas
How to utilize historical and current data to find out trends - it system or big data system - how does opex and capex get affected
Role of Government / Health Care regulation
Investigate if there is a cartel / price fixing at play and how to address it
How to streamline costs and get the maximum profit, quality health care and highest customer and employee satisfaction
Develop a 4-5 page executive memo for your boss. Include the following:
1. Describe the company's product or service using appropriate economic terminology.
Questions to address include, but are not limited to:
- What does your company produce? What utility or benefits does it provide to the consumer? How do consumers use it?
- What is your company's history with this product or service?
- What does the competition in the market look like for this product or service?
- What actions has your company taken to remain competitive?
- Does your company sell other products or services that could enhance this product or service? How well are they selling?
2. Provide one or more specific suggestions for price discrimination. (It's pricing strategy, and benefits to consumers.)
- Which price discrimination technique(s) will you use?
- In order for your proposal to generate more profits, will you recommend markup or margin pricing? Why?
- What is the current price? What will be the new price?
- How will consumers benefit from your proposal?
3. Explain how implementing your proposal is expected to impact consumer demand.
- How will your proposal impact sales in the first three months?
- How will your proposal impact sales within twelve months?
- What would increased sales enable the company to do differently?
Typed, double-spaced, using Times New Roman font (size 12) with one-inch margins on all sides.