麦肯锡－案例库Going for high price

001107MU2_182305_027_v3,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,*Footnote,Quelle:Sources,Unit of measure,BACK-UP,Legend,Legend,Legend,PD Paper,November 2000,Go for a Higher Price Incumbents Race for Competition,Bernhard Schmidt,BE,Andreas Florissen,DU Boris Maurer,BE,Axel Flasbarth,BE,Achim Hausen,CG,Thomas Vahlenkamp,DU,0,Source:McKinsey,INDUSTRIES WHERE GO FOR A HIGHER PRICECAN BE APPLIED,Oligopolistic markets with new entrants and/or strong competition:,Retailing,Banking,Insurance,Airlines,Fast-growing industries fighting for market share:,Mobile operators,Internet service providers,E-commerce,Newly deregulated industries:,Telecommunication,Utility,Transportation,Competition perceived as high,New entrants with new technologies,especially in banking(e.g.,online brokerage),Traditionally low/negative margins in retailing,Flawed business models that lead to customers with negative value,New technologies tend to lead to lower prices(price transparency,auctions,etc.),No skimming for new technologies(e.g.,DSL flat rate by DTAG),Main issues,Destructive price wars,Proactive price cuts,Focus ofpresentation,1,HOW INCUMBENTS ARE BOUND TO FEEL,2,AOL TO UNVEIL FLAT RATES IN GERMANY,UK,The Wall Street Journal Europe,06/20/2000,Competition has hit us hard,()Electricity prices for industrial customers(in Germany)have fallen by 30 to 50 percent,private customers are pleased with bills 15 to 20 percent lower,FAZ,11/01/2000,PRICE WAR LOWERS TURN-OVER AT NECKARWERKE STUTTGART AG,Sddeutsche Zeitung,05/08/2000,THE NET WAR IN EUROPE,Business Week,06/19/2000,PRICE WAR ON GERMAN FOOD RETAIL MARKET BECOMES FIERCER,The price war on Germanys food retail market has intensified since the entry of Wal Mart Stores Inc.,the U.S.retail giant,onto the market(),Die Welt,04/28/2000,AT,the,can,e.g.,RWE:Electricity Prices Have Hit Rock Bottom,()operating profits fell by 15 per cent()This was due to the fall in the price of electricity,caused by the deregulation of the sector.,Die Welt,07/04/2000,Rewe Sees No End to Price War,()the so-called retail price war in Germany,in which Rewe has undeniably been one of the key players,severely dented group operating profits,which declined by DM 100 m to DM 500 m(),Eurofood,03/30/2000,Deutsche Telekom hardly earns money in its operational business,()Shrinking profits()are due tohigh marketing cost for acquiring new customers()and the price war in theconventional telephone network.,FTD,11/01/2000,Pricing turns into a science,How a company prices products and services is increasingly acknowledged as an important strategic tool affecting profit,growth and shareholder value(),FT,10/31/2000,INCUMBENTS HIT IN PRICE WARS,Source:Miscellaneous newspapers,McKinsey,3,CHALLENGES FOR INCUMBENTS IN DEREGULATED MARKETS,Source:McKinsey,Incumbent,Pricing,Avoid price wars,Go for a higher price,Organization,Build up new skills,Create a flexible,adaptive organization,Costs,Cut costs,Increase your efficiency,Regulation,Fight for regulatory freedom,Try to raise entry barriers,Growth,Build up new businesses,Prepare for M&A,Pricing,Avoid price wars,Go for a higher price,4,PRICE WAR IN TELECOMMUNICATIONS FINLAND,Time,New entrant,Sonera(incumbent),Price,Day 1,Day 2,Day 3,-50 to-70%,price decline within several,days,Market share Sonera,(LAND Island),Percent,40,50,60,100,Proactive,price cutting,Competitor undercuts incum-bents price,Next panic reaction,*Population=20,000,Source:McKinsey Research,60%loss in market share,5,PRICE CUTS AFTER DEREGULATION POWER SUPPLY SWEDEN,Source:McKinsey,Average pricesSEK/kWh,Large customers,Private customers,Spot market price approx.14 SEK/kWh,SME,1998,1999,1998,1999,1998,1999,-6%,-19%,-35%,Large price decline despite s,mall actual switching rates,15,6,MISINTERPRETATION OF KEY INFLUENCING FACTORS,Source:McKinsey,Hypothesis,Price cuts are too aggressive most of the time,Why?,Competitors price reactions are not taken into consideration;an initial price reduction triggers an avalanche of self-destructive price cuts,Competitors price,1,Overestimation of customer switching rates,Switching rate,2,Fear of losing even a single customer due to un-differentiated overestimation of customer value,Volume-oriented,not value-oriented,Customer value,3,No idea how cost to serve(own,competitors)effect pricing schemes,Cost to serve,4,7,WHAT IS THE RIGHT PRICE?,Source:McKinsey,How high?,Even higher!,The price is higher than you think!,8,?,WHAT IS THE RIGHT PRICE?,EXAMPLES GERMANY:PRIVATE CUSTOMER,In your opinion,how high should.,an incumbent telecommunications,provider(peak time,long-distance calls),an incumbent postal company(local mail)and,an incumbent utility,Source:McKinsey,Attackers price,9 cent/min,0.40/letter,9 cent/kWh*,Actual price set by incumbent after first price decrease,12-18 cent/min,0.55/letter,11 cent/kWh,Optimal model price,16,cent/min*,0.75-0.90,/letter*,16,cent/kWh,*,Estimates for variable cost,customer value *Net price,bel