Pricing Process As A Capability: A Resource Based Perspective
- Topics:
- Price Optimization
- Source:
- Mark Bergen & Associates
FREE Registration is required
Overview: Strategists following the resource-based view argue that firms can generate rents through value creation. To create value, firms develop and use resources and capabilities that other firms cannot imitate, trade for, or substitute other assets for. To capture rents, a firm must set the right prices for what it sells. Hence, to develop the ability to set the right prices, a firm must invest in resources and routines. The article base argument on a study of the pricing process of a large, Midwestern manufacturing firm. It shows that pricing resources, routines, and skills may help or inhibit a firm in setting the right price—and hence in appropriating value created. The view also contributes to economics because it suggests that strategic decisions about pricing capabilities have important implications for a fundamental economic action, determining prices. As a result, resources may be used ineffectively.
(Is this item miscategorized? Does it need more tags? Let us know.)
Format: WORD | Date: Jul 2002 | Pages: 30
