Case ID: 2078
Solution ID: 30635
Words: 1145
Price $ 75

Atlantic Computer A Bundle of Pricing Options Case Solution

Case Solution

When students possess the British-language PDF of the Brief Case inside a course pack, they'll also can buy an audio version. Atlantic Computer, a number one player within the high-finish server market, has detected a marketplace chance within the fundamental server segment. They've created a new server, the Tronn, to meet the requirements of the segment. Additionally, they've produced an application tool, known as the Performance Improving Server Accelerator, or PESA, that enables the Tronn to do as much as four occasions faster than its standard speed. The central question involves how you can cost the Tronn and PESA. Although cost-plus, competition-based, and standing-quo prices are the most typical strategies by which firms establish prices for his or her choices, these approaches prevents firms from fully recognizing the advantages which are because of them. Offers an chance to optimize value capture for that firm through the use of value-in-use prices (i.e., analyzing the worth that the firm's offering produces for that customer, and taking advantage of the savings produced because the grounds for developing prices). Also enables for that search for the difficulties all around the implementation of the value-in-use prices strategy. Included in this are the responses of rivals, customers, and stakeholders inside the firm.

Excel Calculations

Option 1             

Status Quo Pricing

Option 2             

Competetive Based Pricing        

Option 3                                             

Cost Plus Pricing                                             

Option 4                             

Value In Pricing                               

Conservative Strategy                  

Pricing Method

Expected

Sales    

Revenues           

Costs    

Profit   

Difference

Questions Covered

What price should Jowers charge DayTraderJournal.com for the Atlantic Bundle (i.e., Tronn servers + PESA software tool)?

Think broadly about the top-line revenue implications from each of the four alternative pricing strategies.  Approximately how much money over the next three years will be “left on the table” if the firm were to give away the software tool for free (i.e., status quo pricing) versus utilizing one of the other pricing approaches?

How is Matzer likely to react to your recommendation?

How is Cadena‟s sales force likely to react to your recommendation?

What can Jowers recommend to get Cadenza’s hardware oriented sales force to understand and sell the value of the PESA software effectively?

How are customers in your target market likely to react to your recommended pricing strategy?  What response can be provided to overcome any objections?

How is Ontario Zinc‟s senior management team likely to react to the Atlantic Bundle?