Pricing Capability and Its Strategic Dimensions
(2008)- Abstract
- The notion of pricing as being of vital importance to firms is supported by a long line of publications that outline recommendations on how price should be managed in order to maximize long-term profits. This implies that pricing, or firm level pricing capability, should constitute an important area of research in the field of strategic management, a field which has as its prime objective to develop explanations of firm performance. Yet, research on pricing capability in strategic management has remained sparse. Rather than addressing this area directly, firm pricing capability has been treated as a non-strategic issue. This is done either by assuming that prices are automatically set at levels reflecting competitive market prices and the... (More)
- The notion of pricing as being of vital importance to firms is supported by a long line of publications that outline recommendations on how price should be managed in order to maximize long-term profits. This implies that pricing, or firm level pricing capability, should constitute an important area of research in the field of strategic management, a field which has as its prime objective to develop explanations of firm performance. Yet, research on pricing capability in strategic management has remained sparse. Rather than addressing this area directly, firm pricing capability has been treated as a non-strategic issue. This is done either by assuming that prices are automatically set at levels reflecting competitive market prices and the product’s value to customers, or by viewing price as an easily manageable part of the firm’s overall competitive strategy.
This empirical study of pricing capability in five cases in the corrugated packaging industry illustrates the problems firms face when pricing their products. The study showed, not only that pricing was difficult to manage, but also that in order to handle the information and control-related uncertainties inherent in pricing decisions, the studied business units committed themselves to complex configurations of assets, routines, activities, and pricing policies. This thesis sets out to uncover the structure and strategic relevance of these configurations, and by doing so, to point out some fundamental problems in mainstream strategic management theory. As it turns out, the failure in addressing the strategic dimensions of pricing capability is not arbitrary, but reflects a theoretical gap that leaves established explanations of firm performance unable to account for important phenomena, such as pricing capability. (Less) - Abstract (Swedish)
- Popular Abstract in Swedish
Iden att prissättning är något mycket viktigt för företag stöds av en lång rad publikationer som ger råd kring hur företag bör sätta pris för att maximera sin långsiktiga lönsamhet. Detta indikerar att prissättning, eller företags prissättningsförmåga, borde utgöra ett viktigt område inom strategiforskning som har som sin primära målsättning att utveckla vetenskapliga förklaringar av företags lönsamhet. Trots detta så har forskning kring företags prissättningsförmåga varit sparsamt förekommande. Snarare än att adressera detta område direkt så har företags prissättningsförmåga behandlats som en icke-strategisk fråga. Detta har skett antingen genom att anta att pris fastställs automatiskt på nivåer... (More) - Popular Abstract in Swedish
Iden att prissättning är något mycket viktigt för företag stöds av en lång rad publikationer som ger råd kring hur företag bör sätta pris för att maximera sin långsiktiga lönsamhet. Detta indikerar att prissättning, eller företags prissättningsförmåga, borde utgöra ett viktigt område inom strategiforskning som har som sin primära målsättning att utveckla vetenskapliga förklaringar av företags lönsamhet. Trots detta så har forskning kring företags prissättningsförmåga varit sparsamt förekommande. Snarare än att adressera detta område direkt så har företags prissättningsförmåga behandlats som en icke-strategisk fråga. Detta har skett antingen genom att anta att pris fastställs automatiskt på nivåer som bestäms av konkurrenters priser och produktens värde för kunden eller genom att se pris som en lätthanterlig del av företagets övergripande strategi.
Denna studie av företags prissättningsförmåga i fem fall inom förpackningsbranschen illustrerar de problem företag möter då de prissätter sina produkter. Studien visade att prissättning inte bara är svårt att hantera, utan att företag för att hantera den kontroll- och informationsrelaterade osäkerhet som är nära sammankopplad med prissättningsbeslutet, utvecklar komplexa konfigurationer av specifika tillgångar, rutiner, aktiviteter och prissättningspolicys. Denna avhandling syftar till att beskriva dessa konfigurationers struktur och strategiska relevans. På detta vis så pekar avhandlingen också på flera fundamentala problem inom etablerad strategiteori. Som denna avhandling åskådliggör, så är den etablerade strategiteorins misslyckande att adressera prissättningsförmåga och dess strategiska dimensioner inte en slump, utan ett avspeglande av ett teoretiskt gap som lämnar etablerade förklaringsmodeller av lönsamhet oförmögna att hantera viktiga fenomen som exempelvis prissättningsförmåga. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/1059443
- author
- Hallberg, Niklas Lars LU
- supervisor
-
- Allan Malm LU
- opponent
-
- Professor Foss, Nicolai J., Center for Strategic Management and Globalization. Copenhagen Business School
- organization
- publishing date
- 2008
- type
- Thesis
- publication status
- published
- subject
- keywords
- Resource-based view, Organizational capabilities, Appropriation factors, Strategic management, Pricing capability, Value appropriation
- pages
- 274 pages
- defense location
- EC3:207
- defense date
- 2008-05-16 13:15:00
- ISBN
- 13 978-91-85113-22-4
- language
- English
- LU publication?
- yes
- id
- 7f6694e0-e58c-4b0f-a220-6d7ef2fe34e4 (old id 1059443)
- date added to LUP
- 2016-04-04 14:09:15
- date last changed
- 2018-11-21 21:18:35
@phdthesis{7f6694e0-e58c-4b0f-a220-6d7ef2fe34e4,
abstract = {{The notion of pricing as being of vital importance to firms is supported by a long line of publications that outline recommendations on how price should be managed in order to maximize long-term profits. This implies that pricing, or firm level pricing capability, should constitute an important area of research in the field of strategic management, a field which has as its prime objective to develop explanations of firm performance. Yet, research on pricing capability in strategic management has remained sparse. Rather than addressing this area directly, firm pricing capability has been treated as a non-strategic issue. This is done either by assuming that prices are automatically set at levels reflecting competitive market prices and the product’s value to customers, or by viewing price as an easily manageable part of the firm’s overall competitive strategy. <br/><br>
<br/><br>
This empirical study of pricing capability in five cases in the corrugated packaging industry illustrates the problems firms face when pricing their products. The study showed, not only that pricing was difficult to manage, but also that in order to handle the information and control-related uncertainties inherent in pricing decisions, the studied business units committed themselves to complex configurations of assets, routines, activities, and pricing policies. This thesis sets out to uncover the structure and strategic relevance of these configurations, and by doing so, to point out some fundamental problems in mainstream strategic management theory. As it turns out, the failure in addressing the strategic dimensions of pricing capability is not arbitrary, but reflects a theoretical gap that leaves established explanations of firm performance unable to account for important phenomena, such as pricing capability.}},
author = {{Hallberg, Niklas Lars}},
isbn = {{13 978-91-85113-22-4}},
keywords = {{Resource-based view; Organizational capabilities; Appropriation factors; Strategic management; Pricing capability; Value appropriation}},
language = {{eng}},
school = {{Lund University}},
title = {{Pricing Capability and Its Strategic Dimensions}},
url = {{https://lup.lub.lu.se/search/files/6293221/1059444.pdf}},
year = {{2008}},
}