As the market impacts of Coronavirus disease (COVID-19) struck, businesses find themselves starting from very different inventories. Some of them were heavily stocked, while others were not.
FREMONT, CA: Market forces have posed an existential inflection point for many B2B manufacturers, distributors as well as service providers in relation to the global supply chain, forcing them to reinvent logistics and supply and demand dynamics on the fly.
Many of these issues have pricing consequences, and when approached thoughtfully and purposefully, pricing science will help to better handle unpredictable conditions. From inventory locations and distribution to the seismic transition from in-person sales to digital platforms, reimagining a conventional pricing strategy will reduce adverse margin effects. Here's how to price implications and reimagined tactics will contribute to better financial outcomes.
Place of Inventory and Methods of Performance
As the market impacts of Coronavirus disease (COVID-19) struck, businesses find themselves starting from very different inventories. Some of them were heavily stocked, while others were not. Distributors that stick to the just-in-time stocking strategy would close behind the curve, particularly if their suppliers' partners also lack readily available inventories. Contingency plans such as a geographically diversified supply base can protect businesses from the worst upfront impacts, but the long-term reverberations of the crisis will affect even the most prepared. Connection up and down the supply chain and innovative, versatile thinking are essential for well-stocked businesses with a range of supply choices.
Another fluid situation concerns the strategies used by businesses to move goods around the world, either to supply them or to sell to their consumers. Companies need to keep an eye on the impact that this would have on the cost of shipping goods and change where it makes sense. Although cheaper oil is good news for some, it is potentially disastrous for companies selling to the oil and gas sector or selling downstream oil and fuel products, especially commodities. These companies need more than ever a science-driven awareness of price sensitivity in order to make educated decisions about where to pursue the demand and where to continue to preserve margins and pricing power.