September 25, 2009 - Modern Distribution Management

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September 25, 2009

The Art of Executing Strategic Pricing

This article looks at the roles of each part of the organization in strategic pricing. Using a sports analogy, the author refers to the Sales Function as the offense, the Operations Function as the defense, and the Purchasing Function as special teams. IT, Finance, Credit and HR play support roles, enabling the team to be in a position to win. And management is the coaching staff. Running a complex "play" like strategic pricing requires all functions to work in concert.

Much has already been written about the "science" of strategic pricing. I have written some of it, including Strategic Pricing for Distributors, published by the NAW Institute earlier this year. I intended the book as a do-it-yourself explanation of strategic pricing.

The magicians Penn & Teller famously perform a magic act that reveals the secrets of magic tricks. But even if you know the secrets, learning how to execute those illusions requires skill and experience. And even if you understand the relatively simple concepts behind strategic pricing, successful implementation is challenging work.

The Art of Executing Strategic Pricing Read More »

Commentary: Grinding Out Growth in 2010

More good financial news keeps strengthening the outlook for distributors. A big surprise to many in August was the flipping of the purchasing manager index to the positive side of 50 (52.9 from 48.9 in July). That reinforces much of what we at MDM have been hearing about production and corresponding orders in August being more positive than expected. That said, this is not shaping up to be your grandfather's recovery from previous sharp economic cycles.

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Alternative Energy Draws Distributors

This article is part of an occasional MDM series on alternative energy markets.

Distributors and manufacturers responding to a recent MDM survey seemed practical in their approach to opportunities in alternative energy markets.

Some said they were not interested in going after these markets, not knowing where they were headed. But others were more optimistic, saying the niche is a growing one, will likely grow for some time, and they want a piece of the pie. As one manufacturer said: "The growth rate is hard to ignore."

The growth rate may be hard to ignore, but with a rapid growth rate comes growing pains. And as detailed in the Sept. 10 issue of MDM, no one knows whether that growth rate will be sustainable leaving many to question how much and when they should invest in the space.

Alternative Energy Draws Distributors Read More »

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