ALTO CHEMICALS EUROPE (AR)

Group 16

Problem statement
Decision to implement a pricing strategy to increase profitability Decision regarding centralization(decision making power) to the head quarters at Geneva Decision regarding the focus of the company towards converting small and medium accounts or follow the existing strategy

Decision Point 1
Point : To implement a pricing strategy based on Sales volume or based on Profits. Below we have discussed the Pros and Cons of using the strategy. Pros: 1. Will lead to pricing leverage in the long run. 2. Will lead to Enhanced customer reputation in the long run. Cons: 1. Converted customers can go to other suppliers . 2. Will lead to Sales force demotivation.

Decision Point 2
Point : Decision regarding the centralization or decentralization of power regarding the price setting . Below we have discussed the Pros and Cons of using the strategy. Pros: 1. Will lead to a uniform pricing stategy in all the countries. 2. Will lead to equalization of profits in all the subsidiaries. Cons: 1. Subsidiary mangers feel that it will lead to lack of performance and motivation on part of managers.

Decision Point 3
Point : Decision regarding the focus of the company towards converting small and medium accounts or follow the existing strategy . Below we have discussed the Pros and Cons of using the strategy. Pros: 1. Removes the danger of losing a large customer and loss of subsequent large profits. 2. Will give more chance to explore new potential regional markets. 3. Can utilize the potential price sensitive large end use segments Cons: 1. Same time and effort required for conversion but less profits in the long run.