EMERGING MANAGERS

Value Analysis & service industry:

One of every company's main objectives is to gain a competitive edge over competitors in the industry as it boosts business margins, draws in additional clients, and solidifies brand recognition. Valuechain analysis is a methodusedto assess business processes thatcan help businessesacquire a competitive edge and find flaws that can be rectified to increase productivity and provide value. The manufacturing sector is more heavily weighted in the traditional value chain than the services sector. The standard value chain analysis can still be modified to incorporate the value chain idea and produce a service value chain. By breaking down the organization's logistics, operations, and infrastructure,themanagementmaydeterminethe trueworth of agoodorservice. It canalso assist in selecting the competitive edge possessed over competing companies. The sector of the economy, namely the service sector, provides intangible services rather than tangible goods. Banking, hospitality, communications, computer software, virtual trading, healthcare, and other industries can be considered services. Economists have noticed a significant movement from manufacturing to services in the last few years. Robots now perform most of the laborin themanufacturingsector, reducing theneedforhuman work and contributing to this trend. However, there is undoubtedly room for exploration in the service sector.

Companies can use value chain analysis to increase their profits in two ways:

• Cost leadership entails reducing costs and streamlining processes to increase profit margins.

• Competitive differentiation entails branding as a different company and providing a one-of-a-kind, high-quality service.

The service value chain comprises various manufacturing inputs, outputs, and activities: Inbound Logistics for the service industry:

1. Inseparability: Service is delivered to multiple consumers simultaneously.

2. Intangibility: This type of service is tailored to one or more consumers.

3. Perishability: Because services are not perishable goods, they cannot be saved or stored.

4. Heterogeneity: the quality of service and experience may differ from person to person, such as responsiveness and customer service quality.

Operations in a service industry:

The acquisition of raw materials and supporting goods for usage within the organization is referred to as inbound logistics. As can be seen, the manufacturing sector is better served when it comes to this definition. Inbound logistics are included in the supply value chain. However, the items are different.

The importance of operations management in the supplier value chain might take time to become apparent. But, in this case, the processes are the procedures that enable the services and give customers their experiences. For instance, to provide speedy client service in the hospitality industry, food, bedding, drinks, and other requirements must be kept well-stocked. It would help if the tourism industry's boarding, lodging, and emergency procedures are overseen.

Outbound Logistics for the service industry:

According to the traditional business model, outbound logistics includes storing and distributing commodities. Yet, in the service value chain, direct service delivery to the customer without the need for intermediary agents or delays is part of outbound logistics activities. Thus, the qualities are different here. For instance, an internet service provider worries about how smoothly the customer receives the bandwidth, download speed, and service quality the company provides. Similarly, the outbound logistics for the banking sector focus on delivering a positive client experience and dependability throughout transactions.

Marketing & Sales in the service industry:

In the industry value chain, sales refer to persuading potential clients to purchase your services. At the same time, marketing generates demand by providing the appropriate services to those who need them. Lead generation is a classic example of marketing and sales in the service value chain. In the conventional industry value chain, each market is based on the company’s product's characteristics. Having a distinct strategy to offer services while in the service value chain is considered to be the best.

Service:

It is crucial to remember in Value chain analysis, that customer recommendations and reviews are significant in a company’s success. The new customers will want to know other customers’ experiences because the products are intangible. As a result, post-purchase support services are essential to the success of the services industry. A positive customer experience results in client retention, loyalty, and indirect marketing for the business.

Activities that contribute to value in the Service Industry:

The value chain analysis supporting activities create a solid foundation for the physical operations that will be carried out, similar to a framework that includes the main tasks and offers assistance.

Infrastructure:

Differentservicebusinesseshavevaryingformsandsizesofinfrastructureneedsalongtheservices value chain. For instance, the hotel sector requires a substantial physical infrastructure, which includes structures, beds, food, and much more. Contrarily, businesses that provide IT services need data servers, communication routes, fiber optics, etc. Moreover, infrastructure includes the areas of finance, accounting, planning, and law.

Human Resource:

Human resources continue to be a vital component of the service value chain analysis despite the growing importance of technology in this field. Various service value chain models necessitate varying degrees of hiring, training, and other human resource management operations. Legal proceedings, corporate staff training, course instruction, and maintaining transaction privacy are just a few of the many facets of HRM. Hence, HRM must expend more energy, time, and resources.

Technology:

Throughout thepast few decades, technology’s influencehas increased dramatically.Somesectors of the service value chain are solely dependent on technological development. Internet service providers, Amazon cloud computing, and Airbnb are examples of cutting-edge technology success stories. In the modern world, technology is a crucial source of competitive advantage. Thus, it is necessary to recognize innovation and research in this field

Procurement:

Again, procurement varies across various service value chains. Procurement is not very important in the Airbnb model. They must purchase goods to run the firm while working in the banking sector. Nonetheless, procurement is a significant activity in the hotel sector. In the hotel industry, end-of-life management is a constant challenge. They must frequently replace the equipment and supplies used for everyday operations. They must choose the best suppliers at fair prices to save costs and get the most excellent products.

Conclusion:

Any organization may see the path to profitability through a value chain analysis. Examining the service value chain attempts to bring the service sector into compliance with the highest requirements for customer satisfaction. This is the fundamental basis for any firm to achieve a competitive edge. Value analysis weighs the price of a product or service against its benefits to customers. It forces to think about each process step in terms of how it benefits the client, who could be a consumer or another company. This implies that each process stage is examined and challenged in light of its benefit to the client. One can streamline one’s business and utilize fewer resources if there is no benefit to the client, and the step is optional for the product or service as a whole. The cost-saving potential is a crucial benefit of value analysis, and it permeates every other use of the system, making it advantageous in every way. Value analysis divides a good or service into its constituent parts, allowing one to examine each role separately and assess its significance and effectiveness. When properly implemented and executed, value analysis lets one spot pieces that are either unnecessary or may be swapped out for less expensive ones. The procedure for the good or service being analysed is improved to be completed more economically. It is to be understood that services always need to be performed economically while making sure that the quality of the service does not suffer.

About the Author:

Akshay Arvind Thirumavalavan is a young and dynamic student pursuing his master’s in the power and flow group of mechanical engineering, which is involved in dynamic and active research for a cleaner tomorrow from Eindhoven University of Technology-Eindhoven, Netherlands. He did his bachelor's in Mechanical Engineering, at Velammal Engineering College, Chennai, with a final project on investigating after treatment of emissions with low-cost alternatives.

Ms. Diksha Jain

MBA, 2022-2024

IBS Hyderabad

Aggregate Planning

Introduction:

Aggregate planning in supply chain management inside a manufacturing facility is crucial when aiming to increase operational efficiency. The concept of 'Aggregate Planning' deals with planning material procurement so that the cost incurred is minimum to the organization. It is done to get an idea of how many materials need to be procured and at what time so that the production process is smooth. The concepts of aggregate Planning might be used when you want to predict your supply chain needs well in advance. How a company can make the most of its existing resources is what aggregate planning answers.

The supply chain's effectiveness is significantly impacted by aggregate Planning because it needs input from every level to be effective. The overall plan is a general operation guide and provides primary production and distribution decision parameters. If a manufacturer intends to increase production over a specific period, the supplier, transporter, and warehouse must be aware of this intention and factor it into their plans. In an ideal world, all supply chain stages would collaborate on an overall strategy that optimizes supply chain performance. It is unlikely that all projects will mesh in a coordinated manner if each step independently develops its aggregate plan. This lack of coordination leads to supply chain shortages or oversupply. As a result, it is critical to developing aggregate plans for the entire supply chain.

Important factors for Aggregate Planning:

1. Budget: Allocation of budget to different resources to utilize them optimally and efficiently outputs.

2. Risk: Risk and uncertainty go hand in hand. Aggregate Planning should help tackle risks that may arise during production.

3. Competition:AggregatePlanningshouldbedonekeepingcompetitioninmindtomaximize output and for the firm to maximize profits.

4. Futuristic approach: Aggregate Planning is done to align the future needs well in advance to avoid any difficulty later. It has to be done with a futuristic approach to keep all the needs aligned to arrive during the market.

Why is aggregate Planning important?

Aggregate Planning helps to manage facilities so that the finished goods inventory is not stocked up at the facility. Also, the goods should be protected before reaching the target customers. Both these situations are losses for the firm and should be avoided. To avoid the same, aggregate Planning should be done as it helps to manage the inventory to prevent future losses for the organization.

Relationships with distributors and suppliers are also developed due to the process as interaction between various stakeholders increases to keep them informed about the inventory status for production.

A manufacturing organization will incur higher costs if it has less inventory. Also, it will need extra storage space because improper storage increases the likelihood of damage. The company will also need to spend more on supplies, labor, and equipment to handle the merchandise and its transfer. Aggregate Planning helps to meet demand and supply.

An organization can understand its human resource need through aggregate Planning. It helps to know how many more people will have to be employed to complete the work on time and how many will have to be let go to minimize costs for the firm. The aggregate planning method helps the organization to save tie and money that it would have otherwise put into training human resources.

It also helps to adjust the capacity of the manufacturing facility to meet demands.

Aggregate Planning as Operational Tool:

Aggregate planning aids in striking a balance between the organization's operational, financial, and overarching strategic goals. It acts as a platform for managing demand and capacity planning.

An organization can attempt to balance price, promotion, order management, and new demand creation when demand does not equal capacity.

When capacity and demand are out of balance, an organization may consider several different approaches:

Firms can reduce/increase demand by laying off/hiring excess/inadequate excess/inadequate excess/deficient personnel.

Firms can create more capacity by including overtime in the schedule

Temporary labor for a set amount of time or contracting out work to a subcontractor can be done in order to meet demands for staffing.

Influencing factors for aggregate Planning:

Since the organization strives to balance long-term strategic Planning and short-term production success, aggregate Planning is a crucial operational activity. Before an overall planning process can begin, the following elements must be present:

It is necessary to have full knowledge of the available production equipment and raw materials. A reliable demand projection for the medium-term

The cost of production is planned financially, and this involves preparing for labor, inventory, and raw materials.

Organizational policies regarding quality control, labor management, etc.

Challenges in Aggregate Planning:

Despite many advantages of Aggregate Planning, we must remember that, like every coin has two sides, aggregate Planning comes with its share of issues. The first one is that it is done for only a specific duration or a short period. It is done for a limited time duration only. Even though this is a limitation, it presents a chance to improve your management techniques. An aggregate strategy urges you to keep track of changing external and internal factors and incorporate them into your business strategies. You periodically design a new plan that best represents current circumstances and positions you for long-term success. Moreover, aggregate Planning depends on the premise that some variables are specific, whereas, in reality, there could be significant disruptions at any time. This stresses how crucial it is to develop and carry out an all-encompassing plan while keeping in mind that you must be adaptable and mindful of problems as they arise.

How aggregate Planning affects production and team efficiency?

Consistent production enables businesses to meet demand more effectively while wasting fewer resources. Because an effective aggregate plan creates a balance between demand and capacity, it allowsa companyto level out productionrather thanhaving suddenincreases ordecreases. Instead of ramping up or rapidly decreasing production based on the current environment, a facility with an aggregate plan can level out production planning to serve customers over the entire period.

In addition to maximizing business profits and ensuring consistent production, aggregate Planning is critical for creating a stable, dependable work environment for your team. Your company's workforce and resource requirements can fluctuate dramatically without an appropriate aggregate plan. As a result, you may find yourself constantly firing and hiring employees. This undermines trust, makes it difficult to attract new talent, and may encourage current employees to look for work elsewhere. It can also lower work quality because it is difficult for employees to perform at their best when they are constantly concerned about when their jobs will end.

Conclusion:

There are numerous ways to cut costs and improve business strategies, but aggregate planning is unique in that it combines information and addresses demand and capacity issues from a more holistic perspective. If you want to stabilize production, create a more dependable workplace for your team, and reduce costs, you can start by developing an aggregate plan.

Mr.Sai Avinash Kaari

MBA, 2022-2024

IBS Hyderabad

“Inventory is something you don't see in nature. Everything in nature has continuous present utility. Our factories and distribution centers need to be optimized such that everything in there has continuous present utility.”

Supply chain management, which comprises all procedures that transform raw materials into finished commodities, is the control of the movement of goods and services. It entails the deliberate simplification of a company's supply-side operations to optimize customer value and achieve a competitive edge in the market. Through supply chain optimization, businesses can cut back on wasteful spending and speed up the delivery of goods to customers. Effective SCM protects companies from costly recalls and legal actions as well as the media. A supply chain manager controls and reduces costs and avoids supply shortages.

How Supply Chain Management (SCM) Works

SCM represents an effort by suppliers to develop and implement a supply chain that is as efficient and economical as possible. The Supply chain covers everything from production to product development to the information systems needed to direct these undertakings. Supply chain management often aims to centrally coordinate or link a product's manufacturing, shipment, and distribution. By maximizing the supply chain, businesses can reduce wasteful spending and speed up the delivery of goods to customers as discussed, to do this, significant attention is paid to internal inventories, internal manufacturing, internal distribution, internal sales, and the stocks of external suppliers to the company. The foundation of supply chain management is the notion that almost all products that are sold are the result of the work of numerous businesses that make up a supply chain. Supplychainshavebeenaroundforaverylongtime,butmostcompanieshaveonlyrecentlyrealized the value they can provide to their operations.

The supply chain manager works to cut back on shortages and keep costs in check. Supply chain managers "oversee and manage the complete supply chain and logistic operations to maximize efficiency and minimize the cost of the organization's supply chain," which goes beyond logistics and procuring inventories. The bottom line of a business can be immediately impacted by improvements in efficiency and productivity.

The Five parts of SCM are:

1. Procurement: Sourcing and purchasing raw materials, components, and finished goods from suppliers.

2. Production Planning: Determining what products should be produced, how much should be produced, and when they should be produced.

3. Logistics: Managing the transportation and storage of raw materials, components, and finished goods, including inbound and outbound shipments and inventory management.

4. Inventory Management: Maintaining an optimal level of inventory to minimize costs and ensure customer satisfaction.

5. Delivery: Delivering finished goods to customers, including order processing, shipping, and customer service.

Supply chain vs Supply chain Management

The supply chain refers to the flow of goods, information, and money from the raw material stage to thefinal customer.It includes all theactivitiesinvolvedin theproductionanddeliveryofaproduct or service, including procurement, production planning, logistics, inventory management, and delivery.

SCM, on the other hand, is the coordination and management of these activities to optimize the flow of goods, information, and money along the supply chain, minimize costs, improve efficiency, and ensure customer satisfaction. It involves using various tools and techniques, such as production planningand control, logistics management, and inventorymanagement,to managethesupply chain effectively. In summary, the supply chain is the entire process, while SCM is the management of that process.

Types of supply chain models

SCM does not appear the same in every organization. Each business's SCM process is unique due to its specific objectives, advantages, limitations, and Typically, a corporation can choose one of six major models to direct its SCM procedures. The type of supply chain model a company adopts is primarily based on its business model and customer demand. Some common types of supply chain models adopted by companies include:

• Make-to-Stock (MTS) Model: Suited for companies with stable and predictable demand, products are manufactured in advance and kept in inventory, ready for customer demand.

• Make-to-Order (MTO) Model: Suited for companies with low volume, and high variability demand, products are manufactured only after a customer order is received.

• Assemble-to-Order (ATO) Model: Suited for companies with a wide variety, and low volume demand, products are assembled only after a customer order is received, using components and subassemblies that are kept in inventory.

• Configure-to-Order (CTO) Model: Suited for companies with a high degree of customization, products are configured and manufactured to customer specifications.

• Hybrid Model: Suited for companies with a mix of predictable and unpredictable demand, using a combination of forecasting and demand signals to drive production and inventory management. It's worth noting that companies may adopt different supply chain models for different products or product lines and modify their supply chain models over time as market conditions and customer demand change.

Why is the supply chain important?

SCM is important because it can have a significant impact on a company's overall performance and competitiveness, including:

• Cost Reduction: Effective supply chain management can help to minimize costs by optimizing the flow of goods, information, and money, reducing waste and inefficiencies, and lowering inventory levels.

• Improved Efficiency: A well-managed supply chain can improve operational efficiency, speed up delivery times, and reduce lead times, helping companies to meet customer demand more effectively.

• Increased Flexibility: A flexible supply chain can help companies quickly adapt to changes in customer demand, market conditions, and other external factors.

• Improved Customer Service: A strong supply chain can help companies to improve customer satisfaction by delivering products and services more quickly and consistently.

• Enhanced Reputation: Companies with a well-managed supply chain are often seen as more reliable and trustworthy, helping to build a positive reputation in the market.

• Increased Revenue: By reducing costs, improving efficiency, and enhancing customer satisfaction, a strong supply chain can contribute to increased revenue for a company. Therefore, SCM is a crucial aspect of business operations that can significantly impact a company's success and competitiveness in the marketplace.

Ms. Sana Sai Naga Deekshitha MBA, 2022-2024 IBS Hyderabad

How To Lean Your Manufacturing Practice

Manufacturing is a key piece of any company’s strategy to grow productivity, lower costs and bring about long-term growth. Lean manufacturing is a process that aims to decreasethe rateof production by reducing the number of repetitions needed to produce a product. It’s also known as cycle-free manufacturing. Lean manufacturing was originated in Toyota motors to eliminate the waste and enhance manufacturing operations.

What is manufacturing lean?

Manufacturing has many aspects, but one of its most important functions is to decrease the rate of production. By using lesscapital, equipment and workers, the quantities of production can be higher. Although manufacturing is a process that uses some variability in the number of operations to accomplish a goal, the process is still highly reliable.

Take stock of your production process

When you have a general idea of when, how and where your production will occur, you can begin to take stock of the products you’re working on. This is a good time to ask yourself What do I know about production that I can use to my advantage?

Set targets for quality and cost

Marketingandsalesgoalsneedtobeourhighestpriorities,butoperationalandoperational efficiency also play important roles in creating and growing a profit. To help you prioritize the efforts required to reach your goals, create a production and quality budget. This budget should address the following: - Key functional areas and their costs (i.e. raw materials, production equipment and material costs) - What is needed to achieve the goals? (i.e. how much, why and when) - How will I achieve the goals? (i.e. how much, why and when) - How will my team achieve the goals? (i.e. how much, why and when) - What is the cost of doing business in your country?

Monitor your production activity

As you begin to take stock of your production process, you’ll begin to see where you’re making mistakes. Make sure to note down the mistakes you make so you can be better positioned in the future. One common production mistake is to assume that all parts, pieces and machines on a production line know exactly what they’re doing. This is often due to the fact that human employees are often unaware of some of the technical aspects of the job, such as how to pre-drill holes in the ground, or how to sand and/or boring holes in stone. To keep your production running at a standard, you’ll also need to regularly monitor it this includes visual and verbal communication, as well as the way in which the operation is taking place.

Add quality and price controls

Poor quality, time-consuming or already-overdue work can demotivate an operation and prompt the employerto takecorrectiveaction.Toprevent this from happening, it’scritical to put in placequality and price controls throughout the business. These controls should be easy to monitor and easily adjustable. For example, you can establish Quality Control Lines (QCLs) that know when and how much to produce certain products and when to ship others. You can also set up quality control procedures in the company’s purchasing and purchasing policies.

Reduce waste with reduced inventory used

Waste is one of the most important and persistent challenges facing manufacturing organizations. All too often, manufacturers end up with too much inventory that isn’t needed or isn’t needed to meet customer orders. To try and reduce this waste, many manufacturing organizations choose to use automation. However, this can easily turn into a two-tiered system, with one group handling the “ups” and the other handling the “downs.” This leads to overproduction and underconsumption, as too few parts or goods are produced to the demand. It’s also possible to use a combination of processes to reduce this waste. For example, you could use a batching system to bring-off some of the excess capacity that might otherwise occur during the busy months of summer.

Lean more Don’t use the same articles

One of the most important lessons that can be learned from the history of all technological advancements is that the boundaries between disciplines and disciplines must be kept as clean and light-hearted as possible. Artaud famously said, “You can never kill a humorist. You can only kill a manufacturer.” As a manufacturer, you must never do business without using various humoristic terms such as using the word “brick,” “cement” or “leather” to describe a product, or without using the word “run” when discussing the process. These terms make the manufacturer laugh, and they are a great way to keep your work from getting boring. They also help you identify potential obstaclesthatstandinthewayofyouhaving agoodtimewhileyou’remakingyourcompanymoney.

5 principles of lean manufacturing:

This five step process for guiding the implementation of the lean techniques was proposed by James P. Womack and Daniel T. Jones in the year 1997. The five principles proposed by them are a.) Value b.) Value stream c.) Flow d.) Pull e.) Perfection

Value: value is the key determinant that tries to satisfy the customer demands. In order to achieve this the company asks few questions to themselves including what is the timeline for manufacturing and delivery, at what price the customers would purchase it and other related questions.

Value Stream: once the end goal has been determined then the next process is value streaming. It is mapping a simple but eye-opening experience that identifies all the actions that take a product or service through different stages includes, design process, production, procurement, administration and customer service. This process sometimes referred as re-engineering process. Eventually this enhances the entire business operations.

Flow: In this stage there will not be any interruptions or bottlenecks occur during the manufacturing process. However, this has become one of the toughest challenges for the managers because the bottlenecks should be identified and should be removed from entire cross functional departments. By successfully implementing the flow process companies can improve the efficiency more than 50%.

Pull: by removing the lean in the flow process the process will become much faster and can dramatically improve. This helps thecompany to delverthe products as fast as possible.“Pull”refers in delivering the products to the final consumers. With the help of this products need to be built in advance.

Perfection: the most crucial and important principle among all other principles is perfection. Perfection doesn’t come from one person. It ties all the team to built a perfect product. This requires individual as well as corporate effort. Eventually this strengthens the employee bond and lead to a great workforce All these five principles will improve the production process efficiency and remove the bottlenecks.

Conclusion

Manufacturing is a crucial and essential part of any business’s strategy to grow productivity, lower costs and bring about long-term growth. It is crucial that businesses implement lean manufacturing practices to achieve these ends. If you want to create a profitable, healthy and well-educated business,youneedtobeabletoproduceatahighstandard.Youalsoneedtobeabletomeetcustomer orders quickly and efficiently. During the day, focus your energy on making sure your production rate is high enough to meet customer orders. As the owner, it’s your responsibility to make sure your operation maintains a high standard of efficiency. If you don't have this, your company will not be successful.

Mr. Abhisekh Kumar

MBA, 2022-2024 IBS Hyderabad

Developing a New Product Through Crowdfunding: Tips and Strategies

The e-commerce industry is highly competitive and dynamic, with businesses constantly looking for innovative ways to attract customers and generate higher profits. One of the most effective strategies to increase profits and gain a competitive edge is through competition-oriented dynamic pricing. This pricing strategy focuses on adapting to changing market conditions to maximize profits. This comprehensive guide will provide you with an in-depth look into what competitionoriented dynamic pricing is, why it is beneficial for your business, and how to successfully implement it. By the end of this guide, you will have a thorough understanding of how to use this powerful pricing strategy to increase your profits and gain a competitive edge.

Benefits of Competition-oriented Dynamic Pricing

When companies set their prices manually, they’re essentially guessing at what their customers arewilling to pay.Competition-orienteddynamicpricingtactics letyouautomatically analyzedata related to your business and competitors, then respond by changing prices in real-time to increase sales, maximize profits, and attract more customers. There are many benefits that come with using competition-oriented dynamic pricing, including: Improved Profitability - Dynamic pricing allows businesses to price their products in real-time based on supply and demand, seasonal demand, competitors’ pricing, and more. This means businesses can set higher prices when supply is low, and lower prices when supply is high. Accurate Product Pricing - Automatic pricing allows you to set accurateprices that arefairto customers.Insteadofguessingat what yourcustomersarewilling to pay, you can use data to set fair and accurate prices that attract more customers without scaring them away. Attract More Customers - When you have fair pricing, customers are more likely to shop with you,which results in moresalesandalargercustomerbase. IncreasedCustomerLoyalty - Customers who shop at stores with fair pricing are less likely to shop around for better deals.

Analyzing the Competition

Before you can start adjusting your prices, you need to know what your competitors are doing. The first step in dynamic pricing is to closely analyze and track your competitors’ pricing. This will help you understand the types of products your competitors are selling, their profit margins, and the prices they’re currently charging for their products. You can track your competitors’ pricing manually or with help of automated tools that are designed to collect and analyze data in real-time to help you make price adjustments. Pricing intelligence tools allow you to collect and analyze data in real-time to give you insights on how to adjust your prices based on your competitors’ pricing strategy. You can use a pricing intelligence tool like Price to track your competitors’ price, product information, and inventory levels, and see how your prices stack up against theirs. Price’s price tracking tool allows you to track and monitor the pricing and product information of your competitors’ listings and create custom alerts to notify you when prices change. Price also lets you track your competition based on product type, brand, and inventory levels. This will help you understand how demand for similar products and inventory levels vary across different products your competitors sell.

Developing a Pricing Model

Once you’ve analyzed your competitors’ pricing, you can use that data to create a pricing model. A pricing model is a formula that determines the price for each item in your inventory based on the data collected from competitors’ pricing and your costs. There are several factors that you should consider when you’re creating a pricing model, including: Demand - The first thing you need to determine is the demand for your products, which you can calculate using the average sales of your top-selling products. You can also use a price-demand curve to help you determine the price you should charge. Price-demand curves show the relationship between the price of a good and the quantity demanded. You can use the price-demand curve to determine the quantity of units you can sell at different prices. Competitive landscape - You also need to consider your competitors’ pricing to determine a price that will help you stand out from the crowd. Customer pricing expectationsYou should also consider customer pricing expectations when creating a pricing model. For example, some customers may be willing to pay more for organic products while others are looking for cheaper, low-quality products. You can use the data you collected on your competitors’ pricing to help you determine a price range for each product type. Understanding all of these factors will help you create a pricing model and determine the price for each product in your inventory.

Setting Prices in Real-time

After you’ve created a pricing model, you can start setting prices in real-time. Setting prices in realtime helps businesses gain an edge and generate higher profits by responding to changes in demand and reducing inventory levels. Setting prices in real-time is possible through software that incorporates your pricing model and competition-oriented dynamic pricing strategies. There are several software options available, including: Pricing Intelligence Platform - Pricing intelligence platforms are designed to let you set prices in real-time based on your pricing model and tracking data from your competitors’ listings. These platforms allow you to track your competition and react quickly by adjusting your pricing as needed. Pricing intelligence platforms also allow you to set pricing for seasonal goods and services based on a calendar. This helps you save time because you don’t have to manually adjust pricing. Pricing automation tools - Pricing automation tools allow you to set dynamic pricing by analyzing the data in your pricing model. These tools also allow you to set dynamicpricing basedondemand,inventory levels, andyour competition. Pricing automation tools allow you to set pricing based on a variety of factors, including seasonality, weather, customer demand, and more. These tools also allow you to set up alerts and notifications to let you know when to adjust your pricing based on changes in the market.

Monitoring Price Changes

In addition to setting your prices in real-time, it’s important to monitor your competition to make sure your prices are still accurate. This will help you identify any changes in the market that may affect your pricing model and require you to make adjustments. There are several ways you can monitor the competition, including: Monitoring price changes - You can track your competitors’ price changes to determine whether your prices are accurate. Tracking inventory levels - Tracking inventory levels will help you understand whether demand for your products is increasing or decreasing. Monitoring customer behavior - Monitoring customer behavior allows you to understand how customers are responding to your products and competition. This will help you understand whether customers are buying higher priced items or lower priced products. Tracking social sentiment - Tracking social sentiment allows you to understand how customers are feeling about your products, the competition, and the market. This will help you identify any changes in the market that may affect your pricing model and require you to make adjustments.

Strategies to Increase Profitability

There are several strategies you can employ to increase profitability and increase your profits through competition-oriented dynamic pricing. These strategies include: Increasing your prices - If you’ve collected data that shows customers are willing to pay more, you can increase your prices when demand is low and supply is high. Decreasing your prices - If customers are willing to pay less for your products, you can decrease your prices when demand is high and supply is low. Switching to different product lines - You can also switch to different product lines based on demand, supply, and price. This will allow you to sell the products that your customers are willing to pay more for, while also lowering the price on the products they’re less willing to pay for. Avoiding price wars - It’s important to avoid price wars, especially if you’re switching to different product lines. This will help you avoid coming across as desperate and encourage customers to buy your higher priced products

Adopting Automation & AI-based Tools

Many businesses rely on manual pricing and competition-oriented dynamic pricing, but this can be time-consuming and difficult to manage manually. Fortunately, you can use automation tools to save time and energy while improving your pricing strategy. Automation tools can help you set accurate prices, track your competition, and respond quickly to changes in the market. You can use automation tools to track your pricing, track inventory levels of your products, and collect data on your competition. You can also use automation tools to set dynamic pricing based on your pricing model and the data you’ve collected. This will help you save time and energy while improving your pricing strategy. You can also use automation tools to respond quickly to changes in the market. For example, you can set up alerts to let you know when your pricing needs to be adjusted based on changes in the market. You can also use automation tools to help

About Us

The word “Kaizen”, where “Kai” = change, “Zen” = good, signifies change for the better. In its birthplace Japan, the word Kaizen is imbibed as a process that many small continuous changes in systems and policies bring effective results than few major changes. This methodology applies to every department across different sectors.

Kaizen–TheOfficialOperationsClubofIBSHyderabadhasalwaysbeenaspiring“ConstantChange ad Evolvement”. We, as an organization work to inspire and aspire to the student community for the betterment of the future.

KORE – Kaizen’s Operations and Research Entity, one of our primary wings provide the students with a platform to improve and hone their technical competencies to meet the changing demands of the organizations. KORE’s sphere of influence includes Case-Based Research, Consultancy, Live Projects, and Workshops.LAKSHYA,aninitiativeofKOREfocuses onimprovingthereader's knowledgeabout Operations Management by providing insights in the form of articles on various operation techniques followed by different companies and also updating the emerging trends in the communities.

ANAMIKA BHARDWAJ EDITOR IN CHIEF - KORE

Club Kaizen – IBS Hyderabad

Batch 2021-23

LAKSHYA is an academic print and is not for any commercial sale. Reliability and Responsibility, for sources of data for the article vests with the respective authors. Please feel free to drop in your suggestions at kaizenclub.ibs@gmail.com

KORE: Kaizen’s Operations & Research Entity. Kaizen – The Official Operations Club of IBS Hyderabad

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