Blue Ocean Strategy by Chan Kim and Renée Mauborgne | Episode 4 |
The Audiobooks Podcast
The Importance of Strategic Pricing
Dyson has been able to charge a high unit price for its bagless vacuum cleaner since the product's launch in 1995. Southwest Airlines' ticket prices fell into the lower boundary of the corridor, namely against the price of car travel. Companies would be wise to pursue mid-to-lower boundary strategic pricing from the start if any of the following apply: Their blue-ocean offering has high-fixed costs and marginal variable costs. Their attractiveness depends heavily on network externalities. In these cases, volume brings with it significant cost advantages - something that makes pricing for volume even more key.
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