TV Screen Supply Chain Pricing

Vivid, a HDTV screen manufacturer, seeks pricing optimization. Despite increasing sales volumes, revenue remains flat. Production costs have decreased significantly over years, while retail prices stayed constant at $1000/screen. Analysis of discount-volume data reveals excessive discounting by sales team. The value chain shows Vivid retaining less profit ($28) compared to TV manufacturers ($72). Customer feedback indicates high willingness-to-pay and high switching costs for Vivid’s screens. Key issues include misaligned sales incentives, rampant discounting, and potential for price increase. Recommendations include implementing a more granular discount authority system, adding profit-based components to sales compensation, and targeting a price increase to capture more value in the supply chain.