Case Study

Paul’s business opted to use the cost-plus strategy because he felt it was simple for him to understand.

However, when starting to apply the cost-plus approach, factors such as the foreign exchange rate and import costs continuously moved from what he had originally budgeted. Consequently this impacted his ability to achieve the profit he anticipated from product sales.

He would like to employ a better pricing strategy and thus a more consistent approach to his pricing by limiting uncontrollable factors such as exchange rate fluctuations.

Activity

Other than changing his strategy, what would you recommend that Paul could consider to achieve a more consistent price for his products?

Post your ideas to the Comments area below

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