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Learning a bit about this in my MBA classes. Cost + Margin = Selling Price. Apple have the capacity to be more of a cost leader now, since they are not subject
by trilinearnz 5y ago
Learning a bit about this in my MBA classes. Cost + Margin = Selling Price. Apple have the capacity to be more of a cost leader now, since they are not subject to the same bargaining power forces of CPU suppliers. As a result, they have the potential to push their costs down (if not now, then in the future once production scales) and increase their margins. A good time to invest, perhaps?
- clairity 5y ago> "Cost + Margin = Selling Price." that's cost-plus pricing, and should be viewed as a relatively naive model that is no longer typically used for pricing. sophisticated pricing decisions are based on price elasticities to find the profit-maximizing price. apple is a notable example of a company that exhibits this type of pricing decision-making.
- trilinearnz 5y agoCheers for the clarification :)