How Scenario Planning Can Add Impact to Your Amazon Pricing Strategy
Mike Tyson once said that everybody has a plan until they get punched in the mouth. The coronavirus pandemic has delivered a proverbial punch to the most solid business plans and models. If your enterprise fails to envision such a scenario, you’d be forced to go back to the drawing board.
Scenario planning calls for company executives to envision plausible realities and come up with compelling procedural reactions. Supply chains and product availability continue to wane to the aftershocks of the current pandemic. It makes great sense to enact a little more scenario planning into your Amazon strategy.
Here are a few things that will shield your organization from market volatility in the face of an uncertain future.
Explore the Possibilities That the Future Presents
Scenario planning offers you a way to develop contingencies for external factors outside your enterprise’s influence. Compelling scenarios are not meant to predict the future but work as a triage of measures that prevent knee-jerk reactions to the possibilities they envision.
Ultimately, you’ll need to set some objectives for each scenario. Here are a few things that help you set attainable objectives in each scenario.
- Have a clear focus on critical growth and initiatives that will transform your enterprise during periods of disrupted sales volumes.
- Cut through the noise of uncertainty with concrete decisions worth pursuing no matter what the future holds.
- Perform a cost-benefit analysis and other due diligence surveys on vital short-term decisions. Make adjustments to ensure your amazon pricing strategy stands up to real-world situations.
- Drill your marketing team on how to reduce possible risks for every plausible scenario.
Manage Your Expectations
Just as is the case with business decisions, scenarios need to trickle down to every department of your organization down to the most basic business process. These two measures will help you create a forecast for your Amazon pricing scheme.
- Supply vs. demand analysis: take stalk of each scenario and the impact it prevailing market prices. Consider how your Amazon pricing scheme will the value and availability of your product.
- The cost of opportunity: Even uncertainty breeds opportunity, and scenario planning can help you test out some theories. However, some opportunities expose your organization to some risk. So consider if the function helps you mitigate such risks.
Once you establish the outliers to your envisioned scenarios, you can develop a suitable action plan.
Exercise a Pragmatic Approach
Scenario planning is wishful thinking in its essence. The following pragmatic approaches can help you keep your feet on the ground:
- Engage your associates in defining measures they can start taking or things they should abandon as they prepare for envisioned scenarios.
- Create an in-house steering committee within your organization and assign them specific functions towards your goal.
- Recruit function committee members from all ranks of your organization. Diversity of perspective is key to establishing interdependencies that may have a positive or negative implication on the efficacy of your envisioned Amazon pricing.
Such measures ensure your scenario planning reflects reality. It also makes it easier to curtail ideas that may not work without the need for external help before developing a full-blown strategy.
Position Your Organization to Capture Future Opportunities
Even as your steering committee thinks of risk response strategies is important to consider some of the opportunities that the future presents.
For instance, as strategists continue to consider the impacts of the China-US trade war-related scenario on American exports. It worth looking at keeping track of new US trade treaties and bilateral ties. Such agreements may open new markets that could be more favorable to your enterprise.
Keep the Following Things in Mind as You Move Forward
- Pick a few plausible uncertainties that apply to amazon pricing
- Keep track of developing trends in geopolitics and economic relations between state actors
- Envision how such scenarios will play into your action plan
- Put a pin into every measure that may lead to undesired pricing schemes.
Amazon pricing schemes are volatile. However, the subjective nature of scenario planning can create a healthy dialogue that could lead to better sales volumes in the long term. Such measures can also help you address current inefficiencies in the short term.
However, scenario planning can strengthen your business model as you work towards achieving more consistency and sustainability in the future.