Why do some companies have pricing power and others don’t?
Why do some companies have pricing power and others don’t?
- Their product has high utility or desirability
- Their product has no alternative
- Their product has an alternative, but it’s lower quality, more expensive and/or has a switching cost
If you can raise prices without losing sales, then revenue growth is entirely in your hands.
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Very few investors understand the relationship between AND the importance of reinvestment rates, the return earned on reinvestments, and the resulting growth once you combine the two.
I created a fantastic matrix to visualize the sweet spot investors should seek out (high ROIC coupled with high reinvestment rates, resulting in high growth).
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