Cost benefit analysis plays a crucial role in decisions like Tesla's to lower prices. It involves evaluating the total expected cost of a particular decision and comparing it with the total expected benefits. In Tesla's case, the potential benefit of increasing product availability and boosting sales by attracting price-sensitive customers likely outweighed the costs associated with reducing prices. This strategic decision, informed by cost benefit analysis, led to a significant increase in the number of cars Tesla sold in the US in the months following the price reduction.
How do you take your product management to the next level? Due to popular demand, we've expanded our...
Download template