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2019 | Buch

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Economic Value and Revenue Management Systems

An Integrated Business Management Model

verfasst von: Alessandro Capocchi

Verlag: Springer International Publishing

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

Filling a gap in existing literature on revenue management systems, this book explores the use of business strategies which are specifically designed to have a positive impact on economic and financial efficiency. Focussing on services within the tourism industry, the author takes a new approach and identifies dynamic pricing and service differentiation as key components of strategic management. Providing fresh insights into an ever-expanding sector, this book will be a useful tool for those studying business strategy and management, as well as value creation theory, as it ultimately presents an integrated business management model which will ensure sustainability.

Inhaltsverzeichnis

Frontmatter

1. Starting and Running a Business

Abstract

This chapter represents how, in the era of contamination economy, both entrepreneurship and the meaning of doing business are changing. Entrepreneurship and business, as the author explains, do not always coincide. To understand the several implications of the contamination economy, the author emphasizes the significant role of innovation over time.

The contamination economy is the evolution of the sharing economy through aggregation processes of actors on digital platforms and the creation of new business. Sharing economy means crowding, bartering, and making.

Moving from the studies of Shumpeter, Cantillon, and other scholars including Drucker, the author emphasizes the meaning of doing business in the era of the contamination economy, representing the phenomenon of start-up in Italy through a concrete experience: the Enki Stove SRL.

Alessandro Capocchi

2. Time in Entrepreneurship

Abstract

This chapter underlines how time is a precious and decisive resource for entrepreneurship, management, and strategic formulation. Entrepreneurship is a dynamic-time-phenomenon based on the functioning of the economic business cycle. The economic business cycle guarantees the reconstitution of capital and the continuity of the phenomenon over time. The economic business cycle of a company is like the perfect functioning of the automatic gears of a Swiss watch.

Moving from the description of the economic business cycle, the author illustrates the different meanings of the price and the different implications of the time dimension in the business. Entrepreneurship as a dynamic-time-phenomenon is a productive combination oriented to the creation of value over time. The author highlights how the time dimension marks all company life.

Alessandro Capocchi

3. Entrepreneurship, Business Cycle, and Creation of Value

Abstract

This chapter underlines how entrepreneurship is a dynamic-time-phenomenon oriented toward the creation of value. The creation of value is essential for the continuity of the business phenomenon over time. It is a multidimensional issue that involves different dimensions and can be measured in the short or long term. The short-term measurement of value creation can be done through the use of managerial tools.

Moving from the meaning of the financial and economic dimension, the author describes different managerial tools giving important suggestions on their use. The appropriate use of managerial tools is an essential condition for correctly understanding business dynamics. The appropriate use of managerial tools clarifies how entrepreneurship is a dynamic productive combination projected into the time dimension.

Alessandro Capocchi

4. The Short-Term Measurement of the Creation of Value: The Importance of Technical Efficiency

Abstract

This chapter highlights how the short-term measurement of value creation requires the analysis of the technical efficiency of the business. Technical efficiency is the main condition for company profitability. In the short-term analysis, technical efficiency is the necessary, but not sufficient, condition for achieving economic efficiency.

The managerial tools are more focused on the financial and economic dimension of the business than on the technical one. So, the problem is to integrate the financial and economic dimensions with the technical efficiency of the business.

Technical efficiency is measured by the degree of use of the maximum production capacity available to the company. The increase in the level of use of the production capacity available to the company leads to an increase in profitability due to the reduction in the incidence of fixed costs.

After describing the relationship between technical and economic efficiency, the author retraces the debate that in the 80s in Italy involved Egidio Giannessi with respect to the marginalist theories.

Alessandro Capocchi

5. The Impact of Technical Inefficiency on Business Management

Abstract

The author highlights the short-term impact of technical inefficiency on business profitability. In the short-term analysis, technical efficiency is the necessary, but not sufficient, condition for achieving economic efficiency. Technical efficiency is measured by the degree of use of the maximum production capacity available to the company. The increase in the level of use of the production capacity available to the company leads to an increase in profitability due to the reduction in the incidence of fixed costs.

Focusing on the short-term economic impact of technical inefficiency on business profitability, the author draws attention to the illusion of the low-cost phenomenon, the important role of the warehouse to transfer the economic implications of technical inefficiency over time, and the meaning of overbooking policies.

Alessandro Capocchi

6. Revenue Management from a Business-Economics Perspective

Abstract

This chapter highlights the short-term impact of technical inefficiency on company profitability. In the short-term analysis, technical efficiency is the necessary, but not sufficient, condition for achieving economic efficiency.

Focusing on the creation of value, the author describes how, in the short-term, the management link between technical efficiency and profitability is guaranteed by the implementation of RM tools. RM is a methodology or management technique able to support companies in maximizing profitability through the sale of the right product, to the right customer, at the right time, in the right place, and at the right price.

RM systems play an important role in the business as methodology able to drive the expected demand through the correlation between the product/delivered service, the customer, the sales time (even if not necessarily the supply of the service), the place, and the price to be paid. In RM systems, the maximization of profitability is achieved through technical efficiency and maximization of customer willingness to pay.

Alessandro Capocchi

7. Revenue Management Systems Based on Dynamic Pricing

Abstract

This chapter highlights in a business-economic perspective how dynamic pricing represents the company’s ability to sell each unit of a product/service at the maximum price that the potential customer is willing to pay at a specific time and place.

Dynamic pricing is one of the two levers of the RM systems to support business in the maximization of the profitability.

Focusing on the short-term management link between technical efficiency and profitability and on the important role assumed by the capacity of the business to predict the behavior of potential customers, the author describes the different dynamic pricing strategies and models and completes the chapter by analyzing the implications of dynamic-pricing-RM systems on the business decision-making processes in order to maximize the profitability.

Alessandro Capocchi

8. Revenue Management Systems Based on Capacity Allocation

Abstract

This chapter highlights in a business-economic perspective how the capacity allocation represents the company’s ability to sell each unit of a product/service at the maximum price that the potential customer is willing to pay at a specific time and place.

Capacity allocation is one of the two levers of the RM systems to support business in the maximization of the profitability.

Focusing in the short-term management link between technical efficiency and profitability and on the important role assumed by the capacity of the business to predict and drive the behavior of potential customers, the author describes the complexity of the capacity allocation issue. The complexity is more relevant in multiclass businesses where the company has to evaluate whether to accept a request to buy a unit of production capacity available at a certain price or wait for the possible future sale of a unit of residual production capacity to a higher price.

Alessandro Capocchi

9. The Measurement of Revenue Management Policies: RevPAR and Yield Rate

Abstract

This chapter highlights the link between RM systems and integrated business information systems in order to support planning processes and increase business profitability. RM systems are based on two main levers: dynamic pricing and capacity allocation. RM systems are strategically important to support the prediction and manipulation processes of the behavior of potential customers and to maximize the business profitability.

In RM systems, accounting and non-accounting variables play a significant role in supporting decision-making processes, controlling expected demand, allocating production capacity available, and matching the willingness to pay of potential customers.

Focusing on the complexity of RM systems, the author describes the important role played by two indicators: RevPAR and yield rate. RevPAR measures the profitability of the business based on pricing policies and the level of exploitation of the company’s production capacity. The yield rate is an expression of the company’s economic efficiency.

Alessandro Capocchi

10. Economic Value and Revenue Management Systems: Case Studies

Abstract

The creation of value is a complex issue that involves different business dimensions. The creation of value requires the implementation of appropriate business planning tools that, in the era of the contamination economy, must support the decision-making processes and the competitive dynamics. Business information systems are more integrated, and, in recent decades, the non-accounting data have assumed the same relevance as accounting data. In this context, RM systems have become increasingly important.

RM systems are based on two main levers: dynamic prices and capacity allocation. RM systems are strategically important to support the processes of predicting and manipulating the behavior of potential customers and to maximize the profitability of the business.

In this chapter, the author provides some case studies to illustrate the strategic use of some managerial tools to support the maximization of business profitability. Case studies are designed to draw out the integration between the financial, economic, and technical dimensions. In the case studies, some theoretical concepts are provided to facilitate the solution.

Alessandro Capocchi

Backmatter

Titel: Economic Value and Revenue Management Systems
verfasst von: Alessandro Capocchi
Verlag: Springer International Publishing
Electronic ISBN: 978-3-030-02417-8
Print ISBN: 978-3-030-02416-1
DOI: https://doi.org/10.1007/978-3-030-02417-8