Input costs have risen 14% over eighteen months. Your top 20 customers are 62% of revenue and are on annual contracts, twelve of which renew within four months. Gross margin has fallen from 31% to 24%. A 9% price rise would restore margin. Two of the twenty have publicly tendered for alternative suppliers in the past year. Switching costs for customers are moderate: about three months of qualification.
Write a one-page memo to the commercial director recommending how to take the price rise — or not to. Lead with the recommendation.
100 points, 60% to pass.
A flat 9% across twenty accounts of very different risk is the weak answer. The strongest memos segment: take more from accounts with high switching costs and no live tender, less or later from the two that have tested the market, and sequence by renewal date so the firm is not renegotiating twelve contracts at once. Losing one large account can cost more than the entire margin recovery, which is the calculation that should appear.