Outotec (A): Project Capture

Case Solution

Robert J. Dolan, Doug J. Chung
Harvard Business School ()

Outotec has been the market leader in providing mining solutions to large mining companies. The company’s proprietary technology and specialization created value for its customers and helped the company differentiate itself from its competitors. However, Outotec has not priced or marketed its solutions in a way that utilizes their special capabilities and added value. Outotec followed a cost-based pricing policy (from the inside out) that was customary in the industry. As a result, operating profit was only 8% of sales and the CEO had promised the investment community improvements of more than 10%. Outotec wanted to move from a cost-based sales and pricing model (Inside / Out) to a value-based one (Outside / In) to generate more profitable sales and meet the profitability targets that the CEO announced to investors. However, in doing so, there were several challenges that the case highlights for students to discuss and debate.

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