Selection of cases

At the outset of the thesis project, the idea was to approach the scarcely researched concept of pricing capability by means of a multiple case-study in the corrugated packaging industry. The case-study’s primary focus on this industry was partly a consequence of the thesis project being initiated as a part of the learning partnership with SCAP (the Paper and Packaging Program), and partly a result of an evaluation of whether this would provide a researchable design.

The choice of delimiting the study to the corrugated packaging indus-try and SCAP business units can be seen as resting on four types of con-siderations. First, studying similar organizational units within the same industry enabled comparison between cases and minimized industry related effects on the comparisons. Second, conducting the study as part of the Paper and Packaging Program enabled, ex ante, identifica-tion of relevant cases, which without the knowledge of participating SCAP directors would have been difficult. Third, business units within SCAP offered a wide variety of cases in terms of local practices, history, and market contexts that could be seen as representative of the industry as a whole. The primary reason for this was the geographically decen-tralized organizational structure of SCAP with independently operating business units that in many cases had been recently acquired from other companies within the industry (see Chapter 6 for a more exhaustive

strictly independent firms. However, due to the fact that all these centers exhibit a strict local history, have been recently bought or started as a green-field opera-tions, exhibit a structure and a level of managerial discretion similar to a inde-pendent firm, the included units will be treated as individual cases.

discussion). Forth, SCAP offered complete access to chosen business units. Hence, taken together these four considerations indicated impor-tant benefits of the chosen design. These benefits were seen to outweigh the risk of insufficient variation, or difference between cases, which could have been mitigated by selecting cases from a broader set of in-dustries.

The initial ambition of the project was to identify three cases that would exhibit a wide range of different pricing practices, and thus, dif-ferent elements of pricing capability. At this stage, explorative inter-views and discussions with SCAP directors played an important role for determining where these cases could be found.³³ In the first explorative interview with the sales and marketing director of central Europe, the unit Beta was brought forth as a strong candidate to be included. The reason for this was the unit’s novel non-cost based approach to pricing and high sales margin compared to other units in middle Europe. In addition to including Beta in the study, the director argued for the need of a benchmark that would illustrate a normal approach to pricing in continental Europe (i.e. cost-plus profit pricing and a focus on effi-ciency). The candidate suggested for this purpose was Alfa.

The second round of explorative interviews was made with the sales and marketing director of the UK & Ireland. The director suggested Gamma as a unit in UK & Ireland that would display interesting as-pects of pricing. This judgment was based on information that Gamma was operating with a novel and commercially driven approach to pric-ing that set it apart from other SCAP units in the UK & Ireland, and that Gamma for a longer period of time had showed prices and finan-cial performance above the UK & Ireland average.

The third and last round of explorative interviews made in order to identify relevant cases to include in the study was made at SCAP’s European headquarters in Brussels with the European financial direc-tor. The financial director, who also functioned as the “corporate spon-sor” of the empirical part of the thesis project, suggested the inclusion of two more cases; Epsilon and Delta.

33Interviews with sales and marketing director in UK & Ireland (040525), central Europe (040514) and with the Financial director of SCAP Europe (040826).

The reasons for including Delta were in part that the unit had showed higher prices and financial performance than the European average, but also that Delta, which had been acquired in 2002 from another packag-ing company, operated with a separate national sales organization and was pursuing what was considered a more market oriented pricing pol-icy than was common within SCAP. The reason highlighted by the fi-nancial director for including Epsilon in the study was primarily related to the attention that the regional management had paid to pricing is-sues by the implementation of a national pricing model and the unit’s high prices and financial performance relative to other SCAP units.

Having finished all three rounds of explorative interviews and consid-ered the information that had been gathconsid-ered on potential cases, a deci-sion was made to extend the number of cases included in the study from three to five. This more extensive research design enabled captur-ing the full variety of differences and similarities between cases that had emerged as important during the three explorative interview sessions.

Table 5.1 presents a list of included cases, the reason for inclusion, and initially highlighted similarities and differences between cases.

Table 5.1 Cases and reasons for inclusion.

Case Reason for inclusion Initially

indi-cated key ele-ment

Initially indicated key outcomes

Alfa Example of a unit pursuing typical cost-based and efficiency oriented pricing policy with a typical plant based sales organization

Plant based sales organization

Cost-/efficiency ori-ented pricing policy

Beta Selected because of its non-typical market opportunity oriented pricing policy, high sales margin compared to other SCAP units, and non-typical national key account sales-/pricing organization

National key account sales-/pricing organi-zation

Market opportunity oriented pricing policy High sales margin compared to other SCAP units Gamma Selected because of its non-typical

market opportunity oriented pricing policy, high sales margin compared to other SCAP units, and non-typical national and centralized commercial organization

National and centralized commercial or-ganization

Market opportunity oriented pricing policy High sales margin compared to other SCAP units Delta Selected because of its non-typical

market oriented pricing policy, high sales margin compared to other SCAP units, and non-typical separate na-tional sales organization

Separate/external national sales organization

Market oriented pric-ing policy

High sales margin compared to other SCAP units Epsilon Selected because of its non-typical

market oriented pricing policy, high sales margin compared to other SCAP units, and use of a national pricing model (software)

National pricing model (software)

Market oriented pric-ing policy

High sales margin compared to other SCAP units

As described above, the case-selection process was guided by both theo-retical and practical considerations. The theotheo-retical considerations were related to having cases illustrate different aspects of pricing capability in the corrugated packaging industry, either in terms of initially indicated key pricing capability elements, or in terms of specific pricing related outcomes (such as a certain pricing policy or level of financial perform-ance).

The practical consideration that had to be taken into account was re-lated to the scope of the Paper and Packaging Program and the de-mands of SCAP management, which constituted prerequisites for gain-ing access to the different business units. Such considerations limited discretion with regard to the possibility of selecting cases outside SCAP and the corrugated packaging industry, and the sequence and time for conducting the different case-studies. Practical considerations, such as SCAP management’s demands on which units that should be included in the study, also brought about a bias towards selecting cases that, from a SCAP perspective, showed “best practice”. More specifically, this meant that units that had made specific investments in pricing, or were paying this area specific attention, were favored over other more representative units. Further, explicitly searching for units that would disclose “best practice” meant that units that were displaying a high level of market orientation (considered a novelty in the corrugated packaging industry) and high financial performance were favored over others.

According to Yin (2003), cases in a multiple case study design should be replicated so that they either produce similar results for predictable reasons (literal replication), or contrary results, again, for predictable reasons (theoretical replication). This type of stricter replication logic could not, as indicated above, be accomplished due to the specific de-mands SCAP managers placed on the selection of cases. A second im-portant reason why this could not be accomplished was the lack of more specific information about the content of the cases at the outset of project. Hence, rather than being able make a precise prediction of the outcome of cases, ex ante, as suggested by Yin (2003), their selection had to be selected based on a broader notion of the different aspects of pricing capability that they would shed light on (see Table 5.1).

Even after taking into account the practical restrains described above, the pros of gaining complete access to the selected units and the oppor-tunity to have an ongoing discussion with SCAP managers about rele-vant aspects of the different cases, outweighed the cons or restrictions placed upon the research design in terms of not being able to sequen-tially replicate cases solely based on theoretical considerations.