The Pricing Lens

The record

1. 2020

   NIO

   Held in part

   Whether to sell the car with the battery removed and rent the battery back via a company-owned swap network

   • Sell battery with car — Conventional EV sale with battery bundled into the sticker price
   • Rent battery via BaaS — Deduct battery cost from price and lease it back through a company-run swap networkchose this

   Stated reasonLifting the battery off the sticker removes sticker shock and range/degradation anxiety while converting a one-time sale into recurring subscription revenue and lock-in

   CommittedRMB 200 million (NIO's equity investment (25%) to establish Wuhan Weineng Battery Asset Co.)

   What happened

   • 2024 swap business profit/loss: swap business lost an analyst-reported RMB 3.12 billion, stations averaging 32 sessions a day
   • 2024 Shanghai station utilization: more than 150 stations each handling over 100 swaps a day, past break-even
   • 2024 deliveries and net loss: delivered 221,970 vehicles, up nearly 39%, with a RMB 22.4 billion net loss
   Read the full analysis →
2. 2022

   Netflix

   Held

   Whether to start charging for password sharing across its markets

   • Charge for paid sharing — Roll out paid sharing market by market to monetize borrowerschose this
   • Keep sharing free — Continue letting passwords roam with zero friction

   Stated reasonIt could not raise prices or sell ads against an audience where nearly half the seats were free

   What happened

   • 2023 paid subscribers added in Q2 2023: added 5.89 million paid subscribers against an analyst consensus of about 1.77 million
   • 2023 UCAN paid memberships: gained 5.83 million paid memberships across 2023, reversing a loss of roughly 919 thousand the year before
   • 2023 Q4 2023 net additions: 13.1 million net additions, its biggest fourth quarter ever
   Read the full analysis →
3. 2022

   Stellantis

   Reversed

   Whether to widen Jeep and Ram's price premium past 20% above the market on the bet that brand loyalty would absorb it

   • Extract a 20%+ premium — Raise prices well above market betting loyalty would absorb itchose this
   • Keep the earned premium — Hold the ~5% premium reflecting richer product mix

   Stated reasonThe company priced up because its margin targets needed it to and assumed the brand moat would pay the difference

   What happened

   • 2024 U.S. market share: fell from 10.2% (H1 2023) to 8.4% (H1 2024), down 180 basis points
   • 2024 U.S. sales: full-year 2024 U.S. sales down approximately 15% year over year
   • 2024 net profit: full-year 2024 revenue down 17%, net profit down 70%, AOI margin 5.5%, industrial free cash flow negative €6 billion
   Read the full analysis →
4. 2023

   Kering (Gucci)

   Held in part

   Trade Gucci's entry-level volume for higher-end positioning ('premiumization') via a restrained creative reset

   • Premiumize by subtraction — Shed cheap distribution and entry-level range to elevate the brandchose this
   • Preserve volume base — Keep travel-retail, outlets, and entry-level merchandise to protect revenue

   Stated reasonStrip the brand back to its more universal, iconic qualities and become more selective about distribution to trade volume for prestige

   What happened

   • 2024 Gucci revenue: €7.7 billion, down 23% as reported
   • 2024 Directly operated retail (91% of business): down 21% on a comparable basis
   • 2024 Wholesale revenue: fell 28%, and 53% in the fourth quarter
   Read the full analysis →
5. 1991

   American Express

   Held

   Faced with a 250-restaurant boycott over its ~4% merchant fee, should Amex cut the fee or defend and diversify its pricing?

   • Cut the merchant fee — Match Visa/Mastercard's lower per-transaction rate to end the revolt
   • Build more places to charge — Keep the fee and add cardholder and borrower revenue lineschose this

   Stated reasonIts one price was a single point of failure, so it rebuilt to be paid by merchant, cardholder, and borrower on the same transaction

   What happened

   • 2018 Supreme Court ruling on anti-steering provisions: Court affirmed 5-4 that the provisions did not violate the Sherman Act
   • 2025-09 Platinum annual fee: fee reached $895
   • 2025 Net card fees vs discount revenue growth: net card fees grew 20% year-over-year while discount revenue grew 6%
   Read the full analysis →
6. 2002

   McDonald's

   Reversed

   Whether to launch a nationally advertised Dollar Menu that would pull franchisee prices back down without issuing an order

   • Launch national Dollar Menu — Advertise a $1 price to discipline franchisee premiumschose this
   • Leave pricing to franchisees — Let independent operators keep charging local premiums

   Stated reasonA nationally advertised $1 price forced franchisees charging more to pull prices down, since customers felt cheated and walked next door

   What happened

   • 2003-11 U.S. comparable sales: record U.S. comparable sales up 10.2%, with the chairman naming the Dollar Menu as a driver
   • 2006 franchisee price premium on Big Mac meal: premium collapsed from 12.5% to 3.63%
   • 2008 product spec on Dollar Menu: Double Cheeseburger left the Dollar Menu and the McDouble, minus a slice, took its place at $1
   Read the full analysis →
7. 2013

   T-Mobile

   Held in part

   Whether to remove industry switching costs (contracts, ETFs, subsidies) as a growth-phase disruptor weapon or compete on the incumbents' terms

   • Kill switching costs — Drop contracts and pay customers' ETFs to attack incumbents' basechose this
   • Compete on incumbents' terms — Keep contracts and subsidies like AT&T and Verizon

   Stated reasonA challenger with the fewest customers to lose has the most to gain by making switching free, because friction was protecting the incumbents' base, not its own

   What happened

   • 2020-04 subscriber standing: roughly 80 million subscribers at merger close, past AT&T's 75 million but behind Verizon's 114 million
   • 2024 legacy plan pricing: raised prices on older legacy plans by $2 or $5 per line
   • 2024 postpaid service revenue: $52.3B in FY2024, up from $48.7B in 2023 and $45.9B in 2022
   Read the full analysis →
8. 2013

   Adobe

   Held

   Whether to stop selling perpetual Photoshop licenses and move entirely to Creative Cloud subscriptions

   • Move to subscription only — End perpetual licenses; ship only via Creative Cloud subscriptionchose this
   • Keep perpetual licenses — Continue selling boxed Creative Suite with one-time purchase

   Stated reasonAdobe was solving lumpy upgrade cycles and rampant piracy of expensive perpetual licenses by making leaving expensive and revenue predictable

   What happened

   • 2024-06-17 FTC complaint filed: DOJ for the FTC filed a complaint alleging hidden terms and a 50% early termination fee
   • 2026-03-13 settlement: Adobe agreed to a $150 million settlement resolving the FTC case
   • 2013 total revenue: total revenue slipped from $4.40 billion to $4.06 billion
   Read the full analysis →
9. 2014

   Starbucks

   Held in part

   Whether to launch Mobile Order & Pay to remove front-end line friction

   • Launch order-ahead app — Remove the visible line and capture logged-in customer datachose this
   • Add order sequencing first — Build a referee for the kitchen before scaling adoption

   Stated reasonThe app turned anonymous foot traffic into a named, re-targetable customer base and was expected to drive loyalty acquisition and retention

   What happened

   • 2017 same-store sales: 3% same-store sales result, the weakest since 2009, attributed primarily to mobile-order congestion at the handoff counter
   • 2024 app transaction share: 31% of total transactions at U.S. company-operated stores were made via the mobile app — a new record
   • 2024 uncompleted mobile orders: a mid-teens percent of mobile orders went uncompleted due to volume
   Read the full analysis →
10. 2015

    Tesla

    Held in part

    How to acquire customers cheaply while claiming to spend nothing on advertising

    • Buy conventional paid media — TV, billboards and ads like legacy automakers
    • Run referral acquisition machine — Pay referral credits and Supercharging miles, unlabeled as marketingchose this

    Stated reasonAcquire a customer for less than a Super Bowl spot costs, cheaper than legacy media

    What happened

    • 2019-02-02 Referral program restructuring: Tesla shut down Phase 9
    • 2019-03-22 Referral program relaunch: Relaunched restructured version paying in Supercharging miles and sweepstakes, citing cost
    • 2024-04 Paid advertising on X: Disclosed it had spent $200,000 advertising on X through February 2024
    Read the full analysis →
11. 2019

    Disney

    Held in part

    Price Disney+ as a cheap loss leader to grab the household, then raise the rent later

    • Cheap land-grab launch price — Launch at $6.99 to maximize reach and own the householdchose this
    • Premium margin pricing — Price near Netflix to protect margin from the start

    Stated reasonThe low price was chosen to maximize reach as the company's first serious foray into streaming

    What happened

    • 2024 combined streaming operating income: $47M operating profit vs a loss of $512M the year before
    • 2024 Entertainment DTC operating loss (ex-ESPN+): Disney+ and Hulu still reported an operating loss of $19M
    • 2024-10 Disney+ ad-free price: raised to $15.99 from a $6.99 launch
    Read the full analysis →
12. 2022

    Nestle

    Reversed

    During a cost spike, absorb input costs and compress margin, or pass costs through to shoppers and hold the margin?

    • Pass costs through — Raise prices aggressively to protect the margin during cost inflation.chose this
    • Absorb costs — Take the input-cost hit and let margins compress.

    Stated reasonStrong brands allowed price increases that protected the margin through severe cost inflation, and in the short run it worked.

    What happened

    • 2023 UTOP margin: margin held at 17.3%
    • 2023 real internal growth (volume + mix): turned negative at -0.3% in 2023
    • 2024-09-01 CEO leadership: board replaced Schneider with Freixe effective 1 September 2024 after a cut growth forecast
    Read the full analysis →