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How much pricing room does lock-in give a software supplier?
The prompt
Illustrative numbers. A manufacturer in Germany pays EUR 100,000 a year for the business software that runs its orders and accounts. A rival offers the same thing 20 percent cheaper. Switching would need a EUR 300,000 migration project, EUR 50,000 of staff training, and about three months of slower work costing EUR 25,000 a month. Should the customer switch, and how much room does the current supplier have?
Your interviewer will share data as you ask for it. Ask clarifying questions, state a hypothesis, then lay out your structure out loud before you calculate.
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