Title: The influence of pricing strategies on corporate valuation

Authors: Benjamin Cohen; Michael Neubert

Addresses: ISM International School of Management, 17, Boulevard Raspail, 75007 Paris, France ' ISM International School of Management, 17, Boulevard Raspail, 75007 Paris, France

Abstract: This paper seeks to find a correlation between the valuation of software as a service (SaaS) companies and the price-setting practices and pricing strategies utilised. The focus is to assess the pricing techniques employed by the leading SaaS companies, and to identify a correlation with their corporate valuations. Financial data from 18 publicly traded companies was used to apply 14 different valuation methods. The purpose of this paper is to identify those pricing techniques that most influenced corporate valuations. This study discovered that there were identifiable correlations between the price-setting practices, the pricing strategies, and the pricing models. The insights uncovered as a result of this paper are important contributions to the valuation of SaaS companies as a whole, as well as to the pricing techniques utilised in the leading companies. Implications of the price-setting practices and pricing strategies are better understood in terms of their impact on company success.

Keywords: software as a service; SaaS; price setting strategy; pricing model; corporate valuation; finance; software firms; cloud computing; digitalisation.

DOI: 10.1504/IJTCS.2019.101503

International Journal of Teaching and Case Studies, 2019 Vol.10 No.2, pp.125 - 156

Received: 22 Sep 2018
Accepted: 31 Dec 2018
Published online: 11 Aug 2019 *

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