Employee Empowerment and Penetration Pricing Strategies
This paper examines two contemporary business strategies through real-world examples: employee empowerment and penetration pricing. Using Best Buy's Twelpforce initiative, the paper illustrates how a culture of employee empowerment can improve customer service agility by leveraging social media monitoring. It then analyzes Apple's iPad 2 pricing as a notable departure from the company's traditional premium pricing model, evaluating the potential benefits and drawbacks of penetration pricing in a technology market driven by innovation buyers and brand loyalty. The paper concludes with the author's own managerial perspectives on both strategies.
- Introduction: Overview of employee empowerment and penetration pricing
- Best Buy's Twelpforce: Employee Empowerment in Action: Twelpforce concept and its social media foundation
- How Twelpforce Works: Customer service example and internal culture behind Twelpforce
- Apple iPad 2 and Penetration Pricing: iPad 2 launch as a penetration pricing case
- Evaluating Apple's Pricing Strategy: Risks and alternatives to Apple's penetration approach
- Conclusion: Author's managerial perspectives on both strategies
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What makes this paper effective
- Uses concrete, real-world corporate examples (Best Buy's Twelpforce and Apple's iPad 2) to ground abstract business concepts in observable practice.
- Integrates peer-reviewed and professional sources to support each claim, lending academic credibility to what could otherwise be anecdotal observations.
- Ends with a clear first-person managerial perspective, demonstrating applied critical thinking beyond summary.
Key academic technique demonstrated
The paper demonstrates applied case analysis — taking a theoretical business concept (employee empowerment, penetration pricing) and evaluating a specific real-world example against it. This technique requires the writer to not only describe what a company did, but to explain why it qualifies as an instance of the concept and what its strategic implications are.
Structure breakdown
The paper is divided into two parallel sections, each covering one business strategy. The first half covers employee empowerment through Best Buy's Twelpforce, walking through the concept, a specific customer service example, and the internal culture that enabled it. The second half covers penetration pricing through Apple's iPad 2 launch, analyzing market context, strategic rationale, and potential downsides. Each section closes with the author's own managerial judgment.
Introduction
Recent developments in the business world offer strong examples of two distinct corporate strategies: employee empowerment culture and penetration pricing. Each approach carries meaningful implications for how companies compete, serve customers, and grow their market share. The following cases examine Best Buy's Twelpforce initiative and Apple's iPad 2 launch as illustrative models of these strategies in practice.
Best Buy's Twelpforce: Employee Empowerment in Action
Cultivating a culture of employee empowerment can increase a company's agility by freeing employees from the constraints of top-down bureaucratic decision-making and decreasing the time it takes to identify and resolve customer problems. Electronics retail giant Best Buy's Twelpforce is an example of an employee empowerment concept that involves harnessing the power of online social media to identify and address customer service issues.
Customers often vent their frustrations concerning products and services online via social networking media. Twelpforce is a group of more than 2,500 Best Buy employees who have access to an employee-developed system that monitors social media feeds like Twitter and Facebook and alerts group members to posts that mention Best Buy. Twelpforce members are positioned throughout the company and around the nation, collectively forming a large and diverse customer service team that can respond to customer complaints quickly and draw on the resources of the entire company to address service issues and customer frustrations (Bernoff & Schadler, 2010).
How Twelpforce Works
In one example, a customer returned his iPhone to a Best Buy store because it had stopped working. He had purchased the insurance plan and expected to receive a loaner phone of the same make, but the store could only offer him a Blackberry instead. He tweeted his disappointment. Automatically alerted to the complaint, a Twelpforce member responded and was able to arrange next-day delivery of a loaner iPhone. The customer tweeted again — this time in praise of the rapid resolution to his problem (Bernoff & Schadler, 2010).
Twelpforce is a direct result of Best Buy's employee-empowering culture. A social media specialist in the marketing department conceived the idea, and a technology worker in the e-commerce department figured out how to implement it within a week. A marketing manager led the project through to actual implementation, while Best Buy's corporate leadership encouraged and supported the effort (Bernoff & Schadler, 2010). The Twelpforce story embodies all the elements of a successful employee involvement program as discussed by Kauffman (2010): it was initiated and developed by employees who identified a problem and created a solution, and the company's leadership supported and recognized their initiative. From a senior management perspective, this initiative required little intervention — the empowerment culture itself drove the outcome.
Conclusion
Both case studies illustrate how strategic decisions — whether in organizational culture or pricing — carry significant trade-offs that depend on a company's brand position, customer base, and long-term growth goals. Best Buy's Twelpforce demonstrates that empowering employees to act independently can produce innovative solutions that benefit both customers and the organization. Apple's penetration pricing experiment with the iPad 2, while bold, raises questions about whether short-term market share gains are worth the potential erosion of premium brand perception.
References
Bernoff, J., & Schadler, T. (2010). Empowered. Harvard Business Review, 88(7/8), 94–101.
Furtwengler, D. (2011, February 7). Penetration pricing: Good strategy or self-inflicted wound? Retrieved from
Gallagher, D. (2011, March 2). Wall Street analyst breaks down iPad price advantage. Wall Street Journal. Retrieved from http://online.wsj.com/article/BT-CO-20110302-710065.html
Kauffman, C. (2010). Employee involvement: A new blueprint for success. Journal of Accountancy, 209(5), 46–49.
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