$0k $20k $40k $60k $80k $100k $10 $15 $20 $25 $30 $35 $40 $45 $50 Revenue Delta (including cannibalization) Overall Revenues New SMB Offering Price Project Monthly Revenue x 10000 Revenue Max = $35 Price Revenue Neutral - Hurt Competition = $15 Price Company has two choices: Price the new SMB product for max revenues at $35/month/user. Or, Price at $15/month/user. To be revenue neutral, but hurt Competitor One. Company decided to price at $15/month/user. Already financially weak Competitor One filed for Ch.11 bankruptcy after approximately nine months. Client acquired Competitor One. Increased pice to $35/month/ user by launching new version.