CASE STUDY

Strengthening price governance in biotech

How to achieve internal price transparency and maximise price setting? Discover how Chr. Hansen* strengthened its pricing governance and implemented a quoting tool to guardrail price negotiations and create more relevant price reporting.

*In January 2024, Chr. Hansen merged with Danish biotech company Novozymes to form Novonesis.

3

Business units

Shaping pricing governance across commercial practices

25

Global markets

Establishing price transparency across global entities

2

Months

From design of CPQ tool to go-live

Chr. Hansen’s situation & challenges

Chr. Hansen was established in 1874 as a pioneer in the production of enzymes for cheese-making and has since evolved into a global bioscience leader. Specialising in the production of bacteria cultures, probiotics, and enzymes, the company is a driving force for innovation across industries worldwide.

In the light of recent market shifts towards increased price competition and general inflationary pressures, Chr. Hansen increasingly viewed correct pricing as a competitive advantage. The company identified opportunities to unlock value by addressing current pricing challenges:

Aligning price steering mechanisms to achieve pricing goals and the overall value proposition
Defining price levels and establishing full gross-to-net pricing transparency throughout the end-to-end process
Differentiate market-relevant practices and legacy governance mechanisms to streamline and guard the price application

With support from NORTH, Chr. Hansen concentrated on two key objectives:

Maximise price realisation through robust price governance and a simple integrated quoting tool
Establish nuanced price reporting that provides trusted, timely, and complete transparency of all price components

“ Working with NORTH allowed us to establish better pricing control and respond wisely to changing market conditions.”

— Jakob Dalmose Rasmussen, Vice President Human Health Biosolutions, Novonesis

Solution

1. Attaining pricing excellence and end-to-end transparency on value leakage

Chr. Hansen aimed to extract more value by streamlining pricing and quoting across business units and global regions. NORTH analysed Chr. Hansen's pricing processes, tools, and guidance to gain a comprehensive understanding of the company's current pricing governance and areas of potential value leakage. The results showed that practices can be aligned and matured through global tools and guidelines, giving the company the visibility and strategic guidance required to create a competitive advantage through pricing governance and transparency.

2. Designing a Configure, Price, and Quote (CPQ) tool to enforce agreed pricing guardrails

In collaboration with NORTH, Chr. Hansen piloted an advanced quoting tool to establish transparency through applied pricing guidelines, approvals, and subsequent storage and reporting of price data.

The pilot introduced greater precision and consistency in pricing by providing visibility of average selling prices achieved and gaining control over margin performance. This initiative represented a significant step towards more disciplined and transparent pricing practices through process standardisation and tool support.