Relationship between Financial Measures and Contractor Pricing Strategy: Empirical Studies in the Defense Aerospace Industry

摘要

This report includes two separate but related empirical studies of the relationship between financial measures for defense aerospace contractors and pricing strategies adopted by contractors. Two pricing strategies are identified: skimming and penetration. Collectively the findings indicate that the adoption of a particular pricing strategy is associated with the financial condition of the contractor as reflected in measures of risk, asset utilization and organizational slack.