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Essay / Research Paper Abstract
This 3-page paper discusses the scenario of Quasar computers and pricing strategies when competition enters the market. Bibliography lists 1 source.
Page Count:
3 pages (~225 words per page)
File: AS43_MRquaserco.rtf
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Unformatted sample text from the term paper:
company. In other words, it could charge higher prices and, being the only game in town, people would willingly pay the price. However, Quasar needs to be careful, as once
its three-year patent is up, so is the monopoly and - hello competition. When the competition came in (by name of Orion),
Quasar found itself fighting for market share and revenues. Nor was Orion the only one coming into the market. The problem is that predicting the competitors reaction to price change
is the way in which Quasar will survive and get back to gaining strong market share. It wont ever get the same market share it had in the beginning (that
erodes as monopolies collapse). But at least the company could see an increase in its profit margin. The most obvious solution in
this scenario would be to lower prices. But in such a scenario, lower prices means the competition will also lower prices - and too much price undercutting means no company
gains in terms of profit margins. Simon et al (2009) in their article about pricing during an economic downturn, point out that
the kneejerk reaction of moving pricing in response to competition is a sure way to failure. Price wars, the authors note, benefit no one (Simon et al, 2009).
There are, however, ways to cut prices without actually cutting the cost of the product. Strategies such as Internet-only pricing (in other words, if
the buyer buys the product online, and for a certain period of time, he/she gets a discount) is one way to go - this assumes, of course, that Quasar has
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