A low-cost price leader could enforce its leadership through implied threats to a rival by increasing production at a lower operating cost. Let’s say a manufacturer can increase it’s output by 40% while only increasing operating costs by 10%. The low-cost price leader could then say they have the ability to over saturate the market with their product while still keeping a lower price. This would be most effective in a oligopoly, where the competition is limited and the market is shared. An example of an oligopoly would be your local cable companies, where in this example one company could build up infrastructure to support a larger area allowing them to bring in more customers. If the company can bring in more customers while keeping operating costs roughly the same, they can keep the price low and take over the market. Using the knowledge of being able to expand while keeping prices low, that cable company can prevent other companies from lowering prices in competitive areas with vague threats of expansion with superior service and lowers costs.
tables, images, research tools, mail merges, and much more. Tell
tables, images, research tools, mail merges, and much more. Tell us how these features can help you collaborate and work with others? What feature surprised you the most? Do you think you can do better research documents after this week? Why are tools such as spelling and translation so important
