{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

(5) Lamoiyan

(5) Lamoiyan - 1 Lamoiyan Corporation Business Policy(MGBU...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 1 Lamoiyan Corporation Business Policy (MGBU 4441) Prof. Benjamin Cole WTP vs. Cost (cont.) Cost WTP Cost P Increase WTP More Profits Quantity (?) Cost P Increases WTP Lamoiyan “Normal” Differentiator Entry: 50% Differential Current: 30% Differential No Top Limit to WTP Slowly increase WTP Won’t exceed MNEs until ready P P 2 WTP vs. Cost (cont.) Cost Cost Lamoiyan Colgate-Palmolive Entry: 50% Differential Colgate Happee Cost Lamoiyan Kutitap Cost Zest-O Corp. Beam Later: 30% Differential Zesto doing same thing to Lamoiyan that Lamoiyan did to Colgate Had been leaving money on the table with original 50% price differential Zesto tries to undercut price of Happee Lamoiyan introduces “blocking brand” to ensure that Zesto never sells sufficient Q to offset costs of production of Beam Two Major Strategies (for all firms) Cost Leadership No Real Economies of Scale (making more of same) Economies of Scale when: AC(x+1) < AC(x) Minimum Efficient Scale when: AC(x+1) – AC(x) ≈ 0 Possible Economies of Scope (delivering more of different types)...
View Full Document

{[ snackBarMessage ]}

Page1 / 6

(5) Lamoiyan - 1 Lamoiyan Corporation Business Policy(MGBU...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online