The Battle for Market Share

The Battle for Market Share - The Battle for Market Share...

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The Battle for Market Share Universal electronics can increase it market share by, say, 1,000 computers to increase its sales from 8,000 to 9,000 computers. If total market sales stay at 20,000 computers per month, then the other two firms will face a possible reduction in their market shares. Universal can sell the 1,000 increase at either the existing price ($1,000 a computer) or by reducing the existing price , say, to $900 per computer. Case1: Universal Electronics is selling at existing price . In the face of increase in production by Universal, the two other firms (World and International) can defend their market shares by following two strategies: At the existing price, they may step up their marketing efforts to differentiate their products ( product differentiation strategy, i.e., nonprice competition strategy). They may cut prices on their computers ( price competition strategy ). Product differentiation strategy may maintain the two firms’ market shares but cutting prices may bring them more customers and could increase their market shares. Universal
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