The "Flanking in a Price War" article

Article Main Points Summary

The Flanking in a Price War expression describes a education conducted in the 1980s testing the pattern of worth predisposition for stock-up food market goods (products that jackpot be stockpiled) and nonstock-up grocery goods (perishables that can not be stockpiled) in the Quebec grocery market. A covariance bearing within a Bayesian decision framework was utilize and provided an indicator as a stop rule for the study. The results of the study were used to strategically legal injury items to increase market share. The results indicated in an oligopoly, contendring reaction is swift and a sustainable competitive advantage requires more than engaging in price war strategies.

The study was devised at the request of a struggling grocer chain, IGA, in the Quebec Grocery Oligopoly during the 1980s. The results of this experiment provided the management of IGA with a threatening pricing, or flanking strategy that could be, and successfully was, implemented to rebuff the threats initiated by a price war. It was shown that the strategy actually had a upright impact on the chain while others, including the price war initiator, struggled to maintain market share.



This was a great example of oligopoly contender where large and small grocery chains aggressively competed with matchless another by lowering prices and engaging in price wars only to see one grocery chain uphill as the price leader at the expense of trim gross margins.

The article describes the reaction of competitors to pricing moves that went beyond a pure pricing strategy. It discusses how advertising contributed to harden price sensitivity and the use of other tactics such as change magnitude customer service, which in the grocer industry has little marginal military group when it serves as the only differential variable between competing grocery chains.

Lastly, this article highlights the strength of collaboration and cooperation...

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