Decline as competition-consumer price sensitivity increase

Assignment Help Operation Management

Reference no: EM131375356

Market growth—profits go up and down. In the market growth stage, industry sales grow fast—but industry profits rise and then start falling. The innovator begins to make big profits as more and more customers buy. But competitors see the opportunity and enter the market. After East African Breweries created a sensation in Nigeria with its non-alcoholic malt beverage Alvaro, Coca-Cola followed eight months later with its own malt drink Novida.3 Some just copy the most successful product or try to improve it to compete better. Others try to refine their offerings to do a better job of appealing to some target markets. The new entries result in much product variety. So monopolistic competition—with down-sloping demand curves—is typical of the market growth stage. This is the time of biggest profits for the industry. It is also a time of rapid sales and earnings growth for companies with effective strategies. But it is toward the end of this stage when industry profits begin to decline as competition and consumer price sensitivity increase. Agree? and Why?

Reference no: EM131375356

Questions Cloud

How could country stop these mergers from happening : Burger King recently merged with Tim Horton's of Canada. Do some research on the issues involved in this merger and discuss the pros and cons from both the U.S. and Canadian perspective. Do you think such mergers should be allowed? Why or why not? Ho..

Patient is admitted with pneumonia : Patient is admitted with pneumonia. The admitting H&P reveals WBC of 14,000; a respiratory rate of 24; a temperature of 102*F; a heart rate of 120; hypotension and altered mental status. The patient is administered an IV antibiotic and IV resecuation..

Cost leadership and differentiation strategies : How have relational database systems enabled changes in the ways firms compete for the customers their strategies focus upon, and how they implement their choice between cost leadership and differentiation strategies?

Describe what would you do as defensive strategy : White Water Rafters, Inc., (WWR) a competitor of yours, provides rafting tours on the Colorado River. WWR pays tour guides fixed salaries of $170,000 per year. You are the owner of Black Water Rafting (BWR), and you pay your tour guide salaries based..

Decline as competition-consumer price sensitivity increase : Market growth—profits go up and down. In the market growth stage, industry sales grow fast—but industry profits rise and then start falling. The innovator begins to make big profits as more and more customers buy. It is also a time of rapid sales and..

About the advantages and uses of the new product concept : In the market introduction stage, sales are low as a new idea is first introduced to a market. Customers aren’t looking for the product. Even if the product offers superior value, customers don’t even know about it. Informative promotion is needed to..

How to communicate with customers : How to communicate with customers. An important key factor in achieving a distinct advantage for businesses is considered. Furthermore, an important role in increasing the competitiveness of companies manage customer relationships in ways that create..

Financial and non-financial performance appraisal : An organization develops a new strategic plan and seeks ways to measure its performance over a specific period of time. Which tool can apply to both financial and non-financial performance appraisal?

Significant and distinctive economic force : The hospitality industry is said to be a significant and distinctive economic force. Do you agree with this statement? Why or why not? Which issues can impact hospitality marketing strategies in the next decade? Why? What do you believe will be the m..

User Account

All Pages