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Critical Analysis Table of Contents Critical Analysis 1 Table of Contents 2 Introduction 3 Focus 4 Analysis 5 Conclusion 8 References 9 Bibliography 9 Introduction The era of globalisation and competition has led to a situation of intense market competition…
Predatory pricing is one such strategy that is being used by business organizations across the globe. Predatory pricing involves a strategy in which a firm sells its products at lowest possible rates below the offerings of all the competitors so as to grab the market share of the competitors on the basis of competitive pricing (Denger, American Bar Association & Section of Antitrust Law, 1991, p.3-3). This use of this strategy by business organizations to gain market share and take care of the competition in the market has been questioned by numerous authors and various academic and professional circles. The aspect has been so serious that governments across the world have set up competition policies and also appointed watchdogs to supervise and monitor the competitive strategies so as to maintain a healthy competition in the consumer market. Individuals in favour of predatory pricing state that pricing is an integral part of a company’s unique selling proposition and hence freedom must be given to ensure fair balance in the market. It is also in coherence with the free market policy that seeks equal opportunity for all and survival of the fittest. Proponents’ however have slammed this move by stating that predatory pricing ultimately does not help customers in the long run but leads to closure of firms that generates unemployment that can have drastic effects on the total economic scenario of a market. ...
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