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Challenged Questions 4,5,6,7,8,9,10 - Essay Example

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The companies mentioned in the question are pursuing a cost leadership strategy. This is evident from their pricing mechanisms that focus on lower costs for the units of product that they sell. The reason why they spend so much on advertising is that they need the volumes…
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Challenged Questions 4,5,6,7,8,9,10
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Challenged Questions 4,5,6,7,8,9,10

3. Forward pricing makes sense when firms are launching products and the strategy is to ensure that in the initial stages, forward pricing is competitive in the hope of increasing sales later on as well as having an outlook that is bullish on the potential of the product.
4. Centralized decision making is effective when goods are mass produced and sold on a large scale whereas decentralized decision making is effective when the products are targeted at niche segments. The lower wages in the former scenario as well as the higher wages in the latter scenario are justified by the pricing of the products.
5. The differences between these two strategies lies in the way in which marketing costs dominate for export related strategy whereas manufacturing costs dominate for import related strategies. The management control issues that these firms face would be in the sphere of having less control when they operate in nondomestic markets in a manufacturing capacity whereas they would have more control when they are operating in a non domestic market in an import related capacity.
2. It does not seem paradoxical to me because there are certain aspects of products that are not imitable and these are the patented features. Hence, the way to resolve this paradox is by making products that are have unique and distinctive features.
4. It is not the case for firms operating in monopolistic competition as the firms need to be efficient to pursue a product differentiation strategy which needs niche investments and expertise in making unique products and services.
1. Backward integration often results in maximizing efficiencies across the value chain and hence ensuring that firms gain competitive advantage. The opportunism of vertical integration is that firms can leverage upon the entire supply chain as opposed to some parts of it in backward integration.
2. The threats ... Read More
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