Question

Explain a strategy for communicating information to competitors about the reactions to any possible price competition (change) initiated by competitors. Please find examples if you can

Answer 1

In Today's time, the competition has increased a lot and you will see the competition in every kind of business and profession. But in spite of having a high level of competition, organizations should always give priority to there customers as they are the only ones who will help them to achieve their organizational objectives. As you know the demand for every product is rising and the competition is soo high that the companies cannot increase the price of the product generally because if they do this then their customers will get shifted to there competitors' product. In this case, both the competitors make a strategy and try to communicate with each other over this topic. They believe that if the demand for the product is high then we should also increase the price of the product so that it will help us to earn more profit from the products. Here, not all the company persons are ready to increase the price and some may accept the deal which will helps the sellers also by increasing the price of the product. For example: if both the competitors decided to increase the price of the product from 50 to 55 then it will going to benefit both of them and they should increase the price together so that their customers will not shift. So this mutually taken decision over the price of a product while remaining competitors is a strategy of both the sellers.