Share Growth Strategy
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Identify the following challengers' share-growth strategies exhibited in the scenario and provide a rationale for the response (The introduction of low-priced, reliable, and fuel-efficient small cars by Japanese auto makers when first entering the U.S. market in the late 1960s and early 1970s).
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CHALLENGERS SHARE GROWTH STRATEGIES EXHIBITED IN THE INTRODUCTION OF LOW-PRICED, RELIABLE, AND FUEL-EFFICIENT SMALLL CARS BY JAPANESE AUTO MAKERS WHEN FIRST ENTERING THE US MARKET IN THE LATE 1960s AND EARLY 1970s
The penetration strategy used by the Japanese:
Penetration pricing involves the setting of lower, rather than higher prices in order to achieve a large, if not dominant market share.
This strategy is most often used businesses wishing to enter a new market or build on a relatively small market share.
This will only be possible where demand for the product is believed to be highly elastic, i.e. demand is price-sensitive and either new buyers will be attracted, or existing buyers will buy more of the product as a result of a low price.
A successful penetration pricing strategy may lead to large sales volumes/market shares and therefore lower costs per unit. The effects of economies of both ...
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