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Competition using Price and Non-Price Means

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Using cable providers, Dish Network and Direct TV, can you please explain/discuss how that market competes for your business through (1) price and (2) non-price means?

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Solution Summary

Competitions using price and non-price means are given.

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In the satellite TV market, high initial fixed costs, which major players have largely already paid off, are a defining aspect of the industry. DIRECTV is known as the oldest satellite TV Company more subscribers than any other satellite company has. But the company also has serious competition from Dish Network which is the fastest growing company. Each firm tries to surpass the other by having the better offer and the competition is very tight. Let's compare Dish Network and Direct TV through pricing first. In the Direct TV the pricing is only better for the first 12 months. For example the "basic choice package" is $29.99 for 150 channels and the premier package is $59.99 for 285 channels. In order to benefit from the low pricing, customers need to sign a 2 year contract. However in the second year the prices rise and cancellation fees are very high. On the other ...

Solution provided by:
Umut Oltulu, MBA
Education
  • BSc, Dokuz Eylul University
  • MBA, Texas A&M University-Kingsville
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