Dell Computer Corp, the world's largest personal-computer maker, is keenly aware of everything its rival PC manufacturers decide to do. Explain why Dell usually reacts more quickly and more substantially to pricing, product design, and advertising decisions made by Hewlett-Packard and Gateway than when these same types of decisions are made by Apple Computer.© BrainMass Inc. brainmass.com October 25, 2018, 6:34 am ad1c9bdddf
Apple isn't a substitute for Dell. Dell is keenly aware of the decisions and reacts immediately to them when they are made by the major competitors of Dell because they are just that, major competitors. All companies mentioned, including Dell, HP, and ...
The solution discusses why Dell usually reacts more quickly and more substantially to pricing, product design, and advertising decisions made by Hewlett-Packard and Gateway than when these same types of decisions are made by Apple Computer.
Managerial Economics, MBA program
1) Consider a firm selling two products, A and B, that substitute for each other. Suppose that an entrant introduces a product that is identical to product A. What factors do you think will affect (a) whether a price war is initiated, and (b) who wins the price war?
2) The following table reports the distribution of profits (on a per-disc basis) for different steps in the vertical chain for music compact discs:
Artist: $ .60
Record company: $1.80
Retailer: $ .60
Use the five forces to explain this pattern. (Note: There are about half a dozen major record companies, including Warner, Sony, and Polygram. They are responsible for signing up artists, handling technical aspects of recording, securing distribution, and promoting the recordings.)
3) Consumers often identify brand names with quality. Do you think branded products usually are of higher quality than generic products and therefore justify their higher prices? If so, why don't all generic product makers invest to establish a brand identity, thereby enabling them to raise price?View Full Posting Details