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Firm strategy

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Mind Map on Firm strategy, created by Jia Jun Neo on 08/05/2018.
Jia Jun Neo
Mind Map by Jia Jun Neo, updated more than 1 year ago
Jia Jun Neo
Created by Jia Jun Neo over 7 years ago
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Resource summary

Firm strategy
  1. Pricing
    1. Elasticities
      1. PED
        1. YED
          1. XED
            1. PES
            2. Px taker
              1. Accepting the Px mkt determines
                1. e.g PC Firms
              2. Price rigidity
                1. ↓ Px, rivals will follow suits, but when ↑ Px, rivals will not follow suit
                  1. Kink DD theory
                    1. e.g Oligopoly
                2. Px setter
                  1. Limit pricing
                    1. below the short run profit-maximising price
                      1. To drive out competition
                        1. e.g monopoly
                    2. Predatory pricing
                      1. keep price below AC
                    3. Profit maximisation MC = MR
                    4. Non-Price
                      1. R & D
                        1. i.e Real differences
                          1. improve the quality and the features of the good
                            1. ↑ price inelastic dd
                              1. ↑ prices
                          2. A&P/Branding
                            1. i.e Imaginary differences
                              1. ↑ awareness and the appeal
                                1. ↑ DD of the good
                            2. Others
                              1. Output strategy
                                1. ↑ output
                                  1. ↓ output
                                    1. Produce at MC = MR
                                  2. Alt Objs
                                    1. LT profit maximisation
                                      1. Growth maximisation
                                        1. Corporate image
                                      2. Collusion
                                        1. Formal
                                          1. Explicit price-fixing
                                            1. Cartels
                                              1. Act like 1 big monopoly
                                          2. Tacit/Informal
                                            1. Price leadership
                                              1. Dominant firm establishes price/price changes
                                          3. M&A
                                            1. Cost adv
                                              1. IEOS
                                                1. Remove duplication
                                                  1. ↓ Adv cost
                                                  2. Revenue adv
                                                    1. ↑ DD
                                                      1. ↑ Px Inelastic DD
                                                        1. R&D
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