Abstract
Central America is an interesting region for developing business. The closeness to South and North America make the isthmus a strategic region for growth. Guatemala, a Central American country, is seen as an emerging economy with the capacity of growth and expansion. The cement industry is now one of the most competitive industries in Central America and has expanded to different countries in the region. However, this was not the case in 1999 when the Mexican Firm Cruz Azul entered via a price predation strategy into the Guatemalan Market. Game theory demonstrates the advantage of price predation and the rational decision-making behind the strategy, and also demonstrates that a business smaller than its competitors can win a price predation battle by cooperating. The analysis is based on the dissertation by Garita (2008).
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