Price War Research Articles

Future Development Analysis Based on the Price Reduction Trend of Tesla

The electric vehicle (EV) market is developing rapidly, while the complexity of the market is growing along with the growing prosperity of the market, continuous technology innovation, and frequent policy adjustments. As a leading pioneer in the electric vehicle market, Tesla's development trends have had a significant impact on the market and other companies in the market. Tesla's price cut may especially affect the brand positioning of other companies in the industry, and they follow its price cut strategy, leading to a price war in the whole market. It urges them to adjust their strategies to maintain their market position and profitability. Therefore, the paper elaborates and focuses on Tesla's financial data from 2021 to 2023 and price reduction strategies, and uses key financial indicators, such as revenue growth, cash flow, and return on investment, to predict the future development trajectory of Tesla. This paper, through Tesla's financial analysis and future trends, provides reference and guidance for investors, markets, or companies seeking to follow suit.

A critical analysis of the marketing mix elements of small businesses in the retail sector in Durban Central Business District

In an incisive analysis of the marketing mix's impact on small retail businesses in Durban's Central Business District (CBD), this study scrutinizes the extended 7Ps framework: product, price, place, promotion, process, people and physical evidence. Utilizing a quantitative methodology, data from 217 owner-managers, captured via a 5-point Likert scale, were analysed through ANOVA and Tukey's HSD tests, unearthing deep insights. The findings disrupt conventional marketing paradigms, revealing that an intense focus on product attributes does not correlate with enhanced performance. Small businesses that maintained competitive, yet balanced pricing mechanisms outstripped are those that engages in fierce price wars, underscoring the dangers of excessive price reductions. Strategic promotional activities and well-considered choice locations were pivotal, whereas overemphasis on physical evidence and internal processes proved detrimental. The study results advocate for a balanced, strategic approach to the marketing mix, urging small businesses to rethink traditional priorities. This study offers crucial guidance for business owners seeking to optimize performance and calls for targeted policy measures to support the retail sector’s growth and sustainability.

Analisis Strategi Pemasaran Produk Frozen Food Untuk Meningkatkan Penjualan Menggunakan Metode Analisis Swot Dan Metode Deksriptif Eksploratif Pada PT Primafood International (Fiesta Group)

This study conducted a SWOT analysis of PT. Primafood International's marketing strategy to improvemarketing competitiveness, especially in the frozen food sector, where sales and revenue have decreased overthe past year. The method used is a qualitative method with an exploratory descriptive approach, data collectedthrough interviews, direct observation, and secondary and primary sources. The EFE analysis identifiedincreasing market potential (0.6222) as the main opportunity and price wars (0.6984) as the main threat. TheIFE matrix highlights product diversity (0.7718) as the greatest strength and simple management (0.1712) asthe greatest weakness. PT Primafood International is in quadrant II of the IE matrix, indicating the need forgrowth and development. Based on the SWOT analysis, the most appropriate strategy used by the company isto expand cooperation with various agents or resellers in various regions, both in Pasuruan City and PasuruanRegency.

International political aspects of OPEC+ activities in the context of energy diplomacy of Russia and Saudi Arabia before and after the start of the special military operation

The growing interstate rivalry sweeps more and more areas of international relations, including energy issues. While the ‘traditional’ oil and gas exporters are trying to maintain or even strengthen their current positions, new players in the oil and gas market are trying to challenge the status quo. The changing situation on the oil market due to the ‘price war’ between the United States and OPEC countries serves as a clear manifestation of this trend and encourages the OPEC members to coordinate their policies more closely with external partners. This paper aims to identify the prerequisites and assess the dynamics of cooperation between Russia and the Kingdom of Saudi Arabia (KSA) within the OPEC+ framework. The first section of the paper examines the logic behind the OPEC+ agreement in the context of the development of energy cooperation between the Russian Federation and the KSA before the outbreak of the Ukrainian crisis. The authors note that the new format demonstrated stability within the first years of its existence and generated closer cooperation between the hydrocarbon exporting countries. The second section examines the development of OPEC+ in the face of increased geopolitical pressure from the United States and its allies. The authors conclude that the efforts of Washington and oil importing countries to undermine energy cooperation within the OPEC+ format have not succeeded, on the contrary the international stance of the group members has only strengthened. In conclusion, the authors emphasize that OPEC+ not only contributes to the stability of energy prices, but also brings tangible political benefits to its members. At the same time, according to the authors, the future of this format largely depends on the dynamics of international environment and, particularly, on the scale of the US-Russian confrontation.

Strategic coopetition among transportation service providers considering supply–demand congestion effects and asymmetric bargaining power

The phenomenon of transportation service providers (TSPs) engaging in both competition and cooperation, commonly referred to as coopetition, has become increasingly prevalent in the transportation market. This is driven by the rapid advancements in information technology and sharing economy. In practice, competitive TSPs can engage in a resource exchange scheme to share their resources to improve their service quality. However, such a resource exchange scheme may not be sustained since the service prices and profits will be further changed due to the competition in the end market. This study proposes a two-stage sequential-move game to characterize the coopetition problem between TSPs, wherein the first-stage resource exchange problem is modeled with a Nash bargaining game, and the second-stage pricing problem is modeled with a non-cooperative Nash game. Different from prior studies, our model incorporates the supply–demand congestion effects and the asymmetric bargaining power of TSPs. The subsequent impacts on social welfare, TSPs, and end users are investigated. Analytical results show that only when the unit price of the exchanged resources decreases in the exchanged resource quantity will the resource-exchange scheme succeed. Furthermore, we find that TSPs prefer to leave some “buffer zone” in between to avoid fierce competition with price wars.

Examining the Dynamics of Sting vs. Charged in India's Energy Drink Sector: A Case Study on Power Play

POWER PLAY presents a comprehensive case study that scrutinizes the intense competition between PepsiCo's Sting and Coca-Cola's Charged. The study focuses on three key dimensions: the ongoing price war, the strategic innovations taken by Charged to secure market dominance, and its new innovative advertising campaign featuring Amir Khan & how it will impact the landscape of the energy drink segment in India. Through a meticulous analysis of pricing structures, promotional tactics, and market responses, this case study aims to unravel the intricate power dynamics driving the success and resilience of Charged in the competitive landscape of India's energy drink sector. This case provides valuable insights into the competitive strategies employed by Charged, offering a comprehensive understanding of the forces steering India's high-energy drink evolution.

Impact of logistics capacity on duopoly competition: Implications for firms and consumers

AbstractPrice promotion is an effective way to capture market share, as consumer sensitivity to price is universal. Yet, consumer satisfaction with services‐such as logistics‐plays a critical role. Deep price discounts can indeed spike demand, but they can also congest systems, thus prolonging delivery times and diminishing consumer satisfaction. Despite observed significant effects of logistics capacity on consumer and firm payoffs in logistics systems in recent years, economic and operational analysis of these effects remains under explored. This study theoretically examines the influence of logistics capacity on competition between two firms using a refined Hotelling model that incorporates system congestion via a BPR‐type congestion function. Our primary findings include: First, the possibility of multiple equilibria emerges with intermediate product values, fueled by either unilateral price reductions to seize greater market share or price increases to enhance marginal benefits. Moreover, a firm with superior logistics capacity may not always set higher prices at equilibrium. Second, we show that equilibrium pricing exhibits a non‐monotonic relationship with logistics capacity and market size. Lastly, we scrutinize firms' long‐term strategic reactions to changes in logistics capacity and the implications of marginal capacity costs, symmetric or otherwise. Our findings provide the following insights. We caution that the equilibrium pricing strategy is ambiguous when the product value is not extreme because both firms are more likely to engage in random price wars. Intriguingly, while augmenting logistics capacity might elevate service satisfaction, it could paradoxically reduce firm revenue or consumer surplus. Our analysis also indicates that higher marginal capacity costs could, counter intuitively, benefit firms or consumers.

The Correlation Between Market Concentration and Market Profit Margin of New Energy Vehicles

The current new energy vehicle market is in an emerging period. The internal structure and order of the market are in a developmental stage, and there is significant competition within the industry. In the current era where major enterprises are engaged in price wars, it is important to control profits. For policy makers, observing market concentration can better control policy direction and assist enterprise development. This study collected and analyzed data from the top ten companies in the market value of the new energy vehicle industry. Including CR ratio, net profit margin, etc. This article analyzes the correlation between industry profitability and industry profitability from a quantitative perspective through Pearson correlation coefficient analysis. Result is found that there are strong correlation between the two index. The study provides a reference basis for the development of new energy vehicle enterprises and also provides judgment assistance for investors entering the market.

How Brand Differentiation Influences Product Pricing Strategy Choices

In the context of increasingly fierce market competition, brand differentiation has become a key factor for companies seeking breakthroughs. Given the diversification of consumer demands and the growing issue of product homogeneity, brand differentiation is particularly crucial. It not only enables a company to stand out among competitors but also profoundly influences product pricing strategies. Brand differentiation involves more than just image shaping; it requires developing measures that align with a company's actual situation to enhance competitiveness. By creating a unique brand image, offering personalized product features, and delivering exceptional service experiences, companies can cultivate strong consumer identification and loyalty. Therefore, brand differentiation can help companies maintain a competitive position in intense industry competition. If competitors adopt a pricing cut strategy, companies with differentiated brands can maintain or increase price levels by offering value-added services or strengthening their brand image, avoiding price wars. Consequently, when formulating market strategies, companies should emphasize the construction and utilization of brand differentiation to achieve better market performance and economic benefits.

E-Commerce Evolution in China: Taobao's Triumphs, Trials, and Strategic Advancements

In China's e-commerce landscape, this study delves into Taobao's successes, challenges and strategic solutions. The paper scrutinizes Taobao's major developmental turning points, including its evolution from a C2C model to a B2C model, the creation of the Double Eleven shopping festival and the live streaming model. These forward-looking strategic layouts enabled Taobao to stand out from the competition and gain a sizable market size and user base. At the same time, Taobao faced fierce competition from JD.com and Pinduoduo, and was challenged by fake products, trust issues, and endless price wars. Inspired by the Amazon Prime membership model, the study proposes a series of strategic solutions that advocate a shift from price competition to exclusive offers and personalized services. Through these strategic reforms, Taobao can jump out of the swamp of price wars and improve its competitiveness, profitability, and the potential impact of user loyalty in order to stay ahead of the fierce competition in China's e-commerce.

Intertemporal Price Competition in the Two-Sided Market: Reexamining the Seesaw Principle for Startup Platforms

Pricing represents a crucial element in the platform business model search, particularly for startups that face the “cold-start” problem in launching a two-sided marketplace. In a static setting, the literature recommends the “seesaw principle” (i.e., charging a relatively low price, even subsidizing, on the one side and a high price on the other) as the solution. However, little is known about whether the seesaw principle still works in a dynamic setting and how it is influenced by intertemporal factors such as retention capabilities and early period financial pressure. This paper develops a game-theoretic model to examine optimal pricing strategies in a multiperiod setting. We first show that, in the symmetric scenario, the adjustment to the seesaw principle (i.e., the difference between the single- and multiperiod price gaps) increases with the platforms’ retention rate. This insight holds true in the asymmetric case where a startup platform faces greater early period financial pressure than an established competitor. Interestingly, the startup platform should charge a higher price to the less profitable side to differentiate itself and avoid a price war. We also explore the robustness of these insights by considering an endogenous, price-sensitive retention rate.

“Tacit bundling” among rivals: Limited-availability bargains for loss-averse consumers

This paper derives a stochastic discount strategy that encourages the joint consumption of two partial-substitute goods. The seller of the less valuable product offers a limited-availability discount to consumers with reference-dependent preferences à la Kőszegi and Rabin (2006). The stochastic discount introduces uncertainty in the consumers’ outcomes and increases their willingness to pay. Due to market competition, such stochastic pricing is effective only when it induces consumers to purchase both products. The other seller, who can only use deterministic pricing, tacitly consents as he has no benefit from engaging in a price war. Thus, a collusive outcome – which harms consumer welfare – is achieved without any explicit coordination between the two sellers.

Analysis of The Influence of Information Availability, Economic Factors and Changing Trends on Travel Agent Business Sustainability in Digital Era

The goal of this study is to identify key factors in travel agent management and then differentiate their impact on the value creation of these companies. Researchers group methodologies for analyzing value creation in travel agencies into several main categories. The methods are interview and economic-financial analysis. Then we identify value creation indicators to determine economic value-added options, then we conduct empirical contrast. The research results reveal that travel agents, acting as intermediaries, have become highly relevant, absorbing nearly all industries of this sector's production. The historical analysis concludes that travel agents underwent a positive evolution in value creation during the studied period. The revolution in information technology, which increased staff productivity, and the process of sector concentration and association, which increased rotation, are the main factors driving this evolution. Investments in financial assets, tangible assets, and intangible assets also play an important role in transforming the sector's productive structure. While the evolution of margins plays a less significant role in value creation, the sector faces challenges due to price wars and strong competition. The positive impact of the sector's debt also increased, contributing to a significant increase in economic value-added. Finally, travel agents need to pay attention to these factors in their management in order to remain competitive and achieve their ultimate goal of creating value in this sector.

CARTEL TO PLAYER: OPEC DYNAMICS IN THE GLOBAL OIL MARKET

The OPEC, since its establishment in 1960 as a cartel and regime, has been largely controlling the global energy supply and price regulations, and thus, playing a pivotal role in the global geopolitics of energy security. However, the journey of this inter-governmental organisation till date, as a predominant energy cartel, from cartel dominance and regional geopolitics to global competition and climate change challenges, has not been an easy one. Although OPEC has been going through ups and downs in the global energy market, the requirement of petroleum resources by the global community for economic growth and the developmental process cannot be ignored. Therefore, the role of OPEC is likely to be prominent at least till the mid-2030s as indicated by various energy reports. This research paper is intended to test the hypothesis that in spite of internal dissent and discontent, price war and rise of OPEC+, exploration of shale energy, focus for energy transition, OPEC will have an unmatchable share in the global energy basket and remain a dominant player in the global energy market and geopolitics, at least for the near future. The paper also focuses on how the Russia-Ukraine war has united OPEC and non-OPEC suppliers further to control the global energy market Which benefits both.

Sales Strategies and Comparison Between Traditional Vehicle Enterprises and New Energy Vehicle Enterprises

In today's society, car sales have become a challenge for every car company and salesperson. How to sell well produced cars? Nowadays, major car brand manufacturers are engaged in price wars, lowering prices to seek small profits and high sales. From the beginning of the 21st century until now, fuel powered vehicles have dominated the market. With the development of technology and social progress, people are paying more and more attention to environmental protection. Therefore, compared to traditional fuel powered vehicles, new energy vehicles have become a development trend in the global automotive industry. For the global environmental situation, it is necessary to take effective measures to prevent the worsening of environmental pollution. However, for traditional fuel vehicles that have been continuously developed for over a century, it is naturally impossible to give up. At the same time, the research and development and promotion of new energy vehicles are also imperative, only in this way can this paper ensure the development of new energy vehicles while traditional fuel vehicle enterprises are developing.

Food delivery competition in the digital economy: Price war strategy in a developing country

This study investigates how consumers make decisions when using online food delivery services in Thailand, with a particular focus on the price-related factors that influence their choices. The research adopts a mixed-method approach, combining quantitative and qualitative data collection and analysis. Quantitatively, data was gathered from 392 respondents through closed-ended questionnaires, and statistical analysis software was used, employing binary regression to explore the relationship between various independent variables (including gender, age, education, marital status, income, residence, experience, reasons, information sources, frequency, and expenses) and the price war strategy, which serves as the dependent variable. Qualitatively, in-depth interviews were conducted with ten purposively selected participants. The qualitative data were analyzed using content analysis and the NVivo software program. The study's results highlight the significant influence of income and information on the price-related decisions in Thailand's online food delivery market. Moreover, consumers in Thailand prioritize factors like price sensitivity, value perception, convenience, promotions, and cultural food preferences when selecting online food delivery services. This understanding is essential for businesses operating in this market to effectively meet consumer preferences and succeed in the competitive online food delivery industry.

On algorithmic collusion and reward–punishment schemes

A booming literature describes how artificial intelligence algorithms may autonomously learn to generate supra-competitive profits. The widespread interpretation of this phenomenon as “collusion” is based largely on the observation that one agent’s unilateral price cuts are followed by several periods of low prices and profits for both agents, which is construed as the signature of a reward–punishment scheme. We observe that price hikes are also followed by aggressive price wars. Algorithms may also converge to outcomes that are worse than Nash and penalize deviations from it. While admissible in equilibrium, this behavior throws interesting light on the relationship between high algorithmic prices and the standard mechanisms behind (human) collusion.

Game Analysis on Line Self-Reliance Pricing in Foreign Trade

At present, a prominent phenomenon in China's economic life is the coexistence of price war and line self-reliance pricing. The price cartel formed by the homogeneous enterprises participating in export from China shows that the result of the behavior of pursuing profit maximization of export enterprises is bound to fall into the "prisoner's dilemma" . In the absence of external coercion enterprises can depend on each other still can not get out of the dilemma; If the promised action of the penalty clause can be trusted then there will be a cooperative equilibrium; Advantageous firms can also promote the emergence of cooperative equilibrium.

From Tesla's Price Strategy to Reflects the Overall Industry Trends of Electric Vehicles in China

This essay explains and focuses on the decreasing price strategy Tesla has adopted in 2022 and 2023. The cost of lithium batteries has decrease in 2023. The demand for electric vehicles is still high, due to the global trend of lowering carbon footprint and the tax reduction policy in China. To increase sales, Tesla decided to decrease the selling price of Model 3 and Model Y, both designed for middle-level income customers. By analyzing the financial ratios, it is proved that the pricing strategy was successful, and Tesla could tolerate the failure if this strategy couldn’t work out in the long run. The electric vehicle market in China is becoming saturated. There will be a price war in the future, and many brands might disappear because of this. Tesla should retain its brand independence and spend more on research and development to further increase its market share. From Tesla's Price Strategy to Reflects the Overall Industry Trends of Electric Vehicles in China.

Strategies to Mitigate Cutthroat Competition in E-Commerce: Insights from Game Theory

As e-commerce industries advanced irresistibly in recent years, some platforms chose to reduce prices again and again to seize the market, which lead to vicious competition and price war. So, this article tried to find out the best method for different companies to deal with price war. Based on several articles about how to avoid price war for enterprises, this article analyzes price war from the game theory perspective by establishing static game models to analyze the feasibility of each method. The result show that the main reason of this phenomenon is people are trapped in a prisoner's dilemma, and price war is an economic necessity behavior. As a result, government is suggested to establish market superior department and companies are suggested to produce differential products and cooperate with each other to deal with price war. For different kind of enterprises, oligopolies can produce products suit for different people and collaborate with influential companies in different areas while supply chain companies should reach a cooperation treaty with upstream and downstream enterprises achieve win-win cooperation.