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InternationalBusiness 1

InternationalBusiness 1

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Published by: Sham on Mar 04, 2012
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07/23/2013

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Predatory Pricing

Predatory pricing is the use of price as a competitive
weapon to drive weaker competitors out of a national
market. Once the competitors have left the market, the
firm can raise prices and enjoy high profits. For such a
pricing strategy to work, the firm must normally have a
profitable position in another national market, which it
can use to subsidize aggressive pricing in the market it is
trying to monopolize.

Multipoint Pricing Strategy

Multi-point pricing becomes an issue when two or more
international businesses compete against each other in
two or more national markets. Multipoint pricing refers
to the fact a firm's pricing strategy in one market may
have an impact on its rivals' pricing strategy in another
market. Aggressive pricing in one market may elicit a
competitive response from a rival in another market. This

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strategic response recognized the interdependence
between Kodak and Fuji and the fact that they compete
against each other in many different nations. Fuji
responded to Kodak's counterattack by pulling back from
its aggressive stance in the United States.

Pricing decisions around the world need to be centrally
monitored. It is tempting to delegate full responsibility
for pricing decisions to the managers of various national
subsidiaries, thereby reaping the benefits of
decentralization.

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