Case Study of G's Market Analysis

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G., owner of a furniture store all few which he has created himself, has a problem. He had originally priced his handicraft at a slight premium in order to find his niche against the competition that was seeking to throw him out of business. Most of his competitors were alluring clients with rock-bottom prices. The problem for the competitor with this strategy is that he will need to make a profit and ensure that he has money left over after buying his merchandise and expending money on other parts of his business. The problem for other businesses is that constantly lowering their prices in order to beat the competitor can either drive them out of business or become ludicrous. In this way, many competing business, in similar situations, actually end up raising their prices and differentiating their products. They also raise their prices in order to attract clients who do not wish to shop with lower-income individuals or who prefer a more sophisticated environment (compare Target to wal-mart). Since businesses raise their prices, it may be that with time, even those that offer rockbottom prices now may, with the passage of time, slightly raise their prices.. Either way, the aspect of pricing and finding a niche was particularly important for G. in the town that Seattle had become given that all its benefits had attracted a web of competing industries with laborers able to raise their prices. No wonder, then, that G. had problems with his 'profit margins'. Many of the

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