Managing Price Pressure By Means Of Price Reduction

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Executive Summary
Australian retail industry has been facing difficulties managing price pressure by means of price reduction. The essay investigates current challenges being faced by retailers. Following points are made to identify threats and opportunities in difficult times in order to empower the companies to gain competitive edge: Firstly, challenges arising from emerging trends in consumer shopping behaviour and with the introduction of new entrants have been discussed
Next section coins “Dynamic Pricing” as a flexible solution to address these challenges. Importance of big data for successful rollover of this strategic change is also examined
Real world practicability of dynamic pricing techniques and how it makes use of
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These challenges are so impulsive that often they switch over to something new even before the previous challenges are addressed successfully.
Difficult market times can come in any shape as they may be caused by a number of factors. Say it be the inability to address one or more of the five competitive forces by Michael Porter or the lack of an efficient system in place that does the SWOT analysis on regular bases and effectively put the results into the actions in order to gain the competitive edge. With new entrants coming in and escalation of discounts, price deflation is a new challenge companies have been facing.
Generally, all the major key players seem to have only one single solution for these problems and that is; a never ending price war. However this single solution quickly comes up to a saturation point, which is when production cost happens to be at stake. Nevertheless, with the emergence of new technologies and availability of more sophisticated systems in place, retail industry can take advantage of an already tested phenomenon, in other industry sectors, called “Dynamic Pricing”.
Challenges Arising From Emerging Trends
For last few years, the retail industry in Australia has witnessed a major shift in consumer’s shopping behaviour. It is the best time in the history of business world for buyers as their bargaining power is at its peak.
Within the last decade, a
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