Your firm has a new strategy that will make its established product obsolete. However, it will take a year before you are ready to implement the new strategy. If you announce your plan in advance, profits will disappear because many customers will delay purchase until the new product is released. If you don't announce the new plan, customers will continue to buy the established product, but others may end up not doing business with you in the long run. What would you decide to do?

Your firm has a new strategy that will make its established product obsolete. However, it will take a year before you are ready to implement the new strategy. If you announce your plan in advance, profits will disappear because many customers will delay purchase until the new product is released. If you don't announce the new plan, customers will continue to buy the established product, but others may end up not doing business with you in the long run. What would you decide to do?

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter8: Business Organizations

Section: Chapter Questions

Problem 2AA

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