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"Price wars can create economically devastating and psychologically debilitating situations that take an extraordinary toll on an individual, a company, and industry profitability." And according to the authors most managers will be involved in a price war at some point in their career. But the authors believe that managers have an arsenal of weapons other than price cuts at their disposal. They believe that the first step in a price war is diagnosis. Or asking yourself why the price war is taking place. The authors introduce four key areas: Customer issues, company issues, competitor issues, and contributor issues. This diagnosis should provide companies with a few different options. The first option is to stop a price war before it starts or revealing your strategic intentions, using tools such as price-matching policies, everyday low pricing, and other public statements. The second option is to respond with nonprice actions. This option builds on the fact that different customer segments have different degrees of sensitivity to price and quality. The authors use price sensitivity on the Web as an example for this strategy. The third option is to use selective price options. These are mostly complex options such as multi-part pricing, quantity discounts, time-of-use pricing, bundling, etc. Common classic tactics in this option is to change customers' choice, modifying only certain prices, and the use of fighting brands. The fourth option is to fight it out. This should be used as a last resort and you should realize that this option has several long-run implications. When you choose this option, the authors recommend quick and umabigious implementation. The fifth and final option is to retreat. "On rare occasions, discretion is the better part of valor." It means giving away some market share rather than prolong a costly battle. For each of these options the authors provide examples.
The authors provide some insights into the options and their tools available to prevent a war on price. This prevention of a price war builds on the notion that price wars can often harm an entire industry, so companies should have a hard think first before they enter one. It builds on traditional strategy thinking, but also on game theory. The authors use simple business US-English.
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PV should have been more upfront about the characters that he has used to reflect the real persons in Indian national Congress.He ducked various important issues that changed the face of India throughout these years.Most important of them are Emergency and Indira Gandhi's assasination.He also chose to ignore the rise of Indira Gandhi after the famous split in the Congress.
What PV has effectively done is make the reader yearn more of his work. May be the active nature of his politics restrained him to be more forthright in "The Insider". He has promised a sequel.That should be more interesting since he has retired from active politics.
In summary, a good engagaing work but could have been a lot better.
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Should have fun to read this book although it is quite expensive
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I found around five to eight of the 23 chapters to be weak. The remaining are excellent surveys. The book is dated 1996 so the material is late 1995 to early 1996 vintage.
The relevant chapters from this book are required reading for all my Ph.D. students.