Buy custom The cost of competition
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| Topic: |
Business
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| Number of pages / Number of words: |
8 / 2185 |
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Appendix 7 shows a theoretical schematic assuming the market size (=revenue/year is 640 million Schillings). Both airlines are close to obtaining ? of this market ? 348 Million Schillings for Turin Air and 292 Million Schillings for Innsbruck Air (see Appendix 3 for market share and Appendix 5 for revenue)...
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Did Innsbruck Air and Turin Air use predatory pricing as a reaction to Schnell Air entering the market?
Predatory pricing is defined as setting a price below cost. Turin Air and Innsbruck Air have used different strategies to counter Schnell Air's entry into the market. Turin Air has decreased prices and has maintained their original flight schedule; Innsbruck Air has maintained pricing and has increased frequency and quality of service (Appendices 9 and 11)...
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