Gamma Food Products competes in the "center-of-the-aisle" packaged foods business. Ever since its founding and membership in the industry, the company has focused on gaining market share. In 2017, it had, by far, the largest market share in the industry and used this advantage to create order and discipline in the industry, particularly in terms of prices. Starting in late 2016, Gamma Food Products' VP of Marketing, Polly Kundig noticed the heads of Gamma's four largest competitors were meeting often surreptitiously, particularly at trade shows. Parallelly, Kundig also noticed that the four firms were pricing their products at around the same level and distinct from the prices of others, including Gamma. In addition, when one of the four made a move in pricing or capacity planning, the others made quick responses.
-If Polly Kundig decides that Gamma Food Products should react by either decreasing its prices or increase its output,the company is sending out a(n)________ signal.

Question

Gamma Food Products competes in the "center-of-the-aisle" packaged foods business. Ever since its founding and membership in the industry, the company has focused on gaining market share. In 2017, it had, by far, the largest market share in the industry and used this advantage to create order and discipline in the industry, particularly in terms of prices. Starting in late 2016, Gamma Food Products' VP of Marketing, Polly Kundig noticed the heads of Gamma's four largest competitors were meeting often surreptitiously, particularly at trade shows. Parallelly, Kundig also noticed that the four firms were pricing their products at around the same level and distinct from the prices of others, including Gamma. In addition, when one of the four made a move in pricing or capacity planning, the others made quick responses. 
-If Polly Kundig decides that Gamma Food Products should react by either decreasing its prices or increase its output,the company is sending out a(n)________ signal.

Quizplus · Accepted Answer

Gamma Food Products is the market leader and has been using its market share to create order and discipline in the industry. If the company decides to react by either decreasing its prices or increasing its output, it is sending out a tough signal to its competitors.

Gamma Food Products Competes in the "Center-Of-The-Aisle" Packaged Foods Business