If a rival uses cash flows from one country to finance aggressive pricing in another,
A)this is illegal under world trade organization rules.
B)now is the time to attack his high-price markets and grow your market share there.
C)you must retaliate in the price war - or drop all your strategic goals in this country.
D)stay out of this price war.

Question

Quizplus · Accepted Answer

By attacking the rival's high-price markets and growing market share there, you can counter their aggressive pricing strategy and potentially gain an advantage in the long-term. Retaliating in the price war may not be sustainable, and dropping strategic goals in the country would limit potential growth opportunities. It is not necessarily illegal under world trade organization rules for a rival to use cash flows from one country to finance pricing strategies in another, so option A is not the best choice. Option D may not be the best choice if there is potential for growth and market share gains.

If a Rival Uses Cash Flows from One Country to Finance