A firm is considering a large price cut on its leading product as a way to gain market share. One executive strongly disagrees with the price cut. He observes that they are in the same marketplace as their rivals and do not have any competitive advantages in their cost structure. If they cut prices, their competitors will likely do the same. The end result is that everyone will make less money. These arguments are an example of a
A)strategy of co-opetition.
B)strategy of forbearance.
C)hardball strategy.
D)weakness strategy.

Question

Quizplus · Accepted Answer

There may be many circumstances (such as this potential price war) in which the best reaction is no reaction at all. This is known as forbearance, refraining from reacting at all as well as holding back from initiating an attack.

A Firm Is Considering a Large Price Cut on Its