When GM offers discounts and incentives, rivals Ford and Chrysler cannot afford to ignore the challenge and quickly follow suit. These arguments are an example of

Question

Quizplus · Accepted Answer

Whether a company should respond to a competitive challenge will also depend on who launched the attack against it. Compared to relatively smaller firms with less market power, competitors are more likely to respond to competitive moves by market leaders. Another consideration is how successful prior attacks have been. For example, price cutting by the big automakers usually has the desired result-increased sales to price-sensitive buyers-at least in the short run. Given that history, when GM offers discounts or incentives, rivals Ford and Chrysler cannot afford to ignore the challenge and quickly follow suit.

When GM Offers Discounts and Incentives, Rivals Ford and Chrysler