2,867 research outputs found
Chain-store pricing for strategic accommodation
Chain-stores now dominate most areas of retailing. While retailers may operate nationally or even internationally, the markets they compete in are largely local. How should they best operate pricing policy in respect of the different markets served - price uniformly across the local markets or on a local basis according to market conditions? We model this by allowing local market differences, with entry being inevitable in certain markets while being naturally or institutionally blockaded in others. We show that practising price discrimination is not always best for the chain-store. Competitive conditions exist under which uniform pricing can raise profits
Structural Change in the U.S. Dairy Industry: Growth in Scale, Regional Shifts in Milk Production and Processing, and Internationalism
Structural changes in the U.S. dairy industry from the early 1980s to the late 1990s included familiar increases in concentration, industry adjustments to serve large supermarkets, the emergence of two national fluid milk firms (Suiza Foods and Dean Foods), and the emergence of two national dairy cooperatives (Dairy Farmers of America and Land O'Lakes, Inc.). Shifts in the location of milk production in the U.S. to the Western states have caused new dairy product manufacturing plants to locate in those states. This development promises to intensify battles over market share in the expanding U.S. cheese market between Western firms and Upper Midwestern firms. Foreign direct investment in the U.S. dairy industry--especially by European Union firms and a large Canadian firm--increased during the 1980s and 1990s. Facing challenges to expand dairy exports or shrink, the U.S. dairy industry probably will gravitate toward the latter unless government price support and trade policies change to increase price incentives for U.S. firms to export dairy products.
CHAIN-STORE PRICING FOR STRATEGIC ACCOMMODATION
Chain-stores now dominate most areas of retailing. While retailers may operate nationally or even internationally, the markets they compete in are largely local. How should they best operate pricing policy in respect of the different markets served - price uniformly across the local markets or on a local basis according to market conditions? We model this by allowing local market differences, with entry being inevitable in certain markets while being naturally or institutionally blockaded in others. We show that practising price discrimination is not always best for the chain-store. Competitive conditions exist under which uniform pricing can raise profits.Chain-store ; Pricing Policy ; Price Discrimination ; Local Markets
Chain-Store Competition: Customized vs. Uniform Pricing
Retail chains essentially practice one of two broad strategies in setting prices across their stores. The more straightforward is to set a chain- or country- wide price. Alternatively, managers of retail chains may customize prices to the store level according to local demand and competitive conditions. For example, a chain may price lower in a location with lower demand and/or more competition. However, despite having the ability to customize prices to local market conditions, some choose instead to commit to uniform pricing with a âone price policyâ across their entire store network. As an illustration, we focus on UK supermarket chains. Is there an advantage to be gained from deliberately choosing not to price discriminate across locations? We show generally and illustrate through means of a specific model that there exists a strategic incentive to soften competition in competitive markets by committing not to customize prices at the store level and instead adopt uniform pricing across the store network, and to raise overall profits thereby. Furthermore, we characterize quite precisely the circumstances under which uniform pricing is, and is not, profitable and illustrate that under a range of circumstances uniform pricing may be the preferable strategy.Chain-store retailers ; price discrimination ; uniform pricing ; local pricing ; commitment
Market Consolidation and Pricing Developments in Grocery Retailing: A Case Study
When large retailers merge, there is a concern that a sudden and marked increase in concentration will alter the intensity and nature of price competition to the detriment of consumers. This chapter considers just such a situation in regard to UK grocery retailing, which has witnessed steadily increasing concentration over recent years, advanced by a series of mergers. Specifically, we examine the nature of price competition amongst the major âone-stop-shopâ retail chains before, during, and after the Safeway/Morrison merger in March 2004.We find the merger offered consumers an immediate windfall benefit â with average prices falling straight after the mergerâand more intriguingly appears to have led to (or at least is associated with) a marked change in the character of price competition in the market
Cascading Power Outages Propagate Locally in an Influence Graph that is not the Actual Grid Topology
In a cascading power transmission outage, component outages propagate
non-locally, after one component outages, the next failure may be very distant,
both topologically and geographically. As a result, simple models of
topological contagion do not accurately represent the propagation of cascades
in power systems. However, cascading power outages do follow patterns, some of
which are useful in understanding and reducing blackout risk. This paper
describes a method by which the data from many cascading failure simulations
can be transformed into a graph-based model of influences that provides
actionable information about the many ways that cascades propagate in a
particular system. The resulting "influence graph" model is Markovian, in that
component outage probabilities depend only on the outages that occurred in the
prior generation. To validate the model we compare the distribution of cascade
sizes resulting from contingencies in a branch test case to
cascade sizes in the influence graph. The two distributions are remarkably
similar. In addition, we derive an equation with which one can quickly identify
modifications to the proposed system that will substantially reduce cascade
propagation. With this equation one can quickly identify critical components
that can be improved to substantially reduce the risk of large cascading
blackouts.Comment: Accepted for publication at the IEEE Transactions on Power System
Mergers and Business Model Assimilation: Evidence from Low-Cost Airlines Takeovers
This paper examines mergers that lead to an almost immediate replacement of the target firmâs business model in favor of that of the acquiring firm. We examine the post-merger behavior of the two leading European dedicated low-cost airlines, EasyJet and Ryanair, each acquiring another low-cost airline, respectively Go Fly and Buzz. We find that both takeovers had an immediate and sustained impact on both the pricing structures and the extent of inter-temporal price schedules used on the acquired routes, with early booking fares noticeably reduced and only very late booking fares increased. The analysis suggests that the takeovers had a net beneficial effect as a consequence of the introduction of the acquiring firmsâ business models and associated yield management pricing systems. .merger policy; Business model; Low-cost airline; Price discrimination; Yield management .
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