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The point is that there are significant barriers that prevent someone from just coming in and executing a "undercut the leader" pricing strategy. Especially if
by jljljl 12y ago
The point is that there are significant barriers that prevent someone from just coming in and executing a "undercut the leader" pricing strategy. Especially if you are trying to "eliminate De Beers overnight", like you said in your previous post.
- bane 12y agoThere's a barrier to entry in just about everything. If I wanted to start an electric car company, or a rocket ship business I'd be facing the same. Overcome that barrier to execute on your chosen business strategy is how the world works. If you can't overcome the barrier then you can't execute. Simple as that. Either you can raise capital and build up an inventory of diamonds or not. This isn't rocket surgery.
- jljljl 12y agoI agree. One more time: You asked: "Why didn't anyone just enter the market and undercut De Beers?". The answer for a long time was: "Barriers to entry, and low probability of success given the risks involved". This has nothing to do with not understanding pricing strategy. I don't know what you are arguing about anymore.