Discussion 9- economics-tactics for competitors Assignment

Discussion 9- economics-tactics for competitors - Assignment Example Large scale entry-deterrence is evident in the airline industry (McGuigan, Moyer, & Harris, 2008). Some entry-deterring strategies include capacity expansion, limiting prices and predatory pricing. Incumbents in the airline industry adjust their prices to neutralize the threat of entry in the airline bsiness. Adjusting prices limits contestability in the market. Incumbents can charge low prices before entry, charge low prices to push new firms out of business and shape expectations of new firms towards competition. Competition from southwest airlines and other firms results in the reduction of fares in the airline industry. The approach of limiting prices is to deter new firms from entering the market. Entry of firms such as southwest and people express forces incumbent firms to develop entry-deterring strategies in order to reduce competition. The incumbents decide whether to adjust prices or enter the business with large scale carriers. In order for new firms to successfully enter the market, they need to analyze entry conditions into the market before making their decisions. Before starting business new firms must understand the extent of entry barriers, consequences of ent ry barriers and develop counter measures to these

International Finance Research Paper Example | Topics and Well Written Essays - 2250 words

International Finance - Research Paper Example In this case, we look at the injection of capital into the Indonesian economy by an American firm that seeks to invest in a clothing manufacturing firm in Indonesia. Indonesia is a state made up of a group of islands located between Southeast Asia and Oceania (Van Zanden and Marks 2). The country is the fourth most populous nation in the world with 252 million people (Van Zanden and Marks 2). The vast majority of the nationals speak Indonesian which is spoken by members of the largest ethnic group, the Javanese. There are 33 provinces in Indonesia and one Specially Administered region in the country. Indonesia was declared independent in 1945 after the Second World War but it was acknowledged by the Dutch colonizers in 1949. Indonesia is currently ruled by Joko Widodo who is the head of the unitary presidential constitutional republic. This section of the essay will evaluate the relevant elements of the political environment of Indonesia that can affect a clothing manufacturer from the United States, seeking to invest in the country. Indonesia is a republic that is ran as a unitary state; hence all the power is concentrated in the central government with a much lower level of autonomy to regional authorities (Central Intelligence Agency 307). The country’s 1945 constitution has gone through four amendments, and the most modern amendment occurred in 1998 when President Suharto was ousted (Central Intelligence Agency 307). There country has a bicameral parliamentary system which includes the People’s Representative Council which is the lower house and consists of 560 representatives and the Regional Representative Council made up of 132 members. They both monitor the affairs of the executive and pass laws. Indonesia has a GDP per capita of about $10,000 and the country has one of the fastest growing middleclass in the world (OECD 48). The country’s middle class is growing fundamentally because of the reforms made to