Next Up Previous Contents Index
Next: Riding out hard Up: Variation 3: Competitive Previous: Cheap development: expensive

Low margin product introductions

By exploiting its minuscule cost of goods, a New Technological Corporation can introduce new products at extremely low prices and still generate substantial earnings during their start-up phases. These low launch prices either force competitors to lose money attempting to respond at a similar price or deter them from entering the market at all, leaving the New Technological Corporation free to move the product up-market by adding functionality at additional cost as the product establishes itself as the standard in the market.


Editor: John Walker