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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