Political Science 2211E Lecture Notes - Category Killer, Hedge Fund, Predatory Pricing
15 Dec 2013
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3:36 pm: the market power of retail firms. Rise of chain stores, big box stores and category killers: category killer: specialized in particular product category (toysrus, chapters, etc, big box: wal-mart, home depot. Shift away from department stores and indy stores. Company"s power over supplies, competitors, customers and other stakeholders. Lower prices and better service due to: economies of scale, bulk buying, standardization and efficiency, consumer trust. Dumping and predatory pricing: selling below. Clustering: opening more stores than an area can support, too litter business per store drives independents out of business. Bundling: selling less popular products bundled with more popular, microsoft windows and explorer bundled together to drive netscape out of business - which they did. Exclusivity agreements: force supplier not to sell to competitors, force retailer not to sell competitor"s products, york university: Pepsi signed and exclusivity agreement with york. Pepsi didn"t sell orange juice so for 3 years you couldn"t buy orange juice on.
