All that a firm like best buy needs to do is to keep one week of sale where they keep rock bottom prices (preferably where tweeter is not declaring a sale) and they ensure they don’t sell much during that week on the pretext of stock out. In fact just enough to ensure that the sale week was genuine. They then should raise the prices.
A firm like tweeter has to reimburse the price difference compared to rock bottom prices.
APP is prone to short term attacks by competitors. This has already been exhibited in form of losses incurred by Tweeter. A long term blow would be declaring 110-115% refund in price differences.
In 1995, Net Income of Tweeter=2.702 million. Tweeter’s money spent on paybacks due to APP=0.78 million (28.8% on paybacks). In
A firm like tweeter has to reimburse the price difference compared to rock bottom prices.
APP is prone to short term attacks by competitors. This has already been exhibited in form of losses incurred by Tweeter. A long term blow would be declaring 110-115% refund in price differences.
In 1995, Net Income of Tweeter=2.702 million. Tweeter’s money spent on paybacks due to APP=0.78 million (28.8% on paybacks). In