Competitive Strategy
Smith & Wesson (S&W) competes with a number of dominant global firearms manufactures including Ruger, Sig Sauer, Taurus, Glock, Colt, Savage, Remington, Winchester, and Bushmaster. Their …show more content…
Authorized and registered firearm dealers and outdoor product retailers are primarily used domestically, including retailers such as Bass Pro Shops, Cabella’s Dicks Sporting Goods and Gander Mountain. This allows S&W to ensure federal and state firearms laws are adhered to, with specific emphasis on required background checks, while also reaching a large number of potential consumers. Online retail stores are leveraged to market and sell hunting and shooting accessories direct to consumers. This direct sales model is conducive to this product line since background checks and other firearm specific laws do not apply (Smith & Wesson Holding Corporation, …show more content…
Firearms are purchased from the manufacturer and priced by the authorized gun dealer or outdoor retailer using the cost-plus pricing strategy. A profit margin is considered when determining consumer pricing with periodic markdowns leveraged to entice consumers into their stores and dealerships.
The pricing strategy used by S&W depends largely on the specific product line and the lifecycle of the weapon. The skimming price strategy is used when a new and particularly innovative weapon is introduced to the market. This allows the company to recover their research and development costs more quickly and make a profit. Other product lines are priced using the everyday low price strategy designed specifically to target price conscious and entry-level consumers. Note that many high-end manufacturers, such as Browning, Berretta, and Kimber, utilize the prestige pricing strategy to protect their brand image of being a producer of high quality firearms (Tanner & Raymond,