For this week\'s written assignment you are playing the role of a consultant. Fi

Question

For this week's written assignment you are playing the role of a consultant. First pick a fortune 100 company you desire to learn more about. You're tasked, as a consultant, to provide the board of directors of the firm you selected with a brief, 2 page paper and accompanying visuals (PowerPoint). The objective is to fully explain why the company has been successful and will continue to be an effective price maker or if your firm is not a price maker, what actions need to be instituted to become a price-making firm.

Explanation / Answer

Company “ABC” is a fortune 100 company producing electrical appliances. Its rank is 83 out of 100 big and progressive companies in the world.

This is a price-making company, since it a monopoly firm. The company has 100% market share in the domestic country and substantial amount of market share in abroad. Sharing such big market helps the company fixing price of their products.

The company uses price discrimination by offering lower price to lower income groups and higher price to higher income groups. Bulk purchases also come under price discrimination, because prices get reduced there.

The company is successful and an effective price maker because of the following reasons:

1.Quality: The company produces quality products and to maintain such quality it acquires ISO 9000 certification.

2. Goodwill: It increases company’s goodwill, since all interested parties like customers, suppliers, lenders, and shareholders get faith on the company’s activity. Company earns reputation through such certification.

3. Capacity: It improves capacity of production, since the whole system is upgraded.

4. Elimination: The company has minimum elimination in material loss and/or other input loss because of modern technique implementation.

5. Social awareness: The company carries immense social responsibility. Making price should not be done by depriving others. Keeping such thing in mind the company’s management evaluates income of purchasers for charging them appropriate product price.

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