It is a typical Christmas electronics shopping season, and makers of flat-panel

Question

It is a typical Christmas electronics shopping season, and makers of flat-panel TVs are marketing the latest available models through their own Web sites as well as via retailers such as Best Buy and Walmart. Each manufacturer offers its own unique versions of flat-panel TVs in differing arrays of shapes and sizes. As usual, each is hoping to maintain a stream of economic profits earned since it first introduced these most recent models late last year or perhaps just a few months before Christmas. Nevertheless, as sales figures arrive at the headquarters of companies such as Dell, Samsung, Sharp, and Sony, it is clear that most of the companies will end up earning only a normal rate of return this year. (See page 560.)

How can makers of flat-panel TVs earn economic profits during the first few months after the introduction of new models?

What economic forces result in the dissipation of economic profits earned by manufacturers of flat-panel TVs?

ANSWER IT IN 1 1/2 PAGE'S

Explanation / Answer

Flat Panel TV's are perhaps one of the most sold consumer electronics, It is also the most competitive product, The smart TV market is very crowded with large korean and Japanese firms taking lions share of the market, They have very advanced products in reasonable cost. The newer entrants include chinese OEM's which provide TV's in third of the price,

The only way to earn economic profits in flat TV's is to make a product that is not available in market yet, Then market such product very aggresively to acheive economies of scale, Then after few months of successful sales, Some other manufacturer will certainly introduce similar model which will dent the sales of your model.

Smart TV was introduced by samsung which had most of the features like wifi connectivity,Internet browsing etc. Then more than 10 companies followed samsung to introduce similar products. Now we even have android powered TV's Technology is adopted most quickly in this highly competitve space

2) Competition is no.1 problem in this market, Entry barriers are very low so there are so many manufacturers of flat tv's and Online retailers in some places have their own brands, This had resulted in thinning out of profits for established players.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.