You Are the Owner of a New Network That Is

question 61

Essay

You are the owner of a new network that is superior to an existing two-way network.The network you aim to replace currently has 50 users, each of whom is willing to pay an average of $75,000 for each connection service within the network.You are confident that each user values connection services within your two-way network at an average of $100,000 per connection service.
a.What is the maximum price the existing network can charge each user for its services?
b.Devise a pricing strategy that will permit your firm to overcome the first-mover advantage enjoyed by the existing network.

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Definitions:

Strategies

Approaches or plans developed to achieve objectives efficiently.

Tactics

Carefully planned strategies or actions aimed at achieving a specific goal.

Opportunity To Retreat

The option or possibility for an individual or group to withdraw from an uncomfortable, challenging, or dangerous situation safely.

Fait Accompli

A French term meaning "accomplished fact"; something that has already been done and cannot be changed.