Outi Uusitalo and Maija Rökman
The purpose of this paper is to explore the impacts that a new retailer entering a previously stable market has on the domestic retailers' pricing behaviour. The paper describes…
Abstract
Purpose
The purpose of this paper is to explore the impacts that a new retailer entering a previously stable market has on the domestic retailers' pricing behaviour. The paper describes and analyses the context of the entry of the hard discounter chain Lidl into the Finnish market.
Design/methodology/approach
To illustrate the effects of competitive entry on pricing behaviour of competitors, prices of 20 grocery items were collected from three different chains and three market areas in three different points of time. Based on these data the pricing initiatives of the entrant and the reactions of the domestic competitors are described and analysed in terms of four dimensions: competition, geographical, assortment, and time.
Findings
The analysis reveals that the domestic retailers reacted to the intensifying price competition by engaging in selective price changes. Both price cuts and price increases were detected.
Originality/value
The paper provides empirical insights about the impacts of intensifying competition on pricing.
Details
Keywords
The purpose of this paper is to review the latest management developments across the globe and pinpoint practical implications from cutting‐edge research and case studies.
Abstract
Purpose
The purpose of this paper is to review the latest management developments across the globe and pinpoint practical implications from cutting‐edge research and case studies.
Design/methodology/approach
This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.
Findings
In the cold, hard business world of the twenty‐first century there are several markets where the competitors are allowed to throw around comments to shareholders about the “cut‐throat” competition, the “toughness” of competition, or even the “white heat” of competition. Retail is decidedly one of these markets, however while these mitigations may have some truth in the US, UK or Germany, there are still some countries where the idea of a wholly new foreign entrant successfully arriving into a new market is not pure fancy.
Practical implications
Provides strategic insights and practical thinking that have influenced some of the world's leading organizations.
Originality/value
The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy‐to‐digest format.