Response to Nelson Melendez
The discussion considers that offering discounts of up to 30% would result in huge losses of up to $42,525,000 a month. The amount of time to keep the customers is also a short time of only three months. I agree that the loss would be huge for the given amount of time and that there should be other alternatives that can be considered. The best alternative that can be considered would be to provide extra features like that of a redirect feature when a phone call dies in the middle of the day (Steinhoff & Zondag, 2021). Implementing such features is important in ensuring that customers feel that they are getting a value for their money. The other alternative of striving to retain subscribers not only for 3 months but up to 2 years will also ensure that the company has a stable revenue.
Response to Ladd Warwick
The discussion observes that the company is the market leader and should strive to act appropriately when meeting the. I agree with the analysis that increasing the cost would be the most profitable even though it may result in a slight loss in the market share. However, there are multiple considerations the company must take before increasing the cost. It can analyze why the competition is increasing its costs. The Prisoner’s Dilemma may also be considered to analyze when the two entities choose not to cooperate even when it is in the best interests to do so (Garcia & van Veelen, 2018). Considering the impact of the competition, I agree that the best strategy for the company is to consider the impact that rival could have (Gupta et al., 2021). Increasing their rates to match the company’s can result in an increase in the profits. Considering the change in other factors such as fixed costs will ensure that the company critically analyzes the net profit.
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References
Garcia, J., & van Veelen, M. (2018). No strategy can win in the repeated prisoner's dilemma: linking game theory and computer simulations. Frontiers in Robotics and AI , 5 , 102.
Gupta, V., Ivanov, D., & Choi, T. M. (2021). Competitive pricing of substitute products under supply disruption. Omega , 101 , 102279.
Steinhoff, L., & Zondag, M. M. (2021). Loyalty programs as travel companions: Complementary service features across customer journey stages. Journal of Business Research , 129 , 70-82.
