A Personal Opinion to Price Wars

Pricing is one of the most necessary factor a company must take into consideration upon venturing into a selected industry. This is affected by different factors such as the manufacturing costs, marketing costs, legal mandates of the state, the competition, the condition of the industry and the quality of the product. Through this a company is capable of determining their profitability which then may determine how they can generating appropriate amount of income that will support their operation. This may, as well, serve as great strategic tool as this may help the company cope up with their competition through certain adjustments and empolying different strategies. There are certain phenomena that may occur upon utilizing such in an industry and one of those is the price war. 

Price war is a market situation characterized by the cutting of prices of companies below their competitors prices. This may mainly occur on conditions wherein there is a very heavy competition present. In such situation, companies will do every strategy in order for them to overthrow competitors and have themselves obtain greater market share in the industry. This, as well, is done due to the stronger bargaining power of buyers due to the presence of substitute products. Companies may prefer to lower their prices in order for consumers to choose their products over their competitors'.

I think, the environmental condition which will most likely trigger price war is when there is recession in a country. I think, this is the condition in which companies will be most likely be forced to adjust prices in order to keep up with the reduced purchasing power of their consumers. 

Another condition that I think would most likely trigger such phenomena is when a company is engaged in a new market or when a good is newly turned into a commodity. As an example is the smart phone industry. During the first years of the industry, most smart phones are priced highly as it is considered that time as a luxury to have such but as many companies discover ways on how to venture into the industry and have gathered enough resources to support such venture, the supply for the said product becomes greater which then had the prices go down into how is it today. Aside from that, this, as well, have made such products a commodity which further increased the demand for the said product. And speaking of technology, another triggering event may be the introduction of new technology that may allow a company to produce at a lower cost. This will allow the company to have their prices lower than their direct competitors but this will not result into an absolute advantage as such technology will eventually be revealed to other companies which will allow them to lower prices accordingly. This may, as well, result into a price war. 

Playing around with pricing may be one useful strategy for companies to operate more efficiently but it must also be taken into consideration that doing such against bigger companies is not ideal as they may employ predatory pricing, a strategy in which pricing will be low enough that smaller companies can no longer cope up with and may have them go out of business as this will allow the bigger company to grab the market share left by the said business. An effective way to cope up with such is through determining if there really is a price war, as some only lower their prices for promotional purposes, and if there really is be sure to have sufficient resources to suffice such strategy and know when to stop and employ different strategy such as product differentiation.

Personal Opinion: Macro vs Micro Environment

Upon running a business there are two forces upon which companies enacts their strategies and policies in accordance to. One of which is the microenvironment. According to businessdictionary.com, these are the factors or elements in an organization's immediate area of operations that affects its performance and decision-making freedom. These factors include competitors, customers, distribution channels, suppliers and the general public. These are those which into some extent are internal to the organization. In my understanding, these are the factors which the organization has some degree of control. These factors are those which the organization can implement strategies that may somehow influence them. These factors are those which the company can address to easier as they are smaller in comparison to the macroenvironment which has more influencing factors to which the company has no control.

The second force through which organizations enact strategies in accordance to is the macroenvironment. This comprises of players that are much vast that the preceeding ones. These are external in nature and are the ones which organizations has no control and has no choice but to act in appropriation to these. These factors are those which may greatly affect the course of business in the long run. Accoring to businessdictionary.com, these factors include the economic factors; demographics; legal, political and social conditions; technological changes; and natural forces. In my opinion, these factors are of the same importance with the microenvironment but, I think, these factors are harder to address and may pose bigger threat to the course of not only the business but the whole industry.

If I would choose which of the two to prioritize, I think, I would prefer to first settle the microenvironment of my business. It's not that macroenvironment is not important, it's just that for me an organization is like a person, it is better to fix up things within your control first. It's like creating a positive mindset in a person in order to invite positivity into your lives. In relation to business and competitiveness, in my opinion, if a company has a well founded stand within their microenvironment, it would be easier for them to address the needs and demands of the macroenvironment. Having a strong hold in the microenvironment would, as well, allow an organization to have enough resources to support their actions in accordance to the changes in the macroenvironment like when there are economical changes that may occur, the technological changes in the said environment, the new laws and regulations imposed that may affect the course of the business and the likes. An example, for me, is when a company has dominated an industry with an established brand name and holds majority of the share in the industry it dwells in and an economic problem occurs. I think this company would have a better chance of survival compared to other companies in the industry due to advantages with the resources the company was able to stack with the help of their well settled microenvironment.

To conclude this, in my opinion, between the two forces that affects an organization's performance, the microenvironment is more important as this, as well, is the one which the company have some degree of control and as I have said, as well, for me an organization is much like a person, upon creating peace within yourself, peace and positivity on your environment would follow.

Fast Food Experience

It was a sunny day and it was a great time to have lunch with my friends. We only have one class for the day thus having us the chance to actually bond with each other and be able to wind up from all the stress we have been keeping up with for the week. The service we had went quite well. The ambiance was good. The tables and chairs were clean but I have never really felt clean when I eat on this particular branch of Greenwich. The table just feels like so oily or damp? I’m not sure with the term but it just doesn’t feel so clean. Maybe it was because of the rags they use to wipe the tables. This feeling goes the same with some Mang Inasal branches I’ve been to but I won’t talk about that. The glasses they used are also not pleasing. It was full of scratches. You can actually tell that these glasses have gone through many hands. It’s like it has gone through many battles and the scratches were its battle scars. I don’t know, but maybe in a way, I’m just comparing it with the glasses Chowking use. I am not sure, as well, if all the Greenwich branches use glasses like the ones they have in this branch. Glasses in KFC are not like these actually. For the spoon and fork, I have had quite a number of bad experiences with these that’s why I keep in mind to really make sure that I wipe the spoon and fork with the tissue given together with the utensils. There were just those times when the spoon and fork were not cleaned thoroughly. For the food served, it was good. But one thing we have noticed is that there is something like blood on the tray where the chicken was served. There was this reddish liquid but not red enough to look like blood. We disregarded it as there were no traces of blood found on the chicken we ate. My overall experience that day with Greenwich is quite good. Amidst all the things I have said about the utensils and other “eating equipment” they used to serve their customers, I was actually satisfied as I have had way worse experiences than what we had on that day and yes, I'd say it, I'd still go back to Greenwich from time to time.