One strategy to avoid or use caution is intervening in the regulation of prices. The element of excessive pricing and automatic correction of the situation without intervention is unlikely to apply to all markets. For instance, where there is an oligopoly or monopoly, or when it is difficult to enter the market, consumers can be exploited in cases where competition cannot correct the prices (Das Nair & Mondliwa, 2017). On the contrary, predatory prices can harm businesses; hence, there need to be regulations to ensure such practices are controlled. It is difficult to determine when to intervene and the degree to do it, which indicates that the process should be done with caution.
Another issue that should be avoided or performed with caution is using the competitive advantage to predict the performance or number of customers in international markets. The reading on competitive advantage shows that price, product, and service have different impacts on the international stage. International markets are likely to check the product quality and the kind of services the seller offers. However, other factors, such as the distributor’s and customers’ relationship, are still considered (Kaleka & Morgan, 2017). This means that all three aspects of price, product, and services have varying impacts on influencing customers on the international stage.
While companies can use their competitive advantage to gain a market share internationally, there is no guarantee that the trend will continue. To enhance market performance, a firm must have the requisite skills and capability to fulfill the demands of its consumers, who have different expectations (Kaleka & Morgan, 2017). The positional advantage indicates that a business has a powerful potential to create customer demand. The customers may not remain loyal for long because high-value perceptions by rivals may emerge over time to disadvantage the performance expectations (Thomas, 2018). Utilizing competitive advantage to assess performance should be avoided or proceeded with caution to avoid making mistakes.
In my personal life, I have seen areas where some traders practiced predatory pricing. The issue made it impossible for me to profit if I sold my products at the prices they had adopted. Other than dropping prices to compete with them, I decided to wait until their stock was depleted so that I could resume normally in my shop. While predatory pricing is not encouraged, the best strategy to deal with it may be to communicate with them or report them to relevant authorities.
References
Das Nair, R., & Mondliwa, P. (2017). Excessive pricing under the spotlight: What is a competitive price? In J. Klaaren, S. Roberts & I. Valodia (Eds.), Competition law and economic regulation. Addressing market power in Southern Africa.
Kaleka, A., & Morgan, N. A. (2017). Which competitive advantage (s)? Competitive advantage–market performance relationships in international markets. Journal of International Marketing, 25(4), 25-49. Web.
Thomas J. (2018). Strategy levels. Reference for Business. Web.