Business environment Research Paper Example | Topics and Well Written Essays - 3000 words

Business environment - Research Paper Example on a lower floor these grocerying conditions, a Dominant Strategy is a course of action which would be followed in response to any course of action taken by the other player.3. Hiphop or Garries will earn a profit of 6,400 if the other one charge a hurtd 11 per piece and whoever charges 11 will get a border of 1,800 because in that situation the other player will charge 10 and sell more units.Collusion between parties occurs when they act in common fill and trust each other. The best example for Collusion is the OPEC where the petroleum prices are fixed in consultation with all the member countries to the maximum advantage of the countries concerned. In collusion there will be an interaction between the players who want to maximize their earnings. By colluding the players divide the total market place among themselves and by charging the same price they also share the profits that the business offers.There are still first mover advan tages, such as the chance to hand early market share, but without the backing of the right customers and constant innovation, its always possible to loose the advantages. The advantages that the first entrant gets may non be easy to the second one.When twain the companies Burger Binge and McDennys want t... Observation on Collusion from the MatrixFrom the pay off matrix drawn the following observation is made for collusion1. when two Hiphop and Garries charge same price of 11 each one make a profit of 4,5002. It may be observed this profit of 4,500 is in exorbitance by 500 than what they made while they were selling 10 per pieceThis is the result of the agreement between both the players to sell the product at 11 and that is the effect of the retailers collusion. EXPLANATION FOR FIRST MOVER ADVANTAGEFirst Mover Advantage is a notion that being first in a market place gives the first mover an insuperable competitive edge. - David M Katz There are still first mover advantages, s uch as the chance to gain early market share, but without the backing of the right customers and constant innovation, its always possible to loose the advantages. The advantages that the first entrant gets may not be available to the second one. I have made the pay off matrix for companies Burger Binge and McDennys with the help of the data provided.Burger BingeMcDennysBegin OperationStay internationalBegin Operation - 100,000- 100,000 0 250,000Stay Away 250,0000 00ObservationWhen both the companies Burger Binge and McDennys want to operate their business it is not possible for both of them to earn any profit. This is what is observed from the matrix. Alternatively if one decides to stay away from the business the other one can earn a profit of 250,000. For example if Burger Binge does the business and McDennys do not enter the market then Burger Binge gets the first mover advantage and earns 250,000. PART B PORTERS FIVE