How would a low-cost price leader enforce its leadership through implied threats to a rival

by | Nov 19, 2024 | Analysis

How would a low-cost price leader enforce its leadership through implied threats to a rival? How does a firm become a “low cost” price leader? Discuss the specific type of market structure that implied threat strategy can be adapted.

 

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Dante Alighieri played a critical role in the literature world through his poem Divine Comedy that was written in the 14th century. The poem contains Inferno, Purgatorio, and Paradiso. The Inferno is a description of the nine circles of torment that are found on the earth. It depicts the realms of the people that have gone against the spiritual values and who, instead, have chosen bestial appetite, violence, or fraud and malice. The nine circles of hell are limbo, lust, gluttony, greed and wrath. Others are heresy, violence, fraud, and treachery. The purpose of this paper is to examine the Dante’s Inferno in the perspective of its portrayal of God’s image and the justification of hell. 

In this epic poem, God is portrayed as a super being guilty of multiple weaknesses including being egotistic, unjust, and hypocritical. Dante, in this poem, depicts God as being more human than divine by challenging God’s omnipotence. Additionally, the manner in which Dante describes Hell is in full contradiction to the morals of God as written in the Bible. When god arranges Hell to flatter Himself, He commits egotism, a sin that is common among human beings (Cheney, 2016). The weakness is depicted in Limbo and on the Gate of Hell where, for instance, God sends those who do not worship Him to Hell. This implies that failure to worship Him is a sin.


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God is also depicted as lacking justice in His actions thus removing the godly image. The injustice is portrayed by the manner in which the sodomites and opportunists are treated. The opportunists are subjected to banner chasing in their lives after death followed by being stung by insects and maggots. They are known to having done neither good nor bad during their lifetimes and, therefore, justice could have demanded that they be granted a neutral punishment having lived a neutral life. The sodomites are also punished unfairly by God when Brunetto Lattini is condemned to hell despite being a good leader (Babor, T. F., McGovern, T., & Robaina, K. (2017). While he commited sodomy, God chooses to ignore all the other good deeds that Brunetto did.

Finally, God is also portrayed as being hypocritical in His actions, a sin that further diminishes His godliness and makes Him more human. A case in point is when God condemns the sin of egotism and goes ahead to commit it repeatedly. Proverbs 29:23 states that “arrogance will bring your downfall, but if you are humble, you will be respected.” When Slattery condemns Dante’s human state as being weak, doubtful, and limited, he is proving God’s hypocrisy because He is also human (Verdicchio, 2015). The actions of God in Hell as portrayed by Dante are inconsistent with the Biblical literature. Both Dante and God are prone to making mistakes, something common among human beings thus making God more human.

To wrap it up, Dante portrays God is more human since He commits the same sins that humans commit: egotism, hypocrisy, and injustice. Hell is justified as being a destination for victims of the mistakes committed by God. The Hell is presented as being a totally different place as compared to what is written about it in the Bible. As a result, reading through the text gives an image of God who is prone to the very mistakes common to humans thus ripping Him off His lofty status of divine and, instead, making Him a mere human. Whether or not Dante did it intentionally is subject to debate but one thing is clear in the poem: the misconstrued notion of God is revealed to future generations.

 

References

Babor, T. F., McGovern, T., & Robaina, K. (2017). Dante’s inferno: Seven deadly sins in scientific publishing and how to avoid them. Addiction Science: A Guide for the Perplexed, 267.

Cheney, L. D. G. (2016). Illustrations for Dante’s Inferno: A Comparative Study of Sandro Botticelli, Giovanni Stradano, and Federico Zuccaro. Cultural and Religious Studies, 4(8), 487.

Verdicchio, M. (2015). Irony and Desire in Dante’s” Inferno” 27. Italica, 285-297.

Enforcing Low-Cost Leadership through Implied Threats

A low-cost price leader can enforce its position through subtle, yet powerful, implied threats. These can include:  

  1. Price Signaling: The price leader can signal its intention to maintain or reduce prices, discouraging competitors from raising theirs. This can be done through public announcements, press releases, or analyst calls.
  2. Capacity Expansion: Investing in additional production capacity can signal a willingness to increase output and lower prices, deterring competitors from aggressive pricing strategies.

Enforcing Low-Cost Leadership through Implied Threats

A low-cost price leader can enforce its position through subtle, yet powerful, implied threats. These can include:  

  1. Price Signaling: The price leader can signal its intention to maintain or reduce prices, discouraging competitors from raising theirs. This can be done through public announcements, press releases, or analyst calls.
  2. Capacity Expansion: Investing in additional production capacity can signal a willingness to increase output and lower prices, deterring competitors from aggressive pricing strategies.
  1. Aggressive Price Cuts: The price leader can initiate price cuts to drive competitors out of the market or force them to reduce their profit margins.
  2. Strategic Alliances: Forming strategic partnerships with suppliers or distributors can help the price leader maintain cost advantages and deter competition.  

Becoming a Low-Cost Price Leader

To become a low-cost price leader, a firm must focus on reducing costs across its operations. Some strategies include:  

  1. Economies of Scale: Achieving economies of scale by increasing production volume to reduce average costs.

     

  2. Efficient Operations: Implementing lean manufacturing techniques and optimizing supply chain management.  
  3. Technological Innovation: Adopting advanced technologies to improve productivity and reduce costs.
  4. Cost Control: Rigorously monitoring and controlling costs in areas such as procurement, production, and distribution.

Market Structure for Implied Threat Strategy

The implied threat strategy is most effective in an oligopolistic market structure. In an oligopoly, a few large firms dominate the market, and their actions can significantly impact the market price and output.  

In this context, a low-cost price leader can use its market power to influence the behavior of other firms. By signaling its willingness to engage in price wars or capacity expansions, the price leader can deter competitors from challenging its position.  

However, it’s important to note that this strategy must be used judiciously. Aggressive pricing tactics can lead to price wars that erode profit margins for all firms involved. Therefore, a sustainable low-cost leadership strategy requires a careful balance between aggressive pricing and long-term profitability

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