You are the president of the American Construction Company (ACC), a company that contracts with builders to
Question:
You are the president of the American Construction Company (ACC), a company that contracts with builders to use its heavy construction equipment to move large items in to place for the building of commercial buildings (cranes to move large pieces of building frames, large furnaces or air conditioners, etc.). You typically buy your cranes and other equipment on credit and so have monthly payments for that equipment. You cover your costs and make some profit through the rental fees you charge the builders. There are two other companies in town that own equipment similar to ACC equipment and compete with you for contracts. In a meeting of your executive team, one of the members suggests that you do an extended "discount period" where you will price the rental of your equipment significantly below your monthly payments on the equipment to increase business. The suggestion is that once you have captured the business, you can then raise your prices slowly until you above your current price. Discuss this suggestion.
The Legal and Regulatory Environment of Business
ISBN: 978-0078023859
17th edition
Authors: Marisa Pagnattaro, Daniel Cahoy, Manning Magid, Lee Reed, Pe