Most pricing power has long ago disappeared for many companies. A lack of pricing power means that when a company like Samsung or Sony tries to raise its prices for its OLED TV sets, it loses sales volume as customers shift to low cost competitors like LG or find a substitute product. Ultimately, most of these companies have had to lower prices again-sometimes dropping them even further than they were before the attempted price increase – in an effort to regain lost share.
However, pricing power means “making a price increase steak”. That is to say "demand is relatively inelastic for the product". In which case, my question is; how a company like Samsung or Sony gains pricing power? While pondering about the question, I realized that one of the reasons is to produce something radically new, and most importantly, better than the competition.
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