Jack Killpatrick wrote:
> Can anyone explain to me what "market allocation", as referred to above,
> means?
Communism. :0
Basically, they each take a part of the market, and agree not to compete
with each other in those markets. Each company gets all the income from
its area, and can nicely balance budgets and manage costs without fear
of competition.
On the other hand, there's no competition, prices tend to get inflated,
and you also end up with companies protecting each other (say, by
dropping the price of products to limit competition entry into a market,
with other 'colluders' marking up services to the new company on other
fronts to make sure their costs go up while they're trying to drop
product prices to compete).
Also makes it easy for a company to maintain larger markets against
competitors. When you have a guaranteed lock on a national market, for
instance, it's really hard for a new person to start in any region of
that nation . . . if you *know* you get all the income that year from
that market, you just raise prices somewhere else and lower them where
competition occurs, and no one can compete with you.
Or, in the simplest terms, coordinated monopolies.
Still standing by my advice to MS: break the company up now and save
yourselves a billion in litigation. :)
Brett
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