Question

You are the manager of an international firm headquartered in Antarctica. You are contemplating a business tactic that will permit your firm to raise prices and increase profits in the long run by eliminating one of your competitors. Do you think it would make economic sense to expend resources on legal counsel before implementing your strategy? Explain.

Short answer

Investing in legal resources before putting the strategy into action would be wasteful and pointless.

Step-by-step solution

Define Business strategy

Decision-making in business involves creating business strategies to accrue attractive profits to the organization. Economic profit or loss is taken into consideration while executing a strategy.

Explaining the question “do you think it would make economic sense to expend resources on legal counsel before implementing your strategy’’?

The legal ramifications that may be created are the most significant factors to consider when developing a pricing plan that alters the business environment or aims to remove competitors.

Using price variation strategies to eliminate competition and increase the profits of the responsible company can result in negative consequences or legal ramifications, such as complaints from affected companies or antitrust investigations, depending on how the laws are interpreted and where the strategy is developed.

The approach is implemented in Antarctica; a continent that is 98% covered in ice and is controlled only by the Antarctic Treaty, which has consultative status. Knowing this fact, creating legal resource expenditures before adopting the approach would be ineffective and unnecessary.

Therefore, Investing in legal resources before implementing the approach would be inefficient and unnecessary.