Trigger strategy
Okay kiddo, have you ever played a game of tag with your friends? Imagine you are playing a game of tag and you want to make sure you don't get tagged. So, you come up with a special move that will help you escape from your friend who is trying to tag you. This move is your trigger strategy.
Similarly, in the world of business and economics, a trigger strategy is like a special move that companies use to make sure they get ahead of their competitors. Just like in the game of tag, it's all about being one step ahead of the competition.
In business, a trigger strategy can be defined as a plan of action that a company takes in response to changes in the market or actions by its competitors. The goal is to be the first to take action and gain an advantage over other companies.
Let's take an example to understand this concept better. Imagine there are two companies that sell chocolate bars. Company A sells chocolate bars for $2 each and Company B sells them for $3 each. At first, Company A is doing well and selling more chocolate bars than Company B.
However, one day, Company B decides to lower the price of its chocolate bars to $2.50 each. This is where the trigger strategy comes into play. Company A needs to decide whether to lower its price to match Company B or to continue selling at $2 each.
If Company A decides to lower its price to match Company B, this is called a triggered response. Company A is responding to the actions of its competitor, Company B. However, if Company A decides to keep its price at $2 each, this is called an un-triggered response. Company A is not responding to the actions of Company B, but is sticking to its original price.
The key to a successful trigger strategy is to make the right decision at the right time. It requires companies to stay alert and be aware of what's happening in the market, so they can take action quickly and effectively. And just like in the game of tag, being one step ahead of the competition can make all the difference in winning or losing.
Similarly, in the world of business and economics, a trigger strategy is like a special move that companies use to make sure they get ahead of their competitors. Just like in the game of tag, it's all about being one step ahead of the competition.
In business, a trigger strategy can be defined as a plan of action that a company takes in response to changes in the market or actions by its competitors. The goal is to be the first to take action and gain an advantage over other companies.
Let's take an example to understand this concept better. Imagine there are two companies that sell chocolate bars. Company A sells chocolate bars for $2 each and Company B sells them for $3 each. At first, Company A is doing well and selling more chocolate bars than Company B.
However, one day, Company B decides to lower the price of its chocolate bars to $2.50 each. This is where the trigger strategy comes into play. Company A needs to decide whether to lower its price to match Company B or to continue selling at $2 each.
If Company A decides to lower its price to match Company B, this is called a triggered response. Company A is responding to the actions of its competitor, Company B. However, if Company A decides to keep its price at $2 each, this is called an un-triggered response. Company A is not responding to the actions of Company B, but is sticking to its original price.
The key to a successful trigger strategy is to make the right decision at the right time. It requires companies to stay alert and be aware of what's happening in the market, so they can take action quickly and effectively. And just like in the game of tag, being one step ahead of the competition can make all the difference in winning or losing.