Comebaq Computers is aiming to increase its market share by slashing the price of its new range of personal computers

Marketing Jan 12, 2021

Comebaq Computers is aiming to increase its market share by slashing the price of its new range of personal computers.

Are costs and assets likely to increase or decrease as a proportion of sales? Explain.

Expert Solution

Compaq is established in 1982 and provide services include selling and supporting computers and products and services related to computers. It is one of the largest personal computer suppliers in the industry.

Increasing market share by slashing price is a good market strategy and it will increase the sales volume but there will be a reduced profit margin. But if the sales volume is very high then the profit margin will also increase and the Compaq will able to reduce the operational cost. Reduction of the price also eliminates competition in the market because new companies will not able to reduce the price otherwise it will increase their start-up cost.

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