This serves to "deny competitors enough residual
demand". Residual demand, as we previously explained,
causes firms to be efficient. Once efficient, they develop
enough power to "credibly retaliate" and thereby "enforce
an orderly expansion process" to prevent overcapacity
Create "switching" costs. - Through legislation,
bureaucracy, control of the media, cornering advertising
space in the media, controlling infrastructure, owning
intellectual property, owning, controlling or intimidating
distribution channels and suppliers and so on.
Impose vertical "price squeezes". - By owning,
controlling, colluding with, or intimidating suppliers and
distributors, marketing channels and wholesale and retail
outlets into not collaborating with the competition.
Practice vertical integration (buying suppliers and
distribution and marketing channels).
This has the following effects:
The firm gains a "tap (access) into technology" and
marketing information in an adjacent industry. It defends
itself against a supplier's too-high or even realistic prices.
It defends itself against foreclosure, bankruptcy and
restructuring or reorganization. Owning suppliers means
that the supplies do not cease even when payment is not
affected, for instance.
It "protects proprietary information from suppliers" -
otherwise the firm might have to give outsiders access to
its technology, processes, formulas and other intellectual
property.
It raises entry and mobility barriers against competitors.
This is why the State should legislate and act against any
purchase, or other types of control of suppliers and
marketing channels which service competitors and thus
enhance competition.
It serves to "prove that a threat of full integration is
credible" and thus intimidate competitors.
Finally, it gets "detailed cost information" in an adjacent
industry (but doesn't integrate it into a "highly competitive
industry").
"Capture distribution outlets" by vertical integration to
"increase barriers".
'Consolidate' the Industry
Send "signals" to threaten, bluff, preempt, or collude
with competitors.
Use a "fighting brand" (a low-price brand used only for
price-cutting).
Use "cross parry" (retaliate in another part of a
competitor's market).
Harass competitors with antitrust suits and other
litigious techniques.
Use "brute force" ("massed resources" applied "with
finesse") to attack competitors
or use "focal points" of pressure to collude with
competitors on price.
"Load up customers" at cut-rate prices to "deny new
entrants a base" and force them to "withdraw" from
market.
Practice "buyer selection," focusing on those that are
the most "vulnerable" (easiest to overcharge) and
discriminating against and for certain types of
consumers.
"Consolidate" the industry so as to "overcome industry
fragmentation".
Public-domain text, read in full here on John Shaqi.
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