Acquisition of Major Competitors and Pricing Essay

Acquisition of Major Competitors and Pricing - Essay Example Many people would be against the acquisition of competitors because it is one of the ways through which monopolies can be created. This is because when a major player in an industry acquires their competitors, they end up accumulating the market share that was previously under the control of their competitors. As a result of such marketing strategies, big corporations have the luxury of controlling market prices without having to fear being out-priced by their competitors. In such scenarios, it can always be said that the consumers are the people who are most affected. A thing might even get worse in a scenario where an organization acquires a competitor then increases prices of products or services that they deal in while at the same time do very little to enhance the quality or even offer products or services that are of a lower quality than they used to before. In some cases, it will be seen that an organization has just acquired their main competitors but not all the competitors. The point in acquiring their main competitors is that even the minor competitors will not be able to go into a price war with them (Engelbeck 2002, p. 137). For instance, the proposed acquisition of Times Warner by Comcast will mean that Comcast will have more than 30% of the total broadband market share in the United States of America. This does not imply that they will gain total control of the broadband market in the United States of America. It will mean that they will gain majority shares of the market and the remaining shares will be divided among other organizations that do not have the resources that can put competitive pressure on them (Haws & Bearden 2006, p. 307). Even if they decide to increase their prices the other existing companies will not be in a position to take advantage of this and compete for the market share. In such a scenario, it is highl y possible that they will even offer lower quality services and still charge higher than they used to do before.