How and why the developments discussed in the Wall Street Journal Story below affect the elasticity of demand for the flat screen TV’s produced by an individual firm such as Sony or Panasonic.
Want a flat-panel TV with that tool belt?
Home-improvement, clothing and office-supply stores plan to crash the party for big-screen television sets now dominated by Best Buy. and other electronics retailers. The development highlights the starring role that super-slim TVs are taking not just in the living room but in every nook of the home. And the new outlets could trigger ever-faster price declines as lower-cost, lesser-known brands grab shelf space and consumer recognition.
Next month, for example, Office Depot Inc. will begin selling a dozen flat-panel models. HomeDepot Corp. is testing liquid-crystal and plasma TV sales in anticipation of a broad entry. Kohls Corp., the Wisconsin department-store chain, rolled out its first line of LCD TVs this summer, and Radioshack Corp., which left the market several years ago, has returned with flat-panel sets.
All these retailers hope to tap soaring flat-TV consumer demand in the U.S. and Canada, which is expected to reach $20.2 billion this year, up 79% from last year. More stores are carrying the big-screen TVs in part because more companies are making them. Researchers count some 90 flat-panel brands sold in North America now, up from 63 last year
take a shot, what do you think?
Hint: is the story good news or bad news for Sony or Panasonic?
The developments discussed in the Wall Street Journal story, such as home-improvement, clothing, and office-supply stores entering the market for big-screen television sets, can have implications for the elasticity of demand for flat-screen TVs produced by individual firms like Sony or Panasonic.
1. Increased competition: With more retailers entering the market and offering flat-panel TVs, there is increased competition among brands. This increased competition can result in more price-sensitive consumers, as they have more options to choose from. As a result, the elasticity of demand for flat-panel TVs may increase, meaning that consumers are more responsive to changes in price. If a firm like Sony or Panasonic raises the price of their flat-screen TVs, consumers may be more likely to switch to a lower-cost, lesser-known brand offered by one of these new retailers.
2. Greater product variety: The entry of new retailers with their own brands of flat-panel TVs expands the product variety available to consumers. This can lead to a higher level of differentiation among products, and consumers may have more specific preferences and requirements. As a result, the elasticity of demand may increase as consumers become more selective in their purchasing decisions. They may be willing to pay a premium for a particular brand that meets their specific needs, or they may opt for a lower-priced alternative if it provides comparable features and quality.
3. Price competition: The entry of lower-cost, lesser-known brands into the market can also lead to price competition. These new brands may offer flat-screen TVs at lower prices in order to gain market share and compete with established brands like Sony or Panasonic. This can further increase the elasticity of demand, as consumers have more options for affordable flat-screen TVs. If consumers perceive that the lower-priced options offer comparable quality and features, they may be more likely to switch brands or delay purchasing decisions in anticipation of lower prices.
Overall, the developments discussed in the Wall Street Journal story, including the entry of new retailers and increased brand variety, can potentially impact the elasticity of demand for flat-screen TVs produced by individual firms such as Sony or Panasonic. It is important for these firms to monitor market changes and adjust their pricing and marketing strategies accordingly to remain competitive in the changing landscape.