What is Predatory Pricing? A predatory pricing strategy, a term commonly used in marketing, refers to a pricing strategy in which goods or services are offered at a very low price point, with the intention of driving out competition and creating barriers to entry. In contrast to loss leader pricing, predatory pricing is aimed toward…
What is Risk Management? Risk isn’t just an abstract concept — it’s the hidden variable shaping every financial decision. Some businesses incorporate risk management to adapt and grow stronger. Others ignore it and collapse under pressure. Consider the 2008 Global Financial Crisis: firms that failed to manage their exposure to high-risk mortgage-backed securities suffered catastrophic…
What is a Pull Marketing Strategy? A pull marketing strategy, also called a pull promotional strategy, refers to a strategy in which a firm aims to increase the demand for its products and draw (“pull”) consumers to the product. Pull marketing strategies revolve around getting consumers to want a particular product. A pull marketing strategy…
What is a Push Marketing Strategy? A push marketing strategy, also called a push promotional strategy, refers to a strategy in which a firm attempts to take its products to consumers – to “push” them onto consumers. In a push marketing strategy, the goal is to use various active marketing techniques to push their products…
What is a Limited Liability Company (LLC)? A limited liability company (LLC) is a business structure for private companies in the United States, one that combines aspects of partnerships and corporations. Limited liability companies benefit from the flexibility and flow-through taxation of partnerships and sole proprietorships, while maintaining the limited liability status of corporations. If…
What is a Sole Proprietorship? A sole proprietorship is an unincorporated business that one person owns and manages. As the business and the owner are not legally separate, it is the simplest form of business structure. It is also known as individual entrepreneurship, sole trader, or simply proprietorship. The business owner, also known as a…
What is High Low Pricing? High low pricing is a pricing strategy in which a firm relies on sale promotions to encourage consumer purchases. In other words, it is a pricing strategy where a firm initially charges a high price for a product and then subsequently decreases the price through promotions, markdowns, or clearance sales….
What is Full Ratchet? Full ratchet is a provision that protects an option holder, or convertible holder, from any dilution of their investment in subsequent rounds of funding. The provision guarantees that if an equity investment sold in a subsequent funding round decreases the original investor’s equity ownership percentage, then they will be compensated by…
What is Bait and Switch? Bait and switch is a fraudulent activity whereby a company advertises goods at an incredibly low price with the aim of substituting for them with inferior or pricier alternatives at the time of purchase. Just like the worm at the end of a fishing rod, companies use lower pricing to…
