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Our client, Chupa Chip Microchips is a leading niche microchip manufacturer that owns around 30% of the global market. Chupa Chip's main competitor, Megaship Microchips,
Our client, Chupa Chip Microchips is a leading niche microchip manufacturer that owns around 30% of the global market. Chupa Chip's main competitor, Megaship Microchips, also owns around 30% of the global market while the rest is fragmented between smaller players. Due to recent geo-political developments, the cost of transistors, which are a component of a microchip, has increased dramatically. In order to cope with the increase in cost, our client has decided to increase the price of its product by 2$ which led to an immediate 20% drop in market share. After conducting market research, our client was surprised to discover that Megaship Microchips has not increased the price of its product. What is even more surprising is that the competitor does not seem to have had a dip in profit. Your client found out that the vendor for the first in-house solution charges 120,000$ for the installation. Based on that new piece of information, which option would you choose and why? Our client, Chupa Chip Microchips is a leading niche microchip manufacturer that owns around 30% of the global market. Chupa Chip's main competitor, Megaship Microchips, also owns around 30% of the global market while the rest is fragmented between smaller players. Due to recent geo-political developments, the cost of transistors, which are a component of a microchip, has increased dramatically. In order to cope with the increase in cost, our client has decided to increase the price of its product by 2$ which led to an immediate 20% drop in market share. After conducting market research, our client was surprised to discover that Megaship Microchips has not increased the price of its product. What is even more surprising is that the competitor does not seem to have had a dip in profit. Your client found out that the vendor for the first in-house solution charges 120,000$ for the installation. Based on that new piece of information, which option would you choose and why
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