A mobile device company launches with a new strategy - just $50 for the device and an extensive library of software and applications at a price of $25-$75 per application. The applications, which are created by the company and not third-party developers, only work with the specific device. What strategy is the company using?

Question

Hill

Business

12 February, 08:01

A mobile device company launches with a new strategy - just $50 for the device and an extensive library of software and applications at a price of $25-$75 per application. The applications, which are created by the company and not third-party developers, only work with the specific device. What strategy is the company using?

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Answers (1)

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Mateo Clark · Answer 1

Razor and blade strategy.

Explanation:

Razor and blade strategy is one where companies reduce price of a product or give it away for free so that the sale of a complementary good is increased.

Complimentary goods are those that demand for one good results in increase in demand for the other. They are usually used together. For example tea and sugar.

The mobile device companie's strategy of selling a device at $50 with an extensive library of software and applications at a price of $25-$75 per application is aimed at increasing sales of the applications created by the company.