How does predatory pricing fit with CSR?

Predatory pricing is a tactic used to try to drive rival businesses out of business, resulting in
"main line harm" (Shughart,1990). When predatory pricing occurs, the offending company sets
price and output levels below the marginal cost (Kaserman and Mayo, 1995). To be more
specific, according to Kaserman and Mayo (1995), predatory pricing takes place when a business
lowers its price below the short-term profit in an effort to drive away its rivals from the market
so that the price may then be raised above the level that can be sustained. Predatory pricing
relates to CSR for some reasons. Firstly, it is considered an unethical action. Because this sort of
pricing is often used to eliminate a competitive threat, it is sometimes considered an attempt to
achieve an illegal monopoly. The corporation decreasing the price is attempting to keep its
market share from being taken by the competitors, primarily excludes new entrants, and raises
barriers to entry for new firms. (Lisa Nielsen, n.d). Secondly, it violates the law. In the United
States, the law has been quite strong against unfair or monopolistic practices. Predatory pricing
is also considered monopolistic behavior, making it unlawful not just in the United States, but
across the world. Particularly, it violates Antitrust laws, Antitrust laws protect the preservation
of a fair and competitive market and the reduction of monopolistic behaviors. ( Marijana
Bjelobrk, 2022). In addition, it influences directly one of the most important stakeholders who
are customers. In theshort run, predatory pricing is good for consumers. The predatory
corporation will reduce its pricing and most likely experience short-term losses. Other
businesses willdecrease their pricing as well in order to compete. Those that are unable to
lower their prices will see a drop in sales and suffer losses. Customers will now have manybetter
choices due to low-cost items. (2021, Sean Heather). In the long term, because no business can
withstand losses for a long period of time, the competition will become weaker. When the
competition is reduced, the predatory corporation will gradually raise its prices to compensate
for previous losses. Consumers will eventually have to pay the price. (2021, Sean Heather).
Furthermore, when there is little competition, product quality will not be improved. Actually,
innovation, research, and development (R&D) are not in progress due to the power of the
monopoly market. (Bjelobrk, Marianna, 2022).
Summary
The context you provided discusses predatory pricing, a strategy employed by companies to
undercut competitors by setting prices below marginal cost, with the aim of driving them out of
business. This predatory behavior is seen as unethical and potentially illegal, as it can lead to
monopolistic practices and violates antitrust laws aimed at maintaining fair competition.
Predatory pricing initially benefits consumers by offering lower prices, but in the long run, it can
lead to weaker competition, reduced innovation, and ultimately higher prices for consumers.
This practice directly impacts stakeholders, particularly customers, by influencing market
dynamics and product quality.
What is a ‘living wage’ and how is this different from a ‘minimum wage’?

One of the most indispensable elements for most labourers is wage as it helps them maintain
their daily life (Hartman 2011). Historically, wages are divided into a living wage and a minimum
wage (Pollin and Al 2008). Therefore, how a “living wage” is different from a ‘minimum wage’ is
questioned. This part will first focus on clarifying the concepts of “a living wage” and “a
minimum wage”, and then make a comparisonbetween two terms. Different definitions of “a
living wage” have been defined (Pollin and Al 2008, Luce 2017, Werner and Lim 2015, Waltman
2004). Pollin and Al (2008) stated that a living wage would enable workers to make a living and
their family members are able to depend on the income produced by those workers to live.
Clary (2009) reported that a living wage is regarded as the amount of income produced by
labours that allow their families to secure food, housing, healthcare, and other living costs.
Generally, synthesizing from prior studies, a living wage is the amount of remuneration
employers pay for employees, calculated based on area-specific living costs, for instance, food,
accommodation, travelling, and other expenditures. Importantly, the living wage must be paid
so that workers can cover their basic living standards and support their family members (Brown
2015). In this circumstance, “For many of the women this is the first time they are able to make
an income on their own and they are proud to be able to contribute to their families’ needs”,
proving that female workers are trying to earn the living wage. However, due to Covid-19,
Fabulous Fits may apply predatory pricing, lowering product prices to the lowest level to
devalue toeliminate competition and create their monopoly market. Nevertheless, to apply
predatory pricing, Fabulous Fits has to lower the wage paid to employees and extend the
working hours. This point demonstrates that the living wage of workers are not ensured, and
what Fabulous Fits has done goes against virtuous values.
By contrast, a minimum wage is a wage paid to workers per hour of working and not necessarily
living wages, as stated by Waltman (2009). According to Figart (2001), the minimum wage is
regarded as a “wage floor for unorganised labour”. As it is easy to misunderstand the two
concepts of a living wage and a minimum wage, Amadeo (2022) listed some differences to help
distinguish them. The first considerable feature is the regulation. A minimum wage is paid per
hour of working and regulated by law, specifically by federal or local governments. Notably, the
amount of a minimum wage is different in each country. For example, the minimum wage in
Australia is 19AUD per hour, whereas this number in European countries is above 10EURO. By
contrast, a living wage is determined by average living costs in a specific place, and it is not
controlled by any governing body (Thakur 2021, Amadeo 2022). Another opposed consideration
between two terms is the way of calculation. People calculate a living wage based on the living
costs, whereas a minimum wage is decided by congress and depends on a country's overall
economic condition. Next, a living wage differs from a minimum wage due to the amount. The
amount of a living wage can be varied, contingent on location or marital status; however, that
ofa minimum wage is normally same as it is regulated by the law. In fact, in most countries, the
minimum wage is lower than the living wage, and it tends to remain stable despite ever-
increasing costs (Amadeo 2022). Consequently, in this case, Fabulous Fits need to propose
implications to ensure a living wage paid to supply chain workers, which will be explained in the
following part.
 Summary
This passage discusses the concepts of a living wage and a minimum wage, highlighting their
differences and implications, particularly in the context of laborers' livelihoods and economic
conditions. It begins by defining a living wage as an income that enables workers and their
families to cover basic living expenses, while a minimum wage is described as a wage floor set
by law for hourly work. The passage emphasizes that a living wage is not regulated by law and is
based on local living costs, whereas a minimum wage is determined by governmental bodies
and may vary by country.

Furthermore, the passage outlines differences in calculation methods, noting that a living wage
is based on living costs while a minimum wage is influenced by economic conditions and set by
legislative bodies. Additionally, it highlights variations in wage amounts, with the living wage
potentially varying based on location and marital status, while the minimum wage remains
relatively stable and often lower than the living wage.

The passage also discusses the impact of external factors, such as predatory pricing by
companies like Fabulous Fits during the COVID-19 pandemic, which may lead to lower wages for
workers. It concludes by suggesting implications for ensuring a living wage for supply chain
workers, which will be elaborated on in the subsequent part of the text.

Outline the actions that Fabulous Fits will take now to ensure a living wage is paid
to the supply chain workers?

Fabulous Fits should do research across the whole supply chain to identify issues that may
prevent workers from receiving a living wage, which would be a violation of their human rights
because a living wage is a wage necessary to sustain a basic decent life such as food, housing,
and healthcare. They must develop this strategy incollaboration with Garmentz International
because they are the ones that directly paygarment workers' wages. Fabulous Fits must follow
ethical purchasing practices. This includes paying their suppliers on schedule. For instance, they
can sign a contract declaring that they would send the supply chain workers 70% of the total
money in advance, and Fabulous Fits will send the rest after the tailors have completed all the
products. Furthermore, thanks to this solution, the garment workers still get a part of their
salary even if Fabulous Fits cancel orders at late der partnerships will encourage the supplierto
comply with the codes of conduct which includes a variety of detail/quality and formality and
standard. That will help the supply chain solve problems easier. Besides, in order to solve the
problem of non-repetition, Fabulous Fits must realize that "well-paid workers are an integral
part of a profitable, sustainable and resilient business and poverty wages no longer have a
place" is considered a criterion This isa serious problem in many industries and has been
recognized by large companies such as Unilever, etc which companies have transparently
disclosed the salaries of employees and multi-stakeholder who work with them. According to
Barford, A et.al 2022, finding out the living wage and minimum wage data of the areas they are
working in will help them find a reasonable amount to pay the workers as well as a stable cost
of living. granters. In the case of Fabulous Fit, their search teams instead of sourcing for price
pressure can leverage to find price metrics so suppliers can perform well in paying employees.
pellets. Along with only selecting suppliers who change working contact as well as working
conditions as I mentioned above, transparent notices about payment to suppliers as well as
investor selection will help the company attract more customers and meet the balances of Fair
Labor Associated and other big unions. Besides, to maximize the returnable cost to Fabulous
Fits suppliers, the #PayUp campaign will be a good method. This war will require buyer to pay
for their canceled orders. Conduct research on its impact to see which shoppers have agreed to
their payment and vice versa to promote positive non-cancellation and better understanding of
consumers. This data will show the company when they place an order and together with the
methods of payment commitments to help customers more secure about the order as well as
avoid unnecessarily canceling orders. Fabulous Fits may guarantee living wages for their supply
chain workers in many ways. First and foremost, they may increase apparel prices to produce a
higher profit margin that could be utilized to increase staff pay. They might also work with their
vendors to refine their manufacturing process to cut down on waste and, in turn, lower their
production costs, which would allow them to pay their employees more. Furthermore, Fabulous
Fits may advocate for changes that would enhance salaries and working conditions for all
garment industry workers,not just their own. In order to ensure that the employees in the
supply chain are paid a livable wage, Fabulous Fits might, for example, increase the price of
their garments. They would have a higher profit margin as a consequence, money they could
put toward wage increases. This would make it quite evident that Fabulous Fitsis serious about
paying its workers a living wage, even if it means losing business from certain clients. In
addition, a price increase would allow Fabulous Fits to continue being profitable and to pay its
workers a livable wage. To guarantee that thepeople working in the supply chain are paid a fair
pay, Fabulous Fits may collaboratewith its vendors to improve production efficiency. This goal
could only be reached viacoordinated efforts between the company and its suppliers to cut
costs and improve efficiency. This is a way for Fabulous Fits to reduce its manufacturing costs,
which might lead to higher salaries for employees. Another plus is that this would lead to a
manufacturing approach that is easier on the environment and safer for the employees. In
addition to increasing pricing and working with their suppliers to establish a more efficient
manufacturing technique, Fabulous Fits may also advocatefor industry-wide improvements that
would enhance working conditions and pay for all garment industry workers. This would need
working together with other brands, retailers, and suppliers to set industry-wide standards for
remuneration and working conditions. Fabulous Fits would be making an effort to improve the
lives of its workers as well as the employees of competing companies. The fashion industry as a
whole would benefit from the resulting greater fairness and justice. Each of these options would
require some work on the part of Fabulous Fits, but they would benefitthe company and its
workers in the long run. If Fabulous Fits did these things, it would show that the company cares
about paying its workers a fair salary. This would benefit the company in more ways than one,
especially in the eyes of its workforce.

Summary
This passage outlines a comprehensive strategy for Fabulous Fits to ensure that their supply
chain workers receive a living wage, thereby upholding their human rights and ethical
standards. The proposed strategy involves collaboration with Garmentz International,
implementing ethical purchasing practices, conducting research on living wage and minimum
wage data, and advocating for industry-wide improvements.

Firstly, the passage suggests that Fabulous Fits should conduct research across the entire supply
chain to identify issues preventing workers from receiving a living wage. This involves
developing strategies in collaboration with Garmentz International, the direct payers of garment
workers' wages. Ethical purchasing practices are emphasized, such as paying suppliers on
schedule and providing advance payments to support workers, even in the event of order
cancellations.

Moreover, Fabulous Fits is encouraged to increase apparel prices to generate higher profit
margins that can be used to increase staff pay. Collaborating with vendors to refine
manufacturing processes and advocating for industry-wide improvements are also proposed as
methods to enhance salaries and working conditions for all garment industry workers.

Additionally, the passage highlights the importance of transparency in payment to suppliers and
investor selection to attract more customers and meet fair labor standards. The #PayUp
campaign is suggested as a method to ensure buyers pay for canceled orders, promoting
positive non-cancellation practices and better consumer understanding.

Overall, the passage emphasizes the need for Fabulous Fits to take proactive steps to ensure fair
wages and working conditions for supply chain workers, demonstrating a commitment to ethical
practices and social responsibility. By implementing these strategies, Fabulous Fits can benefit
both its workers and its reputation in the long run.

https://www.coursesidekick.com/economics/2173148

https://www.studocu.com/vn/document/royal-melbourne-institute-of-technology-university-
vietnam/creativity-innovation-and-design/gcr-a2-part-12-733w-meh/34121170

https://www.studocu.com/vn/document/royal-melbourne-institute-of-technology-university-
vietnam/managing-international-business-responsibly/busm4692-assessment-2-group-6-
1/38997514
How does predatory pricing fit with CSR?

When predatory pricing occurs, the offending company sets price and output levels below the
marginal cost. To be more specific, predatory pricing takes place when a business lowers its
price below the short-term profit in an effort to drive away its rivals from the market so that the
price may then be raised above the level that can be sustained. Predatory pricing relates to CSR
for some reasons.

Firstly, it is considered an unethical action. This pricing strategy is commonly used to reduce
competition, and consequently, it is occasionally perceived as an attempt to establish an illegal
monopoly. The corporation's choice to lower prices is intended to protect its market share from
competitors, especially by preventing new entrants and creating barriers to entry for new
businesses.

Secondly, it violates the law. Unfair or monopolistic practices have faced stringent legal
measures in the United States. Predatory pricing is classified as monopolistic conduct, rendering
it illegal not only in the United States but also worldwide. Specifically, it contravenes Antitrust
rules, which safeguard the maintenance of a just and competitive market and the mitigation of
monopolistic practices.

In addition, it influences directly one of the most important stakeholders who are customers. In
the immediate term, predatory pricing benefits consumers. The predatory corporation will
lower its prices and is expected to incur short-term losses. In the long term, as no business can
sustain losses, the competition will gradually weaken. As the competition decreases, the
predatory corporation will incrementally increase its pricing to make up for prior financial
setbacks.
What is a ‘living wage’ and how is this different from a ‘minimum wage’?

A living wage would ensure that workers receive a enough income to sustain themselves and
their families.

A minimum wage is the hourly compensation given to workers, which may not always be
adequate to meet the expenses associated with maintaining a certain standard of life.

The first considerable feature is the regulation. A minimum wage is a prescribed hourly rate of
compensation established by either the federal or local government. A living wage is
determined by the average costs to maintain a satisfactory quality of life in a specific area, and it
is not controlled by any regulating body.

Another opposed consideration between two terms is the way of calculation. A minimum wage
is determined by the legislative body and depends on the economic condition of a country. A
living wage is determined by assessing the costs required for an individual to maintain a
fundamental level of existence.

Next, a living wage differs from a minimum wage due to the amount. The amount of a minimum
wage is often fixed by law and remains consistent. The amount of a living wage can be diverse,
depending on the geographical region or marital status.
Outline the actions that Fabulous Fits will take now to ensure a living wage is paid
to the supply chain workers?

Fabulous Fits should do research across the whole supply chain to identify issues that may
prevent workers from receiving a living wage, which would be a violation of their human rights
because a living wage is a wage necessary to sustain a basic decent life such as food, housing,
and healthcare. They must develop this strategy incollaboration with Garmentz International
because they are the ones that directly paygarment workers' wages. Fabulous Fits must follow
ethical purchasing practices. This includes paying their suppliers on schedule. For instance, they
can sign a contract declaring that they would send the supply chain workers 70% of the total
money in advance, and Fabulous Fits will send the rest after the tailors have completed all the
products. Furthermore, thanks to this solution, the garment workers still get a part of their
salary even if Fabulous Fits cancel orders at late der partnerships will encourage the supplierto
comply with the codes of conduct which includes a variety of detail/quality and formality and
standard. That will help the supply chain solve problems easier. Besides, in order to solve the
problem of non-repetition, Fabulous Fits must realize that "well-paid workers are an integral
part of a profitable, sustainable and resilient business and poverty wages no longer have a
place" is considered a criterion This isa serious problem in many industries and has been
recognized by large companies such as Unilever, etc which companies have transparently
disclosed the salaries of employees and multi-stakeholder who work with them. According to
Barford, A et.al 2022, finding out the living wage and minimum wage data of the areas they are
working in will help them find a reasonable amount to pay the workers as well as a stable cost
of living. granters. In the case of Fabulous Fit, their search teams instead of sourcing for price
pressure can leverage to find price metrics so suppliers can perform well in paying employees.
pellets. Along with only selecting suppliers who change working contact as well as working
conditions as I mentioned above, transparent notices about payment to suppliers as well as
investor selection will help the company attract more customers and meet the balances of Fair
Labor Associated and other big unions. Besides, to maximize the returnable cost to Fabulous
Fits suppliers, the #PayUp campaign will be a good method. This war will require buyer to pay
for their canceled orders. Conduct research on its impact to see which shoppers have agreed to
their payment and vice versa to promote positive non-cancellation and better understanding of
consumers. This data will show the company when they place an order and together with the
methods of payment commitments to help customers more secure about the order as well as
avoid unnecessarily canceling orders. Fabulous Fits may guarantee living wages for their supply
chain workers in many ways. First and foremost, they may increase apparel prices to produce a
higher profit margin that could be utilized to increase staff pay. They might also work with their
vendors to refine their manufacturing process to cut down on waste and, in turn, lower their
production costs, which would allow them to pay their employees more. Furthermore, Fabulous
Fits may advocate for changes that would enhance salaries and working conditions for all
garment industry workers,not just their own. In order to ensure that the employees in the
supply chain are paid a livable wage, Fabulous Fits might, for example, increase the price of
their garments. They would have a higher profit margin as a consequence, money they could
put toward wage increases. This would make it quite evident that Fabulous Fitsis serious about
paying its workers a living wage, even if it means losing business from certain clients. In
addition, a price increase would allow Fabulous Fits to continue being profitable and to pay its
workers a livable wage. To guarantee that thepeople working in the supply chain are paid a fair
pay, Fabulous Fits may collaboratewith its vendors to improve production efficiency. This goal
could only be reached viacoordinated efforts between the company and its suppliers to cut
costs and improve efficiency. This is a way for Fabulous Fits to reduce its manufacturing costs,
which might lead to higher salaries for employees. Another plus is that this would lead to a
manufacturing approach that is easier on the environment and safer for the employees. In
addition to increasing pricing and working with their suppliers to establish a more efficient
manufacturing technique, Fabulous Fits may also advocatefor industry-wide improvements that
would enhance working conditions and pay for all garment industry workers. This would need
working together with other brands, retailers, and suppliers to set industry-wide standards for
remuneration and working conditions. Fabulous Fits would be making an effort to improve the
lives of its workers as well as the employees of competing companies. The fashion industry as a
whole would benefit from the resulting greater fairness and justice. Each of these options would
require some work on the part of Fabulous Fits, but they would benefitthe company and its
workers in the long run. If Fabulous Fits did these things, it would show that the company cares
about paying its workers a fair salary. This would benefit the company in more ways than one,
especially in the eyes of its workforce.