Can someone mark my 9 marker response?
In order to increase the profits of ASOS plc ASOS plc should consider Option 1: lowering the prices of their products. This is because the lower costs of the products will give the company the advantage of price as the lower price will attract more customers. This therefore will increase the sales revenue as more customers will be willing to buy fashionable products at a lower price without willing to spend a lot of money for a similar product. As a result this will increase the sales of the company and ASOS plc will see higher profit margins by attracting more customers.
However the disadvantages to ASOS plc for choosing Option 1: lowering the prices is that the company may in the short term see a downfall in profit. This is because in the short term the customers may only start to grow slightly but as the customers start to buy more and more frequent products they will become loyal customers and they will start to recommend the brand to more people and eventually the company will attract a more significant customer base. This therefore as a result means that the business will be generating more revenue in the long run however the short term sacrifice of this option is that the business will have to expect less initial profits.
In conclusion, the decision of Option 1: lowering the prices depends on the long term and short term goals of the company. Do they want to sacrifice short term profits in order to potentially gain higher profits in the long term run? How will external factors influence the businesses decision making? And does the business have the resources to cope with the short term sacrifice in funds?