Frequent upgrading and aggressive price-cutting have become standard practice in the computer sector. While necessitated in part by declining production costs and a highly competitive market, these strategies have also served to make computers more affordable, growing the size of the overall market. Recently downturns in the sales of computers motivate us to examine the impact of these strategies on overall sales growth. We find evidence to suggest that excessive upgrading and overly aggressive price-cutting can be detrimental to overall sales growth. We also find that the computer sector exhibits characteristics that suggest that generic advertising would be an effective mechanism to enhance overall sales growth.

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Copyright © 2007 The Clute Institute. This article first appeared in Journal of Business & Economics Research 5, no. 11 (November 2007): 67-82.

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