Business Case Studies & Business Publications

Lesser Antilles Lines: The Island of San...

Hild, Matthias

Case

Lesser Antilles Lines: The Island of San Huberto (B)

Hild, Matthias

QA-0641 | Published November 9, 2004 | 2 pages Case

Collection: Darden School of Business

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The case is a continuation of Lesser Antilles Lines (UVA-QA-0355) which describes the price competition between two duopolistic shipping companies facing inelastic demand for cargo volume. Customers have inelastic and time-sensitive demand, restricting their strategic possibilities. The fictional case introduces additional pricing instruments to this setup. The duopolists can now offer price guarantees and include most-favored-customer clauses and last-look provisions in their contracts. The case is linked to a web-based simulation exercise that lets students explore the effects of these contractual instruments in a duopoly.