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GE v Westinghouse in Large Turbine Generators

GE v Westinghouse in Large Turbine Generators. GE’s Moves in 1963. GE’s Moves. Price book Simplified pricing including examples Make it easy to determine GE’s bid Lower book prices Create public “multiplier” = 0.76 to discount book prices No exceptions to book x multiplier

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GE v Westinghouse in Large Turbine Generators

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  1. GE v Westinghouse in Large Turbine Generators GE’s Moves in 1963

  2. GE’s Moves • Price book • Simplified pricing including examples • Make it easy to determine GE’s bid • Lower book prices • Create public “multiplier” = 0.76 to discount book prices • No exceptions to book x multiplier • Price protection clause • Audit from KPMG • Publish list of orders and quotes

  3. Westinghouse’s Response • Adopt GE book • July 64: Announce price increase • Publish orders and quotes • 64-75 same multiplier/same book prices • High demand period

  4. Key Take Aways • Don’t give up • Clarity of pricing/threats • Commitment in the form of price protection • Steps to show mutual trust • Game theory matters in turning around an unpromising business landscape.

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