The Impact of Predatory Pricing on Small Businesses

Abstract

Predatory pricing involves large firms leveraging their financial strength to drive out less financially secure competitors and create barriers to entry for smaller market players. The influx of large corporations into Long Island City after the 2019 pandemic has intensified economic pressures on local small businesses, forcing some to relocate and further diminishing the local business landscape. This study aims to explore the impact of predatory pricing on small companies in Long Island City and to identify effective strategies employed by small business owners to mitigate the adverse effects of such competitive practices. A qualitative research approach was employed, using thematic induction and semi-structured interviews with small business owners in New York. Data collection included sources such as schools, libraries, and museums, as needed. Thematic analysis was employed to interpret the raw data, allowing themes and concepts to emerge organically rather than from preconceived notions. The results revealed key strategies that small business owners use to counter predatory pricing. These strategies include enhancing community engagement, exploring alternative business models, and leveraging local networks for support and resources. The study offers valuable insights into the challenges small businesses face due to predatory pricing and highlights practical strategies for navigating them. The findings are concluded to assist small business owners in developing practical approaches to mitigate the negative impact of large corporations’ pricing strategies.