Pricing strategies:

The factors that are to be considered ehile designing the pricing strategies are
The economic environment
Ethiopia has achieved macro-economic stability;
Stable annual economic growth in double digits since 2003;
Stable exchange rate;
Strong government commitment to private sector investment;
Safe and secure working and living environments,
identified by the U.N. and the International Chamber of Commerce (ICC) as key assets for
investors in Ethiopia;
Absence of corruption Ethiopia is described by the U.N. and the ICC as exceptional in its
almost complete absence of routine corruption
A conducive tax environment
Corporate income tax is 30%;
Excise tax is levied (minimum 10%) on selected local or imported products;
Income taxes range from 0-35% on monthly income of $16.50 and above;
Capital gains tax share of companies 30%; business 15%;
Rental income tax (on annual rental income) is 0 -35%, dependent upon the level of rental
income;
Stamp duty-leasing is 0.5% of value;
Export duty is zero; and tax treaties to avoid double tax payment are signed with several
countries, along with bilateral treaties for the protection and promotion of investments
Textile industry in ethopia has 0% rating facility,which the products sold there were subject
to no nay sales tax.
From the porters five forces model we know that
Entry and exit barriers-high
Level of competition high
Bargaining power of buyerts-high
Bargaining power of suppliers low
Threat of substituites-low
Penetrattion and hugh pricing:
Penetration pricing is the practice of setting an initial price much lower than the eventual standard
price. A penetration strategy is the price war; this strategy goes for the deepest price cuts driving
at every moment to have your price be the lowest on the market.
From all the parameters that we have considered above, the acceptance rate of customers there
are high, we will be going with an joint venture, bargaining power of suppliers and threat of
substituites are low.as the level of the competition is high we will go into penetration pricing we
will enter into the market will low price and substantilly increase the price.the labour there is
cheap and taxes are also low there when compared to ethopia market and there is low quality of
tectile products available there with high price it is better option to go into market with joint

venture and low pricing with giid quality and increse the price on making the base there.this is one
of the best pricingbto face the local competition and increase the standing position in their country.