ABS-3 (strategic (eliminate competition by subsidizing a price war…
minimize transation costs of using markets
eliminate competition by subsidizing a price war
leverage our successful position in one to compete more successfully in another.
reduce rivalry through mutual forbearance
having competition in multiple markets we raise the stakes that companies would not want to fight one another.
raise rivals' costs (e.q. vertical foreclosure)
when a near monopoly position allows you to foreclose your rivals from getting access to key resources.
limits on firm scope
antitrust to reduce monopoly power
opportunistic behavior of managers and employees
difficult to monitor and sanction
can't adapt market change well
slow, inflexible decision-making
firms' coordinating layers of management
exploit economics of scale and scope
improve coordination among business
transfer/ leverage rent-generating assets
capitalize on opportunities in unrelated markets
reduce volatility by diversifying assets.
capitalize on opportunities in related market
different to business strategy
is business strategy's extension
a firm operate and how they govern those operations