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【G4】Growth through Entry (Identifying Potential Rivalry (Be aware of "…

- - - - Erect structural barriers (licenses, regulation)
      - Reduce the quality of information on costs and demand
      - Make retaliation more credible(and accommodation less credible)
        
        Make large sunk investments, establish aggressive reputation, incur debt
    - - Raise factor costs
      - Limit pricing, which works best when：
        
        Incumbent holds a true cost advantage
        
        Information about costs is poor
        
        Incumbent has long time horizon & entry becomes harder over time
        
        But be aware of predatory pricing-it is illegal
  - - - Differentiate product to appeal to narrower segment, in hope that competitor will do the same
    - - Make commitments that limit benefits of reducing price
- - - - Establish long-term relationships (repeated game)
      - Make commitments limiting your ability or incentives to compete aggressively
    - - Establish a reputation for aggressive response
      - Penalize malfeasance (tit-for-tat)
  - - - Firms may capitalize on transition points in an industry’s evolution to their advantage
      - To the extent that a form recognizes these ahead of rivals, and moves quickly, it may lock up rare and valuable assets or position
      - To the extent such strategic actions are irreversible the firm may preempt rivals
  - - - High network externalities(winner-take-all markets)
      - Firm cutting price has a potential cost advantage(scale)
      - Firm is niche player relative to competitors (may not provoke response)
    - - “Informative” advertising (prevents commoditization)
      - Early stage of product (public vs private good)
- - - - Considerations
      - Challenges
      - Mapping games
        
        Payoff matrices
        
        Decision trees
    - - Multi-period repeated
      - Multi-period sequential
      - Single-period
  - - - The selective communication of information to rivals to influence their beliefs and change behavior.
      - Provide information to encourage coordination and restraint
      - Selective release of information to influence competitors
    - - The irreversible elimination of strategic options to make threats credible.
      - Make large, specialized(sunk) investments(lock-in)
      - Forego short-term opportunities(lock-out)