Growth through Entry Outsourcing Data Entry

Entry and rivalry

Tool for analysis

Using Game Theory to Understand

Post-entry Strategies

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Weekly vocabulary

Pre-entry Strategies

Identifying Potential Rivals

Gaining insight into rivalry

Fighting Strategy

Cooperative Strategy

Restructuring Strategy

Deterrence Strategies

Accommodation Strategies

Rivalry

Cooperation

Five forces analysis

symmetric

asymmetric

sequential

duopoly

Growth through entry

Entry and rivalry
( Focus on rivalry)

Offering new product and services to existing markets where you compete

Offering existing products and services into markets new to the organization.

Entry Strategies

Pre-Entry

Game-theoretic analysis

Why is it important?

Conclusion

What is it?

Predict the overall intensity of rivalry as a result of structural factors

The effect that competing firm' actions have on each others' competitive positions

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Selectively eliminates some competitors

Drive down margins

Threat of entry

Intensity of rivalry

A firm that anticipates and addresses competitors' moves and counter-moves will perform better

Strategies to reduce the incentive to enter

Strategies to increase the cost and risk of entry

Reduce the quality of information on costs and demand

Make retaliation more credible

Erect structural barriers

Raise factor costs

Limit pricing

Commit to a position that will soften competition after entry

Make commitment limiting your ability or incentives to compete aggressively

Accomodate entry if deterence is too costly

Organize to facilitate future coordination

Dose entrant face retaliation?

Do incumbents have a competitive disadvantage?

Dose entrance face high sunk cost?

The number of competitor is big or small ?

Incentives to fight are high or low?

Prisoner's Dilemma

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based on available options and associated future payoffs

Predict competitors’ likely actions and reactions

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Price Cutting

Impose costs in non-cooperative strategy

Intensive advertising

Cost advantage

Network externality

Niche position

Differentiation

Public good in the early stage

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Share incentives

Repeated gain

Promise avoiding aggressive competition

Prisoner's dilemma

Tit-for-Tat

Broad strategic actions to change present competition rules

Examples

Introduce new products or services

Acquire resources and capabilities

Diversification

Enter or creat new markets

Consolidate market power

Non-market strategies

Deter

Accommodate

Realize two things of “outside” firms

⚠ Economic motivations

⚠ Strategic trajectories

Same vertical industry chain

Value chain overlaps

With relevant capabilities and underutilized resources

Recent entrants to related industries

Geographic expansion in same industry

Firms that take minority ownership stakes of existing rivals

Analyzing competitive exchanges

Types of games

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Known objectives and payoffs

Single-period simultaneous-move games

Multi-period repeated games

Multi-period sequential games

Limited number of competitors and alternatives

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Considerations

Challenges

Mapping games

Payoff matrices

Decision trees

Symmetric vs. Asymmetric

Single shot vs. Repeated games

Horizon effects

Cooperate vs. Compete

Trust and communication

Post-Entry

Cooperate

Fight

Restructure

Signaling

Commitment

Make large, specialized investments

Forego short-term opportunities

Provide information to encourage coordination and restraint

Selective release of information to influence competitors