Please enable JavaScript.
Coggle requires JavaScript to display documents.
〔ASM〕G4-BGS-Growth through Entry (Entry and Rivalry (Gaining insight…
〔ASM〕G4-BGS-Growth through Entry
Game Theory
Understand Rivalry
Game theory: It's the idea of look forward and reason backwards.(Make a prediction.)
Different types of games
Single-period simultaneous-move games
Multi-period repeated game
Multi-period sequential games
Example
entry game
Investment game
Have different capabilities and resources
If we turn it into a sequential game
Other problems
How long is the game repeated?
is there some horizon effect here?
Understand coopoeration
Prisoners' Dilemma
Two firms contemplating
Firm 1 price cut
market share
good decision
IDEA PRICE CUT
increase demand
Price lower
more sales
more profit
Firm 2 not to cut prices
Very good Decision
make $100 in market
foreseeable time period.
symmetric game
IF firm 1 cut the price firm 2 not
profit 2 x
Lose money
price competitive
marketplace
Cheap talk and costly action
Singnalling
Selective communication
Rival
MBA
Potential employers
worthiness
JOB
Providing information
encourage coordination
Restraint amongs
various players
industry
level
level 1
service to customer
comperating pricing
level 2
airlines
pricing information
rival
avoid price wars
1 more item...
Commitment
irreversible elimination
strategic option
threat credible
Post-entry
Cooperate
Make Commitments
Penalize Malfeasance
Establish Long-term Relationship
Restructure
Ahead of Rivals
Introduce New Products or Services.
M&A
Fight
Price Cutting
A Potential Cost Advantage
A Niche Position
High Network Externalities
Pre-entry Strategies
Accommodation strategies
Soften Competition
Limit ability to compete aggressively
Established an organization to facilitate future coordination
Differentiation
Market
Product
Deterrence strategies
Increase the cost and risk of entry
Structural barriers
Retaliation strategies
Lager sunk cost
Aggressive reputation
Incur debt
Price strategic behavior
Limit pricing
Information cost is poor( signal jamming)
Holding prices low (cost advantage)
Predatory pricing
Strong incumbent can up to liabilities
Large cash reserves
Entry and Rivalry
EX: Airbus & Boeing
Growth through entry
Definitions
Why rivalry important?
Dries down margins
Eliminates some competitors
Gaining insight rivalry
Five force analysis
Competitors analysis
Game theoretic analysis
Identifying Potential Rivals
The observation of outside firms
Economic motivations
Economic of scale
Who:Firms where value chain overlaps
Bargaining power
Who:Firms in the same vertical industry chain
Economies of scope
Who:Firms with relevant capabilities and in the declining industries
economies of cooperation
The strategic trajectories
Recent entrants to related industries
Entrants to the same industries in other geographic markets
Existing rivals take minority ownership stakes
Example: BSB company in satellite TV industry
Team members
Flora
Vendy
Willy
Iris
Debby
Sharon
