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Rival Firms (rival + firm)
Selected AbstractsRandal Heeb Innovation and Vertical Integration in Complementary MarketsJOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 3 2003Randal Heeb This paper studies vertical integration by an essential-good monopolist into complementary markets. Unlike previous studies of complementary products, consumers are allowed to purchase some components of a complementary basket, but not others. Two different pricing strategies by the integrated firm may emerge. In mass-market equilibria, the price of the complement under integration is zero and it is given away with the essential good. Niche-market equilibria have more conventional pricing. This dichotomy is consistent with consumer software pricing. Integration enhances consumer and total surplus, unless it leads to exit by the higher-quality rival, in which case welfare is reduced. Exit is most likely when it is least damaging to consumer welfare. Integration reduces innovation by the rival firm. The effect on innovation by the integrated firm is ambiguous, but numerical computation of an extended model indicates that integration increases the innovation of the integrated firm and enhances welfare. [source] Maintenance contracts for leased goods: their role in creating brand loyaltyMANAGERIAL AND DECISION ECONOMICS, Issue 7 2000Julie Hunsaker Using a two-period switching cost model, this paper compares rental profit with sales profit in a framework in which duopolists produce horizontally differentiated durable goods. Rental firms use maintenance contracts that stipulate that repeat customers pay a lower fine per unit of damage than do those customers who switch to a rival firm. In the sales regime, firms give loyal customers a discount on their second period prices. If switching costs are zero, sales profit equals rental profit. For positive and identical switching costs, either regime can dominate. As the exogenous rate of depreciation falls, rental profit exceeds sales profit. Copyright © 2000 John Wiley & Sons, Ltd. [source] Launch decisions and competitive reactions: an exploratory market signaling studyTHE JOURNAL OF PRODUCT INNOVATION MANAGEMENT, Issue 3 2002Erik Jan Hultink When firms launch a new product into the marketplace they often aim to find a balance between building scale and provoking extensive and quick competitive reactions. Competitors react to new products when they perceive the product introduction as hostile, committed or when they feel that the product entry will have a large impact on their profitability. The present study develops a framework that shows how strong and fast incumbents react to perceived market signals resulting from a new product's launch decisions (broad targeting, penetration pricing, advertising intensity and product advantage). The strength of the relationships between the launch decisions and the perceived market signals was expected to depend on one industry characteristic (i.e., market growth) and on one entrant characteristic (i.e., aggressive reputation). We distinguished three market signals in our framework: hostility, commitment and consequences. Signal hostility refers to the extent to which the approach used by an acting firm to introduce the new product is perceived hostile whereas the commitment signal refers to the extent to which incumbents perceive the entrant firm to be committed to the new product introduction. The consequence signal is defined as the incumbents' perception of the impact of a new product entry on their profitability. We tested our framework using cross-sectional data provided by 73 managers in The Netherlands who recently reacted to a new product entry. The results clearly reveal which launch decisions create which market signals. For example, incumbents consider high advantage new products hostile and consequential. Penetration pricing and an intense advertising campaign are also considered hostile, especially in fast growing markets. Broad targeting is not perceived hostile, especially not when used by entrants with an aggressive reputation. In addition, this study explored the impact of three perceived market signals on the strength and speed of competitive reaction. The results reveal that perceived signals of hostility and commitment positively impact the strength of reaction, whereas the perceived consequence signal positively impacts the speed of reaction. The article concludes with the implications of our study for managers and academics. The relevance to managers was assessed from both the perspective of the incumbent firm that must defend, and that of the rival firm that is introducing the new product. [source] Does an Industry Effect Exist for Initial Public Offerings?FINANCIAL REVIEW, Issue 4 2003Aigbe Akhigbe G14 Abstract We examine the impact of initial public offerings (IPOs) on rival firms and find that the valuation effects are insignificant. This insignificant reaction can be explained by offsetting information and competitive effects. Significant positive information effects are associated with IPOs in regulated industries and the first IPO in an industry following a period of dormancy. Significant negative competitive effects are associated with larger IPOs in competitive industries, those in relatively risky industries, those in high-performing industries, and those in the technology sector. IPO firms that use the proceeds for debt repayment appear to represent a more significant competitive threat to rival firms relative to IPO firms that use their proceeds for other purposes. [source] Private Politics, Corporate Social Responsibility, and Integrated StrategyJOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 1 2001David P. Baron This paper provides a theory of private politics in which an activist seeks to change the production practices of a firm for the purpose of redistribution to those whose interests it supports. The source of the activist's influence is the possibility of support for its cause by the public. The paper also addresses the issue of corporate social responsibility by distinguishing among corporate redistribution as motivated by profit maximization, altruism, and threats by the activist. Private politics and corporate social responsibility not only have a direct effect on the costs of the firm, but also have a strategic effect by altering the competitive positions affirms in an industry. From an integrated-strategy perspective the paper investigates the strategic implications of private politics and corporate social responsibility for the strategies of rival firms when one or both are targets of an activist campaign. Implications for empirical analysis are derived from the theory. [source] The Welfare Effects of the National Cooperative Research Act (NCRA) of 1984 and the National Cooperative Production Amendments (NCPA) of 1993AMERICAN JOURNAL OF ECONOMICS AND SOCIOLOGY, Issue 5 2007Yi Liu Cooperative R&D and production joint ventures may enable firms to achieve significant cost efficiencies. However, they can also be a means of controlling industry output and raising product prices. A review of the literature on the welfare implications of allowing rival firms to cooperate in the R&D and production stages indicates that the issue is controversial from a theoretical perspective. There is need to examine the motivations of R&D and production joint ventures in order to assess the welfare implications of the National Cooperative Research Act (NCRA) of 1984 and National Cooperative Production Amendments (NCPA) of 1993, which relaxed the antitrust treatment of R&D and production joint ventures. Using samples of 127 cooperative R&D joint ventures and 342 cooperative production joint ventures announced by U.S. domestic firms during 1979,1999, this article finds that these endeavors do not meet the criteria for collusive behavior specified by the market power doctrine. We interpret these findings as suggesting that cooperative R&D and production joint ventures are motivated by cost efficiencies and are, therefore, welfare enhancing. Our results pose some challenges to the doctrine that antitrust actions by regulatory authorities are always welfare improving. [source] INDUSTRY PROSPECTS AND ACQUIRER RETURNS IN DIVERSIFYING TAKEOVERSTHE JOURNAL OF FINANCIAL RESEARCH, Issue 1 2009Husayn Shahrur Abstract We use a sample of 816 diversifying takeovers from 1978 to 2003 to examine whether takeover announcements release negative information about the future prospects of the acquirer's main industry. We find that rivals that are most similar to the acquirer (homogeneous rivals) experience significant negative cumulative abnormal returns (CAR) around takeover announcements. Takeovers that result in negative wealth effects to acquirers are associated with negative abnormal revisions in analysts' forecasts of homogeneous rivals' earnings per share. We also find a decline in the posttakeover operating performance of rival firms. The decline is especially pronounced for homogeneous rivals and for takeovers with negative wealth effects to acquirers. Our findings imply that CAR-based estimates of acquirer wealth gains from takeovers that do not account for industrywide information releases are significantly biased downward. [source] The Antitrust Implications of Capacity Reallocation by a Dominant FirmTHE JOURNAL OF INDUSTRIAL ECONOMICS, Issue 2 2001Ian Gale When a firm acquires rival firms in one market, and moves their capacity to another market, should antitrust authorities be concerned? We address this question by studying a multi-stage game. A dominant firm has the opportunity to acquire fringe firms that operate in the same market. Then, the dominant firm has the opportunity to move capacity from that market to a second market. The model is motivated by a series of acquisitions in the Specialized Mobile Radio industry aimed at establishing a new cellular carrier. We derive necessary and sufficient conditions for the dominant firm to acquire too little capacity relative to the social optimum. The results shed light on the Consent Decree negotiated in US v. Motorola Inc. and Nextel Communications Inc., 1994. [source] Corporate discourse and environmental performance in ArgentinaBUSINESS STRATEGY AND THE ENVIRONMENT, Issue 3 2008Diego A. Vazquez Abstract There is substantial research and policy interest in the relationship between firms and the natural environment, including how this relationship is influenced by regulators, international pressures, rival firms and stakeholder demands. With some exceptions, the ,softer' dimensions of environmental aspect management , how attitudes, beliefs and perceptions and the human factors drive corporate behaviour , have been understudied. The work that exists tends to be informal, and allows little scope for the statistical validation that is required for robust inference. This paper examines whether corporate values towards the environment affect a firm's environmental performance. It uses survey methods as well as content and discourse analyses of interview text and corporate reports and web sites to explore the links between managerial ,mindsets' and the environmental performance of the firms of which they are a part. Though the application is Argentina, the lessons learned can be generalized to other developing and industrialized countries. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment. [source] | ||||||||||||||||||||||