Session 243

Competitive Dynamics and Market Positioning

Track E

Date: Monday, October 5, 2015

Track F

Time: 16:45 – 18:00

Paper

Room: Plaza Court 1


Session Chair:

  • Yue Maggie Zhou, University of Michigan

Title: A U-Shaped Relationship: How Do Firms Respond to Competitors’ Investment Decision under Environmental Uncertainty

Authors

  • Shaohua Lu, Tulane University
  • Jay Anand, Ohio State University

Abstract: A broad literature in strategy examines how competitors’ presence affects a focal firm’s strategic decision making. This stream of research identifies imitation and deterrence as two distinct patterns, and concludes with an inverted U-shaped relationship. We propose in this study that under environmental uncertainty competition could both strengthen and undermine the benefits of imitation, and consequently lead to a U-shaped relationship. Using data on the U.S. electric utility companies’ commitment to develop utility-scale solar projects, we find empirical evidence consistent with our predictions.

Title: Interdependence within and across Market Positions

Authors

  • Yue Maggie Zhou, University of Michigan
  • Sendil Ethiraj, London Business School

Abstract: We report an empirical methodology that tests the central assumption of market positions: their immutability. We use the threat of Southwest entry into an air travel route and compare the responses of firms in the same position as Southwest to the responses of firms in a different position. We find that, (1) full service carriers (FSCs) reduce prices and increase capacity whereas low cost carriers (LCCs) increase prices and reduce capacity; (2) both FSCs and LCCs reduce flight duration but experienced increased delays, though the effect is stronger for the former; the FSCs also increase their first class seats and economy class seats respectively and reduce their business class seats, whereas the LCCs reduce their seats in all classes; (3) FSCs increase their day flights while the LCCs reduce both day and night flights. These results challenge the theoretical expectation that interdependence is stronger across market positions than within.

Title: Responses After Rivals Exit: Product Variety, New Store Opening, and Preexisting Market Structure

Authors

  • Charlotte Ren, Temple University
  • Ye Hu, University of Houston
  • Tony Cui, University of Minnesota

Abstract: We examine how surviving firms respond to the exit of rivals by using two levers, product variety adjustment and new store opening. Using a unique data set that contains all Best Buy stores in the US in 2006 and 2010, we find that after the full exit of Circuit City, Best Buy increased its store-level product variety and the magnitude of increase is greater in colocated markets (i.e., where Circuit City used to be colocated with Best Buy) than in non-colocated markets (i.e., where Circuit City used to be distant). Moreover, Best Buy were more likely to open new stores in non-colocated markets, and the magnitude of product variety increase diminishes with the opening of new stores in these non-colocated markets.

Title: The Impact of Within Platform Competition in Two-Sided Business Models

Authors

  • M.Mahdi Tavalaei, IE Business School
  • Juan Santalo, IE Business School

Abstract: We analyze theoretically and empirically the impact of exogenous changes in competition in one side of a two-sided market on the optimal pricing of both sides. We consider both its positive impact through enhanced indirect network externalities and its negative impact on same side agents because of higher competitive pressures. We test our hypothesis in the context of the U.S. airport industry exploiting an exogenous change in competition driven by a regulatory change. Consistent with our hypotheses, we estimate that an increase of within airport airline competition increases commercial revenues per passenger. This increase only takes place in airports that adopt a platform business model. We also investigate the impact of passengers through with both sides of the airport are connected.

All Sessions in Track E...

Sun: 08:00 – 09:15
Session 28: The Latest and Greatest in Empirical Methods for Strategy Scholars
Sun: 09:45 – 11:00
Session 29: The Elephant in the Room: How public policy and institutions help drive innovation, entrepreneurship, and firm performance
Sun: 11:15 – 12:30
Session 30: Heterogeneity in Firms and Their Pre-entry Capabilities: Implications for Firm and Industry Evolution
Sun: 16:15 – 17:30
Session 229: How Resources Change in Dynamic Situations
Sun: 17:45 – 00:00
Session 313: Competitive Strategy Business Meeting
Mon: 08:00 – 09:15
Session 273: Complexity in Competition
Mon: 11:15 – 12:30
Session 244: Legitimacy, Stakeholders, and Competition
Mon: 13:45 – 15:00
Session 242: Value Creation in Buyers-Supplier Relationships and Ecosystems
Mon: 16:45 – 18:00
Session 238: Temporary and Long Term Competitive Advantage
Session 243: Competitive Dynamics and Market Positioning
Tue: 08:00 – 09:15
Session 272: Competitive Dimensions of Firm Boundary and Location Decisions
Tue: 11:00 – 12:15
Session 230: Multi-Market Competition and Mutual Forbearance
Session 264: Emerging Technologies and Industries
Tue: 14:15 – 15:30
Session 267: Healthcare Industry Dynamics, Relationships, and Activities
Tue: 15:45 – 17:00
Session 269: Exploration, Exploitation, and Competition
Tue: 17:30 – 18:45
Session 263: Developing a Value Creation Theory

All Sessions in Track F...

Sun: 08:00 – 09:15
Session 193: Phenomenon-driven Research in Strategic Management
Sun: 09:45 – 11:00
Session 221: Reflecting on the scope of the firm: New avenues for future research
Sun: 11:15 – 12:30
Session 194: The State and Future of Disciplinary Research in Strategic Management
Sun: 16:15 – 17:30
Session 113: Serial Acquisitions: Strategies and Processes
Sun: 17:45 – 00:00
Session 314: Corporate Strategy Business Meeting
Mon: 08:00 – 09:15
Session 111: Portfolio Management: Diversification and Divestitures
Session 176: Different Perspectives Informing Governance Choices: Partner Choice in Alliances vs. Acquisitions
Mon: 11:15 – 12:30
Session 195: Where Are the Boundaries of Strategic Management Research?
Session 210: M&A/JV Implementation
Mon: 16:45 – 18:00
Session 112: Acquisitions - Before the Deal
Session 243: Competitive Dynamics and Market Positioning
Tue: 08:00 – 09:15
Session 115: Horizontal and Vertical Scope: Interactions and Embeddedness
Session 272: Competitive Dimensions of Firm Boundary and Location Decisions
Tue: 11:00 – 12:15
Session 117: Issues and Answers for the Diversified Firm
Session 145: Strategic Leadership and Corporate Strategy
Tue: 14:15 – 15:30
Session 58: Corporate VCs and spin-outs
Session 116: Acquisitions - After the Deal
Session 267: Healthcare Industry Dynamics, Relationships, and Activities
Tue: 15:45 – 17:00
Session 110: Models of Corporate Strategies
Tue: 17:30 – 18:45
Session 114: The Interplay Between Financial Markets & Advisors and the Acquiring Firm
Session 271: Spinouts


Strategic Management Society

Denver