Term
|
Definition
| If one firm's stratgic choice adversely affects the performance of another |
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Term
| Can a firm have competitors in other markets? |
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Definition
| Yes- in input or output markets |
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Term
|
Definition
| when the strategic choices of one firms affect the performance of another but only through the strategic choices of a third firm |
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Term
|
Definition
| strategic choice of one firm directly affects the performance of the other |
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Term
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Definition
| A small but significant nontransitory incresae in price. Small is at least 5% and nontransitory is at least 1 year |
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Term
|
Definition
| A merger shouldn't be necessary to identify competitors. It just proves that A&B are substitutes |
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Term
|
Definition
1) They have the same or similar product performance characteristics. Product’s performance describes what it does for consumers.
2) They have the same or similar occasions for use- describes when, where and how it’s used
3) They are sold in the same geographic market. Two products are in different geographic markets if A) they are sold in different locations B) it is costly to transport the goods and C) it’s costly for consumers to travel to buy the goods |
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Term
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Definition
shows the degree to which products substitute for each other. It also measures the percentage change in demand for good Y that results from a 1% change in the price of good X
-when it’s positive, it indicates that consumers increase their purchases of good Y as the price of good X increases (they’re substitutes). |
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Term
| Standard industrial classification |
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Definition
| classifies companies by catagories but ignores GEOGRAPHY, USE and assumes they all make the same thing. Provides a 7-digit identifier. It's a good starting point to identify competitors |
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Term
| Ways to measure market structure |
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Definition
| n-firm concentration ratio (the combined market share of the largest n firms), herfindahl index (the sum of squared market shares) |
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Term
| When do you use the herfindahl index |
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Definition
| when the relative size of the largest firms is important |
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Term
| what are the 4 classes of market structure |
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Definition
| Perfect comp (a range of less than .2 with fierce comp), monopolistic comp (rng of less than .2, intensity of comp depends on degree of product differentiation), oligopoly (rng of .2-.6, comp depends on interfirm rivalry), monopoly (rng grater than .6, intensity is light unless there's a threat of entry) |
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Term
| Why is elsticity sharp in a competitive market |
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Definition
| because consumers can shop |
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Term
| What are the conditions for perfect competition |
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Definition
| 1) large numbers of firms 2) producing standardized produts (most important characteristic) 3) producers and consumers have complete knowledge of the market (all consumers know about all firms and producers know about compeitition as well 4)firms are price takers becasue the marekt sells the same thing and they have to take the market price 5) easy entry and exit from the market |
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Term
| Do firms want perfect competition? |
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Definition
|
|
Term
|
Definition
| It's a company that's free to puruse whatever objectives. It's also illegal |
|
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Term
| What is a regulated monopoly |
|
Definition
| It's run by a state organization and the price is given by the government. Ex- Georgia Power |
|
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Term
|
Definition
| When a firm that's not a monopolist gets to act like one. Ex- a 24 hour gas station in the middle of nowhere is a monopoly at 0200. |
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Term
| Factors creating monopolies |
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Definition
| Patent rights (has eroded except in drug mfg), unfair competition (buying all the supplies to prevent competition from having necessary input) pricing by region, natural monopoly (we benefit from this bc as companies grow, prices drop and the government drops our price) |
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Term
| Monopolistic Competition Characteristics |
|
Definition
| 1) large number of firms 2) producing differentiated products 3) relying on non-price competition (ex- advertising) 4) some (limited) control on price (limited by price elasticity) 5) fairly easy entry and exit from the market |
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Term
| If the demand curve for monopolistic competition goes straight at 3 o'clock, what does that mean |
|
Definition
| it's perfect competition and is perfectly elastic (if the firm changes price, sales drop to 0) |
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|
Term
| If a demand curve for monopolistic competition goes to 4 o'clock, what does that mean |
|
Definition
| it's very elastic because of the number of substitutes |
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|
Term
| What is vertical differeniation |
|
Definition
| products unambiguously differ in quality. ex- if a cleaning product is a better formula that really does a better job |
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Term
| What causes the increase in sales when a firm drops its prices |
|
Definition
| 1) increased sales ot customers who were planning to buy a smaller quantity from the firm 2) sales to customers who weren't planning to purchase from the firm or its competitors, 3)sales to customers who were planning to buy from a competitor but switched to take advantage of the lower price |
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|
Term
| What is horizontal differentiation? |
|
Definition
| Vary in certain product characteristics to appeal to different consumer groups. A big source is geography that allows firms to raise prices in some areas without losing many customers |
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|
Term
| Characteristics of an oligopoly |
|
Definition
| 1) small number of large firms dominating the market (ex auto industry with lots of producers but only a few leaders) 2) producing standized or differentiated products (ex steel which is std or cars which are different) 3) mutual interdependence (the actions of 1 firm affect all of the other firms. based on their reactions) 4) prices are rigid (if they change, it's scheduled) 5)difficult entry and exit from the market |
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|
Term
| For an oligopoly, if a firm changes price and another firm follows, there's a small change in quantity, what happens to demand? |
|
Definition
|
|
Term
| In an oligopoly, if a firm changes price and another firm ignores the change and then there's a large change in Q, what happens to demand |
|
Definition
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|
Term
| Give 2 facts about industry (market) structure. |
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Definition
| 1) Prices are strongly related to market structure and 2) price-cost margins tend to be much lower in competitive markets becuase the firm's ability to control the price is hidden |
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Term
|
Definition
| Stategic substitutes, tough posture, made a decision. Assert dominance and forces rivals to back off |
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|
Term
| What is a Submissive Underdog? |
|
Definition
| Stategic substitutes, tough, refrain from making a decision. Accepts follower role, avoids fighting |
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|
Term
| What is a Suicidal siberian? |
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Definition
| Stategic substitutes, soft, made a decision. Invites rivals to exploit you, may indicate exit strategy |
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|
Term
| What is a Lean and Hungry Look? |
|
Definition
| Stategic substitutes, soft, refrain from making a decision. Actively submissive, posturing to avoid conflict |
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Term
|
Definition
| Stategic compliments, tough, made a decision. Attaks to become top dog, invites battle heedless of costs |
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|
Term
| What is a Puppy Dog Ploy? |
|
Definition
| Stategic compliments, tough, refrained from making a decision. Placates top dog and enjoys available scraps |
|
|
Term
| What is a Fat Cat effect? |
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Definition
| Stategic compliments, soft, made a decision. confidently takes care of self, shares wealth with rivals |
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|
Term
|
Definition
| Stategic compliments, soft, refrain from making a decision. Accepts status quo out of fear and waits to follow leader. |
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|
Term
| What are 2 main and 1 additional components of strategic commitments? |
|
Definition
| The have long run impact(commitment) and are hard to reverse. They also affect choices made by rivals |
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|
Term
| What does inflexibility do to value? |
|
Definition
| it increases the value. Ex- pushing all your chips in the middle |
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|
Term
| What do strategic commitments do to competitors expectations? |
|
Definition
| Alter them because they have to either follow or ignore |
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|
Term
| What are 3 criteria for strategic commitments? |
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Definition
| They have to be visible (we want people to know what we're doing to force a reaction). They have to be understandable by both competition and marketplace. They have to be credible (it's believable an achievable). It should also be irreversible |
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|
Term
| List 3 moves that represetn commitment |
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Definition
| 1) capacity expansion when investment in relationship specific assets 2) contracts with clauses such as most favored customer clause 3) public announcements provided the reputation of the firm/management will suffer when not backed by action. |
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|
Term
| What are concepts to describe how a firm reacts to price/quantity change by a competitor? |
|
Definition
| Strategic complements and strategic substitutes |
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|
Term
| Give an example of what a strategic compliment/substitute typically is |
|
Definition
| Price is a complement and quantity and capacity decisions are usually strategic substitutes |
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|
Term
| What is a strategic complement? |
|
Definition
| When a firm's action induces the rival to take the same action. Ex- when i drop my price, you have to drop yours. One firm's aggressive behavior leads its rival to bahave less aggressively. Happens often in oligopolies |
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Term
| Which happens more often, price changes or mergers? |
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Definition
| Harder to reverse moves are less frequently matched than easier to reverse moves. Ex- price changes are frequently matched vs a big merger |
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Term
| Strategic substitutes are? |
|
Definition
| a firm's action that induces the rival to take the opposite action. Aggresive behavior by a firm leads its rival to behave less aggressively |
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Term
|
Definition
| the present value of a firm's profits |
|
|
Term
| What is the direct effect of commitment? |
|
Definition
| due entirely to the firm's own tactical decisions |
|
|
Term
| What is the strategic effect of commitment |
|
Definition
| It takes into account the |
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|
Term
| The internet has done what to the direct effect? |
|
Definition
| It has shortened reaction time and reduced the direct effect as strategic effect grows. Ex- the airline industry is an oligopology and drops the price. online sellers know first and compeitotrs know at the same time. As a result, there's almost zero direct effect. |
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|
Term
| What is a tough commitment |
|
Definition
| It hurts the competitors and is an effort to outdo one's rivals (ex- capacity expansion or reducing prices. Tyey conform to the traditional view of competition. |
|
|
Term
| What is a soft commitment? |
|
Definition
| it's a commitment that helps rivals (ex elimination of production facilities, increase of prices). it may be beneficial if the strategic effect of the commitment is sufficiently positive |
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|
Term
| Give an example of a non-credible decision. |
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Definition
| K mart saying they'll drop their price by 10%- they couldn't support that decision without going under. |
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|
Term
| Give the components of the strategic effect |
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Definition
| Commitments that lead to less aggressive behavior from the rivals will have beneficial strategic effect |
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|
Term
| If you make a decision that involves a strategic substitute, what's the likely response? |
|
Definition
| The reaction would be a strategic compliment |
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|
Term
| If products are horizontally differentiated, what might happen to the strategic effect? |
|
Definition
| It may be relatively less important since hte rival doesn't have the incentive to react. Ex- all the fridges are diferentiated by bran, so if 1 drops the price, the others don't have to because they're in different markets |
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|
Term
| The value of commitmest lies in creating what? |
|
Definition
|
|
Term
| If there's uncertainty, what is valueable? |
|
Definition
| Felxibility because it opens future options |
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|
Term
| Assesing how a commitment will affect the evolution of market competition dpends on what? |
|
Definition
| Industry conditions and the characteristics of the firm's competitors |
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|
Term
| When the firm's products are highly differentiated, the strategic effect from an investment in cost reduction is likely to be what? |
|
Definition
|
|
Term
| When the products are similar, what happens to the srategic effect of cost reduction? |
|
Definition
| The effect is relatively larger |
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Term
|
Definition
| Real options (a decision maker has the opportunity to tailor a decision to information that will be recieved in the future |
|
|
Term
| What are ways to create real options |
|
Definition
| 1) By altering the way in which they configure their internal porcesses and 2) identify tradeoffs and maximize them |
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|
Term
| Better information about demand can be utilized by what? |
|
Definition
| delaying implementation of projects. Ex- if Kia had known the market would tank, they might have delayed making a plant |
|
|
Term
| The value of real options may be limited by what? |
|
Definition
|
|
Term
| By waiting, what does a firm do? |
|
Definition
| It preserves its option values, may allow its competitors to make preemptive investments. It also minimizes direct efffect because the firsm move gets the most direct effect. |
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|
Term
| What are the four steps for analyzing commitment intensive decisions? |
|
Definition
| Positioning, sustainability, flexibility and judgement analysis |
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Term
| Positioning analysis does what? |
|
Definition
| Determines the direct effect of commitment. The focus is on whether the firm operates with lower costs than its competitors or offers superior benefits to its customers. Also, it provides the basis for determining the revenues and costs associated with each alternative. |
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|
Term
| Sustainability analysis does what? |
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Definition
| Determines the strategic efffect. it also looks at the response by competitors and potential entrants and the market imperfections that protect the firm's competitive advantage. |
|
|
Term
| Judgment analysis does what? |
|
Definition
| Taking stock of the organizational and managerial factors that might distort the firm's incentive to choose an optimal strategy |
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|
Term
| What are the 2 types of errors that can be made in commitment intensive choices |
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Definition
| Type I- rejecting an investment that should hav ebeen made and 2- accepting an investment that should have been rejected. |
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|
Term
| decisions by a firm today will affect it's beahvior as well as what? |
|
Definition
| it's competitors' behavior in the future |
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|
Term
| cooperative pricing occurs when? |
|
Definition
| If prices persist above competitive levels without formal collusion among the firms. Each seller will recognize that the profit from price cutting will be short lived, and so the equilibrium result is the same as if there was collusion. |
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Term
|
Definition
| Firms in a market set a price. It's illegal in US but is legal in other countries. |
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Term
| Tit for tat pricing is what? |
|
Definition
| A cluster of firms are able to get enough of the market to increase the price and competitors follow. What keeps it there is if a competitor drops the price, it makes everyone do the same and hurts profits. "we will not be undersold" or "lowest price guaranteed" |
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Term
| If a company always drops its price in the fall and raises it in the spring, the other firms will likely do what? |
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Definition
| Keep their prices the same and not worry- this causes stability. |
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Term
| Grim trigger strategy is what? |
|
Definition
| Lower price to marcingal cost indefinitiely in response to rival's price cutting in one period. In tit for tat, the response lasts for only one period. |
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|
Term
| Both grim trigger and tit for tat are capable of what? |
|
Definition
| sustaining cooperative pricing |
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|
Term
| What factors of market structure affect cooperative pricing? |
|
Definition
| Concentration, conditions that affect reaction speeds and detection lags, differences among firms, price sensitivity of buyers. |
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Term
| Cooperative pricing is more likely to happen in what type of markets? |
|
Definition
| concentrated, because the revenue loss from a price cut is larger, pootential gain from new customers is smaller and the beneft to cost ratio tilts in favor of higher prices |
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Term
| Anti trust policies used to focus on monopolies, now what do they focus on? |
|
Definition
| the concentration in a market |
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Term
| As the speed with which a firm cna respond to the rival's moves increases, what happens to cooperative pricing? |
|
Definition
| it becomes easier to sustain. if you can react quickly, it means that all the firms will know about changes in a price and adjust |
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Term
| What determines reaction speed? |
|
Definition
| Lag in detecting price changes, frequency of interactions with the rival, ambiguity regarding which rival is cutting prices, inability to distinguish between price cuts by rivals and lower demand as the cause of drop in sales. |
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|
Term
| What are relevant structural conditions IRT sustaining cooperative pricing? |
|
Definition
| Lumpiness of orders, information availability regarding sales transaction, the number of buyers, volatillity of demand conditions (if the market starts to tank, firms will sell now) |
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|
Term
| Lag between orders does what to the gain from price cutting? |
|
Definition
| It makes it more valuable relative to the cost imposed by a rival's retaliation |
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|
Term
| With a large number of buyers, is it easy to give price cuts? |
|
Definition
| No. It's harder to do secret price cuts |
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|
Term
| A drop in demand can be misread as what? |
|
Definition
| Competitor dropping prices. |
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Term
| A key factor of differences among firms is what? |
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Definition
| market pricing says that all firms make the same prodcut, but that's not true. |
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|
Term
| Firms differen in incentives they face for cooperative pricing due to what? |
|
Definition
| different costs, different capacities, different product qualities. The more differences, the less likely price sensitivity. |
|
|
Term
| horizontal differences reduce/increase buyers' price sensitivity? |
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Definition
| Reduce and deter price cutting because variety segments the market. If the market is narrow, coopertive pricing works well. |
|
|
Term
| Frims can facilitate cooperative pricing by doing what? |
|
Definition
| Price leadership, advance announcement of price changes, most favored customer clauses, uniform delivered pricing. |
|
|
Term
| The most favored customer cause does what? |
|
Definition
| It allows the buyer to pay the lowest price charged by the seller. It inhibits price competition. |
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|
Term
| Is quality competition more or less destructive than price competition? |
|
Definition
|
|
Term
| High market concentration does what to Cooperative pricing and why? |
|
Definition
| Facilitates it by coordinating on the cooperative equilibrium is easier with few firms and increases the benefit-cost ratio from adhering to cooperative pricing. |
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|
Term
| Firm asymetries does what to Cooperative pricing and why? |
|
Definition
| Harms because of disagreemtn over cooperatrive price and coorrdinating on cooperative price is more difficult |
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|
Term
| High buyer concentration does what to Cooperative pricing and why? |
|
Definition
| Harms because it reduces the probability that a defector will be discovered. |
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|
Term
| Lumpy orders does what to Cooperative pricing and why? |
|
Definition
| harms because it decreases the frequency of interaction between competitors, increasing the lag between defection and retaliation. |
|
|
Term
| Secret price terms does what to Cooperative pricing and why? |
|
Definition
| increases detection lags because prices of competitors are more difficult to monitor and increases the probability of misreads |
|
|
Term
| Volatility of demand and cost conditions does what to Cooperative pricing and why? |
|
Definition
| Harms- increases the lag between defection and realiation by increasing undertainty about whether defections have occured and about identity of defectors |
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|
Term
| Price sensitive buyers does what to Cooperative pricing and why? |
|
Definition
| Harsm and increases the temptation to cut price, even if competitors are expected to match. |
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|
Term
| What happens to the demand curve as quality increases? |
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Definition
| Deamnd is higher when quality is higher and the cuve gets steeper. The vertical distance between the demand curves is the consumers' willingness to pay for incremental quality. |
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Term
|
Definition
| Firms that produce and sell in new markets |
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Term
| Entrants threaten incumbents how? |
|
Definition
| The market share of the incumbents is reduces (unless the market is growing) and price competition is intensified. Also the individual's firms ability to control its price drops |
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Term
| How does entry take place? |
|
Definition
| An entrant may be a brand new firm or may be an established firm that is diversifying into a new product/market. this is important for analyzing the costs of entry and the strategic response by incumbents |
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Term
|
Definition
| 1) Fold up 2) discontinue a particular product or product group, 3) leave a particular geographic market segment |
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|
Term
| What 10 factors did DRS determine about entry and exit? |
|
Definition
| 1) entry and exit are pervasisive in the US (we lose and gain 1 million business a year 2) entrants are smaller than incumbents 3) most entrants fail quickly and the ones that don't grow precipitously 4) the rates of entry and exxit vary from industry because of barrier to entry, regulations and capital intensive operations. 5)About 40% of the exiters were diversified firms that continued to operate in other markets 6) half the entrants were diversified firms and half were greenfield entrants (new firms) 7) conditions that encouraged entry also fostered exit. 8) the size of hte exiters is about 1/3 the size of avg firms 9) within 10 years of entry 60% of the entrants leave the industry and the survivors double in the same time |
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|
Term
| What are barriers to entry? |
|
Definition
| Facotrs that allow the incumbents to earn economic profit while making it unprofitable for the new firms to enter the industry. |
|
|
Term
| How are barriers to entry classified? |
|
Definition
| Structural barriers (natural advantages) and strategic barriers (incumbents' actions to deter entry) |
|
|
Term
| How do structural barriers to entry exist? |
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Definition
| When incumbents have cost advantages, marketing advantages, and incumbents are protected by favorable govt policy and regs |
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|
Term
| How do incumbents erect strategic barriers? |
|
Definition
| By doing something such as expanding capacity (may expand so much to keep others out), resorting to limit pricing or predatory pricing |
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|
Term
| Three possible entry conditions of a market are? |
|
Definition
| Blockaded entry (the incumbent doesn't need to take any action to deter entry) Accomadated entry (the incumbents shouldn't bother to deter entry because of growing demand or rapid tech change), Deterred entry (predatory acts) |
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|
Term
| The three main types of structural barriers to entry are? |
|
Definition
| Control of essential resources by the incumbent (including labor), economies of scale and scope, marketing advantage of incumbency |
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Term
|
Definition
| When a firm ceases to produce in a market |
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|
Term
| What are barriers to exit? |
|
Definition
| Sunk costs make the marginal cost of staying low (must be paid regardless if you stay or go), obligatiosn and commitments to suppliers and employees are sunk costs as well, relationship specific assets may have low resale value, govt regs (operating under govt contract) |
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|
Term
| List 3 examples of entry deterring strategies |
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Definition
| Limit pricing, predatory pricing and capacity expansion |
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|
Term
| How do entry deterring strategies work? |
|
Definition
| Incumbents must earn higher profits as a monopolist than as a duopolist and the strategy should change the entrants' expectations regarding post-entry competition |
|
|
Term
|
Definition
| Set the price sufficiently low to discourage entrants by either having contestable limit pricing or strategic limit pricing. Low prices are an entry detrent if entrant infers that the post entry price will be low. |
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|
Term
| What's the guarantee of strategic limit pricing? |
|
Definition
| lower costs becaues the entrant has limited capacity or rising marginal costs |
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|
Term
| When does predatory pricing vs limit pricing happen? |
|
Definition
| Predatory pricing is directed at entrants who have already entered (selling belwo the short run marginal cost with the expectation of recouping the losses via monopoly profits once the rival exits. Limit pricing is directed at potential entrants |
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|
Term
| What can an incumbent do to be tough? |
|
Definition
| have low costs, an irrational desire for market share, or because there is other compeittion tha t the entrant is unaware of |
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|
Term
| How does excess capacity help an incumbent? |
|
Definition
| An incumbent can credibly threatn to lower the price if entry occurs, can exapnd output at a low cost, |
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|
Term
| How does excess capacity work to deter entry |
|
Definition
| An incumbent has a sustainable cost advantage, market demand growth is slow, incumbent can't back off from the investment in excess capacity and entrant is not the type trying to establish a reputation for toughness |
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|
Term
| What does industry analysis facilitate? |
|
Definition
| Assessment of industry and firm performance (what's happening and where are we going), identification of factors that affect performance (if x then y), determination of the effect of changes in teh business environment on performance and identification of opportunities and threats (SWOT analysis) |
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|
Term
| What does an industry analysis help with? |
|
Definition
| assessing generic business strategies |
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|
Term
| Where is Porter's five forces framework rooted? |
|
Definition
|
|
Term
| What does a value net do? |
|
Definition
| it supplements the five forces framework to analyze strategy |
|
|
Term
| What are the components of Porter's five forces? |
|
Definition
| Interal rivalry (incumbents), entry, substitutes and complements, supplier power, buyer power |
|
|
Term
| What is internal rivalry? |
|
Definition
| The competition for market share amont the firms in the industry based on price or non-price dimentsion |
|
|
Term
| What does price competition do? |
|
Definition
| it erodes the price cost margin and profitability as well as revenue |
|
|
Term
| What does non-price competition do? |
|
Definition
| It doesn't erode profits as severly as price competition if customers are willing to pay a higher price for the improvementsss |
|
|
Term
| What 10 factors increase price competition? |
|
Definition
| 1) there are many sellers 2)some firms have cost advantage over others 3) there is exxcess cpaacity in the industry 4) products are undifferentiated and switching costs are low 5) prices and sale terms are easily observable 6) large and infrequent sale orders 7) absence of facilitating practiced 8) absence of a history of cooperative pricing 9) strong exit barriers 10) industry demand is elastic |
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|
Term
| How does entry hurt incumbents? |
|
Definition
| By cutting into the incumbents' market share and intensifying internal rivalry and leads to a decline in price cost margin |
|
|
Term
| What are the classifications for the 2 types of barriers to entry? |
|
Definition
| Exogenous (nature of the industry) or endogenous (incumbents' strategic choices) |
|
|
Term
| What are hte key factors that affect the threat of entry? |
|
Definition
| Minimum efficient scale relative to the size of the market, govt policies that favor the incumben, brand loyalty of consumers and value placed by consumers on reputation, entrants' acccess to critical resources (raw material, technical know how and distro network, steepness of the learning curve, netwrok externalities that give the incumbents the benefit of a large installed base, incumbents' reputation regarding post-entry competitive behavior |
|
|
Term
| What does the availability of substitutes and complements do? |
|
Definition
| the availability of substitutes erods the demand for the industry's output and the availability of compliments boosts industry demand |
|
|
Term
| What does it mean if a supplier has indirect power? |
|
Definition
| If upstream market is competitive |
|
|
Term
| What does it mean if a supplier has direct power? |
|
Definition
| the upstream industry is concentrated or the customers are locked into relationship with suppliers due to relationship specific assets |
|
|
Term
| What leads to buyer power (downstream)? |
|
Definition
| Buyer concentration or relationship specific assets |
|
|
Term
| What are the factors that determine supplier power (upstream)? |
|
Definition
| Competitiveness of the input market, relative concentration of the industry, relative concentration of upstream and downstream firms, purchase volume by downstream firms, availability of substitute inputs, extent of relationship specific investments, threat of forward integration by suppliers, suppliers ability to price discriminate |
|
|
Term
| What are some strategies to cope with five forces? |
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Definition
| Develop a cost advantage or a differntiation advantage, seek an industry segment where the 5 forces are less severe and a firm can try to change the forces, facilitating strategies to reduce internal rivalries, moves that increase switching costs for the customers, pursuing entry deterring strategies, tapered integration ot reduce buyer/supplier power |
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Term
| What are 2 benefits of giving a company a strategic advantage? |
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Definition
| higher profits and it allows the co to lower the price to edge out competition. |
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Term
| How does the 5 forces framework view other firms? |
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Definition
| as threats to profitability |
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Term
| How does the value net model view other firms? |
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Definition
| As Coopetition (cooperation and competition) because interactions between firms can be positive or negative. It looks at opportunities posed by each force. |
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Term
| What are some cooperative interactions among firms? |
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Definition
| setting industry standards that facilitate industry growth, lobbying for regulation or legislation that favors the industry, cooperation with buyers/suppliers (to improve product quality, productive efficiency or inventory mgmt) |
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Term
| The value net consists of what? |
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Definition
| Suppliers, customers, competitors and complmementors (producers of complementary goods and services) |
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