Incumbent pricing responses to entry

Simon, Daniel

doi:10.1002/smj.502

Cited by 93 publications

(104 citation statements)

References 40 publications

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“…We tested our hypotheses by estimating our model on subsets of the facilities about which we hypothesized, an approach used by many other organizational scholars (e.g., Eisenhardt and Tabrizi, 1995;Zenger and Marshall, 2000;Simon, 2005;Xiao and Tsui, 2007) and in program evaluations of voluntary environmental programs and educational policies (e.g., Bali and Alvarez, 2003;Brouhle, Griffi ths, and Wolverton, 2009). To test H1, we estimated our model on the subsample of facilities (and their matched controls) that disclosed a violation to the Audit Policy without a direct regulatory threat, defi ned as those facilities that were not targeted by a U.S. EPA Compliance Incentive Program in the disclosure (or match) year.…”

Section: Model Specifi Cationmentioning

confidence: 99%

Making Self-Regulation More Than Merely Symbolic: The Critical Role of the Legal Environment

Short

Toffel

2010

Administrative Science Quarterly

308

230

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Using data from a sample of U.S. industrial facilities subject to the federal Clean Air Act from 1993 to 2003, this article theorizes and tests the conditions under which organizations' symbolic commitments to self-regulate are particularly likely to result in improved compliance practices and outcomes. We argue that the legal environment, particularly as it is constructed by the enforcement activities of regulators, significantly influences the likelihood that organizations will effectively implement the self-regulatory commitments they symbolically adopt. We investigate how different enforcement tools can foster or undermine organizations' normative motivations to self-regulate. We find that organizations are more likely to follow through on their commitments to self-regulate when they (and their competitors) are subject to heavy regulatory surveillance and when they adopt self-regulation in the absence of an explicit threat of sanctions. We also find that historically poor compliers are significantly less likely to follow through on their commitments to self-regulate, suggesting a substantial limitation on the use of self-regulation as a strategy for reforming struggling organizations. Taken together, these findings suggest that self-regulation can be a useful tool for leveraging the normative motivations of regulated organizations but that it cannot replace traditional deterrence-based enforcement.

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Section: Model Specifi Cationmentioning

confidence: 99%

Making Self-Regulation More Than Merely Symbolic: The Critical Role of the Legal Environment

Short

Toffel

2010

Administrative Science Quarterly

308

230

View full text Add to dashboard Cite

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“…While most empirical studies examining incumbent responses to entry focus on tactical changes such as adjusting prices, quality levels or production capacity (e.g., Lieberman 1987;Yamawaki 2002;Frank and Salkever 2004;Simon 2005;Seamans 2009), our theoretical analysis generates several predications related to firms' strategic decisions. Reduced-form regressions are more amenable than structural estimation to testing these predications for a couple of reasons.…”

Section: Empirical Implicationsmentioning

confidence: 99%

Strategies to Fight Ad-Sponsored Rivals

2010

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We analyze the optimal strategy of a high-quality incumbent that faces a low-quality ad-sponsored competitor. In addition to competing through adjustments of tactical variables such as price or the number of ads a product carries, we allow the incumbent to consider changes in its business model. We consider four alternative business models, a subscription-based model, an ad-sponsored model, a mixed model in which the incumbent offers a product that is both subscription-based and ad-sponsored, and a dual model in which the incumbent offers two products, one based on the ad-sponsored model and the other based on the mixed business model. We show that the optimal response to an ad-sponsored rival often entails business model reconfigurations. We also find that when there is an ad-sponsored entrant, the incumbent is more likely to prefer to compete through the subscription-based or the ad-sponsored model, rather than the mixed or the dual model, because of cannibalization and endogenous vertical differentiation concerns. We discuss how our study helps improve our understanding of notions of strategy, business model, and tactics in the field of strategy.

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“…Essential endogenous barriers may begin from excess capacity. This is usually accompanied by greater than before advertising or promotional programme (Gable et al, 1995) or pre-emptive pricing strategy that will result in price wars as a primary form of competition (Simon, 2005). It is thus apt to view endogenous barriers as existing firms' reactions to new market entrants (Karakaya & Stahl, 1989).…”

Section: Barriers To Market Entry and Its Impact On The Entry Strategymentioning

confidence: 99%

Impact of firm-level factors and market entry mode on performance: A study of service MNCs in an emerging economy

Acheampong¹,

Kumah²

2012

MSL

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The study examined the market entry strategies of multinational services companies into Ghana's service sector and the linkages to firm level performance after entry. Literature was reviewed on market entry strategies, internationalisation, globalisation of service firms and resource-based theory. The study adopted a quantitative research approach in this study to enable empirical testing of Ekeledo and Sivakumar (2004) framework. The study found that firm specific factors affect the market entry strategy while the entry strategy also affects performance after it enters the market. Home country factors and the features of services are also seen to moderate on the effects mentioned. The study also found that the features of services were an industry wide issue not so much consideration is given to it.

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Incumbent pricing responses to entry

Cited by 93 publications

References 40 publications

Making Self-Regulation More Than Merely Symbolic: The Critical Role of the Legal Environment

Making Self-Regulation More Than Merely Symbolic: The Critical Role of the Legal Environment

Strategies to Fight Ad-Sponsored Rivals

Impact of firm-level factors and market entry mode on performance: A study of service MNCs in an emerging economy

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