An integrative framework of pre‐emption strategies

Lee, Khai Sheang; Ng, Irene C. L.

doi:10.1080/09652540701525922

Cited by 7 publications

(9 citation statements)

References 82 publications

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“…The behaviours of both firms examined within this framework suggests that they were able to continuously generate dynamic capabilities at a faster rate than any other rival. Competitive behaviours between firms, as discussed in the industrial organisation literature, which created barriers to entry within grocery market segments by sunk costs and pre-emptive strategies also explain much of the emergence of the duopoly (Lee and Ng, 2007;Sutton, 1991). We argue that the creation of dynamic capabilities was a necessary condition for the successful exploitation of pre-emptive strategies.…”

Section: Data Limitationsmentioning

confidence: 99%

The Making of Australia's Supermarket Duopoly, 1958–2000

Merrett

2019

Aust Econ Hist Rev

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Australian supermarkets had one of the highest levels of concentration among developed economies by 2000. This paper explores the making of a duopoly comprising Coles and Woolworths. We present historical data on market shares in Australia and international comparisons for around 2000. We identify the evolution of their dynamic capabilities through the lens of Teece, Pisano and Shuen's positions, paths and processes (1997). The industrial organisation literature stresses interaction become rivals, notably pre-emptive strategies including sunk costs (Lee and Ng 2007; Sutton 1991). We argue that the development of dynamic capabilities enabled the execution of various pre-emptive strategies.

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Section: Data Limitationsmentioning

confidence: 99%

The Making of Australia's Supermarket Duopoly, 1958–2000

Merrett

2019

Aust Econ Hist Rev

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“…It is assumed that the entrant has to pay

γ_{y}

to purchase a unit of capacity and capacity purchase is not lumpy. On the other hand, as the pioneer in the market, the leader has a distinct cost advantage (Geroski, ; Lee & Ng, ). It has to pay only

γ_{x}

where

0 \leq γ_{x} \leq γ_{y}

to purchase a unit of capacity.…”

Section: Modelmentioning

confidence: 99%

“…All of the other financing options are priced based on the risk of the buyer airline. As mentioned earlier, it is common knowledge that a new entrant firm is a much riskier option than an established market leader (Geroski, ; Lee & Ng, ). Hence, one would expect that an established airline should be able to receive better financing options compared to a new entrant airline.…”

Section: Modelmentioning

confidence: 99%

Capacity Investment and Product Line Decisions of a Multiproduct Leader and a Focus Strategy Entrant

Yayla‐Küllü¹

2013

Decision Sciences

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In this article, I investigate the capacity investment cost conditions where a multiproduct market leader may respond to a focus strategy entrant by using different strategies such as changing the product mix, production volumes, quality levels, and/or by investing in more capacity. The products offered in the market are quality differentiated and customers are heterogeneous in their willingness to pay for quality. The capacity investment costs of the two firms (i.e., the leader and the entrant) may also be different. The classical Stackelberg model predicts that an incumbent does not change its position in response to entry. However, when heterogeneous customer base, product differentiation, and capacity costs are taken into consideration, I find that the leader with a low capacity cost may choose to expand its product line and increase its production. The leader with low capacity cost may introduce a product that it was holding back when the entrant has to bear the high-capacity cost and cannibalization threat is relatively small. Nevertheless, the extent of production volume strategies reduces as the capacity cost increases for the leader. I also find that when the leader has the power to set the industry standards by deciding the quality levels, as a response to a high-quality focused entrant, the leader increases both levels of quality and production of the low-quality product. Moreover, when the capacity investment cost is high for both the entrant and the leader, I find that market prices may increase with entry.

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“…Technological factors are believed to be of minor importance in relation to recreational goods and the following deals with the three remaining mechanisms. 1 Lee and Ng (2007) have reviewed how pre-emption can be used to sustain first-mover advantages. They operate with a switching cost strategy which can be particularly relevant to some recreational goods, a tie-up strategy which, in our case, is mainly relevant to spatial pre-emption of attractive market segments and geographic location (e.g.…”

Section: Theory On First-mover Advantagesmentioning

confidence: 99%

“…External factors and risks to consider before choosing a first-mover strategy can be public opinion, governmental policies, shifts in consumer needs, technological and market uncertainties, free rider problems and crowding out by public supply (Lieberman and Montgomery 1988;Kerin et al 1992;Lee and Ng 2007). External factors and risks are all related to the setting in which a specific recreational good is offered and are therefore case specific.…”

Section: External Factors and Risksmentioning

confidence: 99%

Creating First-Mover Advantages in Nature-Based Recreational Goods

Vedel

2009

Small-scale Forestry

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Most nature-based recreational goods have traditionally been viewed as positive externalities of forestry and other land uses. They have been characterised by low degrees of excludability and rivalry and have therefore mainly been public goods. Due to increased rivalry among various user groups as well as an increasing demand for new recreational experiences, markets for nature-based recreational goods and services are gradually emerging. Despite the slow market development it is argued that nature-based recreational goods can be connected with substantial first-mover advantages. This paper explores the possibilities for using theory on first-mover advantages combined with characteristics of recreational goods to find the main areas of focus and the related strategies by which to gain first-mover advantages. The characteristics of recreational goods are analysed as well as the relevant first-mover advantages from the literature. Four examples of nature-based recreational goods are provided and used to analyse the scope for creating firstmover advantages according to the characteristics of each type of good. The analysis shows that particularly buyer switching costs and targeting the right buyers can create considerable first-mover advantages. Furthermore, non-subtractable goods and goods which can attract organised buyers can be connected with greater first-mover advantages. Combining knowledge on recreational goods and first-mover advantages can support the development of markets for nature-based recreational goods and increase returns on investments in this field.

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An integrative framework of pre‐emption strategies

Cited by 7 publications

References 82 publications

The Making of Australia's Supermarket Duopoly, 1958–2000

The Making of Australia's Supermarket Duopoly, 1958–2000

Capacity Investment and Product Line Decisions of a Multiproduct Leader and a Focus Strategy Entrant

Creating First-Mover Advantages in Nature-Based Recreational Goods

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