Professional Documents
Culture Documents
Sloan Program
Stramgt 258
Strategic Management
7
Paints
10
Petroleum Refining
Integrated Steel
10
Works
11
Storage Batteries
14
Glass Bottles
41
Cement
January 28, 2003 John Roberts 12
Rivalry
Even with high barriers to entry and no
buyer/supplier power firms might compete away
profits:
Structure (composition of firms)
Conduct (firm behavior)
Structure:
Higher concentration makes (tacit or explicit)
coordination easier
But not sufficient
January 28, 2003 John Roberts 13
Rivalry
Conduct:
Even two firms can compete away profits
Highly differentiated products diminish rivalry
Coordinated pricing (helped by visibility of
prices)
Effect of excess capacity (scale penalty)