Strategy19Handout - 11/13/2008 Strategic Moves Change the...

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11/13/2008 1 Strategic Moves ± Change the rules of the game to benefit yourself ± Usually involves making a pre-game move 1 st ± Actions must be ± Observable ± Irreversible Strategic Moves ± Strategic moves are to deter or compel ± Unconditional commitments ± Try to change the payoffs ± Conditional moves ± Try to prune opponents branches ± Threats ± Promises ± In any strategic moving credibility is necessary for success Strategic Moves ± Examples ± AOL Time Warner adopts a “poison pill”, if Rupert Murdoch buys more than 5% of outstanding stock, the company will use all its cash to buy up stock from shareholders ± Hernán Cortés burns his expedition’s ships before they begin the conquest of Mexico ± U.S. passes trade legislation that will automatically impose tariffs on goods from countries in violation of fair trade agreements Strategic Moves ± Examples ± A company holds a Pre-Thanksgiving Day sale ± A company institutes a low-price guarantee ± On the first day of class, a professor
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Strategy19Handout - 11/13/2008 Strategic Moves Change the...

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