Peng Chapter 11 (2nd Edition)

Peng Chapter 11 (2nd Edition) - 1 Global Business 2e...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Global Business 2e Chapter 11 Managing Global 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
LEARNING OBJECTIVES After studying this chapter, you should be able to: 1. Understand the industry conditions conducive for cooperation and collusion. 2. Outline how formal institutions affect domestic and international competition. 3. Articulate how resources and capabilities influence competitive dynamics. 4. Identify the drivers for attacks, counterattacks, and signaling. 5. Discuss how local firms fight multinational enterprises (MNEs). 6. Participate in two leading debates concerning global competitive dynamics. 7. Draw implications for action. 2
Background image of page 2
GLOBAL COMPETIVE DYNAMICS Competitive dynamics Actions and responses undertaken by competing firms. Competitor analysis Process of anticipating rivals’ actions in order to both revise a firm’s plan and prepare to deal with rivals’ response. Application to Opening Case? 3
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
COMPETITION, COOPERATION, AND COLLUSION Competition While businesses compete for market share (“war”), they also cooperate and collude (“peace”). Collusion Collective attempts to reduce competition. Tacit Collusion Indirect collusion through signaling to reduce output and maintain prices (legal). 4
Background image of page 4
COMPETITION, COOPERATION, AND COLLUSION Explicit collusion Firms directly negotiate output and pricing and divide markets (illegal). Cartel An output- and price-fixing entity involving multiple competitors. Trust A cartel in which members have to trust each other to honor agreements. 5
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
COMPETITION, COOPERATION, AND COLLUSION Antitrust laws Cartels/trusts have been labeled “anticompetitive” and outlawed by antitrust laws in various countries. Duration of Cartels Cartels often collapse (average duration of six years) because of incentive to “cheat” as illustrated in the prisoner’s dilemma. 6
Background image of page 6
COMPETITION, COOPERATION, AND COLLUSION Prisoners’ dilemma Ø Game in which two prisoners are suspected of a major joint crime but police do not have strong evidence. The outcome depends on whether they collude or defect. Ø
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/25/2012 for the course ECON 102 taught by Professor Jones during the Spring '11 term at UVA.

Page1 / 32

Peng Chapter 11 (2nd Edition) - 1 Global Business 2e...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online