The perils of high-growth markets

Article Abstract:

The validity of assumptions about investing in a growth market can be challenged. These include the ease of gaining share; the worth of the share gains; the head start on the experience curve; the lower price pressure; the necessity of entering early to gain access to technology, and thwarting later competition. There are also unrecognized risks in high growth markets such as: competitive overcrowding; the possibility of 'shakeouts'; distribution and resource constraints; mutating success factors; changing technology; a superior competitor; or disappointing market growth. Once assumptions and risks are assessed, there are certain circumstances under which growth markets must be entered, such as when the company enjoys firm customer loyalty and-or can expand product lines with no ready or apparent competition.

Methods, Decision-making, Decision making, Markets (Economics)

Mobility barriers and strategic groups

Article Abstract:

Mobility barriers reveal the skills and assets that separate industrial groups and form the basis of competitive advantage in marketplaces. An analysis of strategic group procedures in 679 oil-well drilling firms indicates that a process for identifying strategic groups based on mobility barriers can be developed. The firms were clustered in three specific groups and results indicate that stability did exist in the groups to a high degree.

Competition (Economics), Labor mobility

Strategy over the business cycle

Article Abstract:

An empirical and analytical framework has been developed for researching the changes in strategy over the business cycle. Results indicate that: firms change their strategies asymmetrically to adapt to particular business cycle stages; there are observed differences between optimal and actual strategies over business cycle stages; and there is no observable consistency in the performance measure between up and down markets.

Business cycles