Chapter 11 - Managing Global Competitive Dynamics

Front 1

Blue Ocean Strategy

Back 1

Strategy that focuses on developing new markets (“blueocean”) and avoids attacking core markets defended by rivals, which is likelyto result in a bloody price war or a “red ocean."

Front 2

Predatory Pricing

Back 2

An attempt to monopolize a market by setting prices below cost andintending to raise prices to cover losses in the long run after eliminatingrivals.

Front 3

Antitrust Law

Back 3

Law that outlaws cartels (trusts).

Front 4

Cartel

Back 4

An output- and price-fixing entity involving multiplecompetitors.

Front 5

Competitor Analysis

Back 5

The process of anticipating rivals’ actions in order to bothrevise a firm’s plan and prepare to deal with rivals’response.

Front 6

Capacity to Punish

Back 6

Sufficient resources possessed by a price leader to deter and combatdefection.

Front 7

Market Commonality

Back 7

The overlap between two rivals’ markets.

Front 8

Resource Similarity

Back 8

The extent to which a given competitor possesses strategic endowmentcomparable, in terms of both type and amount, to those of the focal firm.

Front 9

Competition Policy

Back 9

Government policy governing the rules of the game incompetition.

Front 10

Explicit Collusion

Back 10

Firms directly negotiate output and pricing and dividemarkets.

Front 11

Antitrust Policy

Back 11

Government policy designed to combat monopolies andcartels.

Front 12

Concentration Ratio

Back 12

The percentage of total industry sales accounted for by the top four,eight, or twenty firms.

Front 13

Mutual Forbearance

Back 13

Multimarket firms respect their rivals’ spheres of influence incertain markets, and their rivals reciprocate, leading to tacitcollusion.

Front 14

Antidumping Laws

Back 14

Law that makes it illegal for an exporter to sell goods below cost abroadwith the intent to raise prices after eliminating local rivals.

Front 15

Competitive Dynamics

Back 15

Actions and responses undertaken by competing firms.

Front 16

Dodger

Back 16

Strategy that centers on cooperating through joint ventures with MNEs andsell-offs to MNEs.

Front 17

Defender

Back 17

Strategy that centers on local assets in areas in which MNEs areweak.

Front 18

Multimarket Competition

Back 18

Firms engage the same rivals in multiple markets.

Front 19

Price Leader

Back 19

A firm that has a dominant market share and sets“acceptable” prices and margins in the industry.

Front 20

Prisoners' Dilemma

Back 20

In game theory, a type of game in which the outcome depends on two partiesdeciding whether to cooperate or to defect.

Front 21

Cross-Market Retaliation

Back 21

Retaliatory attacks on a competitor’s other markets if thiscompetitor attacks a firm’s original market.

Front 22

Collusive Price Setting

Back 22

Price setting by monopolists or collusion parties at a level higher than the competitive level.

Front 23

Counterattack

Back 23

A set of actions in response to attack.

Front 24

Extender

Back 24

Strategy that centers on leveraging homegrown competenciesabroad.

Front 25

Tacit Collusion

Back 25

Firms indirectly coordinate actions by signaling their intention to reduceoutput and maintain pricing above competitive levels.

Front 26

Collusion

Back 26

Collective attempts between competing firms to reducecompetition.

Front 27

Game Theory

Back 27

A theory that studies the interactions between two parties that competeand/or cooperate with each other.

Front 28

Contender

Back 28

Strategy that centers on a firm engaging in rapid learning and thenexpanding overseas.

Front 29

Attack

Back 29

An initial set of actions to gain competitive advantage.

Front 30

Dumping

Back 30

An exporter selling goods below cost.

Front 31

Antidumping Law

Back 31

Law that makes it illegal for an exporter to sell goods below cost abroadwith the intent to raise prices after eliminating local rivals.

Front 32

Cartel (trust)

Back 32

An output- and price-fixing entity involving multiplecompetitors.