Search Results

This chapter examines the conditions under which firms should pursue market share as a goal. Specifically, it focuses on the factors that determine revenue- and volume-based market share, including cost dynamics, demand dynamics, competitive reaction, cost and technological uncertainty, process innovations, and demand uncertainty. In particular, it shows how the firm can use this information to coordinate its marketing, finance, and production decisions.

This chapter examines the conditions under which the multiproduct firm should use market share as a metric for resource allocation. It distinguishes short- and long-run effects, analyze the effects of competition, and show how the discount rate affects the firm's revenue- and volume-based market shares. In particular, it shows how the firm can use marketing-finance fusion to choose the optimal performance metrics for managers so that they focus on maximizing long-run performance.

This chapter is the first of two taking a micro view encompassing three creative industries — publishing, music, and video games — to detail the pattern of invention/creation, embodiment and diffusion of soft innovations. At the micro level, industry-specific indicators relating to the numbers of new product variants introduced are used with certain advantages relating to the identification of the rate of significant innovation being claimed for a specific measure that tracks the share of the sales of bestsellers that were recently introduced onto the market. In the creative sector, the indicated rates of innovation are high, with very considerable numbers of new products or titles being launched and rates of market churn of the bestsellers in the studied markets being very fast. This reflects a pattern quite different to the usual suggestion that innovation occurs at a rate of about 2.5% per annum (a measure usually based upon indicators of labour productivity growth).

Chapters 2 and 3 focus on the organizational strategies of insurance firms. Chapter 2 analyzes the disparity between transnational and domestic life insurance firms’ strategies. Insurance firms from both camps faced a conflict between local preferences and profits when designing their products. However, they handled this conflict very differently. While transnational firms defined life insurance as modern risk management, and offered products for managing unexpected misfortunes; domestic firms defined life insurance as money management, and launched products for savings and investment purposes. The former adopted a profit-oriented model by attempting to change local preferences; whereas the latter took on a market-share approach by accommodating local preferences. Through a chronology of the ebbs and flows of the market’s development, this chapter demonstrates the tension between the local cultural logics and the profit-oriented institutional logic of life insurance. It documents the battle between the transnational and domestic players in the field, explaining how their battle is rooted in their different ways of handling cultural obstacles, and in their divergent institutional logics of operation.

Although the three major subsectors of the information sector—mass media, telecommunications, and information technology—developed at different times and paces, technological and regulatory tendencies affected them in roughly the same periods. In the 1990s, a fourth subsector emerged—Internet media. This chapter asks: Has it been subject to similar dynamics of market structure? Is the Internet still as open and competitive as it used to be, or is it becoming concentrated and dominated by a few firms with market power? This chapter looks at the market concentration trends for eight Internet sector industries in the United States: Internet backbones, Internet service providers, broadband providers, search engines, browser software, portals, Internet protocol telephony, and media player software. The revenue and market share of each firm for a period of up to twenty years are also calculated. These market shares are then used to calculate concentration indices and track them over time.

Mergers do not safeguard firms from long-term decline in terms of market share and profitability. The lack of sophisticated hierarchical corporate structures and vertical integration is evident in British industry compared to American and German industry. There is also a prevalence of unsophisticated corporate structures and personal management that can be observed after mergers take place. This chapter analyses how unsophisticated management techniques and corporate structures hindered the development of the progressively concentrated British industry. The consistency and pervasiveness of the strategy and structure of the British-owned motor manufacturers prior to 1968 reveals a path dependence that lead to the creation of unique British characteristics, which can be compared to characteristics of multinational and international rivals.

A major debate has been unfolding in the United States and around the world over media concentration and its implications. This book is a study of the American mass media and information sector over two decades—its change, its dynamics, and its concentration and ownership trends. First, it discusses the dynamics of industries or industry clusters and provides a methodology. It then provides market share data analysis and narration for each industry; calculates national, local, vertical, and ownership concentration trends; and aggregates the data into increasingly larger segments and sectors. It provides an explanatory model for long-term concentration trends and a new index for measuring local media concentration. This chapter provides the setting for the book: its aim; the history of media concentration issues in America; today's debate and its combatants; goals and fears (localism, commercialism, quality, diversity, social reform); past research; and the international dimension.

This book investigates whether the American information sector has become more concentrated. To provide an empirical answer, a methodology that is straightforward, simple, and transparent is adopted: the trend of two media concentration indices used in American antitrust enforcement, the so-called Herfindahl-Hirschmann Index (HHI) and the four-firm market share index, the C4. This book looks at the market concentration trends for 100 separate information industries in the United States. Examples for such industries are broadcast television, cable television, film distribution, daily newspapers, Internet service providers, television set makers, microcomputers, local phone service, and cellular mobile providers. For each of these industries, individual firms' revenues in the US market are analyzed and their US market shares in this particular industry are calculated.

Given the relative cheapness of electronic and physical distribution, it is usually more cost effective to produce a program centrally and distribute it widely rather than for each retail outlet to produce its own content. Thus, networks and syndicators emerged from which retail outlets acquired programming, or they produced the program themselves. These networks and syndicators package the content and distribute it to retail outlets such as broadcast stations, cable network operators, and satellite distribution systems. This chapter analyzes the concentration of trends in radio program networks and television broadcast networks. Because radio is often used as an example for media concentration trends, it needs to be discussed at greater length. In about one decade, from 1992 to 2001, the market share of the top four firms increased from 9% to 38%. The national level of radio concentration was less dramatic than its rapid rate of change suggests, coupled with local concentration. In the case of television stations, the concentration trend in ownership has received high visibility. Cable television has become the major delivery platform for additional video channels.

For growth-seeking companies with sound technologies and executives who aim to create new streams of revenue within two or three years, strategy need not be so complicated. Market segmentation is the first step in new market applications development. The best way to understand market segmentation is, like most things, to understand its fundamental principles and observe those principles at work in different examples. The examples offered in this chapter run the gamut from physical assembled products, to software and systems, to biotechnology, and to services. Marketing specialists correctly suggest that the differences between segments must be measurable and meaningful. That means that you must have concrete data for the different regions on your grid. These data might include: current sales by segment, annual growth rates, market share, competitors and their market shares. Putting all these together on a single page provides a rich picture of the market and the competitive landscape.

In this chapter, Michael Wortmann examines European retailing and its global expansion. Within the European Union, retail markets are still highly fragmented in many respects. The national retail systems in Europe are significantly different from one another, not only because of differences in consumer preferences, but also because of variations in regulations affecting retailing. Although now slowed by recession, the most rapid transformation in retailing has occurred in Eastern Europe, with West European retailers in many cases playing a leading role. Many of the changes in Europe mirror those in the USA, with the development of self-service, larger store size formats, horizontal expansion, and retailer-led efficiency gains in the supply chain. However, in no European country are these changes as advanced as in the USA. The higher level of regulation not only hampers these changes, but modifies them, leading to new and successful innovations in some cases. Wortmann focuses on retailing in four major countries. In France and the UK, retailing regulation has been relatively weak, so many of the trends have materialized to a much greater extent than in Italy, which has very rigid regulations. Germany is somewhere in between, attempting to limit store size, but not merchandising practices, which has led to the growth of small-store hard discounters, such as Aldi, the owner of Trader Joes in the USA. In part because of the limited opportunities to expand domestically, some of the major European retailers have been leaders in the global expansion of retailing. The chapter includes short case studies of some of the major European retail innovators, such as Carrefour, Aldi, Metro, and Tesco.

This chapter explores the implications of the following assumption: ‘bad products cannot drive out good’, i.e., a high-quality product will hold onto some minimal market share no matter how many low-quality products it competes with. It concludes that the capabilities required to produce high-quality products will inevitably be ‘scarce’: the global market will be dominated by a small number of firms.

This chapter examines entrepreneurial authority from the 1950s to the present by focusing on the creation of environmental civil regulations. Private agents are most often useful for their expertise in technical matters and are delegated other tasks with little impact on state autonomy. However, they are rarely charged with potentially weightier tasks such as enforcement or rule making, and they are seldom the sole agents charged with a given task. Yet, if private actors are increasingly important in the landscape of global governance as many have claimed, the question is where and how they are projecting authority. The answer lies in the concept of entrepreneurial authority. The chapter shows that there has been a precipitous increase in the number of civil regulations since the 1950s. It also reveals that there is competition among various sources of entrepreneurial authority: different private actors are jockeying for market share in fairly narrow issue areas.

Chapter 9 summarizes lessons from successful firms and their use of constructive dialogue to help prevent undisciplined risk-taking. The book’s recommendation, that constructive dialogue be required of all major financial firms as a way to strengthen them and contribute to their safety and soundness, builds on the work of Professor Sydney Finkelstein and colleagues about the need for respectful challenge to help offset the possibility of flawed decision making by a leader. Moreover, only effective supervision can help protect financial firms from a race to the bottom. In 2005–2007 lenders and borrowers took on increasing amounts of risk without regard to the consequences. Citigroup’s CEO sought government intervention to reduce risks that firms took in the race for market share and profits. CEOs can benefit from feedback from supervisors as well as their boards, management teams, and risk officers.

The Framework negotiations of 1993–95 represented a turning point in U.S.‐Japan trade negotiations. The U.S. for the first time made “results‐oriented” trade demands, in which the Japanese government would be held responsible for increasing imports in certain markets, the centerpiece of its negotiating approach. And for the first time the Japanese stuck to their guns and resisted American trade pressures. In this chapter the author defines revisionism in terms of three core arguments: that Japan's economy was so inherently closed that efforts to remove protectionist barriers would fail; that the Japanese system was so fundamentally different that it represented a unique brand of capitalism; and that the Japanese system represented a genuine threat to the U.S. economy and especially its high-tech industries. The revisionist school called clearly for a policy of managed trade, or forcing the Japanese government to set aside a share of the market for foreign producers.

Empirical testing of correlations between consumer price changes and reform indicators is performed in each of the three key industries. Chapter 4 deals with the effect of reforms on residential prices of fixed telephony. This service was the starting point for privatization policies worldwide, following the divestiture of British Telecom in 1984. After a brief overview of technological change and of policy reforms in the EU, the market structure in selected countries is discussed. The incumbents are found to still retain s considerable market share. Then price variability across the EU-15 is discussed, and earlier empirical literature is reviewed. Empirical models find some evidence of a beneficial impact of market opening on some prices, but limited evidence of the benefits of privatization.

This chapter examines a number of examples that demonstrate the manipulation of choice in markets. It notes that the preservation of choice in markets is secured by making them open to newcomers, so that competition is endemic — a basic mechanism for the advancement of the capitalist market economy. It discusses how collaboration with rivals is one solution for those who do not enjoy competition. It then describes cartels as associations which involve either price fixing or market sharing. It evaluates the causes and effects of bad choices and how the rise of the credit industry shadowed and enabled the rise of consumerism. It demonstrates that choices is at times abusive and disadvantageous, rather than a boon. It emphasizes how choice does not always deliver what it claims.

Marc Whitacre of Archer Daniels Midland reported to the government that his company was involved in price-fixing. He then began tape-recording his meetings with his boss, Michael Andreas, and other lysine manufacturers. A 1993 meeting with Japanese lysine manufacturers was thought to contain the critical evidence of price-fixing. The parties talked about the growth of volume and possible legal problems of competition. The Japanese introduced the topic of possible allocation of market shares, moving the conversation into legally questionable territory. Andreas’s schema of the meeting changed when topics of the potential allocation and sharing market growth were raised. No agreement to allocate lysine was made during this meeting. This smoking gun evidence was produced by the Japanese executives, not by Andreas. This was about all that could be used to defend ADM, however, since during later tape-recorded meetings the speech act of agreeing was clearly made by all parties.