Wednesday, October 9, 2013

Multipoint Competition

GIMENO Javier
Access the publisher's website
in The Palgrave Encyclopedia of Strategic Management, David J. Teece Mie Augier (Eds.), Palgrave (2013)

Multipoint (or multimarket) COMPETITION describes a situation where firms compete simultaneously across multiple products or markets, and competitive actions taken in one market trigger reactions in other markets. Although multipoint competition provides more opportunities for competitive interactions and retaliation, paradoxically it results in less intense rivalry owing to mutual familiarity and deterrence. Empirical research provides substantial support for the 'mutual forbearance hypothesis' that multipoint competition reduces price and non-price rivalry and improves performance. The frontier of research explores multipoint competition in more general strategic settings such as multinationals or diversified firms, and assesses spillovers between competitive and cooperative relations.