Evaluating the prospect of entry

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Evaluating the prospect of entry, an entrant may fear that engaging in head to head competition post-entry with the incumbent may result in severe losses. Some companies manage to make a virtue out of staying small when entering markets dominated by large incumbents. Why is it that entering small and remaining small can be an advantageous entry strategy (describe it in the context of a sequential game)? What is the role of commitment in adapting this strategy and what are the attributes of commitment? Discuss when you expect this strategy to work. In the second part of your essay, discuss a real-world case in which an entrant tried to commit to be soft when entering a market. Explain how effective this strategy was. Could it have been made more effective?

Reference no: EM13689698

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