Strategic investment, single-market focus and competitive advantage: An application to the natural gas industry
نویسنده
چکیده
This paper presents a model of multimarket competition with capacity investments. A firm which serves a single market enjoys a strategic advantage over a multimarket rival. It “overinvests”recognizing that its rival can deploy capacity to another market. The focused firm, due to the specificity of its investment, has no such “outside option”. The model shows how lower costs and a sharper focus are complementary as sources of competitive advantage. The paper sheds light on competition between “focused”pipeline and “diversified” liquefied natural gas (LNG) exporters, and on the global impacts of the 2011 Fukushima nuclear accident.
منابع مشابه
Strategic investment, multimarket interaction and competitive advantage: An application to the natural gas industry
This paper presents a game-theoretic analysis of multimarket competition with strategic capacity investments, motivated by recent developments in international natural gas markets. It studies the competitive implications of heterogeneity in firm structure arising from asset specificity. A single-market focus confers advantage even in the absence of superior value or cost. Lower costs and a shar...
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