When Does Competition Foster Commitment

摘要: Consider a firm that would like to commit focused business strategy because focus improves efficiency and thus increases profit. We identify two general conditions under which tougher competition strengthens the firm's ability strategy. Under these conditions, fosters commitment for reasons: (i) reduces value of option diversify (the contestability effect) (ii) importance being efficient effect). use number different models imperfect illustrate applicability our results. Our examples suggest effect is very general. In contrast, often requires further are specific nature in each model. both cases, analysis helps us predict when effects more likely be observed.