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Shanghai Xin Tian Di, photo by Motohiko Tokuriki, 2010 (Source: Wikimedia Commons)

Why Increasing Demand Is Not Always the Answer to New Competition

Idea posted: October 2014
  • Strategy
  • Marketing

Faced with a new competitor in the market, an incumbent company is usually expected to respond by investing more into its products to offer products that will please more customers. However, new research shows that a higher product investment in response to competition is not necessarily the best answer. The reason: new entrants may change the incumbent’s return on investment trade-off.

Idea #450
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