Elevating repositioning costs
Subtitle: strategy dynamics and competitive interactions in grand strategy
By: Anoop R. Menon, Dennis A. Yao
Contributors: Yao, Dennis A., author; Harvard Business School
Series: Working paper / Harvard Business School -- 14-103; Working paper (Harvard Business School) -- 14-103.
Publisher: Harvard Business School
Published: 2014
Place of publication: Boston]
Language: eng
Number of pages: 17
Description: This paper proposes an approach for modeling strategic interactions that incorporates the costs to firms of changing their strategies. The costs associated with strategy modifications, which we term "repositioning costs," constitute a defining feature of strategic choice which is particularly relevant to interactions involving grand strategies. Repositioning costs can critically affect competitive dynamics by making strategies "sticky" and, consequently, the implications of strategic interaction for strategic choice. And yet, while the organization and strategy literatures broadly recognize the importance of repositioning costs, game-theoretic treatments at the grand strategy level with very limited exceptions have not focused on them. In this paper we argue for greater recognition of repositioning costs, provide a repositioning cost typology, and demonstrate the fertility of this approach with a simple model of inter-firm competitive interaction in which repositioning costs increase with the length of time that a firm has been executing its current strategy.
Notes: "April 2014" -- Publisher's website.

Includes bibliographical references (pages 15-17).