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Publications
Publications
  • 2020
  • Working Paper
  • HBS Working Paper Series

Pushed into a Crowd: Repositioning Costs, Resources, and Competition in the RTE Cereal Industry

By: Young Hou and Dennis Yao
  • Format:Print
  • | Language:English
  • | Pages:43
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Abstract

This paper exploits a natural experiment involving self-regulation in the ready-to-eat (RTE) breakfast cereal industry to evaluate how firms respond to entry in light of changes in competition and to estimate the value of brand equity as products are repositioned. Self-regulation led to a crowding of the product space by forcing differentiated products to become more similar. Among other things we find that products constrained by regulation perform relatively worse than unconstrained products, brand equity specific to a product is tightly linked to existing product positions and does not transfer well to new positions, and that when competition increases, firms reposition to new segments and increase investments on product differentiation. The paper offers a performance based assessment of repositioning and to our knowledge offers the first empirical analysis in the strategy literature that measures in performance terms how repositioning changes the value of brand equity.

Keywords

Positioning; Resources; Competitive Dynamics; Non-market Strategy; Goods and Commodities; Governing Rules, Regulations, and Reforms; Product Positioning; Food and Beverage Industry

Citation

Hou, Young, and Dennis Yao. "Pushed into a Crowd: Repositioning Costs, Resources, and Competition in the RTE Cereal Industry." Harvard Business School Working Paper, No. 20-014, August 2019. (Revised May 2020.)
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About The Author

Dennis A. Yao

Strategy
→More Publications

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More from the Authors
  • Fueling a Cleaner Future: ACWA Power and Green Hydrogen By: Dennis Yao and Alpana Thapar
  • Beyond Strategic Intuition: Course Introduction By: Dennis Yao
  • Pushed into a Crowd: Repositioning Costs, Resources, and Competition in the RTE Cereal Industry By: Young Hou and Dennis Yao
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