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  • January 2022
  • Article
  • Strategic Management Journal

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

By: Young Hou and Dennis Yao
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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 the performance impact of product repositioning. It then examines how a product's brand equity value declines with repositioning distance and explores various nonprice responses of firms to increased own and rival competition. Self-regulation led to a crowding of the product space by forcing differentiated products to become more similar. We find that products constrained by regulation performed relatively worse than unconstrained products. Furthermore, brand equity specific to a product was tightly linked to existing product positions. Increased competition also led to increased brand equity investments and some products with strong brand equity repositioned more aggressively than those with weak brand equity.

Keywords

Positioning; Resources; Brand Equity; Competitive Dynamics; Non-market Strategy; Regulation; Repositioning; Product Positioning; Performance Evaluation; Brands and Branding; Competitive Strategy; Consumer Products Industry

Citation

Hou, Young, and Dennis Yao. "Pushed into a Crowd: Repositioning Costs, Resources, and Competition in the RTE Cereal Industry." Strategic Management Journal 43, no. 1 (January 2022): 3–29.
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About The Author

Dennis A. Yao

Strategy
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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
  • CEO Activism, Consumer Polarization, and Firm Performance By: Young Hou and Christopher W. Poliquin
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