The Economics of Electronics Industry: Competitive Dynamics and Industrial Organization

This entry highlights fundamental changes in the electronics industry that have transformed its competitive dynamics and industrial organization: a high and growing knowledge intensity; the rapid pace of change in technologies and markets; and extensive globalization. That explosive mixture of forces has created two inter-related puzzles. The first puzzle is that a high degree of globalization may well go hand in hand with high and increasing concentration. This runs counter to the dominant view, based on the assumption of neo-classical trade theory, that globalization will increase competition and hence will act as a powerful equalizer both among nations and among firms. Multinational corporations, after all, may not be such effective "spoilers of concentration", as claimed by Richard Caves (1982). The second related puzzle is that this industry fails to act like a stable global oligopoly, even when concentration is extremely high: a market positions are highly volatile, new entry is possible, and not even market leaders can count on a guaranteed survival.

Cote d'Ivoire : private sector dynamics and constraints

Private sector assessments provide information and analysis essential to formulating strategies for alleviating constraints on private sector development. They are meant to contribute both to the Bank's policy dialogue with borrowing governments and to the formulation of country assistance strategies. Theauthors examine the constraints on growth faced by private enterprises and how these relate to the policy and institutional environment in Cote d'Ivoire. They employ new data sources as well as surveys of, and in-depth interviews with, private entrepreneurs. They focus on: the effects of taxes and labor regulation on private firms; the impact of public spending on private sector development; and the role of informality in enterprise activity. Following are some of their findings. Tax policy and enforcement impose a heavy financial burden on a shrinking base of formal enterprises, whose regulatory burden has also grown. Taxes are increasingly independent of a firm's profits. This substantial fixed cost may lead some businesses to exit prematurely and may discourage others from formal entry. The overall tax burden on small and medium-size enterprises has risen disproportionately, to levels that discourage formal participation in the economy. Informal firms pay some taxes, but there is considerable leakage in collection. Unnecessary rigidities in labor policies weigh less heavily than expected on firms, because they avoid their full costs through such means as subcontracting and apprenticeships. The restrictions nonetheless limit firms'flexibility of operation and ability to reward merit. In the 1980s, public spending increasingly channeled limited financial resources and human capital toward nondevelopment purposes, including poorly performing enterprises and elite-oriented services, precluding their use in the private sector. The methods of financing public spending (such as withholding taxes and accumulating arrears) have sharply curtailed the capital available to private enterprises. The public sector's dramatic accumulation of arrears and growing reputation as a bad customer are undermining the competitive private supply of goods and services to the government. Government employment policies attract many of the most qualified potential entrepreneurs and business professionals to governmentemployment. Rather than a sharp divide, there is a continuum between small informal and large formal firms. Some medium-size and large formal firms engage in informal behavior, and large firms sometimes lower their costs through links with informal firms - including purchases of inputs that have escaped regulation and taxes.Banks&Banking Reform,Environmental Economics&Policies,Public Sector Economics&Finance,Private Participation in Infrastructure,Microfinance

Wintelism and Production Networks in the Electronics Industry

This paper deals with two interrelated elements of globalization: Wintelism and cross national production networks which have been underexposed in discussions about globalization.Wintelism refers to the shift in competition away from final assembly and vertical control of markets by final assemblers toward a struggle over de factor product standards generating market power anywhere in the value chain.In electronics Intel and Microsoft are leveraging their control over PCs to alter the terms of competition by emphasizing the microprocessor resp. the operating system as de facto market standards.The creative use of intellectual property rights and associated licensing strategies define defensible market positions more than manufacturing cost as the basis of competitive advantage.Cross national production networks refer to the dis-integration of the industry's value chain into constituent functions which can be contracted out to independent producers wherever located in the global economy.These networks have emerged most clearly in Asia and have been used by American and Japanese firms.The development of USA direct investment in electronics in Asia over the past three decades will be examined and compared with Japanese investment in Asia.A production network typology will be used to analyse the positions of US, Japanese and Overseas Chinese electronic firms.The final question to be discussed is whether the production networks that have emerged in East Asia can become a significant feature of the integration of Central /Eastern Europe.The optic of such networks provides an alternative perspective on the East European economic transition.The basic conclusion is that Wintelism and networking were the principal means by which the US electronics industry recovered from its mid-1980 s crisis in competition with Japanese firms and will likely influence a broader range of sectors.However, there is nothing automatic about the benefits of participating in international production networks.Periodically there are important reversals in the distribution of such benefits.The China Circle will witness one of the great market battles in memory as US, Japanese and indigenous production networks vie for 21 st century advantage

The influence of proprietary disclosure costs on the decision to go public

This thesis studies the influence of proprietary disclosure costs related to informing product market competitors on management communication with investors. In doing so it focuses on the firm's decision to go public. A firm that goes public not only experiences a change in its financial and governance structure, it also has to cope with a more demanding disclosure environment. A central theme throughout the thesis is the trade-off between marginal proprietary disclosure costs and other marginal financing costs related to the choice between public or private financing. This choice is analytically explored in this thesis. We find that the influence of competitor-related proprietary costs on the firm's decision to go public is nonmonotonic and that this influence is the highest for firms that compete in moderately competitive industries. This prediction is empirically tested by comparing industrial characteristics of Dutch Firms that executed an Initial Public Offering on the Stock Exchange of the Amsterdam Exchanges between 1984 and 1995 with firms that were in a position to do so. We find evidence indicating that proprietary disclosure cost considerations influence the decision to go public and that the association between competition and going public is nonmonotonic.

Managing multi-tiered suppliers in the high-tech industry

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2009.Includes bibliographical references (leaves 131-135).This thesis presents a roadmap for companies to follow as they manage multi-tiered suppliers in the high-tech industry. Our research covered a host of sources including interviews and publications from various companies, consulting companies, software companies, the computer industry, trade associations, and analyst firms among others. While our review found that many companies begin supplier relationship management after sourcing events, we show that managing suppliers should start as companies form their competitive strategy. Our five step roadmap provides a deliberate approach for companies as they build the foundation for effective and successful multi-tiered supplier relationship management.by Charles E. Frantz and Jimin Lee.M.Eng.in Logistic

\u3ci\u3eThe Conference Proceedings of the 1999 Air Transport Research Group (ATRG) of the WCTR Society, Volume 3\u3c/i\u3e

UNOAI Report 99-7https://digitalcommons.unomaha.edu/facultybooks/1149/thumbnail.jp

Development of a design and evaluation framework for supplier cities

Thesis (S.M.)--Massachusetts Institute of Technology, Engineering Systems Division; and, (S.M.) -- Massachusetts Institute of Technology, Sloan School of Management; in conjunction with the Leaders for Manufacturing Program at MIT, 2007 [first author]; and, (S.M.)--Massachusetts Institute of Technology, Dept. of Mechanical Engineering; and, (S.M.) -- Massachusetts Institute of Technology, Sloan School of Management; in conjunction with the Leaders for Manufacturing Program at MIT, 2007 [second author].Includes bibliographical references (p. 77-79).For companies pursuing opportunities by expanding manufacturing to new markets, one major challenge is unavoidable: identifying and developing capable, local suppliers. In developing markets suppliers often lack the cutting edge technology, processes, and management methodologies driving the world's best businesses. The ability to identify and develop, relocate or build suppliers with World-Class capability becomes a competitive advantage. This thesis discusses the state of the art in Industrial Conglomerations (including Industrial Clusters and Supplier Cities) as well as their benefits and limitations. To analyze the potential opportunity for manufacturing firms considering supplier cities, we have developed a technical, operational, and financial framework for considering the opportunity and making key decisions about structure, location, and included processes. The framework includes a discussion regarding process selection based on an analysis of critical technical issues at each manufacturing step. This analysis considers the relationship of process capability to overall product performance and ultimately to product competitiveness.(cont.) In an attempt to help justify the effort of the host company in establishing a Supplier City, we include a discussion of the cost model we developed to quantify the benefits associated with supply chain expense, learning curve effects, and the expense of developing suppliers located in Supplier City versus those located elsewhere. We further discuss the legal, political, social and environment risks of Supplier City and guidelines for stakeholder focused management of local, regional and national governments, party officials, and NGO's. Finally, we include a case study in which we apply our framework to The Timken Company's China operations. We discuss their specific case and our recommendations.by Jason Antoine Mellein and Daniel Allen Shockley.S.M

Three Essays on Managing Customer-Based Strategies: A Pricing and Revenue Management Approach

Many firms and organizations with already-optimized business functions are under market pressure to protect their narrow profit margins. Their need for supplemental and reliable revenues calls for performance optimization beyond the core business functions. Motivated by applications from online social media and the airline industry, in my dissertation, I focus on the revenue management and pricing decisions of customer-based plans and programs. More formally, the research question addressed in this study is: How can firms effectively use customer-based pricing strategies to boost revenues? My dissertation consists of three essays. In the first essay, I analyze the ongoing competition among online social media (OSMs) to attract users. Concentrating on the importance of community retention and expansion to OSMs in preserving financially sustainable business models, I investigate whether OSMs should develop revenue sharing programs and reward their contributing users from their limited revenue streams. I present a duopoly OSM game (with a less favourable and a more favourable OSM) in which heterogeneous users choose their levels of contribution with respect to each OSM based on their preferences. In this chapter, I explore how online users’ actions and perspectives impact the outcome of the competition among OSMs. Furthermore, I investigate how small social media firms can compete with a dominant firm in the market. In the second essay, I study the role of ancillary revenue and its significance for industries such as airlines. These firms can barely survive without ancillary fees, even when their capacities are almost fully utilized. I consider the case in which customers-changing rates between flights are stochastic but decreasing with reference to the change fees. In this essay, I examine how firms should design change fees to manage customers’ switching behaviour. Specifically, I incorporate change fee revenues as a portion of total revenue structure and investigate how firms should update their markdown pricing strategies when they face price-tracking customers. In the third essay, I focus on the dynamics between a firm and customers who are uncertain about their future travel plans. While the firm maximizes its revenue by imposing optimal change fees, customers consider their travel plan uncertainties and maximize their utilities by responding strategically to these fares. In this study, I seek to answer two important policy questions: Although imposing a change fee could increase total revenue, does it burden the firm with a lower customer demand? How should the optimal monopolistic price be set with the presence of a change fee? Without imposing any distributional assumptions, I analytically derive each market player’s best reaction to the other to prescribe the characteristics of the firm/customer interaction equilibrium

Essays on Environmental Spillovers in Supply Chains

abstract: The phenomenon of global warming and climate change has increasingly attracted attention by researchers in the field of supply chain and operations management. Firms have developed efficient plans and intervention measures to reduce greenhouse gas (GHG) emissions. While a majority of research in supply chain management has adopted a firm-centric view to study environmental management, this dissertation focuses on the context of GHG emissions reduction by considering a firm’s vertical and horizontal relationships with other parties, and the associated spillover effects. A theoretical framework is first proposed to facilitate the field's understanding of the possible spillover effects in GHG emissions reduction via vertical and horizontal interactions. Two empirical studies are then presented to test the spillover effect in GHG emissions reduction, focusing on the vertical interactions - when firms interact with their supply chain members. Drawing data from Bloomberg Environmental Social and Governance, and Bloomberg SPLC, this study conducts econometric analyses using various models. The results suggest that first, a higher level of supply chain GHG emissions is associated with the adoption of emissions reduction programs by a firm, and that this supply chain leakage contributes to the firm’s financial performance. Second, a firm's supply base innovativeness can contribute to its internal GHG emissions reduction, and this effect is contingent on a firm's supply base structure. As such, this dissertation answers the recent call in the field of supply chain and operations management for more empirical research in socially and environmentally responsible value chains. Further, this study contributes to the literature by providing a better understanding of the externalities that value chain members can impose on one another when pursuing sustainability goals.Dissertation/ThesisDoctoral Dissertation Business Administration 201