Tuesday, November 13, 2012

Core Competencies?

In my Industry Analysis course, one of the topics we look at is the profitability of vertically related firms either staying separate or integrating.  One of the results is that under the conditions in the models, that firms have an incentive to merge whether they are both monopolists or both Cournot-type oligopolists.  Yet, in the real world we do not always have this as a firms managerial strategy.  Here is the New York Times has a nice article on SAP, which is sticking to their core competencies (business software) as opposed to integrating like some of their rivals.

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